HOUSTON–Sharmir Karkal, who co-founded Simple and then led the organization until it was acquired by BBVA, has now accepted a position with the bank as head of open APIs.
The reason, said Karkal, is he believes that in opening BBVA’s core platform and services and enabling others to build companies on top of these will help the bank to build a new business.
“It’s hard to believe now, but when Amazon Web Services (AWS) launched in 2006, people wondered why an online retailer was launching a new business offering companies server capacity from its own technology platform,” Karkal wrote in a blog posting. “I think that question has been answered fairly robustly: In the quarter ending in December 2015, AWS had revenues of $2.4 billion and operating income of $687 million. Year-on-year, it grew 69%. This from a business that isn’t even 10 years old. Essentially, Amazon has built the world’s fastest-growing technology business (yes, faster than Google and Apple) by letting third parties build businesses using its technology platform.”
Karkal noted Twitter and Facebook have also done similar things.
“The industry jargon for this process is ‘open APIs’ – open application program interface,” wrote Karkal. “There is huge demand for these core services in areas such as customer authentication, money transfer, accounts, cards, and transaction data. $12bn was invested in financial technology start-ups in 2014 (according to Forbes) alone – a vibrant financial technology ecosystem that needs access to products such as ours.”
Karkal said he recognizes that building an open API platform for banking is a huge challenge given the need for security and privacy around consumer data, so it is starting slowly.