How API Technology Is Revolutionizing Regional Banking

The financial services industry now manages more data than ever, and API technology can synchronize that data to enable partnerships and drive revenue.

March 21, 2024 | By Tony Whitlock

Application Programming Interface (API) is at the core of data management and digital transformation in finance. It’s essential for the gathering and movement of data—so disparate systems can communicate across platforms and produce value through business partnerships.

API technology is increasingly being used in the financial services industry to generate revenue by allowing companies to sell to other banks in the open market and create personalized products for customers. While APIs require time and resources upfront, the benefits outweigh the investment.

Leverage Data To Expand Business Opportunities and Drive Revenue

Build an intentional strategy that evaluates project management from beginning to end. Zero in to understand the workflows, access the API technologies and connect internal data flows. Your process should include these key action items:

1. Capturing and processing data: Map out the project and architecture plans, then align workflows to target and capture realistic data. Realistic—aka anonymized—data represents the variety of information in interrelated fields that articulates the relationship between data sets. Once gathered by a third-party or FIS application, the data can be used to build an API with mediation layers that connect the Google API solution to the FIS solution, initiating transformation.
2. Identifying the right technology: The product team will identify the appropriate API technology to facilitate transactions in the open banking format—then data can be scaled and shared across different institutions. API technologies monopolize data across banking services and electronic features by connecting customer accounts to different vendor populations.
3. Implementing monetization strategies: There are a variety of methods to generate revenue from an API—directly and indirectly. When your system gathers, validates and scrubs customer data, you unlock the potential for additional lines of business. Once collected, data is sent to a central repository—a process that is built on an API. Since sensitive data is not included in an API, it can be sold to other banks or institutions in an open-source type of transaction.

What Should Banks Consider When Choosing an API Solutions Partner?

Leaders in the regional banking sector are recognizing the value of APIs as a tool for digital transformation in finance, and as the ability to monetize these technologies evolves, so will adoption.

Collaborating with an experienced partner who delivers open API development can help you manage the process and establish timelines.

Establishing an API technology timeline requires a solutions partner who is:

• Experienced—with strong expertise in API and a track record of providing quality, efficient digital transformation services that drive partnerships between financial institutions
• Innovative—provides advice and solutions based on new and evolving technology
• Flexible and attentive to the size of your project, technology requirements and changing needs of your project goals
• Agile and efficient—a trustworthy partner who can adapt and evolve to deliver business value on time and at scale

The Future of Banking Relies on API Technology

Digital transformation in financial services has created an unavoidable shift from the brick-and-mortar setting. Banking today is more flexible and accessible than ever thanks to API technologies. This provides more opportunities for banks to diversify their services, improve the customer experience and build business networks in finance through the sale of API data.

Banking institutions can benefit from the expertise and services offered by companies that can help implement API technology to drive new revenue streams and keep pace with rapid digital business modernization. 

Is your company ready to own change and drive business growth? Hit the ground running with effective API data management and solutions with a partnership that will expand your business.