I interviewed two of our sales team leaders, Nick Paoloni and Alex Paoloni, cousins who have worked in the fintech integration space for over 20+ years. My goal was to understand better how banks, credit unions, and fintechs currently think about integration and how they can avoid the cringe-worthy, innovation-stifling, point-to-point architecture that is prevalent in the industry. This blog shares that conversation, shedding light on what financial institutions (FIs) should do to build the proper safeguards that protect their investment in fintech partnerships.
Q: What is the status quo for banks and credit unions today regarding their integration strategy? And what do you see most often as the number one mistake FIs make?
Nick:
Most banks and credit unions have an outdated, backward approach to integration; It’s an afterthought that only becomes a priority after the FI has selected a third-party fintech vendor that they now need to connect to their core or another system. We’ve seen scenarios, especially during crises like COVID-19 and the Silicon Valley Bank collapse, where FIs scrambled to adapt. They could have pivoted more effectively if they already had a strategic integration approach.
Alex:
Right, and this approach goes well beyond handling crises. For day-to-day operations, FIs need to consider integration from the beginning to build efficiencies and cost savings, more quickly and effectively launch new services and respond to competitive pressures, develop a framework for data management, and maintain a better position to comply with regulatory requirements.
Q: How do you educate FIs on the importance of integration upfront versus an afterthought? What sets PortX apart from our competitors in terms of integration strategy?
Nick:
Our primary challenge is to help FIs understand the importance of prioritizing their integration strategy. Fortunately, this is becoming a more common discussion as the outdated mindset is being phased out through acquisitions, strong competition in the industry, key management retiring, and a younger, forward-thinking generation moving into decision-making roles.
Alex:
Many of our competitors that call themselves an integration platform are, in reality, a point-to-point solution with data flowing in a single direction to the core. Our platform addresses this by allowing bidirectional data flow, allowing FIs to leverage their data for anything they need. This allows us to discuss open data channels with any solution an FI needs to create a comprehensive view across platforms – there is virtually no limit to what we can connect to. For instance, when an FI onboards a new client via a loan origination system, we can simultaneously update the CRM and banking core, automate welcome emails, or incorporate special offers – a level of integration many providers can’t match.
Q: How can banks better plan their integration strategy and pave the way for smooth partner onboarding?
Nick:
The magic happens when an FI brings us into the conversation early. From the moment they consider a new system, we can help outline a roadmap, establish API connections, and set the stage for future scalability.
Alex:
Including a trusted integration partner, like PortX, in contract negotiations with third-party vendors has been a key factor for our most successful customers. By partnering early in the process and building safeguards, we’ve helped banks and credit unions ensure they don’t pay unnecessary fees for services already provided as part of our solution. It’s all about maximizing your technology’s value and making the integration process as seamless as possible.
Q: Can you provide an example of how PortX has guided FIs through the vendor negotiation process?
Alex:
Recently, we had a discussion with an FI that was taken aback by the integration quote it received from a digital banking provider. We were able to facilitate a conversation with representatives from the fintech and the FI to cover each cost line-by-line with the goal of eliminating any redundant services and emphasizing how our services would mitigate the fintech’s workload. We were able to successfully navigate the complexities of their contract and move the deal forward as a result.
Nick:
Our consultative approach isn’t just at the sales stage. For us, it’s an ongoing partnership. We’ve built relationships with our customers where we’re the first call when they consider a new system. We help them navigate the technology landscape to find solutions that meet their unique needs.
Keep the conversation going
This conversation with Nick and Alex made it that strategic integration from the start is non-negotiable for today’s FIs aiming for agility, efficiency, and regulatory compliance. Their expertise reinforces the critical need for FIs to reevaluate legacy integration approaches and embrace partnerships that offer dynamic, forward-looking solutions.
Let’s discuss how a tailored integration service can streamline your operations and future-proof your infrastructure. Start a conversation with Nick, Alex, or another member of our team today.
