Banking APIs and everything you need to know

What are Banking APIs?

Keeping up with new technologies and innovations, open banking APIs were introduced in the field of banking and finance. Since then many banking API providers have emerged and they have become an ideal way to solve varied banking problems. API is the platform that provides a front end design for easy banking solutions. It is linked to the backend for all validation and database operations. To provide very specific user solutions, third party APIs for banking institutions were introduced. Also known as Application User Interface, this is a modern banking technology. It is a set of tools and software that allow banks to gather and store user data during operations. API services like Aadhaar verification, PAN verification, Passport and DL verification were introduced. Various such identity verification checks were put in place to reduce identity thefts.

API integration services in finance

API is used in a wide range of services in the finance industry and for automating the core banking system. Most banks have their customized-designed applications that are used to transfer money, keeping a track of spending limits, checking balance, Aadhaar verification, verify PAN card and many more. These sorts of open banking APIs or applications assist in everything right from payment operations, tracking transactions, identification and background verification. It is because of these functionalities that the term Mobile Banking came into existence. These applications are also password protected with multiple levels of encryption which help protect the data and access from unauthorized people. 

Most of the APIs for banking industry have an automatic locking-off facility when there is any kind of inconsistency like the input of the wrong pin multiple times. This is a complete technology-based solution. Developers are working round the clock to upgrade the services and add new features to keep up with the changing trends. It has several upgrades to protect itself from ever-developing threats. Hence, banking institutions leverage API framework for Aadhar card verification, to verify PAN number and put in place a robust ID check system. Being a dynamic model makes it more adaptable to the current environment where there are increasing cyber frauds and vulnerabilities.

The core banking system of financial institutions generates a huge amount of data on a daily basis. It is required not only to protect the data but also to streamline them in such a way that it is easier to control and validate. API integration services or programs are a boon as they promote a consistent way of collection and storage of data. This, in turn, facilitates firms to verify aadhaar number, also to verify pan details along with pan number verification.

Effect of the Pandemic

Most APIs are exclusively developed for the financial and banking institutions. It has a banking technology design and features that are exclusive to the needs of the customers. However, what marks the difference is how useful they are especially in the current times of the COVID-19 pandemic. Adhering to social distancing and lockdown norms, customers have shown increasing disregard when it comes to physically visit banks. In such times, a solution like the open banking APIs comes off as a great help. With its help, everything can now be done from the comfort of one’s home. The only things required are an internet connection and mobile devices to carry out the banking tasks. Driving license verification, Aadhaar verification, PAN verification and more of such tasks were earlier deemed to be time-consuming and complex.

Most APIs for banking institutions nowadays use artificial intelligence to replace customer care help. The conversational AI models have their own set of predefined questions that are presented to the customer. The customer can choose to process with the one that closely relates to his or her problem. Moreover, these models are trained to grasp and learn from the problems asked by the customers. They keep on increasing their database by adding more questions to its learning set. Because of the ease of availability, customers can report unapproved activities on their accounts easily.

All transactions and identity verification documents are validated and kept track of through the mobile application. Hence, the customers can be sure of whether or not a particular transaction happened successfully. This eliminates the need of having to wait for a bank employee to check the computers and revert back. These third-party API services provided great solutions to the banking institutions. 

Benefits of API 

API integration services are seen to have two major benefits when it comes to the core banking system operations. Firstly, they are the source of IT urbanization in an industry mostly dominated by manual work and one on one interactions. The technical models used in API help communicate with each other which detects and repairs issues without external help. This helps a lot especially because banks generally use standalone systems where the systems don’t communicate with each other. Thus this promotes a lower level of error detection and patching. 

Secondly, these kinds of services make data more accessible as they make it more organized. Let it be to a third-party API or in-house application, all the user and bank data are now at fingertips. Hence, the Aadhar card verification and PAN card verification process have become seamless.

Moreover, this banking technology improve customer engagements and keep changing their model with respect to customer demand. This increases overall customer experience which acts as a huge positive push to the reputation and growth of the said financial institution.

Changes in compliance and regulations are faster. This can be more easily reflected in banking API’s as compared to a one on one working relationship. This increases the ease of use which is what any component of digitization is about. It can be confirmed with the increasing number of background verification companies that provide national ID check or verification services.

Future of API

The third-party API’s are indeed something to be seen a lot in the future. This eliminates the need for banks to use third parties to integrate the data into their system thereby making the process to verify aadhar card, PAN card verification services  hassle-free. It becomes evidently more secured for banks to manage and access their own data by using the services of banking API providers. Now the technology is closely intertwined with the finance and banking industry.

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