An application programming interface (API) is an interface which allows two applications to communicate for the seamless completion of tasks. In essence, these APIs act as the translator between two sets of unique code. In the finance world, this is incredibly useful for a number of things. For instance, when buying and selling stock, you want your trader to have the most up to date information possible. Using an API, their screening software is integrated with their brokerage account which gives them current prices, making placing orders effortless.
APIs in Fintech
Naturally, application programming interfaces are an important part of the entire Fintech industry. APIs are the part of Fintech which make the integration of new technologies so simple for users. While there is hard work and months of planning going into the look and feel of each new app or website, in the end it is through the API that the transition is so smooth. Think of all the apps you’ve used Facebook or Gmail to log in with. That ease of access is key.
Fintech is all about finding seamless – but still secure – ways for customers to access their finances from across the web. Through APIs, this is possible. The perfect example would be when a customer logs into their bank in order to use a financial planning app, an API allows the two apps to speak to one another. The same can be said of mobile payment services such as Venmo or CashApp.
APIs are evergreen in the ways they continue to be applied to new uses and industries. For Fintech companies, they are a valuable part of keeping the customer experience simple and enjoyable.