Easier API adoption is key to fintech's growth and maturity
It’s fair to say that the uptake and success of fintech depends heavily on APIs.
Applications that bridge unsiloed interconnectivity between data sources, broaden user bases and facilitate key trust verifiers is what gives fintech the edge on legacy technologies and processes.
Ultimately, this interconnectivity is key to creating true innovation for any financial services customer, creating the perfect blend of speed, insight and intelligence to provide an experience which fulfils a user’s needs without being overbearing.
The API journey
Embedded finance - being able to offer customers the right financial products at the right time, completely immersed in a platform they already use and trust - and smart product partnerships in general all depend on API adoption. The promise is to open up data sources and bring products to users through new channels.
They’ve had some success, but as more and more of fintech’s growth hinges on their adoption, ease and consistency will be vital to build scalable solutions as the industry matures.
Yet, ask anyone who actually works on the integration of APIs and API-led partnerships in general, and they will tell you that we have yet to reach this goal of unsiloed interconnectivity. Aside from multiple technical challenges to overcome just to get an API into a technology stack, there are a host of other considerations which can delay (and sometimes kill) a go-to-market for an API-led partnership.
Regulatory concerns
When dealing with a regulated product or even a regulated entity embedding a non-regulated product, there is a lengthy review process to ensure compliance with various regulations is met.
Ensuring good customer outcomes and adherence to all security and compliance requirements is a key concern not just in getting the initial deployment off the ground, but ensuring ongoing updates are made where necessary across all platforms where a product is deployed.
UI/UX strategy
Moreover, a UI/UX strategy needs to be implemented and a front end built, ensuring both sides of the partnership are happy with the end result. Usually, a product or service provider will be concerned with the user journey to access their product, while a distribution channel will want to ensure this is placed appropriately in their platform, based on how the product complements its core offering and its deep knowledge on the needs of its customers.
Bringing together resource
To cap it all off, all of these considerations require the expenditure of a great many resources, which is oftentimes the preserve of only the largest companies. Even in these enterprises which do have access to the Front and Back-end Development, Product and Commercial resource required - bringing this all together can requires significant internal and external coordination.
Getting it right
These are certainly challenges, but why is it worth innovating to solve them and making API adoption work across the fintech and financial services spectrum?
Rapid API adoption will lead not only to quicker and easier product launches - and all the time and cost savings this can bring - but to huge potential network effects for those fintechs and FIs looking to get a slice of the embedded finance pie.
Getting it right - and breaking down some of the key barriers to cross-business connectivity - will enable product and service providers to broaden their total addressable market for their API-led product and generate a powerful network effect.
All this means that the provider is no longer targeting those companies with the right resource - and willpower - to handle a complex API integration, but can reach any company with a suitable number and demographic of end users to access their product where it is needed most, no matter the sophistication of their technology stack.
Want to learn more about how mmob is helping companies achieve easier API adoption? Get in touch.
