The FinTech industry grows rapidly. There are lots of new, innovative products every year leveraging the power of new technologies. Many of these innovations are simply original, unprecedented ideas or approaches build upon existing solutions—APIs. It is like a LEGO construction: you pick bricks from different sets and create a completely new stuff.
Fintech developers have plenty of APIs to choose from. Each of them gives an opportunity to find and embrace unexplored territories. But it is not a “find an API, then make something out of it” strategy, although you can imagine a situation, when someone learns about a given API and suddenly gets an idea of application, which could use its power in some revolutionary way. Most of the times, when developers make an application, they need to have its concept first in order to find right tools and solutions. APIs are one of them.
At the heart of it all
Imagine an online personal finance manager, a web-based application to control your budget. Developers can make it user-friendly, with a beautiful interface full of colors, charts, sliders and so on. They can achieve the best user experience where everything is intuitive, smooth and done with couple clicks. They can find the best ways to make money on the service through subscriptions, ads, partnerships offering special deals, or by selling financial products. In other words, they have a full, finished product ready for market. Do they?
No. They are missing the fuel for their engine: user data. Without it, the whole service does not make any sense. So how should the data be acquired? Entering the numbers manually is a tedious process, which could be possible 3 decades ago, but not in the 21st century. Importing files is not a good idea, either: it requires the user to regularly export the data from all of his/her accounts—provided that the banking system offers such function. No, there should be a simple solution, which does this automatically. Fortunately, there are APIs for that: they will login into the user’s accounts and retrieve all necessary information. The only thing developers need to do is to implement the API in their own code or just make their code communicate with the API.
Instant gratification
APIs have three big advantages: they provide real data for a variety of applications, they are easy to implement and, last but not least, they are already here. Developers can use them almost instantly, focusing on what is really important for their product and its users. Some APIs do not even need more features built around them: customizing and branding of the user interface is enough to get final application ready to be marketed. In this scenario sales and marketing departments have more work to do than developers team.
The fact APIs are so easy and quick to deploy has another big plus: it prevents losing the competitive edge by being too late with a product. Any great ideas are great as long as they are first and original. When the time from the concept to the final product is too long, competitors can simply steal the idea and market it faster by using already available solutions such as APIs.
Another important factor to consider is security and responsibility. When you deal with sensitive data, you need to secure them properly. This means additional costs, falling into regulations on storing users’ information, and so on. It is simply easier and safer to rely on the expertise of a third party company, which developed the API and takes all responsibility for the data hosted on their servers, not to mention the costs of storage and security.
All in all, APIs are great tools, which save developing time and give an access to enormous amount of data. This simply cannot be overlooked. This is especially true when it comes to banking API, it is costly to implement on your own, but the benefits of financial data are enormous.
About Konstantin Rabin
Konstantin has taken part in various projects in the European financial industry for the last 4 years. Currently Konstantin is heading marketing at Kontomatik - a European developer of bank API. In addition to this, Konstantin often publishes articles on finance and technology on key websites.
About Kontomatik
Kontomatik is a provider of Banking APIs. The service supplied by Kontomatik is mostly aimed for banks with competitive products, online lenders that are looking to optimise loan-issuing processes and start-ups that want to build their app around supreme technology. Online credit scoring, instant KYC and contextual financial offers are the key benefits supplied by Kontomatik, yet the main service is the provision of a tool that lets an organisation become a true innovator in the financial industry.
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