The emergence of FinTech as a disruptor has been paralleled by some of the best in class tech innovation. APIs are one such example, which has driven the FinTech innovation over the past 5-6 year.
Over the past few years, the growing discussion and regulatory/industry-wide initiatives around open banking, the new wave in bank-FinTech partnerships, and the growing emphasis on open architecture have been the key drivers pushing for APIs to take center stage in FinServ’s journey towards a comprehensive digital transformation.
The advent of API-driven innovation has been instrumental in transforming the way businesses operate. A set of protocols facilitating interaction between two or more systems, APIs enable secure, cost-effective, and controlled access of the data and capabilities between two parties. While the level of ‘openness’ or the extent of permission needed for data sharing depends on the type of API in question – i.e. private API/partner API/open API. In the world of financial services, open APIs have taken everybody by storm with all the discussions around open banking and PSD2.
Several banks have begun to develop their tech-infrastructure to meet the regulatory mandate and/or prepare themselves for the inevitable future of API banking by opening up their APIs. However, the bulk of APIs today are exposed by banks/businesses/tech providers in a partner API arrangement, for an implementation or collaboration objective. While APIs have been around for a while now, it is now that their usage has picked up pace.
Almost all the FinTech providers today use API-based integration for their services. A stripe API lets you install a payment button anywhere on your website or blog in just a matter of minutes. Facebook or Google APIs are everywhere,
