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The API SlideShare for Bankers and Fintech Executives


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In this guidebook we’ll walk you through what you need to know about why APIs matter in today’s banking environment. First we’ll discuss the basics, then we’ll dive into details about what specific features you should look for when using a fintech provider’s API or when building your own.

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Published in: Economy & Finance

The API SlideShare for Bankers and Fintech Executives

  1. 1. The API Slideshare for Bankers and Fintech Executives
  2. 2. Welcome! In this SlideShare we’ll walk you through what you need to know about why APIs matter in today’s banking environment. First we’ll discuss the basics, then we’ll dive into details about what specific features you should look for when using a fintech provider’s API or when building your own.
  3. 3. Application Program Interfaces (APIs) have been a major part of banking for decades. That’s because they enable developers to use financial data without having to get bogged down with core systems and legacy software. APIs can also provide ready-made libraries of code that help developers focus on the products they want to build instead of starting everything from scratch. It’s similar to how concert pianists don’t build their own pianos, how painters don’t create their own paint or brushes, or how construction workers don’t cut down their own trees for boards or melt their own metal for nails. People in every profession use shortcuts. It’s the best way to work. In other words, APIs give developers a way to build products more quickly. They enable developers to take something that another team has spent 5 years on, and put it to use in a few days or weeks. Introduction to APIs
  4. 4. Examples of Popular APIs Now that we’ve covered the basic definition of what an API is, let’s look at a few examples.
  5. 5. uses this method. It’s a simple API, but it has big payoffs for Facebook and the companies that use it. For instance, TripAdvisor saw a 27% increase in engagement once they started using this API. Facebook Chances are that you’ve seen a website login screen that asks if you want to create an account via Facebook, as shown below. This is one of the most popular APIs in the world. It enables companies to offer an easier signup process, and it gives Facebook free advertising since their logo is centerstage on every site that
  6. 6. Google Maps Another well-known API comes from Google, with their maps product. This API is featured in banking apps that have branch locator, as well as many GPS apps and fitness apps such as Map My Run. With this API, developers don’t have to launch satellites into orbit or drive cars around every street in the world like Google did to build a digital map. Instead, they can just use Google’s API and immediately build something new on top of it. In return, Google gets subtle advertising (as seen at the bottom of the image) and they also collect data on users from a wide range of apps.
  7. 7. Walgreens With the Walgreens API, developers can create apps that send in-app photos to Walgreens for printing. In addition to being able to tap into a network of more than 8,200 Walgreens stores, developers who use the Walgreens API get 20% commission each time a user prints something with the service. In return, Walgreens has seen increased store traffic and publicity—which was a factor in their dramatic stock price surge after their API was released in 2012.
  8. 8. With these examples, you can see how APIs can be used to benefit both sides of a partnership. In every instance, it’s a win-win.
  9. 9. What to look for in selecting or building an API Now let’s cover a few things to loo for when selecting an API. While it’s not necessary for an API to have all these components, each can be helpful — especially when it comes to financial services.
  10. 10. High Availability: Upwards of 99.97+% uptime Impenetrable Security Layers: SOC-2 Type II and PCI DSS compliant RESTful architecture: Not SOAP, which tends to be cumbersome Data Format: JSON or XML In-house Support: Immediately available to answer your questions Versioning: Non-breaking API changes, so your app doesn’t experience problems when the API is updated Scalable: Ready for however many calls you want to make Real-time: Pushes data as it comes in rather than batch-processing it What to look for in an API
  11. 11. Programmable Web has created a directory of 62 real-time APIs. You can see that REST is the overwhelming choice for protocols, and JSON and XML are the overwhelming choice for data formats.
  12. 12. There are many more things to consider beyond those previous charts. For instance, Joshua Bloch, Principal Software Engineer at Google, has published a keynote titled “How to Design a Good API and Why it Matters.” Here a few of his points:
  13. 13. General Principals API should be as small as possible but no smaller • You can always add, but you can never remove Names Matter — API is a little language • Names should be largely self-explanatory Document Religiously • Document every class, interface, method, constructor, parameter, and exception API must coexist peacefully with platform • Obey standard naming conventions Method Design Don’t make the client do anything the module could do • Reduce need for boilerplate code, generally done via cut-and-paste Don’t violate the principle of least astonishment • User of API should not be surprised by behavior Avoid Long Parameter Lists • Three or fewer parameters is ideal Avoid return values that demand exceptional processing • Return zero-length array or empty collection, not null
  14. 14. In other words, whether you’re looking to select or build an API, it’s crucial to review the documentation over and over again for clarity. If an API uses language that’s ambiguous or unclear, avoid it. If your own API has those same qualities, then you know it needs more revisions before it goes live. As Bloch says, “code should read like prose.” When you’ve found an API that meets all of this criteria, you know you’ve found something worthwhile.
  15. 15. Financial institutions that are doing interesting things with APIs In the final section of this SlideShare, we’ll look at some API examples within financial services. Hopefully, this will spark some ideas to help you succeed in your own endeavors.
  16. 16. BBVA API_Market BBVA created a program named API_Market so fintech companies can use BBVA data to create new applications. For instance, Dwolla uses this program for their FiSync protocol, enabling BBVA customers to enjoy the benefits of real-time transfers and bypas outdated systems like ACH. Again, this is an instance where two companies are using APIs to create a stronger product.
  17. 17. Capital One Hackathon API Capital One created a hackathon that gives developers access to a mix of public facing and mock account data — all structured the same way Capital One “actually runs things.” This enables develop- ers to prove their chops and possibly get a job at Capital One, but it also allows the bank to see innovative ways to “re-imagine banking.”
  18. 18. Chase Paymentech Chase has built an API that developers can use to add a payments layer to their application. By using this API, developers tap into the Chase network of 300,000 merchants and can authorize transactions in more than 130 countries.
  19. 19. Fintech companies that are doing interesting things with APIs
  20. 20. Square Like Chase Paymentech, Square lets developers add a simple way to make payments directly within their app. Square stands out from the competition because of the simplicity of their design and their network of physical Square readers.
  21. 21. Apple Pay API Apple Pay has an edge in the payments world because it’s connected to Touch ID and is therefore is part of the hardware that many users already have at their fingertips. In addition, Apple has built a simple way for users to select their product at checkout as shown in the example with Groupon (who uses this API in their product).
  22. 22. Coinbase The Coinbase API enables developers to add a digital currency component to their application. They’ve processed more than $5 billion in payments in 33 countries and are set on making Bitcoin and Ethereum easier to understand and use.
  23. 23. Conclusion: APIs are the future of banking The lines between fintech and banking are blurring as APIs increasingly take center stage. As you can see from this white paper, fintech startups are interested in APIs from banks and vice versa. It’s no longer a matter of whether fintech startups or banks will win some sup- posed fight against each other. Instead it’s a matter of which companies will offer and use the right combination of APIs to create something that consumers really want. In short, APIs are the future of banking.
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  25. 25. Power your business with APIs from MX If you want to learn more about the range of APIs that MX offers for financial institutions and fintech companies, contact us: 801.669.5500 or