New technologies are transforming banking and other financial institutions. Customers are doing their banking online and via mobile apps more than ever before. Mobile banking is quick and easy, but there’s a lot of software supporting it. Here are some reasons why APIs are important to banking.
1. Streamlining Communication
In modern banking, it’s important for communications between banking representatives and customers, between customers and software and between different systems to be streamlined. A banking API is a program that supports communication between software systems. Many of these systems and apps need to be able to communicate constantly and instantaneously, creating a speedy, seamless user experience. An example of this is money transfers. If you use a mobile banking app to transfer money between accounts, you want that transaction to occur immediately and to receive your transaction confirmation as soon as the process completes.
2. Safety and Reliability
The various uses of APIs in streamlining and securing communications help make financial organizations and banks that use them more competitive. Utilizing an API can raise investor confidence in your organization and help you collect and analyze data to improve communications and system functions. APIs are also good tools to facilitate other methods of increasing revenue. An API is a more secure method of enhancing your software and mobile apps, as well as for secure communication for your organization and your customers. They make communications and transactions safer and more reliable.
3. Customer Engagement
Because of the speed and safety aspects, an API can be appealing to customers. You can build your brand, increase customer engagement and enhance your technological and service offerings. All of these options can help you build your relationship with your current customers and widen your customer base by appealing to new markets. If you have healthy customer engagement, you can leverage that to understand what your customers like about your offerings, what they want to see in the future and improvements they think could be made. Additionally, some banks utilize APIs to collaborate with other institutions, which can be advantageous to people who use both services and draw in people interested in streamlining some of their transactions. A good example of this would be electronic money transfers between a customer’s bank and his or her retirement fund. If the customer has the option to set up an electronic transfer option, that can be an incentive for someone who wants to make his or her transactions quicker and easier without sacrificing security.
4. Digital Banking
At its core, an API facilitates digital banking. With more transactions taking place in online spaces every day, it’s important to customers that their transactions be safe, fast and easy to do. Banks and other financial institutions need to be able to work behind the scenes to ensure a customer is able to complete a transaction no matter whether that customer is using a banking app or the website. API is a great technology to take advantage of to do these things.
If you use a banking app or log in to a bank’s website, an API may be helping protect and speed up your transaction.
Author | Emily Forbes
An Entrepreneur, Mother & A passionate tech writer in the technology industry!