What is an API?
An API is a computing interface that allows applications to communicate and share information. For this to happen, APIs send and receive requests through an API gateway. The API dictates how the requests are sent and received, the kind of requests sent, the data formats used, and the conventions used when sharing data.
When different organizations want to share data, they do not have to combine their systems or operating systems. They use APIs to allow the systems to communicate, sharing only the information that they want to share, and making sure that security is maintained. This way, they (organizations) are able to deploy the agile methodology of development and come up with new systems within a short period of time.
In the financial industry, resources, especially money and time are very important. APIs help them save on these resources while at the same time opening their systems and driving change in the industry. One of the most useful APIs that is driving change in this industry is the Yahoo Finance API.
With this API, financial institutions are able to offer stock details, financial reports, press releases, quotes, and other financial information within a click of a button. Customers do not need to visit their financial institutions to learn about stocks and investments. They can do this from anywhere all because of this API.
How APIs are Driving Change
Financial institutions are working very hard to provide innovative solutions that make their service delivery easy and straightforward. They need new ways of handling their business processes and solving any underlying issues. They have turned to APIs to exploit the opportunities that they (APIs) offer. This way, they have been able to offer personalized services that meet the demands of their customers.
In addition, APIs have made it easy for financial institutions to develop products with enhanced functionalities. This is because when developing the products, the institutions can simply implement an API that offers the same or similar functionalities as the ones they are looking for, albeit with little or no customization at all. This way, APIs have played a major role in driving change in the financial industry.
When a financial institution wants to develop a new product or a service, they do not have to build it from scratch. They can look for the same features from third-party providers who have built an API with the same features. For instance, if a bank has realized that they have an increased demand for a certain service, such as mobile money transfer, but they are not able to build their own application that offers such a service due to different constraints, they can simply look for another party with a similar application, and implement their API. The bank can then customize this API to match their requirements.
APIs have made it possible for financial institutions to develop applications that not only streamline their service delivery but also match the requirements of their customers. Furthermore, the institutions are now collaborating for digital solutions to make the running of their business processes easy. For instance, they are using APIs to access a customer’s financial information before initiating transactions with the customer. This shows how APIs have driven change in the financial industry.