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How is Fintech Changing the World with APIs?

How is Fintech Changing the World with APIs?

February 5, 2022

The global demand for financial technology or fintech has snowballed in recent years. According to a survey by The Brainy Insights, the global fintech market is projected to increase from US$115.34 billion in 2021 to US$936.51 billion with a CAGR of 26.2% by 2030. This impressive growth can be attributed to implementing APIs that encourage a faster and safer banking experience within financial institutions. But how is fintech changing the world with APIs for the next ten years or so?

How Is Fintech Changing the World: Fintech APIs promote agile principles

Time keeps ticking, and innovation must stream freely. Fintech is a fast-changing industry, and the inability to meet specific demands can result in a loss of revenue. APIs allow decision-makers to access data across all platforms. In turn, it enables them to collaborate with business partners seamlessly, with less time and money consumed.

Moreover, specific APIs also compile customers’ data from other platforms. Fintech companies now have the opportunity to test out new financial services and products or services without worry. The valuable data can be their resources to know if the products or services will perform well in the market, even before the launch. How is fintech changing the world if the infrastructure doesn’t support it? Hence, a reliable API is a necessity, not only something nice to have.

Time and cost-efficient

Sure, the initial investment to have a one-for-all API will require a lot of money. But the benefits outweigh the cost. First and foremost, APIs can streamline the business flow. In the fintech startup industry, the business process is arguably complex. Time is of the essence because customers value swiftness—a quality that the fintech industry boasts.

Take the example of an online banking company. API is the gateway for open banking, which grants free access to banking information that might take days—even months—to extract. This information may include credit history and personal data. Thanks to APIs, the banking company can evaluate their potential new customers in a matter of minutes. Indirectly, it improves the brand’s reputation and cuts costs as APIs require less manpower.

More robust security system

Any fintech company will agree that cyber threat is at the top of their radar. One data breach can bring down their profitability, customer loyalty, and trust. Who would put their money at a company that doesn’t have a secured system?

APIs open up platforms and access but can be optimized to detect fraud. A fintech company can use APIs to access information from different sources and authenticate any transaction. For example, if an account was flagged by another company, then the API can detect it and notify other banking companies.

Better customer experience

Everyone wants the best. How is fintech changing the world that keeps on demanding? It’s all in the experience. Race is about effortlessness. Even though your fintech company doesn’t offer as many products and services as others, customers will still choose your company. Of course, with one condition: you must bring forth a smooth customer experience. To do this, you need APIs. Fintech APIs enable users to make transactions and transfer funds through online platforms. No more paperwork for them and no more waiting.

It supports the digital ecosystem

The fintech industry correlates with many other cogs of the global economy. Without open banking, there wouldn’t be online banking. If it were not for online banking, people wouldn’t be able to shop at e-commerce sites. APIs are the backbone of the digital ecosystem. It will keep evolving; thus, any fintech company should always be ready to scale up.

How is fintech changing the world? APIs bridge several obstacles and open new opportunities for fintech companies to meet customers’ demands. The goal is not to be the first man running but the last man standing. Start your journey of fintech APIs implementation with Ayoconnect. It’s one solution for all your payment transaction needs, where you can automate recurring bill transactions, access nationwide online and offline payment points, verify your customers’ profiles, and many more.