An investment from SunTrust Bank will enable Wilmington-based Apiture to accelerate work on an open application program interface (API) platform, spurring growth for its customers and itself.
In the announcement about the investment, Apiture did not disclose the amount. But in comments during a recent quarterly earnings call, Live Oak Bancshares Chairman and CEO James "Chip" Mahan said that SunTrust had invested in Apiture in "a meaningful way." Apiture is a joint venture of Live Oak Bancshares and Atlanta-based First Data.
An API is a set of routines, protocols and tools -- essentially, building blocks -- for creating software applications, and the API specifies how separate software systems should interact. It's vital that financial software programs be able to communicate with each other to ensure smooth digital banking experiences for customers.
An API building block approach will allow Apiture to integrate seamlessly with its financial institution customers' banking systems, according to Apiture President Christopher Cox.
“Apiture and SunTrust share a common vision around the need for banking technology to evolve in a changing market,” Cox said in the company's announcement last week. “Apiture’s mission is to enable financial institutions of all sizes to attract new customers and better serve existing customers through digital channels.”
Besides being a part owner, Live Oak is also a major customer for Apiture, and the fintech firm plays a key role in providing the software Live Oak will need to grow and provide innovative cloud-based technologies to its customers, Cox said Tuesday.
In the quarterly earnings conference call, Mahan also mentioned his company's goal of having an integrated array of financial technology from three firms that will allow his company to speed its growth. By creating the API first, developers will use the same building blocks, avoiding development backtracking.
"By mid-next year  we intend to be in the market with a combination of everything Finxact, Apiture and Payrailz to offer a fully API-first environment," Mahan said, referring to the collaboration that will happen among the three firms. Finxact provides cloud-native core banking technology. Payrailz offers mobile and online payment technology.
"These three companies share a philosophy about cloud-based technology and API-first," Cox said Tuesday. "It will be easy for these different systems to talk to each other. Live Oak can't be constrained by technology. They need to move quickly and they need flexibility . . . to partner with whoever can help Live Oak deliver innovation."
Apiture's new technology will also expand its own capabilities. At present, the fintech firm has more than 500 customers. Although a few customers have assets of $5 billion or more, the majority are small, at less than $1 billion in assets, Cox said Tuesday.
"We have historically served, and will continue to serve, small financial institutions," he said. "With the new technology, however, we are positioning ourselves to serve larger ones as well."