Open APIs: A Breakdown In today’s rapidly evolving fintech market, Open APIs serve as a transformative force for community banks. Offering new opportunities for expanded digital capabilities, Open APIs lead to enhanced services for consumers (like remote account opening or the management of mobile transactions) and increased profitability for financial institutions. So, what exactly is this magical piece of banking technology? API stands for Application Program Interface and serves as a connection between a third-party application and a bank. By making the tools and services of a bank available to a third party, (like Chime or Acorns, for example), both entities benefit from enhanced digital solutions and specialties. Open APIs work similarly but go a step further in allowing third parties to access the data of banking customers. This data can include the account holder’s name, account type, transaction details, etc. As sensitive as this data is, when handled with care, the sharing of customer information leads to the improved relevance and convenience of banking services. For customers, this can look like customized investment plans, real-time updates, budgeting assistance and more. For banks, this looks like increased customer satisfaction through competitive, flexible offerings. Built to ensure platform-agnostic operations, Open APIs function compatibly across all systems (whether MacOS, Windows or Linux) and lead to augmented digital services and capabilities. As such, understanding the specific advantages provided by Open APIs and how to ensure your hosting provider optimizes them is crucial to successful open banking. BENEFITS, DEVELOPMENT AND WHAT TO LOOK FOR IN YOUR COMMUNITY BANK’S HOSTING PROVIDER By Daren Fankhauser, SVP, Chief Development Officer & Chief Architect, Data Center, Inc. 6 The CommunityBanker
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