In my last blog post we discussed how to identify good candidates for APIs. This week we will apply the techniques to Banking. This is still generic and not specific to any single Bank. Hopefully some of these examples can provoke thought and help you identify APIs specific to you that will benefit your business.
Mobile App Development – let’s start with Banks creating their own mobile Apps for their customers. Within this we will look at three areas for APIs:
- General information – this is information that is not tailored to the specific customer using the App. It could include general information about the bank offerings – account types and details, loan rates, CD rates, mortgage rates, financial tools, routing numbers, and other services such as credit card offers, financial advice/retirement accounts, etc.
- Custom information and transactions – this is information and transactions that are tailored to the customer using the App. Obviously for these APIs, additional security is required to ensure appropriate access. APIs fitting into this category might include – account balances, transfer funds, bill pay, e-statements, credit card payments, account alerts and similar functions related to the App user’s interactions with the bank.
- Mobile advantages – Customers using the App on the mobile device can take advantage of functions of the phone or tablet in conjunction with APIs provided by the
bank. Sample device functions that we can take advantage of are the camera, GPS services, near field communication (NFC) and digital wallet. Relating this to the bank’s APIs we can use the camera to deposit a check as is often done today, use the GPS services with APIs to find the nearest bank branch or ATM, use NFC with other security mechanisms at an ATM to identify the customer and process pending transactions (such as a cash withdrawal). Digital wallet opens up many business opportunities to provide payment services.
Partnering – APIs can help make it easy to do business with you as a bank. Providing APIs to partners would allow them to sign up for services, access information about
their accounts and provide services to their customers using the Bank’s services. Sample capabilities could include branded credit cards or gift cards, rewards programs, and business services such as accounts receivable and accounts payable. APIs to obtain reports, cash flow analysis and real time information can be a big advantage.
Public APIs – Many of the same APIs used internally and with partners can be used as public APIs to drive additional business and help obtain new customers. For
example, potential customers may be shopping for the best loan rates or CD rates. By making an API available for a comparison App, your Bank has the opportunity to compete for this new business.
One of the most exciting aspects of the API economy is extending your reach to other industries that can send business to you. Banks can benefit by offering loans to customers of other industries such as automotive for car loans, education for student loans, and real estate apps for mortgages. Retirement planning, vacation planning, college planning and other high cost life events can drive opportunities for bank services. By providing APIs to these other industry Apps the bank has the opportunity to obtain new customers focused on these areas who were not even thinking about the related banking aspects.
Social / Big Data Analytics – In this area you might act as a consumer of APIs and mash this information with your own APIs. Acting on company references and trends in social media can provide business advantages, allowing you to take advantage of opportunities or head off problems. For example, twitter feeds that reference your bank may combined with your own analytics can help determine if actions need to be taken to rectify customer satisfaction issues. Other references to consumer or business needs might allow you to act to offer banking solutions.
Device Integration / Wearables – In this area let’s be creative! The device most closely associated with Banking is the ATM. ATMs can be fitted with sensors for near field communication for authentication as mentioned earlier, but perhaps we can take this a step further? The bank could offer an API to local businesses to provide offers to customers in the vicinity of the bank’s ATM locations. When an ATM recognizes a customer is nearby, businesses in the area might pay to invoke an API to push information to the customer with an offer to attract them to enter their business.
Data Assets – Banks have access to an extremely important data point – financial information about a potential customer for companies in other industries. Providing access to data assets in aggregate can be valuable for advertising in particular locations within the city where target customers might live.
For additional value (and with appropriate opt-in support) the ability to target specific bank customers with offers from other industries could also be supplied.
Finally, let’s take a look at some public APIs currently being offered in the banking industry:
- Plaid – is designed to allow developers to integrate transaction and account data from most major financial institutions into third party applications. The data includes merchant names, street addresses, geo-coordinates, categories, and other info.
- Price My Loan API – serves the mortgage lending industry by providing loan pricing and underwriting services online as a service. The PriceMyLoan API allows users to integrate the mortgage processing service into third party applications.
- Tipalti API – is a mass payment service. Tipalti allows businesses to pay out vendors, employees, and others globally via multiple methods from ACH to PayPal to wire transfer. The Tipalti API allows developers to access and integrate the functionality of Tipalti with other applications.
- BankImport API – provides users with a single place to track their financials over several accounts from different banks. The BankImport API allows developers to automatize the processing of incoming and outgoing money, providing direct access to transactions, bank accounts, and settings.
- IBAN Calculator API – can convert a national account number into an IBAN, validate an IBAN, and find bank information for an IBAN. These functions are useful when performing cross-border online transactions in Europe, validating account numbers, etc. Also, in the event of a fraudulent money transfer, the police can use an IBAN find out about the bank involved and its location.
Connect with me through comments here or via twitter @Arglick to continue the discussion. You can also read my earlier blogs.