Features and Benefits of API in Banking
An increasing number of financial institutions in India are now realising the potential benefits of Open Banking and the role of APIs in the process. But what makes banking APIs such a breakthrough technology? Read this post to find out.
Open Banking has taken digitalisation a major step forward in India. While the foundation of this initiative was laid in Europe in 2016, India is currently one of the leading countries to embrace it.
Any discussion about Open Banking is incomplete without Application Programming Interface (API) which is the primary building block of this revolutionary initiative. An increasing number of credit unions, payment processors, traditional banks, and even fin-tech start-ups in the country are now realising the potential benefits of API Banking.
Why is the financial industry in India so enthralled with Open Banking and APIs? It is due to its potential benefits like the ones listed below:
1. Catering to the Challenging Needs of the Consumers
For financial institutions in India, a major part of their potential consumers is technologically savvy. They now understand the digital landscape and want their digital experiences to be worth their time. In other words, they are looking for personalised experiences, products, and services and want them delivered as quickly as possible.
Using API services of a bank helps financial institutions get closer to the challenging consumer demands. Rather than building their own APIs for every function or service, using the ones offered by banks can help them save time, effort, and money.
2. Create APIs from Scratch
While some banks in India already offer a plethora of APIs which can be readily integrated by businesses, they also offer the option to build custom APIs. From features to the tools needed to build and test APIs, they offer an efficient environment for developers to create powerful APIs that have access to the core system of the bank.
As compared to creating APIs on your own, the API creation and incorporation through the platform offered by the bank makes more business sense.
3. Moving Towards Digital Economy
One of the biggest API banking benefits is the ease and transparency it adds to the way how end-consumers access and use financial services and products. Going forward, this simplicity can help India become a truly digital economy.
Using the APIs offered by banks, several financial institutions have already created products and services to exclusively cater to the Tier 2 and Tier 3 states of the country that were previously known to have minimum digital penetration.
4. Regulatory Compliance
As per Payments Services Directive (PSD2) in the European Union, financial institutions are now compulsorily required to give access to their customer information to licensed 3rd parties. It is only a matter of time before India makes this mandatory too.
Using API banking features now can help financial institutions gain a competitive edge and also make their offerings future-proof.
The Rise of Open Banking and APIs
Several top banks in India have already launched their API services, and many others are expected to do the same soon. For businesses, this can be an excellent time to start experiencing the benefits of banking APIs, gain a competitive edge, and better meet the needs of their customers.
Visit the official API services platform of a top Indian bank to know more about APIs and the different ways in which they can help you grow.
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