When it comes to financial services, customer and business expectations are on the rise and FinTech firms are capitalizing on this and are quickly evolving services to outpace their competition.
In the past, finance APIs remained closed in order to provide exclusive benefits to those who knew how to use them – limiting access was one way to exert some control over the market. However, many banks and large firms have been making their APIs available to developers and fintech firms, creating an open API structure.
So the big question is…why are large firms and banks opening up their APIs?
Banks need digital transformation: According to American Banker, APIs are key to banks’ survival and relevance in a mobile-first world. The main driver is innovation and they realize that FinTech is the answer. By sharing APIs, banks are able to innovate much faster and move more transactions or users through their systems.
More collaboration: The open API enables multiple firms to work together with much closer collaboration. Previously, taking data and making it available across a range of content sets was very difficult. The open API structure allows both clients and developers to build on top of the API and make applications that suit their specific business needs.
Meeting Consumer Demand: When it comes to the consumer, the number one thing that banks and other large firms want to do is create a seamless experience. Banks are currently facing a sweeping transformation of customer habits, with younger customers migrating to online and mobile banking.The widespread interest in more personalized services across mobile supports the view that banks need to adapt quickly to meet evolving customer expectations.
APIs are becoming the beating heart of innovation and new development in the financial space. At Thumbtack, we help firms build out their own APIs as well as manage complex integrations with arrays of 3rd parties. We’re excited by the open API movement and the innovative floodgates it is opening.