The API landscape
A few years ago, who would have thought that banks would open up their software to third parties? But today, it’s becoming common practice, and for good reason—it improves the customer experience. Today, banks are able to do this in a more secure way, thanks to Application Programming Interfaces (APIs).
Consumers and businesses are using mobile devices as their first choice, and this changes what they expect and need. From banking to healthcare to retail and beyond, organizations are using APIs to innovate and adapt quickly, since these tools link new technology with legacy systems. The beauty of APIs is they can work with any operating system, machine, or mobile device, standardizing access and allowing apps to easily communicate with each other.
How APIs are changing finance
In finance, API data-exchange agreements allow banks and others to work together to provide a seamless user experience. Select information is shared in a safer, more private way, with customers maintaining the security of their credentials.
APIs allow users to do business more easily, with fewer steps and less manual intervention. Since APIs communicate virtually instantly with each other, data is updated in real-time. Companies using APIs can go innovate faster by cutting time from the development cycle. Taking banking out of the bank and into a native digital experience provides new value to customers and our customers’ customers.
APIs also provide more secure access with less data input. Over the past several months, Wells Fargo announced plans to open our API Gateway to Intuit and Finicity, allowing consumers to gain greater control over where their financial information is located. Agreements like these have made Wells Fargo data portable in a secure way. For example, Wells Fargo’s customers who use financial management applications such as Mint and TurboTax can choose to import bank account details. Not only does this save customers time from manual data entry, but also ensures the accuracy and reliability of the data.
Businesses working with large, regulated financial institutions also benefit. For example, say you’re selling a product through an online marketplace. If that website or app embedded the Wells Fargo ACH payments API, you could check status in real-time to know with confidence the buyer has sent payment.
Wires, account validation, and foreign exchange are just some of the other transactions being done faster, with better information, and with more convenience for all parties involved.
Integrations are also happening faster—with APIs, it’s possible to integrate in two weeks or less, a significant decrease in the time other product integrations took in the past. And, the possibilities with APIs will continue to expand.
Where will APIs take us in the future?
APIs allow banks to meet customers where they are, and we’ll likely see the technology integrated into new places. APIs already play a predominant role in mobile apps, social media platforms, wearables, and online shopping experiences.
I am also seeing a drive to accommodate traditional banking services in new ways through API channels. For example, an insurance company can pay out a claim directly to its customer’s debit card in near real time, which drives a positive customer experience.
As the Internet of Things continues to expand deeper into our lives, APIs will play an increasingly significant role. All of our connected devices, from in-home virtual assistants to smart watches and fitness apps, collect a lot of data. APIs help connect that data, providing more valuable insights and value to users. As more and more of our everyday devices are connected, the conveniences for users will increase – with APIs behind the scenes, making it all work.