How to Build API-First FinTech Platform

In the rapidly changing world of financial services, it’s often challenging to keep up with all the new trends and technologies popping up. Considering the ever-evolving customer behavior, banks and FinTechs have to put in enormous efforts to keep their tech systems up to date. During this pursuit, many companies realized that in many cases having a partner or 3rd party vendor for a particular feature is way more effective than trying to build it themselves. This is basically how API Economy appeared.  

The API Economy is a term used to describe an ecosystem in which APIs (application programming interfaces) are used to rapidly introduce new products and services. This can include anything from card issuing, account opening and Fx to developing innovative financial services with AI. 

API Economy In FinTech

In the financial technology sector, APIs are playing an increasingly large role. By leveraging APIs, companies can offer customers access to various banking services without having to build their own infrastructure from scratch. The API economy has enabled new business models and partnerships within the fintech space that weren’t previously possible. Furthermore, APIs significantly reduce time to go live with particular offerings. It used to take many months or years to start loan offerings before but now it is just a few clicks away.

Most of the fintech unicorns successfully employ APIs in their products, such companies as Paypal, Chime, Revolut, Stripe and others are connected to multiple service providers at the same time. 

By using APIs, fintech companies can access data and information they need while still maintaining full control of their systems, allowing them to stay agile and competitive in an ever-changing market.

API Economy has come to the forefront of the fintech sector and is here to stay. Enabled by open APIs, banks and fintechs have the chance to significantly improve the customer experience and create value through new products and services.

As the FinTech industry continues to grow and evolve, so too will the potential of the API Economy. As companies and banks become more familiar with the functionalities and capabilities enabled by APIs, more organizations will likely look to leverage APIs to improve their business models and create better solutions for their customers.

What Is API Orchestration?

APIs can offer a huge potential to businesses, however, they need to be systematically organized to create an uninterrupted customer experience. That is why it is necessary to add a specific orchestration layer that allows all APIs in the system to communicate together. This layer creates and designs workflows while coordinating the data transfers between different sources and destinations and automates them whenever possible. 

Since APIs are written in different languages and are based on different platforms, the orchestration layer is responsible for converting data into a standard format so that it can be effectively shared across all components of the API system. Regardless of whether the process is simple or complex, data transfers depend on logical workflows which will guarantee that the appropriate commands are executed when needed and without errors within the API ecosystem. An orchestration platform coordinates these exchanges and makes sure it is being correctly processed without errors.

Most importantly, API orchestration helps ensure consistent performance and reliability—no matter where your data is stored or how often it changes. This allows you to monitor your environment with real-time insights and be confident that your workloads are always running smoothly. Thanks to its versatile capabilities, API orchestration is one of the most powerful tools for taking control of IT systems. Below are some of the best practices to ensure an effective and future-proof orchestration:

  • Cloud Middleware

Cloud middleware is an effective way to abstract away complexities in the application and provides a layer of services that can be applied across multiple platforms. This allows quickly integrating of components and creating seamless workflows between multiple applications.

  • Create Scalable Architecture

Make sure to pick a digital banking platform that is scalable so that you can quickly respond to market changes and customer demands.

  • Automate Workflows

Automation can help streamline and simplify processes including managing multiple data sources, processing transactions, and running complex tasks.  

In conclusion, API orchestration and cloud middleware can be extremely beneficial for automating IT workloads and operations and building highly-sophisticated and future-proof fintech products. If you’re looking to streamline your IT operations and innovate quickly, API orchestration and middleware technology are great options to reach your goals.

Interesting Related Article: “What Are API Integrations? Everything You Need to Know