Once upon a time… in the nineteen’s of the 20th century, some people bought computers by pieces to build them up on their own, being independent of the models provided by the machine companies. When any piece got old compared with the new developments, it was easy: people switched off the old and plugged the new one. Of course, there was a limit and, in the end, they had to buy a new machine. Nowadays, complexity increased and the machines are quite efficient and proportionally cheaper. It is not so interesting to build up one from the beginning.
Those were the times focused on hardware. Now, the question is software . The usual trend in the companies leans to implement big platforms to manage all kind of possibilities. That is easy to perceive in the financial branch. As in all decisions, there are pros and cons. If you have a full platform, you have a great range of features for your business with the same code and technological language to avoid incompatibilities, but you are dependent from a provider, which can be more efficient (or not) to develop updates that usually make machines running slower and the chances of little failures increase.
That is why the last technological wave (but surely, not the last one forever) has to do with APIs. These developments are fintech-trendy because they are flexible, scalable and companies obtain certain independence from the provider and improve their user experience with lower investments.
Why should a fintech company bet for the API wave?** We give you six reasons:
- A PIs provide a specific solution for a specific feature . In this case, you do not have to think about in a difficult implementation of an update of the platform that usually performs inefficiently in the beginning, until the failures have been repaired. With an API, you just plug and play the solution.
- APIs are compatible with your platform . This is linked with the above-mentioned reason. The technological language is standardised in order to tailor to your system. Lower costs, easier developments.
- APIs are cost-saving solutions . You just have to invest in specific solutions that are easy to switch to your platform. You update your features without digging in your platform code o thinking about changing the entire platform into a new one. That brings also more safety for your technology and avoids failures.
- APIs improve the user experience with simple use, attractive designs and technological safety . If we think that a simple Facebook icon at the end of any news (i.e. an API) in a digital newspaper eases the chances to publish that news in your own Facebook account, then we have already perceived what simple use in APIs mean.
- APIs allows scalability to improve the feature offered through them . You can expand their use at a time in several modules of your platform, for instance, with lower technological costs, as you are more independent from your provider.
- APIs are efficient low-cost (but not low-quality) solutions to update your features and old legacy platforms. And moreover: is some kind of APIs becomes old-fashioned, you just switch it off and it is not so annoying for user as a change in the platform code that can fail.
There is a question that somebody can put rationally: does it mean that I have to implement APIs eternally? Well, digitalisation means developments, new tools, new technologies, new products, new… that is the word: “new”. Business has costs and, in the fintech world, we must accept that there is a cost related to cutting-edge technology to improve results, reduce costs and be more efficient to our final customers. APIs are a way to implement easy answers to user needs. For instance, think about what you need a specific development for investment proposals in order to provide your customer with a new design with your corporate image that recently changes.
Implementing an API can be a way to rapidly integrate the new brand while you develop harder changes in your platform. Another API can help customers fill in and sign up their forms to invest. In the case your regulator asks for any change in the questionnaire, the change is simple, as you have just to adjust the API.
Some technology providers have already found this market niche in the fintech branch, as the Spanish developer TechRules. This company has created specific APIs to solve two problems : on one hand, the financial companies’ technological needs and, on the other hand, the customer relationship. For the companies, the APIs are focused and advanced solutions for portfolio tracking, data analytics, investment tools, investment advice, model portfolios or calculations.
As a company, you can choose any, some or all of them depending on your needs attending your customers’ demands with the advantage that they are compatible with your system and easy to switch in. For the customers, these APIs are usable, easy, with a well-designed and clear charting for the final user . TechRules is not the only player, but this company has usually led technological developments for fintech in Spain, Latam and Europe.
This is the next technological revolution. This word in technology has another meaning as in politics because it has to do with a deeper and silent movement that has changed everything when everybody realises it. It is non-sense to swim against the waves.