With the advent of the Application Programming Interface(API), we have seen exponential growth in the banking industry. Did you know that the introduction of APIs in an organization has the capability of increasing their revenues by 10x? It allows the distribution of data among different software among different systems across the globe. However, one can easily use the functionalities of other apps or software through APIs. That is why the API banking platform has gained tremendous popularity in the banking industry. Organizations are curious to get their hands on this outstanding platform.
Nowadays, we all are addicted to online shopping and do online payments via smartphones. But have you ever thought about it’s working? However, these devices & apps never have your banking information. Isn’t that strange? So, the biggest question is who is providing all this information? All the information comes on to us with the help of API banking.
This write-up will explain to you all about API and its relation with banking platform plus, API marketplace banking.
Table of Contents
Banking API Introduction
Banking API work as an intermediary between the software enabling streamlined and smooth exchange of information. It has a significant role in the Banking as a Service (BaaS) industry. Let’s take a look at an example of API banking
We’ll dive into the use cases of API banking involving embedded finance and banking as a service (BaaS)
- Banking As a Service (BaaS)- Nowadays, the API banking platform is being used by several banks in order to offer a digital banking experience to their clients. It encompasses mobile banking also called net banking and online banking. Did you know that API is also helpful in linking the bank’s services to fintech applications? Yes, it further widens the customer base allowing them to open saving accounts, debit, and credit cards in those apps.
However, if your API integration is not from a reliable API-providing company, your customers won’t be enjoying premium digital banking services. Additionally, you will need to maintain a decent budget for building in-house investment. Henceforth, DigitalAPICraft is the most recommended one for API integration.
- Embedded Finance- The process of embedding financial tools & banking into non-financial apps is called embedded finance. Here, we have come up with three examples given below-
- Embedded Payments- Nowadays, customers moving to digital payments rather than traditional. They can easily pay via apps. For Example- Riding share businesses like Uber, Ola & Lyft.
- Several Other Embedding– In fintech applications, banks are allowed to embed their services ensuring users use money. For Instance- The Robo advisors for investing.
- Embedded Lending- In several websites, EMIs options are embedded which is called embedded lending. Now, customers have good opportunities of paying in installments or EMIs if they are facing financial issues.
Types of APIs
- Private APIs — Private APIs are those APIs that are being used in the traditional banking organization. These APIs are supposed to improve the operational efficiency in the enterprise.
- Partner APIs — These types of APIs encourage the expansion of an organization and barely, it happens between a bank and third-party partner.
For example- When an enterprise has a partnership with API, bank can easily start working with third-party companies separately in order to create loan. Mostly all banks are gradually shifting from private APIs to public ones.
- Open APIs — Open APIs are those where data is available to third parties via API integration enabling them to enhance their products & services. In this API, banks are also concerned about the privacy & security of clients’ information.
The Advantages of API Banking for Banks
The advent of API banking in banks has brought a revolutionary change in the industry by enabling the digitalization of services. Now banks can serve their customers with utmost care especially to those who are far away from physical branches of banks. However, faraway people always prefer net banking. Isn’t it?
According to FDIC, approximately one out of 5 banks have accessed their bank accounts by bank tellers in the 2019 year. But these numbers have declined after the establishment of API banking. As more & more people are considering online banking as their primary mode of transaction. Henceforth, this indicates that API marketplace banking & API Banking Platform has gained remarkable reputation and still has room for exponential growth.
Furthermore, the surge of Covid-19 cases has also been pushing banks towards digital transformation. Approximately, hundreds of branches have opted for digital banking in 2020.
Several Other Benefits Associated With API Banking
- The major benefit of API in Banking has eliminated the complicated process of banking. In simple words, financial service providers got a great advantage as all tasks have become a cakewalk.
- API banking offers customers all access to different banking products and offerings. In the case of B2B customers like SMEs & start-ups, they get access to several services like accounting mass payouts, virtual cards & expense management.
DigitalAPICraft- The Best Platform to Manage API Marketplace Banking
DigitalAPICraft is one of the best online platforms when it comes to API integration. We’ll help you to build a robot’s API banking services that offer exponential revenues. When you choose, you’ll be entitle to the following benefits mentioned below:
- It aids in generating higher revenues.
- It bring-forth technical innovation & stimulates business
- It has Wider Customer Scope
- Infinite Business Opportunities
- Ease integration of backend data and applications
- Extend customer reach and value
- Support sales and marketing activities
After considering the latest API banking trends, it’ll open up more opportunities in terms of different services & products to customers and satisfy them at noteworthy standards. So, what are you waiting for? It’s high time to adopt an API banking platform and reach out to DigitalAPICraft.