5 ways businesses can integrate API to smoothen customers journey

By Joy Dumasia

API, or Application Programming Interface, is a buzzword in every industry, with as many as 90% of software developers banking on APIs to develop core functionality of their applications, as per Slash Data survey. Open Banking APIs expose a range of data to third-party financial service solution providers, including payment initiators, account aggregators, and other emerging FinTechs. These APIs are designed and documented to support PSD2 and Open Banking regulations.

Gautam Mahesh, Director of Product, Decentro, said: “In today’s digital era, most businesses aim to offer a seamless customer experience through a digital-first approach. Though each business may differ in nature, size, and services, one common purpose that unites them is to have a robust IT infrastructure to leverage data analytics, automation, and other digital tools that fuel business growth. And APIs are a critical piece of the entire IT infrastructure that makes a business process efficient.

API’s are crucial in driving innovation as they not only enable businesses to digitally transform but also allow businesses to navigate all the challenges swiftly. It streamlines business operations and helps businesses deliver a personalised, interactive and convenient customer experience. While the future is digital, the critical layer of APIs will enable it. The API economy is here to stay, and with all possibilities, it will only grow.”

There are innumerable examples of how an API-first approach transforms the customer experience, whether signing in social media, paying using e-wallets, or searching for the weather. Here are the 5 ways businesses can integrate APIs to smoothen customers journey:

• Simplifying the user onboarding journey with KYC APIs 

Know Your Customer (KYC) is a mandatory process that allows businesses rendering financial services to identify and verify their customers. Traditionally, companies had a tedious KYC process involving a lot of manual work. With KYC APIs, businesses can eliminate lengthy & time-consuming verification processes and create a seamless experience. Plug-n-play APIs automate every step of the KYC process, reducing the risk of clerical errors. Moreover, with CKYC APIs, businesses can skip multiple steps and onboard customers by accessing their information in one place and also detect & prevent fraudulent activities and money laundering cases. 

• Reduce operational cost with Payment APIs 

A payment process is an integral and critical part of any business. And, companies often struggle with a pile of invoices, second-guessing every transaction that happens. Payment APIs streamline all the payment related processes, lessens collections costs by more than 10X, enables instant settlement, automates recurring charges, and reduces transaction risk. Businesses can also use Payment APIs to generate a payment link that can be used across multiple channels like Whatsapp. Moreover, payment APIs have proven immensely useful in avoiding manual account reconciliation, saving time and money. 

• Making banking integrations easy 

Banking APIs have revolutionised business banking. FinTech companies can enhance cash flow visibility, reduce operational hurdles, and analyse all financial transactions using simple APIs. It enables seamless opening of Consumer & Current bank accounts and conveniently availing banking services like money transfer without going through any paper transaction. With Banking APIs, FinTech can let customers open bank accounts with just a few clicks from the comfort of their offices or homes.

Further, banking APIs have fueled the growth of Neo Banking. Apart from this, APIs have also facilitated interactive financial services, including modern use cases like Embedded Banking. API platforms are coming up with simple plug and play APIs that can simplify various financial operations for FinTech platforms, marketplaces, etc., across products such as virtual accounts for reconciliation or virtual cards for businesses to spend, track and manage their accounts etc. within their ecosystems.

• Leveraging the Card API to create customised prepaid and credit cards

FinTech, NBFCs, and other businesses can leverage Card & Wallet APIs to create physical and virtual cards with as little as an email address. With Card APIs, businesses can issue physical or virtual cards for multiple use-cases spanning expense management, purchases and lending. Companies can offer customised cards explicitly designed to cater to a merchant’s needs. With co-branding, a business can leverage brand recall easily & naturally in their customers.

Card APIs allow businesses to harness the power of Credit Lines for FinTechs and Lenders. It allows fintechs to cater to the needs of today’s consumers who avoid going through tedious processes and look for convenient financial solutions. 

• Ease credit availability with Lending APIs

The introduction of APIs in Lending has disrupted the end-to-end lending cycle. The Lending API module has allowed lenders to validate borrower’s data digitally and run a check on their financial history. Businesses can integrate their APIs on their internal platforms, web, consumer assets (web/app) to make credit accessible. 

Moreover, it also enables businesses to quickly launch their customised buy now pay later (BNPL) product. BNPL is among the most evolving FinTech verticals that allow users to avail credit without going through all the tedious processes of loans. There has been an exponential demand for APIs that allow lenders to facilitate BNPL and offer a fast, secure, convenient consumer experience in the past few years. 

ALSO READ: Open Banking roadmap for mid-sized banks in Europe Report 2021