The open banking market generated $7.29 billion globally in 2018 and will reach $43.15 billion by 2026, per a recent Allied Market Research report. Driving adoption: new applications, services and APIs.
Development of cloud migration activities also helps power the evolution of application programming interfaces, which permit programmers to create apps for financial institutions to exchange data with third-party financial technology firms. The current digital transformation and the rise in demand for prompt access from anywhere increases the need for a place to distribute APIs for financial institutions and fintechs securely.
Another API influencer is shifting communication methods with the web. Some banking industry experts see core accounting, loan origination, account opening and other systems, going from Simple Object Access Protocol to Representational State Transfer. SOAP was the longtime standard method for web service interfaces, but REST, has taken over in recent years. REST developers also promote a greater use of APIs.
With their growing significance, developers need a place to shop for APIs — or shop them to others. API portals, offering either home-produced or a template-based tools, was the primary source of application programming interfaces for a quite a few years. Portals have gradually given way to marketplaces. Whereas API portals usually offer positioning for a single API provider while letting developers integrate and securely onboard with the API source; the marketplace allows developers a one-stop shop for everything from integrated on-boarding to features such as security issue tracing. In addition, marketplace aggregate a number of API providers into a holistic view and typically add search capabilities so developers can browse the interface inventory.
Usually, an API marketplace comprises several components, including an API manager, gateway, security, publisher and developer areas. They collect, categorize and present the published APIs. A significant marketplace goal is to use and recycle APIs. Therefore, marketplace usually ensure APIs are searchable and have the correct categorization connected to them.
The marketplace model lets financial institutions continue to provide and develop their core services, but also provides an opportunity for them to fill gaps within the product and service offerings they generate from partnerships with carefully handpicked allies.
This approach also levels the playing field for API providers. The marketplace increases exposure for API developers of all sizes, especially those seeking a bigger fintech presence. For some providers, deploying to a marketplace can mean replacing their portals completely. They can also market APIs based on categories and how they interact with consumers, third-parties and applications. Choosing an API will consequently become more a case of matching features of the API as a product with overall need, rather than picking an API based on just the technology implementation.
Anyone can host their APIs in a marketplace. Some companies are already delivering an API marketplace, and many are determining if this is a direction that they want to go. But what if they store a “bad API" that either steals information or performs malicious activity?
A trustworthy marketplace should fundamentally feature a straightforward interface with groupings and a search mechanism. It should also deliver all essential material for the API such as documentation and sample code. However, it is also vital that an API marketplace contain a security component because of the troubling concerns associated with cloud security and an increase in cyber attacks within the existing cloud API market.
NXTsoft’s OmniConnect Platform is a premier open banking marketplace for all API needs. OmniConnect utilizes cutting-edge cloud technology to connect fintech solutions to financial institutions, ensuring that its clients have the most secure and reliable integration environment in the industry. It connects everything from digital banking to item processing and financial systems. OmniConnect delivers the access needed to financial institutions, removing integration roadblocks and providing a seamless connection between a solution and a financial institution’s core processing systems.