How APIs are transforming banking services

This new-age tool is revolutionising the way banking is done by enhancing the experience for all stakeholders

API (Application programming interface) is a new-age tool which allows two different systems/applications to communicate with each other in a controlled and regulated manner. A standard user consumes API for tasks ranging from sending an email to doing a bank transaction via an online app. With more and more companies moving their data and operations to cloud, APIs and their management has become very essential.

API product management refers to understanding the needs of stakeholders like providers, partners, consumers and ultimately end users along with coming up with most efficient and sustainable solutions for them. It involves creating strategies to monitor the different stages of API development such as defining user journey, development, testing, deployment, maintenance, monetisation and enhancement/ feature addition over time. In large organisations which have to be compliant with the Governing body’s rules and principles, analysing and minimizing the risk associated with the API and keeping in check all the necessary approvals required before making it available to end consumer also becomes a major task for an API Product manager.

API products offer increased reach, foster novelty and collaboration, enrich customer experience, provide monetization opportunities and enable strategic partnerships. They are invaluable in contributing towards a competitive edge. Let us broadly classify the benefits of Banking APIs to Partners, Customers and Banks.

I. BENEFITS TO PARTNERS:-

API banking offers several benefits to their partners like fintech companies, payment aggregators, other businesses and developers. Some of the major benefits of having API products include Access to Banking Data and Functionality, Collaboration and Innovation, Expanded Customer Base, Streamlined Operations, Leveraging the compliance frameworks and infrastructure already in place with Banks and Authorized Data Driven Insights. All of these assist in creation additional revenue streams which in turn will contribute to progress and sustainability.

II. BENEFITS TO CUSTOMERS:-

API banking products help in building a superior banking experience and providing greater control and convenience. Customers gain personalized recommendations, access to a comprehensive range of services, consolidation of all their financials in one platform, robust security measures are implemented to protect customers from misuse of their data, transacting becomes more convenient and user experience is seamless.

III. BENEFITS TO BANKS:-

Banks which provide API products are differentiating themselves in the ever transforming digital financial space. API products are not only influential in revenue generation, but also help in fostering an environment of innovation and customer/partner centricity. Banks are able to enhance the UX attracting more customers, expand their service offerings and increasing customer touchpoints by collaborating with partners giving a wider range of financial solutions. Using API products will bolster growth with the use of analytics and data driven insights.

Overall, API Banking or Open APIs are instrumental in transforming the banking industry and shaping the future of financial facilities.