Banking and Benefiting from API’s
The communication between Internet banking systems and third parties are made possible with the use of an application and programming interface (API). An independent payment provider, for example, will be able to access particular data about a certain user through his bank account through an API. Of course, before a banking API can do this, the customer’s consent must be secured.
The biggest benefit of API in an era where time is equivalent to money, is the elimination of repetitive steps when it comes to new customer verification. In short, the technology allows independent third-party financial service providers to move faster and easier. A successful online banking login is all that will be needed. A simple example is credit scoring, which can be completed in a matter of seconds, with data being accessible from a client’s bank account via the API.
There are different kinds of API’s with different target uses and solutions, but these are mainly categorized into core banking, plug and play, cards/wallets/transfers, and acquiring.
A lot of today’s biggest banks and financial institutions have been existing for more than a hundred years, but that doesn’t mean they’re not updated with technology. To make this a reality, API’s helped them.
With the creation of digital portals, lending and investing can now be done over the Internet. And of course, what make these portals work are API’s that tackle information updates and retrievals from various databases. These very digital portals can also depend on API’s to help customers in different ways, such as currency exchanges, finding nearby locations, and so on.
Peer-to-peer payment transfer programs have recently taken off, especially among younger professionals who prefer cashless payments. With bank accounts being linked to such platforms through API’s, financial institutions are able to increase customer satisfaction. With increased pressure coming from fintech and alternative providers on banks and other financial institutions, many organizations are resorting to advanced analytics to be able to meet the present and future needs of their clients. For instance, they may adopt fraud analytics solutions for more efficient theft detection, and the same technology can also be used to predict future needs of current customers. Such type of advanced analytical action relies on API’s to gather data from different databases and other sources.
Even as most banks are already using APIs for their internal information flow, many of the are still trying to figure out how to merge functionality from business partners. However, API’s can deliver Innovation and functionality to the business by increasing system and data availability to outside parties, as well as establishing new income streams for both organizations.