You know how sometimes when you’re reading a research paper, the website hides the rest of the paper until you sign up? Then, you get lazy and just sign up with your Google account or even Facebook. Does this mean they’ve got your information now? Let’s see!
What is an API?
Well, they have your information but not all of it as you allow third parties to access only the information that you want to share. That happens through Application programming interface (API). API is a tool that allows two parties (applications) to communicate without hassle.
To simplify it even more, imagine you’re at the Apple store and you want to buy a new Macbook. But, you need a specific laptop with a fixed budget. It should also be one that you can use for everyday tasks and could run Adobe Illustrator and YouTube at the same time! You tell this to a salesperson and they’ll get you exactly what you’re looking for. In that case, the salesperson is the API.
You don’t need to know how things work behind the scenes. You request and they deliver. Now, how can we apply this to banking terms?
Well, remember the payment gateway? This is one type of how API works! It’s the process of making banking services accessible to outside businesses. This enables banks and independent businesses to offer their customers a wider range of complementary services and products than they could on their own.
Benefits of API banking
1. Better User Experience
The use of API Banking will be made simpler, more seamless, and easier for the user. It also offers flexibility and can be tailored to meet your business needs.
2. Better financial management
Any business will have to face complex financial activities and management. Well, API banking is here to the rescue. It will optimize your finances from automating cash flow reporting to conducting mass transactions. It eliminates all the heavy work and allows easy access to cash, paperless cheque deposits, mass transactions, and automated cash flow reporting.
API banking provides layers of authorization to ensure high levels of security for both your financial data and the private information of your customers. Because users can control which data third parties can access, every activity is secure and you won’t have to be concerned about any leaks.
4. Time saver
It will only take a few seconds to carry out several transactions for your business. All payments will be neatly recorded in your business’ transaction history as they will be integrated into your system. When everything is automized, there will be a smaller place for errors.