John Pitts, head of industry relations and digital trust at Plaid and Jaime Lopez, principal developer advocate at Jack Henry, shed light on the transformative role of Open Banking beyond the nation’s top financial institutions, during a Fireside Chat at Open Banking Expo USA today (June 26).
During the discussion, titled ‘Beyond the noise: The future of digital banking at every scale’, Lopez offered critical insights into how community banks and credit unions are being digitally empowered.
Pitts opened the discussion with a striking figure: while 114 million accounts in the US are now connected via API, just 10 to 15 of the country’s largest banks account for the bulk of those.
However, the often-overlooked long tail – comprising nearly 9,000 small and mid-sized banks and credit unions – is increasingly API-enabled, largely due to partnerships with core providers like Jack Henry.
Lopez highlighted that many of these institutions may not even realise their systems are already API-capable, thanks to their core and digital banking providers.
Pitts asked how Jack Henry is “helping them speed their capabilities and make sure that they’re giving their customers the experience they want as the banking industry continues to digitize at a faster and faster pace”.
“Part of it is participating in industry,” said Lopez. “So whether that’s working with major data aggregators like Plaid, whether that’s participating in the Financial Data Exchange, in its working groups, task force, and making sure that the bottom 9,000 are not left out of the discussion, but that it’s truly open for everyone.”
The conversation also touched on “disruptive factors” reshaping financial services: Open Banking, faster payments, digital wallets, stablecoins, and generative AI.
Lopez called these “huge technology shocks” that smaller institutions must navigate without the resources of the large banks. “We want to uplift them so they can hopefully compete with the top 15,” he said.
Pitts pointed to the “scale” of the US market, particularly in comparison to the UK, which has nine large banks that were mandated to implement Open Banking.
“You need to think about how to deliver that Open Banking experience at the scale and the reality of what the US market looks like,” he added.
“It means thinking of this as a core required infrastructure where everyone can then build competitive practices on top of it, rather than viewing the actual pipes as the way they somehow eke out an extra couple bits of revenue.”
“The amazing power of technology is its ability to scale at effectively zero marginal cost,” said Pitts.
Lopez echoed this sentiment: “Our goal is not just to support, but uplift, everyone.”
Infrastructure-led partnerships, like the one between Jack Henry and Plaid, are ushering in a digital era where even the smallest institution can deliver big-bank experiences.
Further reading: Mastercard, Lendio highlight Open Finance innovation for SMBs at OBExpo USA
