NCR, which is primarily known for its ATMs and point of sale hardware, is taking more steps into digital banking.
The Duluth, Ga.-based company launched its Developer Portal this week, a cloud-based platform on which financial institutions can build their own digital banking applications to meet consumers’ financial management needs. The platform was originally built by Digital Insight, the online and mobile banking provider that NCR purchased in 2013.
“Every organization has a strategy for how they want to meet the market niche they’re trying to serve," said Kristen Bernard, senior director of product management at Digital Insight. NCR's goal is "really about enabling financial institutions’ growth through giving them the power to innovate and build on their strategy," she said.
The self-service portal for internal developers at financial organizations allows them to view and test application program interfaces, access a software development kit and an app gallery of applications already developed through the platform.
Bernard called it a “development hub for innovating on top of our platform,” adding the company “wants to create an ecosystem among our clients where they can collaborate with each other.”
Without getting into the specifics of the pricing, she said there’s no cost explore the system and think of uses for it. A about 50 NCR clients are experimenting with the system, she said, and a handful of clients are in active development and a couple have gone live with it.
To industry followers, this was expected. It’s been three years since NCR bought Digital Insight, for its online and mobile banking software. Now, late in 2016, mobile payments still haven’t reached a tipping point but mobile devices have broadened the scope of interaction between consumers and banks.
“This developer portal is an extension of that move toward digital channels and omnichannel, and I see it as a necessary competitive response," said Rob Berini, global service line lead for omnichannel customer acquisition and servicing at the consulting firm Genpact.
NCR is active in the financial services, retail and hospitality industries. Like Apple has evolved from the earlier Apple Computer, NCR – formerly National Cash Register – is gunning to become a provider of more services to more markets. Its hardware would simply become the channel through which NCR delivers those services.
The customer experience of buying tickets, food or reservations is often portrayed as a mere line item on a banking statement. Financial companies should provide a richer set of data about transaction information and how they connect.
“This platform is one of the first steps we’re taking in the financial services space to enable our clients to access digital banking," Bernard said. "Over time we will add to increase that capability.”
By embedding a developer's sandbox into a payments company better known for in-store or ATM transactions, the hope is that it will bring together the capabilities that are truly omnichannel, said Michael Moeser, director of payments at Javelin Strategy & Research.
“Having NCR come in with this capability paves the way because they are an approved vendor,” he said. “Banks have legacy systems that need to be supported; they have requirements, they need to use trusted vendors.”
The strategy also helps NCR maintain those relationships, he said. “NCR, having a large legacy business it needs to protect, also needs to look forward and say, ‘how can we do that?’”
The new offering comes as banks face the realization they will have to partner with fintech startups to keep up with consumer expectations for on-demand service. Retail payments generated 74% of total payments revenue in 2015, according to a report by Boston Consulting Group with Swift. They’ll continue to dominate through 2025, accounting for 71% of total revenue growth and reaching nearly $1.5 trillion in 2025. Meanwhile, digital payments could soar to to 20% by 2020 of total retail sales worldwide from a mere 6% today. That includes in-browser, in-app and proximity payments.
North America alone generated $242 billion in retail payments revenues last year, according to the report. North America was also home to 60% of payments-related investment in fintech startups between 2010 and 2015.