How Open Financial APIs Will Lead to Integrated Banking

If there were ever a time to develop a banking app it would be now. It is estimated that a quarter of the top 50 global banks will have a banking app store within the next two years. A plethora of 3rd party banking apps have emerged in recent years, causing trouble for slow-to-adapt banks. Banking apps, and their ecosystems, offer banks a multitude of new revenues streams, as well as help to broaden partner and user bases. For those less convinced of app viability, a cursory glance at market trends should be convincing enough. Business is going paperless, and those unwilling to accommodate customers needs will be left in the dust. The people want quick, accessible, and secure banking, and they want it now. In this article we will look into the future of financial APIs based on an article recently written by Swaminathan Mahalingam.

Indeed, banking APIs can facilitate business beyond customer ease and mobility. They make it easier to reach disabled customers and to reach customers in multiple languages. Furthermore, the more accessible APIs are for developers, the more developers can drive a business into new markets and reveal new capabilities. This, in turn, encourages developer and customer participation, creating a 3-tiered dialogue between provider, developers, and customers. The developers reach new customers with new technology--these new customers consume and comment on existing services- the provider can then consume customer feedback thereby ensuring customer needs are met, but also potentially revealing new business opportunities. By staying on top of developer and customer needs, providers put themselves in a good position to incorporate any new tech that might be released into the market. However, its important to note that in the world of banking, security is of upmost importance. Thus, a balance must be struck between open platforms and technologies, and security. 

With that being said, adaptability is the second-most important tenant. Make your API or app easily incorporated or integrated into other programs and applications. If you’re developing an API, this means setting up logically designed forums and developer portals. Make sure developers understand the full breadth of your API by including an explicit list of capabilities, FAQs, descriptions of different versions, and code samples including reusable artifacts such as micro-processes. This might seem like more work upfront, but by facilitating integration, providers encourage collaboration and connectivity within their ecosystem. This has obvious benefits. 

Adaptability is also important insofar as customers and developers can customize their access to your interface. Keep in mind that APIs and apps can be used internally between employees, partners, regulators, and other banks.  Also consider the variety of new and trendy services banking apps and APIs provide. For instance, some offer access to digital banking advisors, whereas others make it easy to track spending and manage assets. Incorporate as many diverse services as possible.

It is also important to establish a well thought out monitoring system.  As a provider, you need to know everything you can about quality assurance. Are there issues with latency? How accurately are actions being executed? In an ecosystem where apps are dependent upon peer runtime, these considerations must be address. But also, take time to examine what resources are being consumed, what events are occurring, and how that data can be statistically analyzed to reveal meaningful patterns and projections. 

Lastly, make sure to establish guidelines. Make it easy for developers to understand what they can and cannot do, and how they can monetize your service. This includes creating detailed legal contracts and policies, and outlining possible scenarios where confusion could arise. The more you can be clear and concise about what you have to offer, the more you can leverage your business. By making developer’s lives easier, you’re also reducing likelihood of support requests, you’re empowering developers to self-manage, and you’re increasing the likelihood your banking API or app will endure. 

Original Article

Composable Banking Platform through Open Bank APIs

John Piela

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