API-first approach expected to boost PHL financial institutions
ADOPTING modern technologies with an application programming interface (API) would benefit both Philippine banks and financial technology (fintech) firms as these will help improve their products and services, API management platform APIwiz said.
APIwiz Co-founder and Chief Executive Officer of Rakshith Rao said in an interview with BusinessWorld that financial institutions in the country and across the region should use API for more innovative digital financial services.
“Ten years ago, every enterprise was looked upon if they had a mobile app or not. So, it was the most important thing in their business portfolio to make and reach to customers having a mobile app,” Mr. Rao said.
“Five years ago, it was every enterprise making sure that they power all of their omnichannel experience through an API. Now, it is getting to a point where everything that an enterprise does is driven through something called an API. They become the underlying backbone for an enterprise survival,” he added
API relays information from one organization’s technology to another. APIs connect to different areas of a software platform, allowing for more information to be accessed when businesses undergo digital transformation.
An “API-first” approach can help companies improve their development and strategies to adapt to an evolving digital market, Mr. Rao said.
“So, what we are offering is now a new paradigm shift in improving the productivity of an organization, increasing the reliability, but with all security, compliance and governance in place to make sure that what they are doing does not expose them to risk of threats from external actors and from other partners,” he said.
Mr. Rao cited how digital bank Tonik reached $100 million in customer deposits in eight months. APIwiz enhanced Tonik’s Open API Platform and helped the lender increase productivity and reduce operational costs.
“The ability for an organization to take and embed their service in every possible form factor and every other enterprise out there is the force multiplication factor that they will get by leveraging to integrate with APIs,” he said.
However, Mr. Rao said there are challenges to transforming financial institutions and in creating an end-to-end open finance experience where clients can freely access several financial service providers.
“Some of the challenges that we foresee is the ability for enterprises to change their way of doing,” he said. “So we simplified that over the last year to create a more simplified local platform, a local API lifecycle management, because we feel that stuff that needs to be done behind the scenes that does not require human intervention should be done in such a way that you can make releases multiple times a day.”
Mr. Rao said banks and fintech companies should work together to offer more innovative financial services.
“If you look at Southeast Asia and the Philippines, to be more specific, Southeast Asia carries or 8% of the global population… And even within Philippines, if you look at it, the large part of the ecosystem are still unbanked,” he said.
“And the challenge for that is essentially having the ability for them to do transactions at their fingertips,” Mr. Rao added. “If you can actually bring the bank to where people are in their daily lives, essentially, you’re bridging the gap and helping to bring financial transactions to them where they are.” — Keisha B. Ta-asan