API Platforms in banking07/08/2022 0 By indiafreenotes
An API, or application programming interface, is basically software that acts as an intermediary between other pieces of software. As the acronym implies, an API is a program that acts as the interface between applications.
APIs play a crucial role in the Banking as a Service (BaaS) industry. BaaS sometimes called Banking as a Platform (BaaP) or banking Software as a Service (banking SaaS) refers to services that enable banks to provide digital services to customers or integrate with other digital services. BaaS providers like Treasury Prime offer API banking. Treasury Prime also connects fintechs and banks directly with each other so they can build relationships.
A BaaS company is a type of fintech company, and is sometimes referred to as “Fintech Banking as a Service”. Fintech is short for financial technology, and refers broadly to technology for financial operations. BaaS companies provide services to other types of fintechs that need to embed banking services into their applications. In addition to BaaS, fintech refers to payments apps, apps for day trading, neobanks or online-only banks, and other financial technology tools. Examples of top fintech companies include PayPal, Stripe, Square, Gravity Payments, and Affirm.
Benefits of API Banking
- Direct integration and Instant solution; Real time solution for processing banking transaction
- Secured medium of integration; Exchange data or files in encrypted environment
- Highly efficient mode of banking; Reduce turn-around time of banking transaction as initiation as well as reverse status available on customer system on real time. Easy reconciliation
- Saves time; No need to visit bank or uploading transaction files manually.