How API Integration is revolutionizing Finance Industry
The Banking and Financial sector is going through a period of major transformation on the digital front especially after the pandemic. New digital regulations, need for contact-less onboarding and increase in per capita transaction all have contributed towards expedition of digital transformation in the sector. While most major companies have adapted to this need for transformation in a short span of time, many others are still struggling to make this happen. Several offline and manual experiences need to be digitized, existing infrastructure needs an overhaul to accommodate the changes. Of all the ways digital transformation takes place, API integration plays a significant role. APIs are basically an interface between applications and users. Modern APIs are having much more utility than the conventional definition. Here are some major fronts, within the discussed domain, where significant transformation is expected through API Integration.
- Wealth Asset management: Investments have grown manifolds these days and the asset management companies have a tough task to provide their customers an enriching experience in terms of ease of onboarding/new user addition, cross platform data sharing and accessibility of accounts and financial portfolios etc. To achieve this, a lot of back end and front end integrations are required in the existing infrastructure of the organizations. Data in its source is discreet in different platforms and APIs greatly help in accessing them and integrating them under an umbrella or client database and then use it in various applications in cross functional and collaborative manner in the organization.
- Lending operations: Due to increasing mortgage demand, reducing margins and emerging relief programs for small businesses, lenders these days are under immense pressure to deliver while the manual processes make the work very challenging. Conventionally, lenders deal with the loan originating process which involves a lot of manual work like uploading documents, reviewing loans and underwriting. APIs can streamline manual processes which are expensive and allow lenders to fasten the processes while delivering connected borrower experiences.
- New account creation: Users nowadays expect the banks to open an account in less than an hour. This has become an increasing demand since the onset of the pandemic and resulting in lockdown and closure of branches in many locations. Existing banks are still burdened with manual processes which are becoming obsolete and need an immediate adoption to an efficient digital onboarding system. To achieve this, companies can use multiple APIs such as Accounts APIs, Documents APIs and Risk APIs to unlock and integrate data in client databases of the bank and other cloud systems.
- Payment platforms: Payment methodologies and platforms have evolved significantly over the years and are not just limited to the commercial sector. Several trends are driving this evolution in 2021 and most important is data which is used in delivering personalized services, products and experiences through financial decision making. As digital commerce is growing, embedded payments and associated transactions continue to grow as spending and consumption is on a rise. To create all inclusive payment platforms that can cater to the new and existing needs of the consumers, APIs are highly relied upon these days. APIs are not only providing new and efficient ways to make payment, but they are helping in creation of an ecosystem fuelled by personalization and collaboration between all major stakeholders.