Third-party Application Programming Interfaces (APIs) are not new to the financial market. Banks, FinTech startups and Credit Unions have been interfacing with third-party applications for years.
APIs are essentially sets of requirements that govern how one application e.g. your CRM system, can communicate and interact with another - your core banking system for example.
Open APIs vs Private APIs
Before you look at APIs, it is important to know the difference between an Open API and a Private API.
- Open API: APIs that are open are available to the public and provides any developer access to your software (eg. core banking system) or web service.
- Private API: APIs that are private offer front end interfaces to back end data and application functions by offering a “point of entry” for developers to access.
For Credit Unions, your technology partner should be receptive to APIs with 3rd parties, however they must do so in a way that doesn’t compromise the system. It is our responsibility to make sure that your banking system is secure and robust. Therefore, it is also our responsibility to ensure that all 3rd party APIs and integrations have been fully vetted and that we have a secure plan for roll out - it is your core banking software after all!
APIs are helping with members’ needs
The reason that APIs will become more popular in FinTech the next 12 months is due to a paradigm shift in the changing needs of the members. The various channels (and devices) people use to make and receive payments and manage their finances has changed significantly in the past 10 years. This year, integrations, such as biometric authentication, will offer an easy (more secure) way for members to provide ID verification and login.
In addition, we are seeing Credit Unions adopting new tools to help manage their operations such as marketing and sales. Facilitating APIs for business management tools, such as Customer Relationship Management (CRM) systems, will enable Credit Unions to tie in their other core systems with their core banking software and support campaigns for lending.
How Wellington IT work with APIs
At Wellington IT we strategically integrate with dozens of 3rd party applications to increase security, expand member services and improve operational efficiency for our customers. In 2019 and beyond, we plan to continue to integrate with 3rd parties by creating flexible APIs for specific business functions. Click on the video below to hear our Head of Product & Development, Ian Glenn, discuss how we are working with 3rd party APIs.
This section features in our eBook ‘Future of FinTech in Irish Credit Unions’ along with information on other key aspects such as biometric ID verification and debt management solutions. Find out more about the future of FinTech by downloading our free eBook.