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The Role Of APIs In Omnichannel Banking

The biggest advantage of this model was that all processes, technology and their components were under control but also proved to be the drawback due to which personalised experience as per the ever-changing consumer expectations wasn't possible due to regulatory and compliance issues

Long before APIs disrupted all the business verticals, Banks introduced us to ATM machines . . . which basically allowed us to not be in the queue for hours and deposit/withdraw cash on our own easily without entering the banks. This was just the beginning. Banking is going on a whole new level altogether . . . overcoming all the challenges they are facing these days in exposing their internal systems, protected resources, legacy systems, and a huge amount of confidential data as APIs. Kristin Moyer, director of research at Gartner, stated that in 2012 "banks must transform themselves to continue to be profitable and relevant in the financial services value chain: applications stand in the way in the banking sector, as they are rigid and reactive". In the recent times, mobile banking is not only gaining much popularity but also is raking in the major part of customer delight in omnichannel banking. A routine visit to the bank branch is most likely to annoy by almost 2.5 times as compared to the app interaction.

Now, it is obvious that digitisation is becoming an imperative step that each bank must take before it is too late. To succeed in providing delight in omnichannel banking experience, however, banks must ensure these capabilities have been embraced:

" Single view of the customers across channels-ability to map the journey in a bank, on the web, on the mobile and on social media-to launch contextually relevant campaigns
" Extraordinary and interactive user interface, considering that a lot of importance is being given to the design these days and the speed . . . users won't hesitate in uninstalling the app if any screen takes the time to load
" Each banking process such as adding payees, third party transactions, bill payments, account statement requests, communication and all others must be streamlined and simplified for your users to quickly make routine transactions
" Personalised user experience based on the behaviour, activities, and interests . . . so that only relevant information is shown to them
" Should a customer get stuck at any screen or has any query regarding any feature, there must be a way to get in touch with quick support with proper authentication
" Much faster development and deployment cycles without dependency of the tech team to launch new and complex use cases quickly to keep up with rising customer expectations
" An enhanced working model that provides agility within the banks and with third parties . . . exposing existing internal backend systems and offline data and marrying the two to collaborate with third-party developers

The New API Banking Platform:

Traditional banking involves banks to control their entire end-to-end banking experience through their closed system that involves bank's point of sale, web and mobile app. The biggest advantage of this model was that all processes, technology and their components were under control but also proved to be the drawback due to which personalised experience as per the ever-changing consumer expectations wasn't possible due to regulatory and compliance issues.

The new age banking platform involves secure exposure of bank's protected resources as APIs that opens access for new possibilities and opportunities for innovation to meet the expectations while protecting and controlling their own interests, offline data, legacy systems and processes at the same time.

This API Banking platform sits between the backend systems of a bank and the combined experiences of that bank and third party services to enable new business models such as opening their internal infrastructure to third-party developers to build their software on and provide new use cases to their customers to stay ahead of their competition. Using this API platform banks can earn long lasting customer loyalty, revamp their infrastructure and reduce time to market from months to a few days.

New Business Model and Use Cases:
As stated above, the API driven banking platform not only changes the way banking is done but also brings in new opportunities, business models and use cases to disrupt the market completely.

Let's learn more:

Consumer Driven Market:
" Integration with the company's ERP systems for instant validation of electronic receipts
" Instant refund payments to e-commerce customers -using IMPS APIs ensuring 24/7 servicing
" Real-time vendor transactions
" Instant reconciliation of cash transactions
" Loan Disbursements
" Real-time Information of Forex Remittance by NRIs
Digital Banking:
" The Web and mobile apps with complete account info, KYC fulfilment procedures, transactions, deposit requests
" Bank services information, locations, ATM finder, promotional offers
" Cheque deposit through the camera of phones, biometric login
Partner Integration:
" Development of digital wallets
" Digital payment through web/mobile apps, IoT devices, smart wearables
" Utility Bill Payments
" Invoicing and Bill Management facility for universities and hospitals
Partner Infrastructure:
" Bank or third party partner led loyalty programs
" Real-time analytics to monitor customer activity, capital flows and market info
" Introducing bank as a trusted identity for secure authentication
" Predictive Analytics to monitor and fraudulent activity and clustering of customer data

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

Tags assigned to this article:
atms banking digital banking

Naman Kapur

The author is Marketing Head ShepHertz Technologies

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