API As Olive Branch? Silicon Valley Bank Seeks To End FI Rivalry

The rivalry between banks and FinTechs has, at times, been tense if not downright combative. Enter APIs to help the two sides coexist more peacefully.

API solutions are doing more than helping two different types of financial institutions find ways to collaborate. By integrating artificial intelligence and machine learning capabilities, companies are relying on API solutions to fight cybersecurity threats and help businesses determine the trustworthiness of a potential trading partner before entering a risky arrangement.

Because these solutions that can help reduce the risk of conducting digital commerce, investors are taking notice and writing the big checks with several AI and machine learning solutions securing millions in recent fundraising rounds. The August edition of the PYMNTS.com B2B API Tracker™, a FI.SPAN collaboration, examines how API solutions are adding new efficiencies for businesses of all sizes and are prompting venture capitalists to make big investments.

Here’s a snapshot of some recent notable B2B API news: 

Cybersecurity was the hot-ticket item for venture capitalists in July, with artificial intelligence and machine learning solutions among the biggest winners in recent fundraising rounds. U.K.-based firm Darktrace secured $75 million for its AI and machine learning program that detects and mitigates cyber threats. With $32 million in fundraising, Israeli firm Deep Instinct secured an impressive haul of its own for its automated AI solution that responds quickly to potential cybersecurity issues.

Across the globe, AI and machine learning APIs are also giving a refresh to the old ways of lending. In the U.S., Headway Capital has been using a digital platform known as Colossus to assist borrowers move through the pre-qualification steps with very little human input. Over in India, Innoviti Payments Solutions is making a big investment in its own platform that provides lending services for smaller merchants.

Lending is not the only assist that smaller merchants are getting on account of APIs. PayPal recently launched a new line of API products to help U.S. merchants broaden their global reach by addressing common trade speed bumps like international shipping, website translation and local payment acceptance. Payment processing could also get easier thanks to a new merchant-focused solution from Bill.com. The company recently released a new solution that integrates with Intuit QuickBooks and allows SMBs to send ACH bank transfers instead of paper checks, potentially saving merchants 50 percent of time paying bills.

Are APIs the ‘common language’ banks and FinTechs need to collaborate?

Banks and FinTechs are often competitors and this has sometimes meant the two sides have had a frosty relationship. But APIs could be the “lingua franca” — or the common language — that both sides need to band together for greater productivity. This is because API solutions can help more established banks find innovative partners to collaborate on modern solutions, while simultaneously helping newer FinTech companies work with these older banks’ legacy payment systems. For the August Tracker’s feature story, PYMNTS catches up with Jason Carone, Silicon Valley Bank’s director of ACH product management, about how APIs are getting rival financial institutions on the same page.

Take a look inside the August edition of the B2B API Tracker™ for the feature story, along with all the latest news and trends from around the space.

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    About the Tracker

    The PYMNTS.com B2B API Tracker™, a FI.SPAN collaboration, serves as a monthly framework for the space, providing coverage of the most recent news and trends, along with a provider directory highlighting the key players contributing across the segments that comprise the B2B API ecosystem.