APIs in Fintech: All You Need To Know

Technological and digital innovation has often been credited with having significant strategic implications for firms by shifting the competitive landscape and changing the market dynamics in an industry. 

The recent wave of digitization in the banking industry – more specifically in payments – and the use of access and network technologies have created various opportunities for new entrants such as FinTechs and challenger banks to claim some market share, but also for established banks to reconsider their market position and rethink their value proposition to their customers.

You might have seen a huge difference in the banking industry in recent years. There are mainly two reasons behind this: One is the financial technology (fintech) organizations and the other is the use of application programming interface (APIs). With the coming of these technologies like fintech and API, people are able to do multiple things with their money sitting at their homes even without reaching the banks.

The use of APIs for fintech has been made possible in part by the rise of open banking. 

Now banks can provide third-party providers with access to their financial information by taking permission from their customers. This helps in allowing for the development of the applications and programs with the help of which financial lives can be managed better.

Fintechs and APIs: Overview

By Fintech we simply mean those companies which make use of tech to provide financial services to customers. The fintech space is indeed the biggest one. There is everything included from apps designed to help people create budgets to Robo-advisors, and from payment processing programs to blockchain technology.

API is “a way for two computer applications to talk to each other over a network using a common language that they both understand”. APIs can be used by firms internally, to integrate diverse systems and allow for the exchange of data across different departments by performing API “calls” or sending queries to an API server.

This systematic way of sharing data can make it easier for internal teams to collaborate and access information when and how they need it, thus helping to interconnect services and business processes across the organization as well as improve employee productivity and even create better omnichannel experiences for customers.

In addition to having a variety of different uses, APIs provide numerous benefits to the fintech companies that use them.

Banks can no longer close their eyes to the necessary digital transformation. If they also want to be economically successful in the future, they need to modernize their systems and processes as quickly as possible. Therefore, it is worth making the transition to the platform bank, as it enables the transition to an API ecosystem that allows the use of current technologies without replacing legacy systems.

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Open banking via an application programming interface (API) is an integral component of the future of banking. Some parts of the industry will welcome that fact. Others will not, but in order to prepare, we must accept that it is a fact. 

In the brave new world of API, customers will be able to track their payments in much the same way they might track a parcel being delivered by the likes of courier services, Customers will be able to see where a payment is at any single point in its life cycle. They will be able to see who is handling it, who is delaying it, and, arguably most importantly, just who is adding to costs.

“API” Application Programming Interface: Beyond the Concept

The successful design and high performance of APIs are becoming key points for a variety of applications. The performance of APIs can increase when criteria such as programming methods and programming languages and/or environments are selected appropriately. 

The applications are often built on application programming interfaces (APIs) based on web technologies such as HTTP (HyperText Transfer Protocol), REST (Representational State Transfer), SOAP (Simple Object Access Protocol), and JSON (JavaScript Object Notation), which can be used for other operations.

This feature enables the development of increasingly complex third-party applications, which repeatedly use existing content and services. These applications, which convert content from various applications into an integrated experience can be created by developers who are not directly associated with the original developers of reuse services.

APIs in the Lives of the Coders

An application programming interface (API) is a programming style that exposes the inputs, outputs, operations, and data types of a piece of code in a standard documented way. In the context of websites, an API is a definition of the generic format of URLs that will return data from a site, as well as information about the structure of the data returned by each URL.

This makes it easy for other software developers to interact with a site’s API, as they know how to format requests for information and how to process what is returned.

Banking and APIs

What is at stake for financial services giants is not just the digital transformation wave but an imminent complete reboot enabled by technologies (cloud, mobile, Open platforms, and API). It will enable financial institutions to better serve their clients and also to better connect financial services to the rest of the world, something especially true for small business and commercial banking activities. Fintech startups are at the vanguard of this shift and are picturing the future of the industry. The banks earlier had systems that were never meant to be open but with new regulations and market constraints, all of it has changed.

Case Study: Open Banking, APIs and Digital Transformation

1. World® ’16 Case Study: Open Banking, APIs and Digital Transformation—the Banco Original Story Guga Stocco, Banco Original David Bressler, CA Technologies DO3X86S DevOps

2. © 2016 CA. ALL RIGHTS RESERVED.@CAWORLD #CAWORLD © 2016 CA. All rights reserved. All trademarks referenced herein belong to their respective companies. The content provided in this CA World 2016 presentation is intended for informational purposes only and does not form any type of warranty. The information provided by a CA partner and/or CA customer has not been reviewed for accuracy by CA. For Informational Purposes Only Terms of this Presentation.

3. © 2016 CA. ALL RIGHTS RESERVED.@CAWORLD #CAWORLD. Abstract Digital transformation is forcing every industry to adapt to emerging technology patterns, with finance and banking at the forefront of change. One way to explore digital transformation patterns is through the lens of customer experience, and how delighting customers can become a north star for successful transformation.

In this session, Guga Stocco, head of strategy and innovation at Banco Original, the first and only 100% digital bank in Brazil, and David Bressler, VP, Vertical Markets at CA API Management, share a customer experience playbook for successful digital transformation and the Banco Original story of embracing Open Banking to rethink what it means to be a bank. Guga Stocco Banco Original Head of Strategy and Innovation David Bressler CA Technologies.

The Best UPPLABS Fintech Practices In Detail

Over the last 5 years, UppLabs mastered the skills and gained experience in creating reliable, secure, and sophisticated Fintech products. We have strong knowledge of Fintech trends and innovations, constantly learn, visit the best fintech conferences, and have the best team of professional web and mobile developers. Our experience shows that the tech stack you use will determine the possibilities and limitations of your product.

Final Words

This is how I have tried to explain some of the case studies along with explaining what is API and the role of API in the finance industry. Well, it could be said that with the implementation of API, the financial industry could be seen to have improved so much.

So, if in case you belong to the financial industry, you should hire API developers in India to get the best services for your business.

Good Luck!