A definitive guide to understanding API banking
There isn’t any need for emphasizing the importance of APIs in banking. By now you would have already got an idea as to how important this rapidly growing technology is.
A lot of work goes into testing and selecting the right API. It is equally important to choose the right API provider. The right provider API will lessen your headache and help you focus on growing other important aspects of your business.
Developers have a wide range of options available for integration. Since the open banking concept is gaining popularity in Asia and North America, there has been an increase in the number of API providers in these regions.
But, how do you choose the right financial API provider for integration?
Here are a few tips from our side to choose the best API provider.
The strategic goal of integration
You should determine the strategic goal of integration before you select an API provider. It could be anything like improving the customer experience, cross-selling the products, acquiring additional customer insights, or something else. Once you have it in place you’ll have clarity on what APIs to look out for.
Consider whether they’ve a developer community
A developer community is a place where a lot of developers gather together to discuss & contribute to solving a common problem. Here is an example of one such community - Dwolla.
Being a part of a developer community helps you gain the right information & advice on how to gain the necessary skills to accomplish your goals.
Evaluate the documentation
Evaluate the documentation in detail. Look for elaborate documentation with FAQs. Some of the API providers have less standard documentation. Things like whether the APIs are paid or not, or if they have some tech limitations (for eg: Number of queries per hour), etc., can only be understood once you go through the API documentation in detail.
Check & analyze different offerings
You need to closely analyze different sets of offerings by any API provider. This will help you identify the right set of APIs you need and this will also tell you if you can solve problems by integrating several APIs. If a solution can be made by integrating several APIs then it helps you save time from building everything from scratch.
Verify standard & legal compliance
All the developers working with you should confirm the security standards of the selected APIs. The legal department of the company should look at whether the process of data sharing meets legislative requirements and have a process in place to take permission from the users.
Look for fraud monitoring features
Check if the API provider has a fraud monitoring system integrated with the APIs. The chances of financial fraud are very high nowadays and it is imperative to have a proper crime and fraud detection system in place. Businesses and banks will have to invest more in the enhancement of your fraud detection capabilities.
The time required to move it from Sandbox to live
Another parameter to look out for would be the time required to move APIs from Sandbox to live. Moving APIs from Sandbox to live is known as Sandbox sign-off phase. It is different with different API providers. You should ideally choose the one which helps you easily switch from the sandbox environment to a live environment.
You should select the API provider that has a proper error management system in place. Most of the API providers have a very strenuous error management system, where they would throw an error, and businesses like yours wouldn’t be able to make anything out of it. Ideally, all error messages should be simple and easy to understand.
These are some of the parameters you should look for while selecting the right API provider. You can plug & play with the APIs available in the market to easily build & launch your applications.
With many types of banking APIs getting launched in the market, API banking services are only expected to grow popular in the future. If you run a business then you should definitely try out APIs to automate many of your mundane tasks.
Using APIs for the first time? No problem.
Head over to our Open API documents section. We provide developer-friendly APIs with proper documentation for issuance of Cards, Payments, Collections and Payment Gateway.