An OpenAPI is an application programming interface available to the public, and that offers developers access to a web service or a software application. APIs allow the exchange of information and data between different applications. This technology has grown in recent years and changed how almost every other industry operates.
Banks have not been left behind. Most of them have already implemented OpenAPIs and started reaping the benefits that come with this technology. The OpenAPI specification has made it possible for third-party developers to come up with services and applications that revolve around the operations of banking institutions.
How OpenAPIs have changed the banking industry
Since they are publicly available, OpenAPIs are helping banks maintain financial transparency while at the same time helping them to create new innovations that offer their customers exactly what they need. Customers are also able to create their own tailored experiences to meet their requirements using the same specification.
But how can developers with existing APIs convert them to OpenAPIs? Well, there is a tool called APITransform that allows developers to upload their Postman collection then it does the conversion for them. This way, developers can make their APIs available publicly and contribute to changing how different industries operate. The banking industry has changed in many ways, among them;
Sharing data and information
OpenAPIs have made it possible for businesses and individual customers to gain access to any banking data that they might need in real-time. They can get up-to-date and accurate data regarding their financial positions, making it easy for them to make informed decisions. Banks can also offer resources that are personalized to meet the different requirements of their customers.
OpenAPIs have made it possible for other financial institutions to gain access to bank data and different functionalities. For instance, Fintech companies can access their client’s data from banks when a service requires that they do so. This was not possible before without the use of OpenAPIs. It is through OpenAPIs that potential collaborations between different financial institutions have been achieved, making it possible for customers to get services faster and efficiently.
Establishing bespoke services
OpenAPIs have made it possible for banking institutions to engage their customers personally. This has made it easy for them to tailor services that match the requirements of different customers. With OpenAPIs, banks can now collect customer data and analyze it to get insights into what their customers need. This way, they can offer them experiences that would otherwise have been difficult to achieve.
Increase in revenue
Every other bank is always looking for ways to increase their revenue. One way for smarter banks today has been in digital revenue. Like we discussed above, customers can access all their banking information in real-time because of the use of OpenAPIs. Banks are exploiting these functionalities and adding more features through which they can increase their revenue.
For instance, customers needed to go to a bank for a transaction. This could take them quite some time, which could end up discouraging some of them. However, they can initiate transactions on the go today without ever stepping into a banking hall. They can also take loans and initiate other services. Banks are now cashing in on these functionalities, and might even end up closing some bank branches to concentrate on digital banking.
Finally, as much as banks are encouraged to implement the use of OpenAPIs, it is important to make sure that they test the APIs for any security vulnerabilities. The financial industry is very sensitive and a bank can collapse if its customers’ data, money, and information are not safe.