May 21, 2019

Everything You Need to Know About APIs and How They Relate to Banking

Mobile Banking | Security | API | Online Banking | Core Banking

APIs (application programming interfaces) are simply communication tools for software applications. APIs are leading to key advances within the banking industry as financial institutions continue to collaborate with third parties.

What Are APIs?

Simply put, APIs are software applications used to develop other apps that connect to other firms’ pre-existing technology. By using APIs, banks can offer a more seamless, efficient customer experience. In turn, innovative solutions are created that solve specific banking problems. Problems such as a high number of failed payments, noncompliant or inefficient international payments, managing internal roles and responsibilities, changing or canceling payments on short notice, and more.

There are currently three types of APIs, all of which provide a gateway to more innovative solutions. These include:

  • Private APIs — Most commonly used within the traditional banking organization, private APIs help enhance operational efficiency and are viewed as essential by the vast majority of banks.
  • Partner APIs — Typically occurring between a specific third-party partner and a bank, partner APIs allow for expansion, especially in relation to new channels, products, etc. For example, through an API partnership, a bank could work with a separate third-party company to automatically create loan documents in relation to loan applications. This would also allow the bank to automate loans, increasing efficiency. Most banks will gradually transition from private to partner APIs.
  • Open APIs — The least commonly used type of API, this structure involves making business data available to third parties. In this case, banks are often concerned with the security of data and other sensitive client information.

Connecting chain

The Link Between APIs and Financial Institutions

If you’re currently in the banking industry, you know that your customer’s experience is imperative to your success. In today’s digital banking age, banking applications are in high demand. After all, the public wants an easy-to-use experience that offers the latest digital services.

One key study recently found that out of the 2,000 Americans surveyed, 31 percent use their mobile banking app the most — more than social media or weather apps. The demand is increasing so much that 91 percent of users prefer to use their banking app than to physically go into a branch.

Banks are now taking advantage of APIs, as they add new revenue streams, increase access to additional customer data, encourage future innovation, and more. They also support the development of new distribution channels.

In addition, by taking advantage of APIs, banks can provide a deeper, more efficient experience for their current and future customers. This is particularly true of the customers' ability to seamlessly interact with various service providers. Overall, APIs improve the customers' experience based on greater freedom, flexibility, and personalization.

By offering customers a powerful lineup of banking solutions, your bank can become an unstoppable force of function, speed, and efficiency. Whether you’re interested in a core information module, an all-in-one banking machine, or a more efficient wire transfer system, FPS GOLD assists financial institutions by providing state-of-the-art banking software. Our powerful APIs allow for customization that can meet the needs of any bank.

Examples of APIs in Banking

There's a reason why API-based products are gaining so much traction within the financial marketplace, as customers demand more immediate, seamless banking and payment options. After all, the way customers interact with financial institutions is rapidly changing.

Just a few key examples of banking APIs include analytics, account authentication, account information, payment processing, and even loyalty programs.

Banks are using APIs for one or more of the following four main reasons — reach, speed, domains, or the Internet of Things (IoT). In turn, operations become more efficient, and all parties mutually benefit.

For example, a bank may develop a mobile app that allows customers to access their account details as well as information about ATM locations, branch hours, etc. In order to optimize their app, they would need to use an API to connect with a third party. This would allow the bank to offer even more features, such as information on credit scores, mortgage tools, etc.

From making it easy for customers to check their credit scores to using mortgage tools, the API methodology has many applications within banking.

Another great example would be FPS GOLD's API associated with our partner, MX. By creating an API that specifically works with MX's account aggregation product, banks that offer mobile or Internet banking can provide their customers with a much better experience. With the ability to see their spending habits through a simple, digestible dashboard, customers can get the most out of their banking services.

APIs also make it easier for banks to partner with major credit card companies, brokerage firms, and other large corporate clients who streamline and optimize the customers' experience. The end goal is to drive more business and obtain new customers — all while ensuring current customers are satisfied.

Interested in more information? If so, fill out this form.

Compete. Profit. Thrive. Do it with FPS GOLD

Still running on the same old banking software?

Don't get left behind. Make the switch to FPS GOLD today!

Let's Chat!
Don't get left behind!

Most Recent Post
Be More Than Just a Bank. Here's How.

Mobile Banking | ROI | Relationships | Technology

Follow Us
Share This Blog Post!


Be More Than Just a Bank. Here's How.

For your financial institution to see great success, it needs to be more than just a place where people can store their money. Many financial institutions make the mistake of limiting the support and options they provide because they’re only worried about themselves and how they can cut costs to make more money. However, if institutions would focus more on their customers and their needs, they’d quickly realize that it’s worth every penny to provide them with everything they need. By going above and beyond for your customers, you’ll create greater value, which in return will generate more revenue than ever before. The following guide walks you through different techniques you can use to make your financial institution more desirable to potential clients for maximum success.

Read More


Is Your Institution Not Getting the Attention It Deserves? Let's Change That.

It's every financial institution's worst nightmare: you sign up for service with a software provider or vendor, hoping for a great experience. You're excited about the software, and looking for a chance to grow your business and meet your objectives. You're also looking forward to getting the tailored, customized attention you need to launch your new system.

Instead, you get left out in the cold. It's nothing like you expected, and you're not sure where to go from here. Even big-name providers don't often provide the attention, assistance, and support financial institutions crave. It's a frustrating yet common situation.

Read More


Wanting to Switch Core Providers? Here are 5 Questions to Consider.

If you are reading this blog, you probably already know what a core banking system is, but in the case that you’re new to this sort of thing let’s give you a quick breakdown of what a core system is. A core banking system processes daily banking transactions and posts updates to accounts and any financial records. These include deposit, loan, and credit processing. The core banking system also connects with tools for reporting and ledger systems. To put it simply, the core is like the heart of your bank. It’s what helps your bank run properly. That’s why it’s important you ask yourself the following questions when considering switching to a different core provider.

Read More

FPS GOLD Customer Service Rep

Grow Your Community With FPS GOLD

With powerful software comes great responsibility. That’s why our amazing team is here to help you every step of the way. Give us a call or request more information, and start growing your business and community the right way.

Let's Chat!
Still unsure if FPS GOLD is right for your institution? No problem. Give us a quick call. We’re happy to answer any questions or concerns you may have.