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APIs: Bridging the Gap Between FinTech Companies and Financial Institutions

The potential for banks and FinTech apps to work together is endless. FinTech has significantly altered the banking landscape, triggering Financial Institutions to rethink traditional banking. The expectation of society's on-demand lifestyle has not only led to the creation of these FinTech companies, but is now empowering them.

If you don't work in the FinTech space, you may think this blog doesn't apply to you. You couldn't be more wrong. You may not work in FinTech, but every day, you PLAY in the FinTech space. Your wants, needs and options drive the industry to be better, more convenient and more secure than ever before. How do you access your financial data? Do you wish there was an easier, more convenient way to watch your spending, manage your income, view your savings or download your credit card statements? If you answered yes to any of these, you're not alone and Financial Institutions are feeling the heat. In today's reality, the pressure for Financial Institutions to provide efficient and secure data access methods for their account holders is mounting.

There are over 1,000 FinTech companies globally, at all stages of evolution, and industry investment continues to pour in. These remarkable companies are at the height of innovation. Some started in the traditional innovation labs of major banks. Others started as two friends who needed an alternative to carrying cash. For these FinTech companies to continue to thrive, they need secure and direct access to Financial Institutions.

Consumers are no longer satisfied relying on bank-offered interfaces. In growing numbers, they prefer to interact with their banks through unrelated, third party applications. Unbeknownst to most, these third party applications acquire 90% of their financial data through "screen scraping," a method that is:

  • Unsecure, untrusted & risky for both the Financial Institution and the consumer
  • Flawed
  • Unreliable
  • Results in stale information

Screen scraping not only affects the consumer and Financial Institution, but the entire FinTech ecosystem. Persistent data challenges can lead to reduced trust in the user's financial application, reduced availability of application functions and eventually push the user towards alternate solutions. While this won't stop consumers from using third party applications altogether, it might cause them to leave banks that make it particularly hard to access their data.

At a Financial Institution, an Application Program Interface (API) is a natural fit that could standardize data sharing and equalize access to financial data. I like to imagine the API as a bridge that begins at my Financial Institution and ends at my personal financial application. A well-designed API, such as EEI's FS-API™, will provide a safe and authorized direct connection to these third party applications. This allows for a natural partnership between Financial Institutions and FinTech companies. Through a rich API, Financial Institutions can gain a competitive advantage and put their customers in control of their finances by providing real-time, secure data.

The future of banking is to collaborate with FinTech companies to share data, not shield it and simultaneously lock customers out. Every FinTech company is an opportunity for Financial Institutions to gain a competitive advantage and unlock innovation. The financial sector is now at an inflection point and as competition increases and demand grows, we will see Financial Institutions reject these disruptive technologies or embrace them. I hope they choose to embrace them. 


This is part of my FunTech blog series; FinTech through the eyes of a Millennial. 


Comments: (3)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 26 January, 2017, 19:09Be the first to give this comment the thumbs up 0 likes

While announcing its recent data sharing initiative with Intuit, JPMorgan Chase has referenced Open Financial Exchange (OFX) 2.2 API (Source: American Banker). But, of course, I don't expect to find any mention of that technology in this article, which seems to be a sales pitch for EEI FS-API™, a product from the author's employer Enterprise Engineering, Inc.

A Finextra member
A Finextra member 26 January, 2017, 19:20Be the first to give this comment the thumbs up 0 likes

Hi Ketharaman,

Thanks for commenting. I appreicate your feedback. This is not a sales pitch, I was using an example. However, you should also know that EEI was one of the founding members of the OFX Consortium and was the first company to support OFX 2.2 upon it's realease. I definitely could have played up the sales angle if that was my intention :)



Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 26 January, 2017, 19:30Be the first to give this comment the thumbs up 0 likes


Maybe it's only me, but the way your post currently reads, it's not on the right side of Finextra Community Rule #5:

Do not use the site to attempt to sell your services and products

Had your post mentioned upfront about OFX 2.2 and that "EEI was one of the founding members of the OFX Consortium", I wouldn't have dreamt that it was a sales pitch:)