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Nationwide digital chief: API market 'immature'

Written by Hannah McGrath

The market for API-driven financial services such as Open Banking is still in the “immature” stages of development, according to Nationwide’s head of digital and mobile.

At an event organised by cloud platform service Amazon Web Services yesterday, James Smith, director of mobile and digital at Nationwide Building Society, said his organisation was currently at the iterative, testing phase for a number of API integrated products as part of a £4.1 billion technology transformation planned for the next five years.

Asked about the race amongst established financial services organisations to provide a digital offering based on integrated services such as Open Banking, he explained: “Looking at the marketplace right now I’d characterise it as being immature.

“There’s lots of different organisations making lots of little bets, iterating, testing and seeing what’s what. And that’s broadly the same space that we’re at.”

Application Programming Interfaces (APIs) enable the sharing of customer financial data across a number of online and digital channels including third party applications, offering developers the potential to create more innovative products and consumers greater control over their finances.

Nationwide, the UK’s largest building society, announced plans for a £4.1billion investment in new technology in September, including a wide-ranging re-platforming of digital assets and the creation of up to 1,000 new jobs. Smith said he hoped to be able to reveal the location of a new tech hub early next year.

Smith, who heads up Nationwide’s long-term digital and mobile strategy, said the financial services industry was in the grip of a “technology revolution” that would “radically change” the lives of consumers along with their expectations of financial services providers.

“The best thing any organisation can do is recognise that you don’t know and put in place the technology platform, the processes and people that allows you to be quite nimble because I think that is, without wanting to get too Darwinian, that ability to adapt is going to be the crucial factor,” he said.

The building society began its transition of digital assets to Amazon Web Service’s cloud-based platform last year. Smith described Nationwide’s approach to digital transformation as a gradual, customer-conscious process rather than the often disruptive, fast paced culture change that can accompany a shift towards mobile and online.

“There are organisations out there that have done a kind of overnight, you come in and everybody suddenly works in a new way, “ he said.

“For us that would not have been the right thing to do, it’s ultimately delivering service for members, knowing our current obligations and deliver against them and I think that it also gives us the opportunity to get things right as we scale.”

The mutual has recently launched the ‘My Nationwide’ app, which uses artificial intelligence (AI)- driven chatbot technology to support first time buyers in the mortgage application process.

“We’ve got a chat bot that supports the first time buyer journey and you can essentially just hand it off to a real person,” he said, explaining that the chat begins online but progresses to interaction with a human adviser.

“So it’s like Whatsapping with your building society, which for that quite narrow use case... it’s proving to be really useful, so it’s a good example of going narrow but quite deep,” he said.

The app is part of the building society’s increasingly ominchannel approach, which emphasises the need to offer digital solutions whilst preserving the close customer relationship with Nationwide members through in-branch advice and one-to-one interaction.

“As an organisation we need to have a very strong digital proposition to be able to respond to what’s happening from an Open Banking perspective and we need to be able to retain that ability to have a physical personal interaction. I think that whatever we do from a digital standpoint we need to make sure that we retain the essence of who we are,” he added.

Earlier this month Nationwide launched a £3million initiative aimed at encouraging FinTech startups to develop Open Banking apps to help consumers facing financial challenges.