There’s a new catchphrase in financial services: the API economy. It refers to the transformative impact that application program interfaces (APIs) are making with companies and consumers.
APIs are not new. What is gaining fast traction is their use across treasury management, payments, and customer service at businesses large and small.
Connecting systems with far less time, effort, and expense
The popularity of APIs stems from the time and effort they save in custom development, and how easily they interface with bank systems and other applications. Using APIs, companies tap into pre-built connections, which eliminate the need for programmers to create, test, and implement custom code. Instead, the “plug and play” building blocks of APIs securely link company systems—such as ERPs, accounting software, CRMs, or websites—to almost any application, database, or third-party system.
APIs hold almost unlimited potential for treasury management and other corporate stakeholders. They help companies to:
- Create meaningful digital experiences
- Use development resources wisely
- Automate important activities
- Innovate quickly and lead in their markets
Mainstream adoption of APIs offers companies more choices
APIs open the door for all types of organizations—not just those with big budgets and sophisticated IT teams. Because these tools are easy and cost-effective to implement, even smaller companies and less tech-savvy organizations can take advantage of the benefits.
More mainstream adoption also means fintechs, ERP providers, and other vendors are embedding APIs in their solutions. In these cases, all companies need to do is provide permission to access systems or data; there’s no need for internal development resources.
When treasury management stakeholders need multi-bank data for forecasting, the Trovata solution uses an API to connect their strategic cash positioning application directly with account information from various banks. The API can integrate real-time account data from Wells Fargo, without IT intervention or the need to download and import files manually.
Dashboards, payments, and cash positioning among popular API use cases
The wide spectrum of API development opportunities gives companies maximum flexibility. Well-resourced organizations can create custom opportunities using internal development teams; other businesses can find off-the-shelf tools to solve their challenges.
Where can APIs from your bank streamline, automate, or improve experiences at your company? These use cases are among the most popular today:
- Automate daily cash positioning. The more bank accounts your company holds, the more challenging it can be to obtain current balance information for strategic decision-making. Instead of logging into numerous bank portals and downloading or re-entering information every day, account balance APIs integrate critical data directly from your bank into your ERP, treasury workstation, accounting system, or third-party forecasting tool. Staff can focus on analysis rather than collecting data.
- Power customer dashboards. Today’s savvy customers expect instant access to reports and information, especially if they trust your business to hold, invest, manage, or facilitate payments on their behalf. APIs can push account balance and transaction details to portals, dashboards, digital wallet applications, or other interfaces that you create so customers always have visibility to their funds.
- Streamline customer enrollment. When customers sign up for services that require refunds, claims payments, reimbursements, or other disbursements, an account validation API can automate the process of collecting and verifying bank account information. Thanks to real-time connectivity, there’s no need to wait days for a micro deposit or user intervention; confirmation occurs instantly.
- Pay workers. Faster payment options such as Real Time Payments, Same Day ACH, and Push to Card move funds quickly and electronically. They’re perfect for paying hourly workers, freelancers, contractors, and gig employees at the end of a shift or project. APIs enable this functionality by moving payments from daily batches to immediate disbursements.
Many more API options exist through banks and other financial services providers. If you’re curious about the potential that real-time, system-to-system connectivity holds for your organization, ask your bank to share their options, facilitate a discovery session with your team, or provide your internal developers with access to their API gateway and sandbox.
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