Podcast August 31, 2020

How to succeed with open banking and embedded finance

Open banking seems like it’s been just around the corner for years. 

Now it’s here… 

But most organizations are still a little scared to move into it. 


To find out, Cara caught up with Phil Peters, EVP/Chief Operating Officer & Head of Institutional Banking at Radius Bank, a company who’ve embraced open banking with open arms. 

In this episode, Phil explains:

  • Why Radius moved into open banking
  • How embedded finance is shaping the future
  • What makes a winner (and why there will be many) 

Why open banking?

So why did Radius dive into open banking while other institutions seem worried?

Open banking — or API banking — covers a lot, so it may be best to pin down what aspect Radius moved into.  

Actually, now that we mention it — that’s exactly what Radius’ first thought was, too. 

See, before you dive into the newest ways of doing things, it’s important to pinpoint exactly what you are trying to do with them.

“We have a saying around here: Don’t boil the ocean. What it means is focus on what you’re trying to accomplish, fail fast and move on.” — Phil Peters

Radius’ goal was to deliver a timely product of high quality to their partners. 

In fact, they’ve been in the partnership business for quite some time, so they were specifically looking to help their financial service partners — who aren’t bankers — deliver banking services to their customers. 

But these services were never as cost-effective as Radius hoped. 

So they turned to open banking.

API banking allowed them to work with more partners simultaneously. That’s because once the layer was built for the API entrance to the bank, they could integrate APIs into their own for both delivery and exchange of information.

The ability to do this gave them the speed to market they were vying for, while also offering commercial customers a way to break from slower legacy banking services.

The future in embedded finance

Radius has, in the process, also embraced embedded finance — the idea that banking isn’t with the traditional bank; it’s where your customers are.

This is most often within an app or your website. 

The point is that it offers a better experience for your customers when these are integrated into the services they care about. 

One reason other banks are reticent to hop on board is that they worry about enabling their competitors in the process.

But Radius looks at it differently.

 “There are enough deposits in this country alone to go around.” — Phil Peters

In their estimation, they are giving the customer what they want and, in the process, growing their market share. 

There is more than enough growth to go around, so Radius see it as a win-win for everybody.

Who the winners will be

Speaking of winners… 

The way Radius has excelled in moving into open banking has been through picking the right partners.

They take a lot of things into consideration when picking these partners. 

Overall, however, they aim to be the best at what they do and partner with those who are the best at what they do. 

We live in a world where people don’t want to buy everything from one place — except maybe Amazon, but that’s a different topic — which makes cross-selling difficult.

When it comes to finance, for example, just because someone has an Acorn account doesn’t mean they want to get a mortgage from them — they’d probably turn to Rocket Mortgage.

So, Radius offer the products they believe they do best, while partnering with companies who do the best in other areas. Offering a marketplace is better for their customers. 

Especially in the areas that are still being explored by emerging fintechs. 

And with all these various fintechs out there in these new and exciting spaces away from legacy finance, Phil thinks there will be a lot of winners.

But they will all have something in common. 

“The winners are going to be those who can adapt to change.” — Phil Peters

One look at 2020 and it’s easy to see how quickly the world can change. 

If you want to succeed, you need to adapt. 

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Until next time!

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