Why Open APIs Matter for Banking

To keep up with the competition, your bank needs to deliver hyper-personalization and convenience around the clock. But as a business with customers who may live in different states across the country, how do you scale up to grow without sacrificing your standards?

The key is in something your customers may never even see – your application programming interface, or API. Today, we’re walking through the types of APIs available to your bank and how to choose the best options for the customer experiences you want to create. 

What is an Application Programming Interface?

An API is a software system that aggregates your data from different programs – they’re all about improving the client experience. 

Here are just two of the many things APIs can do:

1. Give real time data on clients
2. Ease tech integration by allowing several software systems to communicate with one another

APIs can assist with account verification, analytics, processing payments, and much more. With so many options available, how do you know which API is best for your bank?

The first step: choosing between an open or closed API. 

What’s the Difference Between Closed and Open APIs?

Although all APIs serve the same core purpose of sharing or aggregating data, they have some key differences you’ll want to take into account when deciding which type is appropriate for your bank to use.

The Android vs. iOS Analogy

The difference between an open and closed API is similar to the difference between an Android and an iPhone. 

Android – Google’s operating system for smartphones – is open, so developers can access the source code and adjust it, allowing them to tweak how the system looks and functions. If you’ve ever used a Samsung Galaxy versus a Google Pixel, you know that each phone operates differently even though they are built on the same foundational operating system.

On the other hand, iOS – Apple’s iPhone operating system – is completely closed, meaning no one can adjust the primary operating system. As a result, every iPhone looks and functions the same when you open it up.

Open APIs

In addition to typically being a lower cost option over closed APIs, open APIs are usually easier to implement, and allow for more integrated workflows. 

Since open APIs are cloud-based, anyone you’ve granted access to with internet and a device can easily work within your system, creating greater functionality for both consumers and your employees. 

One potential drawback? For all the inclusivity of open APIs, they often struggle with more complex issues, like translating between different coding languages. 

Closed APIs

Closed APIs can only be accessed by the owners of the operating system, which can be useful if you are not planning on connecting your system to others.

However, a closed API means that you won’t be able to connect with outside applications – only applications built by your own team. As a result, new features and integrations are typically slow to arrive.

Because closed APIs can’t easily connect with other applications, you run the risk of keeping your customers in the dark – making it difficult for them to access their own data through third-party systems as they wait for your team to build the necessary infrastructure.

Why are Open APIs Important For Banks?

Technology is constantly evolving and shifting – as are consumer needs. An open API allows your software to keep up with these shifting demands, while still offering security. Offering more ways for customers to engage with your software can also increase your competitive advantage and appeal to more prospective customers. 

How Does Wealth Access Use Open APIs to Unify Bank Data?

With Wealth Access, your clients can view their entire balance sheet in a convenient and safe way. That’s because we’ve created a library of API endpoints, allowing for the aggregation of not only managed assets, but also held away assets that you may not have known about, giving you the chance to bring those assets under your firm’s management and realize new revenue.

Each of your customers has a unique financial profile, usually with different pieces held in multiple sources. Open APIs allow you to capture all of those pieces in a single, easy to view picture, regardless of which systems they’re using. 

Our open API system allows you to create a unified and personalized customer experience with fully aggregated data, for each and every one of your clients. 

Open New Doors with Wealth Access

Ready to see Wealth Access’ open API in action? 

Click here to schedule a demo of our enterprise customer data unification platform today.