# An API-first approach will revolutionise Financial Services
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2019-03-07
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: Unlocking the Power of APIs for Modern Financial Services
Meta Description: Learn how APIs are driving growth in the financial sector, enabling seamless customer experiences and efficient service customization.
URL: https://financedigest.com/api-first-approach-will-revolutionise-financial-serviceshtml

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_**Carlos Oliveira**, CEO at_ _SPINR_

Whatever business you’re in, you know perfectly well the new realities of commerce: customers expect sophisticated services across the digital domain. Markets and competitors change at internet speed – while legacy IT infrastructure does not. And data is the electricity that flows through it all: difficult to control but also immensely powerful.

Controlling data is modern commerce’s greatest challenge, particularly in the rapidly changing financial [services sector](https://www.financedigest.com/the-state-of-cybersecurity-in-todays-financial-services-sector.html "The state of cybersecurity in today’s financial services sector"). [Building smart](https://www.financedigest.com/untapped-cost-savings-why-smart-building-management-systems-are-a-finance-department-priority.html "Untapped Cost Savings: Why Smart Building Management Systems are a Finance Department Priority") controls that can extract, filter and combine data to feed business logic, frees developers to mix and match sources quickly and reliably. Those controls are APIs. They [handle the complexities of each data](https://www.financedigest.com/crowdsourcing-of-data-to-drive-the-patient-handling-equipments-market.html "Crowdsourcing of data to drive the Patient Handling Equipments Market") source, hiding the mechanical details of access and control, and translate data to a common format.

Once a common API or network of APIs has been created for data sources, any conceivable [application or service](https://www.financedigest.com/service-lifecycle-management-applications-market-to-grow-at-a-cagr-of-6-9.html "Service Lifecycle Management Applications Market to grow at a CAGR of 6.9%") can be built to that API.

**How does that work in practice?**

Consider the commercial environment facing a typical up-and-coming [fintech company](https://www.financedigest.com/7-cyber-threats-fintech-companies-should-watch-out-for.html "7 Cyber Threats FinTech Companies Should Watch Out For"). Thinking with APIs helps such a business get [ahead of the market](https://www.financedigest.com/dollar-soars-to-two-decade-high-as-putin-shakes-fx-market-ahead-of-fed.html "Dollar soars to two-decade high as Putin shakes FX market ahead of Fed"). Hundreds of new, technology-based [firms are starting up every year](https://www.financedigest.com/german-engineering-firms-expect-hit-from-supply-chain-bottlenecks-next-year.html "German engineering firms expect hit from supply chain bottlenecks next year"), and they are giving more established competitors a run for their money. The lesson is clear: APIs are driving [business growth](https://www.financedigest.com/extracts-and-distillates-market-overview-high-demand-recent-trends-future-growth-business-scenario-technology-2022-2029.html "Extracts and Distillates Market Overview, High Demand, Recent Trends, Future Growth, Business Scenario & Technology 2022-2029") today, and companies that don’t embrace that trend will fall behind.

**Challenges and answers in** [digital finance](https://www.financedigest.com/the-role-embedded-finance-systems-will-play-as-commerce-goes-increasingly-digital.html "The Role Embedded Finance Systems Will Play as Commerce Goes Increasingly Digital")

Today’s customers know what they want, and are no longer resistant to changing their financial [services providers](https://www.financedigest.com/unprecedented-constructive-disruption-to-drive-the-sleep-service-providers-market.html "Unprecedented, constructive disruption to drive the Sleep Service Providers Market"). BAI reports that from millennials to baby boomers, [customers expect a highly consistent omnichannel](https://www.financedigest.com/how-omnichannel-cx-can-help-insurers-meet-customer-expectations.html "How omnichannel CX can help insurers meet customer expectations") experience above all. They’re also looking for an emphasis on mobile, highly usable tools for customisation, and a way to [bring together](https://www.financedigest.com/the-digital-ir-revolution-how-new-technology-is-bringing-companies-and-shareholders-closer-together.html "The digital IR revolution: how new technology is bringing companies and shareholders closer together") the information and services they want.

Meanwhile, financial service providers are keen to analyse [customer data so they can come up with new ideas and customise offers and services for more personalised customer experiences](https://www.financedigest.com/financial-services-is-upping-its-customer-experience-game.html "Financial services is upping its customer experience game").

What resources do organisations have to help make this happen? As the old maxim says, you fight with the army you have, not the army you want. Think about any financial business: their existing technical estate likely includes many different data stores from CRM to email, and the company’s [development process](https://www.financedigest.com/crowdsourcing-of-data-to-drive-the-high-throughput-process-development-market.html "Crowdsourcing of data to drive the High Throughput Process Development Market") may be anywhere along the pathway from waterfall to DevOps. They also have to consider performance, [compliance and security](https://www.financedigest.com/managing-compliance-complexity-will-deliver-security-rewards.html "Managing compliance complexity will deliver security rewards"). But the customer doesn’t care about any of this. The customer just wants their financial [services provider](https://www.financedigest.com/sleep-service-providers-market-report.html "Sleep Service Providers Market Report") to be seamless, efficient and easy to use.

Management of these elements is done by APIs, [effectively breaking](https://www.financedigest.com/break-in-case-of-emergency-plan-early-plan-now-for-effective-crisis-comms.html "Break in case of emergency – plan early, plan now, for effective crisis comms") them down into optimal logical components that can be connected and reused in the simplest possible way.

Say you have a new product and want to target a specific demographic of people, if you have built APIs across your [data sources that work in a consistent way](https://www.financedigest.com/four-ways-data-and-ai-can-transform-financial-services.html "Four ways data and AI can transform Financial Services"), then your new product developers need only learn that once. Using a new data source takes seconds.

Such capabilities are useful for organisations of any size. But they can be especially valuable for [small and medium-sized businesses](https://www.financedigest.com/best-small-business-loans-speaks-to-fundbox.html "Best Small Business Loans Speaks to Fundbox") looking to remain competitive against larger companies with far greater available resources.

**APIs enable more than just speed and efficiency**

When financial organisations adopt an API-first mindset, they also gain other benefits as well:

- **Democratising innovation**

Because APIs hide complexity, they create simple, abstract concepts that anyone can grasp and use in what-if thinking, even if they’re not programmers. Using tools as simple as pencil and paper, or codeless graphical [design software](https://www.financedigest.com/helpful-saas-softwares-to-be-aware-of-as-a-freelance-designer.html "Helpful SaaS Softwares to be aware of as a Freelance Designer"), anyone with sector expertise in a company can sketch out how to build a system around data that can address a need or offer a brand-new idea. This can be invaluable across financial [services](https://www.financedigest.com/facilitating-open-finance-through-secure-services.html "Facilitating open finance through secure services"), where customers’ needs are ever changing.

Far too often in all business, a lot of valuable information and experience is never used because IT is seen as a disabler rather than an enabler. APIs don’t cure this entirely but they do offer a path through it.

- [**Opening up new data sources**](https://www.financedigest.com/why-should-investors-be-paying-more-attention-to-open-source-software.html "Why should investors be paying more attention to open source software?")

There are well over 20,000 open sources of data available online through APIs, according to the ProgrammableWeb API Directory. And that number has been [growing by around 15 new APIs per day](https://www.financedigest.com/the-medical-tourism-market-is-estimated-to-substantiate-i-e-grow-at-a-handsome-rate-in-upcoming-years-the-present-day-scenario-implies-the-adoption-of-smarter-ways-to-do-business-as-such-digital.html "The Medical Tourism Market to get filtered through organic digitized growth").

These APIs provide data from every category of source: geographic, [social media](https://www.financedigest.com/meet-the-founder-of-the-web-3-decentralized-social-media-metaverse-and-on-achieving-guarantees-of-green-for-a-proof-of-impact-future.html "Meet The Founder Of The Web-3, Decentralized, Social Media Metaverse; And on Achieving ‘Guarantees of Green’ For A Proof-of –Impact- Future"), weather, advertising, economics and so on. They also [provide a signpost to how the future](https://www.financedigest.com/are-banks-destined-to-merely-become-infrastructure-providers-in-the-banking-industry-of-the-future.html "Are banks destined to merely become infrastructure providers in the banking industry of the future?") is shaping up, especially in finance. For example, the emergence of Open Banking – built on open APIs – is [driving a lot of new thinking at every level of financial services](https://www.financedigest.com/how-crowdsourcing-can-help-drive-the-benefits-of-advanced-analytics-in-financial-services.html "HOW CROWDSOURCING CAN HELP DRIVE THE BENEFITS OF ADVANCED ANALYTICS IN FINANCIAL SERVICES").

- **[Opening up new business](https://www.financedigest.com/neoma-business-school-opens-the-first-virtual-campus-in-europe.html "NEOMA Business School opens the first virtual campus in Europe") models**

Once a company has built internal APIs that make [data accessible to new ideas and services](https://www.financedigest.com/accelerating-financial-services-innovation-with-the-promise-of-data-mesh.html "Accelerating financial services innovation with the promise of data mesh "), it’s a small step to making some of that data available to external interests. Any company that is successful in a [market has a high degree of current](https://www.financedigest.com/pharmaceutical-contract-packaging-market-current-impact-to-make-big-changes-2020.html "Pharmaceutical Contract Packaging Market Current Impact to Make Big Changes 2020") knowledge of that sector, often locked up in data sets across many sources. Other [businesses could become new markets](https://www.financedigest.com/fortified-dairy-products-market-outlook-cover-new-business-strategy-with-upcoming-opportunity-2022-to-2032.html "Fortified Dairy Products Market Outlook Cover New Business Strategy with Upcoming Opportunity 2022 to 2032") for that knowledge, using it either for their own internal purposes or as part of a partnership or joint enterprise. APIs offer a simple, standard, [secure and highly usable route to explore these ideas and find new ways](https://www.financedigest.com/behavioral-biometrics-simple-and-secure-way-to-authenticate-consumers-digital-identities.html "Behavioral Biometrics: Simple and Secure way to Authenticate Consumers’ Digital Identities") to sell what a company does.

**Where next?**

Quickly connecting multiple applications and data sources is a significant operational benefit for financial [services companies](https://www.financedigest.com/why-financial-services-companies-should-consider-rfps-in-their-digital-transformation-strategies.html "Why financial services companies should consider RFPs in their digital transformation strategies"), but building innovative digital platforms is truly transformational.

By connecting your own legacy systems with third party data and cloud applications, you may aggregate information flows and create new services, like market updates, from your own [digital platforms](https://www.financedigest.com/choosing-the-best-digital-experience-platform-dxp-in-financial-services.html "Choosing the best Digital Experience Platform (DXP) in financial services"). This could deliver [value to customers with the potential to generate new revenue opportunities](https://www.financedigest.com/the-potential-impact-of-coronavirus-covid-19-for-riveting-tools-market-revenue-opportunity-forecast-and-value-chain-2021-2028.html "The Potential Impact Of Coronavirus (Covid-19) For Riveting Tools Market Revenue, Opportunity, Forecast And Value Chain 2021-2028").

APIs are now at the centre of [innovation creation and also help to enforce the ontology and data standards](https://www.financedigest.com/esg-innovation-allowing-everyone-to-meet-the-standard.html "ESG innovation: Allowing everyone to meet the standard") throughout an organisation. This in turn demonstrates the [importance of financial services](https://www.financedigest.com/how-financial-services-organisations-can-address-the-vulnerability-lag-and-safeguard-their-most-important-digital-assets.html "How financial services organisations can address the ‘Vulnerability Lag’ and safeguard their most important digital assets") embracing APIs to help solve their key integration challenges, as well as automating and streamlining data operations.


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