The Extensibility Advantage: Flexible Banking Tech for Community FIs
Traditional banks are only just now adopting a paradigm of flexibility with regard to their banking stack, and the data proves it.
According to Cornerstone Advisors, just 31% of bank executives report being even “somewhat satisfied” with their core provider’s product innovation [1]. Most are trapped in slow-moving hierarchies, which makes it nearly impossible to keep up with digital-first competitors. In fact, only about half of bankers are happy with their tech providers' execution and ability to integrate with third parties [2].
“Traditional banks and credit unions operate in long planning cycles, rigid hierarchies, and slow approval processes—a stark contrast to fintechs and digital-first competitors that release new products at lightning speed.” – Cornerstone Advisors
What is Extensibility?
To stay competitive, financial institutions must rethink their tech stacks and embrace extensible, API-friendly platforms that make integration fast and seamless. According to Narmi forward deployed engineer Ryan Siebecker in The Financial Brand, banking tech now falls into three categories:
Closed systems – proprietary cores with limited integration capabilities.
Limited integrations – some openness, but custom development is typically slow and expensive.
Open, extensible systems – API-based platforms that allow plug-and-play third-party connections.
“The difference between the second category and the third category is really speed and ease to integrate,” says Siebecker. “You create API credentials and you flip a few settings…and you have a new user experience.”
And the shift isn't just theoretical. Grasshopper Bank’s SVP of Product, Luther Liang, shared how extensibility enabled them to deploy new features rapidly — with just two engineers and one QA – without needing to hire dedicated technical staff to manage integrations.
“We’ve been able to do releases with a very small development team,” Liang notes. “Historically, fintechs do an excellent job on the user interface and experience… we want to be right there with them on functionality, and this allows us to do it.”
The Future of Flexible Banking
As fintechs and community financial institutions prepare to strengthen their relationships to compete against megabanks, it’s becoming clear that agility and extensibility are no longer optional.
To thrive in this next era, financial institutions must:
Scrutinize their core platforms for openness, speed, and ease of integration
Prioritize API-first solutions to unlock rapid innovation and automation
Choose vendors that act as true partners — not blockers — to growth
Adopt the fintech mindset: iterative, lean, and relentlessly user-focused
Additional Reading on Extensibility in Banking:
Banking Tech Needs to Be Extensible. A Flexible Platform is Key (The Financial Brand)
Smarter Bank 2025 Report (Cornerstone Advisors)
The Next Generation Digital Banking Platform (Cornerstone Advisors)
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