APIs — An Expanding Foundation for Digital Business

The digital banking industry is rapidly changing, and new technologies are constantly being introduced. One technology core to the continued success of financial services is the application programming interface — or API. This software intermediary allows two applications to talk to each other. In a recently published report from Gartner on the Hype Cycle for APIs, three significant trends are emerging in 2022 that highlight this crucial technology that is the foundation for success in digital banking. These themes include:

Reliable APIs: For financial institutions and fintechs whose business relies so heavily on API functionality, having a dependable API is becoming a focus in 2022. When searching for the right API to use, companies are focusing on APIs that are optimized for performance, provide real-time data access, sync with microservices, and are easy to integrate.  

Secure APIs: It is an unfortunate truth that as APIs become more prevalent in the industry, malicious parties will put more attention and effort into exploiting weaknesses. API security threats continue to increase, and businesses are responding by focusing intensely on secure connections that don’t leave user data vulnerable. This means knowing which parts of the API are vulnerable, leveraging OAuth, using tokens, and encrypting data.

New API Products: While there has been an increased growth of API products within the financial industry, there has also been API development in other sectors like insurance, digital commerce, healthcare, and telecommunications. This growth has been shown in API-centric companies that can now offer a broader range of products and services.

These important trends emphasize the progress being made around the world with API adoption and innovation. For those industry leaders looking to keep pace with the competition, there are very real competitive advantages to be gained by devoting resources toward better API development and adoption.