Ever since the evolution of online payment system, the interaction with the banks was always a sensitive issue. With the new digitization methods, many developers use Apis to interact with banks and make it possible for the products and services of one company to connect with those of Bank services. The software companies like Matrix Marketers are implementing and exploring further by opening data, functionality, and services to third-party APIs, to expand business with its highest capability to comprise an entirely new ecosystem for banks.

When it comes to Banking, the Open Business model enabled by APIs promises much. The banks having the parallel services like mobile banking facility are able to increase their revenue by 20% whereas those failing to do so risk losing to disruptive industry players.

Open Banking Drivers

One of the reasons for this is the now well-understood force of digital disruption. Today’s customers look for high profit services and really don’t bother that a government authorized bank is providing that service or some private bank is giving the service. The digital disruptors are being assisted by new banking regulations that aim to increase competition, innovation, and transparency; such as the Directive on Payment Services (PSD) and the Open Banking Standard.

The banking industry has to adopt new technologies which can fully support API based interfaces, mainly bring the changes in the backend services.

This change can be enabled by APIs. The Open APIs are published for customers with experiences and outcomes that are developed by third parties and powered by banks. Open APIs are responsible for taking and extending the banking system to other industries, platforms, and businesses. This will help in overall growing the banking system.

The Evolution of Banking

An API based open banking system are emerging as the parallel systems to carry forward the financial transactions.

A change in Old Banking System: To adopt central banking system, Open APIs will enable banks to move beyond simple utility service provision to become live to the customers.

The banks are coming up with the new services which are not directly related to money transactions. The banks are already reshaping their date and develop the automatic system to depict the demographic trends and discovering the requiring service to the customers. We have many examples that have just launched movement, which provides anonymized access to its data for use in urban planning.

Of course, anonymization and security will be critical for such services to work in open banking. The challenge before banks is to update their data so that the rich database can be utilized to offer new services to the existing customers.

The Future is Here

Many banks are taking this path today. Matrix Marketers has worked closely with incumbent banks to open their business and drive innovation. An API driven process was introduced to overcome such hurdles like arranging the data and finding the appropriate marketplace to launch the new products. The changes are recommended in the architecture and design of back-end services for streamlining API exposure.

A new customer database can be created using these effective APIs which will generate more revenue for individual businesses. The easy integration facilities and focused applications are helpful in developing more accurate APIs.

Conclusion

The API based business model is well accepted in the banking domain. The banks must have an attitude to build applications which bring financial independence to provide customized banking services in new ways. Let’s ensure that you have the correct building blocks in place internally before you open your operations through APIs. Banks implementing this transition effectively will become the market leaders for the digital age. To develop such a powerful APIs for interacting with banking applications, hire Matrix Marketers for new innovations!