Enabling Digital Transformation across Financial Ecosystem with Open API

December 5, 2022

Enabling Digital Transformation across Financial Ecosystem with Open API

In the last decade, Financial Institutions (FIs) have seen a key transformation across their technology ecosystem. Disruption from present-day FinTech’s, NeoBanks, New- Age Lenders, and Digital-only Banks along with the changing regulatory frameworks and constantly increasing customers’ expectations has pushed FIs to implement the latest technologies and broaden their offerings. Democratized technological innovations have brought tectonic shifts in how consumers utilize financial products.

Fintechs have created a parallel and complementary service ecosystem that works with Banks and Traditional lenders by providing instant and quick solutions. The advancement in data sharing has resulted in consumer service portability and has significantly increased the dependency of Banks on Fintechs.  FinTech’s have become essentially significant to FIs with Institutions opening their information to relevant external agencies and clients are more able to move quickly for better services.

Technology penetration and dependence have impacted and transformed the regulatory frameworks of Central banks that essentially monitor and regulate financial institutions.  These regulatory-driven changes are encouraging banks to share their data and open up their technology stacks for more inclusive financial systems. Traditionally banks have always had a lot of data, but were reluctant to share it with the relevant external agencies and had serious concerns about security and privacy.

Now, with the help of Secure APIs, Banks are opening up and leading the industry to a turning point.  In retrospect, retail banks relied heavily on outdated and legacy systems and had limited resources that restricted their involvement in technologically-led innovation. Legacy systems are evolving, and more banks are preparing to operate in the Cloud. In this regard, Fintech’s are leading the way and are becoming vital to the Banking and Financial Industry.

Whether it is Legacy modernization, Data retention, customer center transformation, Cloud migration, or Digital platform integration – APIs are an indispensable part of this technology adoption and are becoming universal. APIs have helped banks to innovate and provide quick solutions and are enabling digital transformation across the whole industry.

Challenges and risks

Financial Institutions and Banks in order to provide various and varied services have deployed increasingly complex combinations of Technologies, Systems & Applications to serve customers and business partners. Over a period of time, this has created a tech stack that has components of various generations. These legacy systems become increasingly inefficient with time, partly because they are generally not interoperable with new technologies.

Financial services companies that rely on these legacy systems will encounter serious problems when they try to add updated software and services, SaaS applications, and modern APIs. Sometimes, these problems can be solved through point-to-point integration between existing systems. However, over time, these custom end-to-end integrations can create multiple, fragile, and complex dependencies. Systems like this are prone to failure. Even if they work, complexity will have a negative impact on customers and partners, wasting precious resources.

Moreover, since open API will generate a large number of new connections and access points, it will increase the risk of sensitive data being misused and may lead to data loss and fraud. FIs will have to use a new layer of network security when opening up APIs and sharing customer data. APIs themselves can be tricky because they are vulnerable to cyber threats. Appropriate API security metrics must be in place, so the monitoring of API management will be even more important.

AllCloud – Simplifies API integration, design, and development      

AllCloud is helping major Financial Institutions transform their lending ecosystem through multiple API integrations by creating a hyper-connected digital ecosystem with AutoCloud – AllCloud’s Digital First and API driven SaaS Lending Platform which offers financial services industry easy-to-implement solutions for API integration and development with plug-n-play integrations with Majors Banks, Credit bureaus, KYC data repositories, and Payment & Collection providers. AutoCloud Platform makes it easy for Lending Institutions to incorporate seamless integration and interoperability throughout an environment thus catering to key lending operations like Customer onboarding and Origination, Credit checks, instant disbursements, and collections.

AutoCloud is a Techfin for Fintechs, Banks, Digital Lenders and NeoBanks that provides one-stop plug-n-play solution to transform, operationalize and scale lending operations of organisations. With AutoCloud’s simple and configurable lending capabilities, NeoBanks and Financial platforms can integrate their front end digital stacks seamlessly and serve multitude of financial products to customers quickly.

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