That customers expect basic banking functions to run flawlessly are a given. But in this age, basic may not suffice. They furthermore desire better designs, intuitive interfaces and fingertip accessibility to the services.
Catering to these contemporary expectations could be a tall order, given the rigidity of the core applications and the inherent risks that the transformation process entails. Moreover, the exercises for ‘Running the bank‘ and ‘Changing the bank‘ are generally preferred to be kept mutually exclusive, lest they open up a dangerous pandora’s box. This makes the pursuit of core banking transformation to be one of the biggest quandaries in world of financial technology today.
Still it’s not all gloom and doom. APIs (Application Programming Interfaces) could furnish an ingenious breakaway from this impasse.
API is nothing but a translator in the software partitioned world. They serve as aggregators (connectors) that can seamlessly and securely link various disparate apps and services together to provide a better customer experience (CX).
APIs arm application developers with the building blocks they need to develop a specific app, and include subroutine definitions, protocols, and tools. API management can help create thousands of apps to serve every niche and audience, without building a thing.
APIs are also important for the businesses that provide them, because third-party developers build out ancillary applications that further the use of the company’s core product. This saves the API provider both time and money.
- Make it possible for people to share their transactional financial data easier with third parties online.
- Allow third parties to get access to banks’ data through aggregators and open APIs.
- Make public and openly share their product information as well as their various service level indicators.
Ultimately, it can help facilitate effective interplay of various services, rather than requiring a complete re-engineering of the application system.
When we speak of APIs, cognitive APIs deserve a special mention. Cognitive APIs are emerging across voice, speech, vision and text processing and even including back-end automation such as automated customer service. Robotic Process Automation (RPA) is growing, as larger financial services institutions have begun to embrace cognitive technology.
APIs are contributing to the financial services disruption we are seeing along with cloud computing, mobile devices and the Internet of Things (IoT). APIs have become part of the building blocks that developers can use to create disruptive, innovative applications without heavily investing in building capabilities from ground up.
That said, full potential of Open API banking has not been entirely explored yet. But opportunities for innovation and, ultimately, improved services for consumers, seem infinite.