APIs? Check. Fast Payment Portals? Check. Knife Sharpener? Check
Suresh Ramamurthi has been on American Banker's radar for some time now. In December, we named the chairman and chief technology officer of CBW Bank our 2015 Innovator of the Year.
Ramamurthi, one of the finalists for the 2016 Digital Banker of the Year, keeps innovating. In the past 12 months, he and his team have introduced a health care payment portal based on a faster payment platform they created. They've set up an API marketplace that customers have already begun using to build their own products and services atop the bank's homegrown technology. And they've created an app for cloud-connected cars.
All at a $17 million-asset bank in Weir, Kansas, population 661, where farmers still stop by the branch to use the knife sharpener. Ramamurthi and his wife took over the bank when it was struggling to survive after the financial crisis, turned it around and have used it as a launching pad for new technologies.
Ramamurthi has transformed a 123-year-old institution with one branch serving a dusty Kansas town into a seedbed for disruptive financial technology not to mention a wildly profitable generator of fee income.
Though lukewarm about Bitcoin itself, bankers see promise in the technology it runs on, specifically the distributed ledger, for efficiency and security improvements in areas like payments and securities handling.
"This bank and Suresh himself look at processes that are broken or that provide an unfavorable or lackluster experience to the end user, and try to find a way to fix them, as a banker and a technology provider," said Jacob Jegher, senior vice president at Javelin Strategy & Research. "For a very small bank, he's able to do a lot."
His years at Google give Ramamurthi some of his edge, Jegher said. "He says, 'I'm going to approach this like a technology project — if it doesn't work out, I'm sure there are things I could learn from it and apply to my future development efforts.' "
The technology behind CBW's new portal and many of its APIs is a system built by Ramamurthi's team at Yantra Financial Technologies (where he's also CEO) that uses debit networks to instantly disburse payments across multiple channels, including cards, the automated clearing house and internal systems.
The health care portal uses the faster payment platform to process and complete payments for claims. Doctors and hospitals can use it to see what they have billed for their services and what they got paid, and then direct the money to any bank account. One doctor's office already uses it to determine the timing of payments and make funds available in real time.
"The market is big. There's almost $2 trillion in health care payments happening in the country," Ramamurthi noted, referring mainly to the payments that insurance companies make to providers after adjudicating claims. "It's a very complex, many-to-many process," he said.
On the API front, the bank's new application programming interface for its faster-payments platform is being used by an online lender that wanted to improve its competitive advantage by being able to underwrite a loan in 30 seconds or less. It's using the bank's technology to deliver funds in real time as soon as a loan application is processed. CBW works in the background, debiting the lender's account and sending the money out to the customer.
This year, Ramamurthi says, CBW Bank is likely to launch an API marketplace for certain industries including, potentially, money services businesses.
"You would have access to disbursement of funds to a number of countries through the API," he said. "Which means you can now focus on the customer experience, customer acquisition. Everything else is abstracted to a couple of APIs."
Is he OK with the idea of acting like a utility in this case?
"As long as I'm making money, yes," Ramamurthi said.
Another idea he's kicking around is SKU-based lending, in which consumers could point their smartphone to anything for sale on the web or in a store and obtain financing for it, with the stock-keeping-unit number providing the product information.
CBW could potentially provide a "buy now, pay later" button on any SKU through an e-commerce engine.
"Say you're able to browse and see something you like for $500; we should be able to tell you in 30 seconds if you qualify for a loan, if marketplace lenders will finance it," Ramamurthi said. "If so, we will deliver the money and you will then owe $500 to the lender."
Ramamurthi also recently created a "commerce-enablement" application for refueling a cloud-connected car. It checks the vehicle identification number to ensure it's the correct car associated with the account and views the miles since the last fill up to confirm that the transaction makes sense. This could be used, for instance, by a truck-fleet company.
"We built it, it works, but consumers don't want to use it because they don't want to be tracked," Ramamurthi acknowledged. Corporations are interested in using it for fleet tracking.
That brings up another reason the bank is opening an API marketplace — to let others write applications and figure out if there's demand for them.
"We cannot write 100,000 apps," Ramamurthi said. "We said, 'Let us open it up as a marketplace and let other people do it.' "