An API (Application Programming Interface) is a set of commands, functions, and computer protocols that enable the creation of programs that interact with other applications. It is a formal specification of how one software module communicates or interacts with another, allowing the exchange of messages or data between two applications.
APIs can be:
- Open: available to anyone and made accessible to provide third-party services.
- Partner: available to external collaborating parties for the development of services in a bilateral context.
- Internal or private: access exclusively within entities to streamline internal processes and to offer clients the same levels of service and user experience across different interaction channels.
A banking API is a method of communication with a banking system. With a banking API, third parties (financial service or payment providers) can access the necessary information of a client stored in the bank where they hold their account. Banking APIs can only access information with the explicit consent of clients, so, for example, to process payments, the client must authenticate so that the API can verify the account balance.
Uses of APIs in the banking sector:
- APIs with which developers can retrieve key user information, such as name, gender, identity document… without the need to fill out endless questionnaires.
- APIs that allow pre-authorized users to access account information, balance, and transaction history of the client.
- APIs that allow access to all information about a client’s card, such as balance, limits, and expiration date, as well as transactions made with the card.
- APIs that enable third-party apps to offer domestic and international transfers and remittances to pre-authorized users. Transfers can be one-time, deferred, or recurring.
- APIs with which users can find out whether or not they have a pre-approved loan and its conditions. If they have the loan, it provides information about limits, amounts, terms, and fees.
- APIs that allow users to receive real-time notifications of their transactions.
- APIs that offer aggregated and anonymized statistics from millions of card transactions to create a virtual map that enables analysis of customer consumption habits. With these statistics, one can determine the maximum, minimum, and average amount of purchases made at the establishment, which day and time sees the most or least sales, where customers come from (for tourism), what customers do in areas near the business (what other establishments they shop at), how much customers spend on products in the same sector and in other sectors.
- APIs that are based on the user’s location to access a comprehensive database with information about nearby ATMs and, additionally, businesses that accept emerging and innovative payment methods.
- APIs that provide information on various financial products.
