Why is API Integration a must for Digital Banking growth
The Open Banking model and use of APIs are said to accelerate the growth of online banking in India further. But what are the reasons that make API banking integrations such a promising technology for online banking? Read this post to find out.
The rapid consumption of modern technologies has abundantly changed consumer behaviour in India. Talking about the banking industry in the country, modern consumers now expect their banks to offer a range of non-traditional services and products.
24x7 banking and mobile banking apps are not adequate anymore. The Open Banking model and use of Application Programming Interface (API) integration is expected to help banks meet these changing consumer demands and fuel the growth of online banking in the country. But what are the reasons that make banking API integration a great way to boost online banking in India? Here is a list of top four:
1. Offering non-traditional services/products
Younger customers, mostly in the age bracket of 18-25 years, now make use of several fin-tech platforms and apps. They expect their bank accounts to remain accessible on these 3rd party platforms. But this is only possible when the bank switches to the Open Banking model and lets 3rd party applications access their core data with the help of APIs.
With more and more banks now introducing products and services to meet the needs of younger customers, banking APIs cannot only help banks better meet consumer expectations, but also boost digital banking in the country.
2. Enhanced convenience without compromising security
Open Banking has paved the path for a completely new banking system. It provides consumers with more power and transparency into how they manage their finances. But the nature of this initiative is as such that critical financial data is shared between multiple parties. This calls for added scrutiny for matters related to data privacy.
Even if online banking is to flourish in the country, security will always remain vital. Some of the top banks in the country have developed APIs in a way that ensures complete convenience and efficiency with utmost security. Moreover, they also offer secure environments where developers can create custom APIs that function seamlessly and remain fully protected at all times.
3. Easier invoicing for businesses
Apart from retail consumers, even businesses will be required to play their part in making India a digital economy. Thus, banks need to offer much more than online banking services or a few customised products/services to attract businesses. Digital Application Programming Interface can play a crucial role here.
The APIs can abundantly help businesses in their day-to-day financial operations. For instance, APIs now can be integrated with Enterprise Resource Planning (ERP) systems to help enterprises manage their cash payables and receivables directly from their ERP without creating any file or logging in to any banking portal. Such solutions can be used across industries to help grow digital banking.
4. Boon for start-ups
The fin-tech industry is where a lot of start-up action is being observed in India. The changing consumer behaviour and the rising popularity of online financial services and products are two reasons responsible for the rapid growth of financial technology companies in the country. As many such start-ups operate digitally, they also help boost digital banking.
With the help of APIs offered by banks, such start-ups can come up with innovative products and services. They can also use APIs to improve their existing products and increase their reach. For instance, a (Peer to Peer) P2P lender can use bank API to check the credit score of a potential borrower instantly.
API Integration for fuelling Digital Banking transformation in India
As you can see, several reasons make banking APIs a must for the healthy growth of online banking in the country. It is only when the government, banks and businesses work together that India can get closer to its goal of becoming a truly digital economy.
Businesses and start-ups can try to know more about banking APIs to improve their operations and better meet the changing needs of the consumers.
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