In the past few years, the financial services industry has faced a lot of changes powered by advancements in technology. The industry invested heavily in online banking two decades ago, something that brought about a lot of changes.
However, that innovation did not focus a lot on the demands of the end customers until recently when APIs infiltrated the industry and came with new innovative solutions for the customers.
APIs (Applications Programming Interfaces) are programming interfaces that enable communication and sharing of data between applications. They dictate the requests sent by the applications, how the requests are sent, the responses received, and the data formats used when sending requests and receiving responses.
The financial services industry has invested heavily in APIs to improve the ability of its systems and to offer its customers solutions that meet their demands. For instance, customers that want to access real-time and historical financial information are able to do that with a click of a button due to the stock price API that the financial institutions use.
APIs Are Changing the Financial Services Industry
APIs are playing a significant role in changing how the financial services industry operates. To start with, they are boosting business for this industry by answering both business and customer needs quickly.
Initially, businesses in the financial services sector would struggle or take long periods of time before they could add new functionality to their applications. Furthermore, adding a new functionality often meant that they had to develop the entire application again, spending much more time and resources.
However, this has been changed by APIs. Today, businesses in the financial services industry are able to address customer demands whenever they want to. For instance, if they want to add new functionality to an already existing application, they are able to get an API that has the same functionality and implement it.
In cases where an API addresses some of their needs, they are able to customize it, edit its code, and modify it to make sure that it meets all their requirements. Compared to before, this takes a very short period of time, allowing the financial services industry to release new innovative solutions quickly.
Building APIs Framework
After realizing the benefits that come with the implementation of APIs, financial institutions have been left with no option but to build an API framework. This framework is supposed to have APIs that address the needs of their clients without requiring a lot of effort from the client-side.
For example, clients should be able to access all their financial details with a financial institution from a variety of devices. This should focus on devices that the clients use the most – handheld devices. A customer should never be forced to visit a bank’s branch to open an account.
In addition, they should build an API framework with APIs available to the public, or rather to third parties. The public, in this case, refers to other fintech companies, independent developers, or even their partners. This will help the third parties to integrate the APIs into their stock market software in a bid for them to serve their clients.
For example, smart financial institutions have provided third parties such as booking companies with APIs that they can use for payments. Their customers can pay for bookings directly from the bank without even contacting the bank.
Technology has completely changed how businesses operate. It has forced businesses to come up with applications that meet and adapt to changing customer demands. This has also been boosted by the adoption of IoT devices that communicate and share information using APIs. Financial institutions have been left with no option but to adapt to the changes in technology and adopt the use of APIs.