Balance Sheet as a Service

A World of Platforms Economic activity is migrating to digital platforms as software eats the world. In this platform world connectivity is provided by Application Programming Interfaces (APIs) and everything becomes a service. Consumers and businesses interacting with platforms have a range of financial preferences: sellers want to be paid early, buyers want to pay later, the seller wants to be paid in RMB but the buyer has USD, and so on. These financial preferences will be served within the platforms by one of three parties: banks, fintechs... or the platforms themselves. If banks wish to remain relevant, they need to publish the right APIs to deliver financial services to consumers and businesses transacting through E-commerce platforms. What is a Bank? Look beyond all the individual lines of business in a bank and you get to the heart of what a bank is: a balance sheet. Car loans, mortgages, savings, credit cards, corporate banking, etc. are means to generate assets and liabilities. The bank is the balance sheet. Balance Sheet as a Service Tony McLaughlin Emerging Payments and Business Development, Treasury and Trade Solutions, Citi Banks need to deliver responsible, instant lending through standard APIs to E-commerce platforms. As banks consider their future in a world of platforms they will begin to open up a panoply of retail and wholesale services through API. These APIs may not initially expose the core, but the inevitable destination is the provision of balance sheet through API. Whether you call it ‘Platform Lending’ or ‘Balance Sheet as a Service’, banks will realize that in order to deliver their core service into digital platforms, lending will need to be delivered through APIs. “No one wakes up in the morning thinking about completing a transaction, yet we all know what both good and bad looks and feels like. APIs allow companies to more easily combine products, capabilities and services from both inside and outside their organization to create compelling user experiences for their customers.” Ken Moore, Executive Vice President Products and Innovation Head of Mastercard Labs Treasury and Trade Solutions