A Beginner’s Guide to API Banking Services and How They Work

API banking services

A Beginner’s Guide to API Banking Services and How They Work

The present is the age of Open Banking, and it has quickly become one of the most optimal paths towards digitisation. As partner and customer expectations are shifting towards the digital flow of banking operations, a multitude of financial services has stepped up to leverage the value that API banking services can create.

API (Application Programming Interface) Banking enables Open Banking, which is one of the biggest advancements made in the industry of banking. It provides consumers and businesses an easy access to customised API banking services while ensuring improved efficiency and complete security. Check out below to understand API Banking India in a better way and how they work.

A Word About API Banking Services

API Banking enables third party applications to use a platform through which they may access a set of tools and services. In other words, the bank offers access to their customised services to the third party through specialised APIs. Then, the third parties can use these banking services or even offer them to their customers. 

Some of the top Indian banks are now allowing API Banking Services companies to access their API banking platform and create custom APIs. From building the APIs to testing them and making them live, banks offer wide access to the developers to create efficient and powerful APIs.

API Banking Meaning and How it Works

The banking industry has become modern and is open to trying and benefitting from the latest technologies. With an aim to meet the changing expectations of the consumers and to stay ahead in the competition, many top banks across the globe, including India, are devouring advanced technologies much faster than ever before. Open banking through an API banking platform is one such innovation.

Basically, API banking connects a bank with a third-party API banking services company through a set of tools and protocols. Therefore, it involves access to APIs through the bank’s core system. The third parties can either use these APIs within their API banking platform or offer them to their customers to give them a more customised banking experience. 

The clients need to integrate this system in their backend ERP, after which they can perform banking functions like money transfers, balance queries, beneficiary management, account validation, and transfer automation.

Evolution of API Banking Services in India

Now that you have understood what API is and how an API banking platform works, it’s time to have a look at the evolution of API banking services in India. In August 2016, the CMA (Competition & Markets Authority) of the UK asked multiple top banks like Lloyds and Barclays to give access of their banking data to authorised third parties. This was also the time when NPCI (National Payments Corporation of India) developed and RBI launched UPI (Unified Payments Interface) in India. This system of payment played a crucial role in encouraging the rise of API banking in the country. 

Some Indian banks started offering API services at that time, and now, almost all major banks offer them to their customers. A host of API banking services are spread across varied categories, including Payment Gateways, Trade Services, Business Banking, and Accounts & Deposits. For instance, a business may integrate its ERP with API banking to manage its cash payables and receivables and to carry out its banking operations.

API Banking Portal: Efficient, Fast, and Secure

An API banking portal offers access to the core banking data, which efficiently eliminates barriers between the businesses due to uniform access to the data. Ultimately, it helps in improving the financial industry and enhancing the quality of the services made available.

With several different types of APIs being offered by banks, the popularity of API banking services is only expected to grow over the next few years. If you are a business owner, get in touch with an efficient API Banking Solutions company in India and see how they can benefit you.

FidyPay is one such API Banking Services company that makes banking much easier, faster, and safer than ever before. Apart from allowing instant 24/7 banking transactions, we also handle your back-end security and maintenance needs so that you can stay focused on your customers’ requirements. So, register today and improve!

Send us your query at care@fidypay.com or call us at +91 731 4086993 to avail our services and for more information.

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