Magazine article American Banker

Build Your Own Bank? SVB Lets Customers Do Just That

Magazine article American Banker

Build Your Own Bank? SVB Lets Customers Do Just That

Article excerpt

Byline: Robert Barba

Skip branches. Forget online banking. What if the future of banking is letting commercial customers, or at least those with the technological wherewithal, program their own experience with the bank?

For Silicon Valley Bank customers, the ability to do just that is set to arrive by the end of the year. The company is working to build out its application programming interfaces so that its high-tech customers can customize how they interact with the bank. That effort is being accelerated with the addition of the team of Standard Treasury, a fintech startup that focused on helping banks open their applications to others. Standard Treasury recently sold its intellectual property to bank holding company SVB Financial Group and the team led by Daniel Kimerling and Zachary Townsend agreed to join the bank.

"We are thinking about this as another channel for our customers to interface with the bank," said Bruce Wallace, chief operations officer of the $37 billion-asset SVB. "Our clients want more control in how they send data to us and a lot of them come from developer backgrounds, so they have the ability to build [the method] themselves and open APIs give us a much more flexible channel for them."

The first ways customers will be able to use the bank's APIs will focus on how they direct the bank to handle payments on their behalf, Wallace said. That includes both payments processed through the Automated Clearing House and card services. Wallace said the company will continue to build out additional ways for customers to connect - it has a road map, but also understands that it will need to be flexible. He declined to say what would likely follow the payment APIs.

"Things are changing so rapidly," Wallace said. "It is evolving, but we know what we want to build out."

SVB, given its high-tech clientele, is perhaps uniquely positioned to let clients program their own experience. Still, the way banks and commercial customers exchange data is perhaps ripe for an overhaul, said Patricia Hines, a senior analyst with Celent.

"Banks send their clients' treasury departments these big flat files of data and a lot of times it involves data that the company doesn't need," Hines said. "I could see some clients saying, 'Let me come in and get what it is that I need on my own terms.' "

The potential problem, Hines said, could be the treasury management systems that the companies use. Are they going to be easily conformed to fit the new way the bank and the company interact? What will the company need to do on that end to make it work?

"A lot of them are using packaged software," Hines said. "Will they begin to push their vendors? It is a little bit of a chicken-and-egg situation. …

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