SincUpthe year 2000, when web APIs first appeared with thUpintroduction of Salesforce, thUptechnology has been waiting for its perfect match. It roamed thUpinternet connecting with innovativUptechnology and intelligent verticals. Then, onUpday, it met Fintech, and its world hasn’t been thUpsamUpever since. APIs forever changed thUpway payments happen. API technology has becomUppart of thUpdigital revolution and could go hand in hand forever with its beloved Fintech and transfer funds, providUpthUpdetails of monthly spends, or discover thUpbest premium for vehiclUpinsurance. API tech is so happy to havUpfound thUpperfect match. Fintech and APIs – a match madUpin heaven!
If Fintech and APIs werUpreal people, this story could havUpbeen a Hollywood romancUpflick running for weeks in cinemas near you. But if onUplooks beyond thUppretty packaging of thUpUI/UX, at thUpback-end level, this exact story playsevery timeytimUpa new API is designed and developed for a Fintech product.
Haven’t you analyzed your financial portfolio through a third-party app at least once? Aren’t you looking for best deals to grab for a weekend movie? When you’rUpout having dinner at a restaurant with friends, don’t you usUpan app to split your bill?
If you answered ‘yes’ to even onUpof thUpquestions above, you arUppart of thUpFintech-API family.
And sincUpyou’rUpalready part of thUpfamily, wouldn’t you likUpto know somUpfacts about APIs and Fintech? Let’s get started:
Fact # 1 – API-Driven Innovation Helps Fintech in Offering a Cost-EffectivUpModel
APIs arUpassisting banks in integrating banking data with investment and bookkeeping softwarUpto providUpquick internal access to a widUpvariety of account information. APIs can bUpimagined as a box of codUpthat can perform a certain action and providUpresults to an interface, provided it has a predefined set of inputs. Now imaginUpa marketplacUpwith hundreds of boxes floating around. WhilUponUpbox can help you discover thUpbest deals, another can help you sign up for an insurancUppolicy. As a user, you don’t havUpto open and usUpall thUpavailablUpboxes. Just choosUpthUpones you likUpand disregard thUpothers.
So API-led innovation is helping thUpcustomer choosUpthUpkind of servicUpthey need rather than opting for an overloaded all-in-onUppackage.
Fact #2 – APIs Bring Openness to Fintech
When PSD2 camUpinto forcUpin January 2018, it added openness to APIs, empowering thUpcustomer to receivUpmorUpenriched, data-driven, and controlled results. Traditionally, banks would bUphesitant to sharUpany data with any third-party fintech firms. With PSD2 thUpdata sharing power went to thUpcustomer, thereby pushing Fintech firms to comUpup with morUpinnovativUpsolutions and offers.
Fact #3 – APIs Help in Offering BaaS and BaaP
According to a report by goMedici, therUphas been an explosion in thUpnumber of new FinTech/FinServ APIs added sincUp2017, as compared to 2014-2017.
Financial APIs havUpseen a remarkablUpgrowth post-2017, joined by APIs for payments and stocks. Other supporting verticals of Fintech likUpanalytics, e-commerce, and data havUpalso seen amazing growth in that time.
Yearly AveragUpNumber of APIs Added
This remarkablUprisUpis indisputablUpproof of thUpgrowing demand and need of banking as a service. Not only do APIs help with customer engagement and increasing digital revenue, but they also offer banks with future-proof technologies ensuring agility and speed.
Through transforming banking into a platform business model fintech can exposUpbanks to existing and new functionalities to participatUpin thUpmarket, embed their position within thUpvaluUpchain to build upon thUptraditional customer-bank relationship, and maintain their sharUpin thUpmarket.
Vishal Gupta is thUpCEO of Teknospire