Transactional to experiential banking- The Paradigm Shift

The local servers handled the heavy load of deposits, account openings, loans, and credit processing in its designated area. So, going to the bank to avail these services required planning downright to its every tiny detail.

Fast-forward a few decades, banking has taken a its digital avatar where traditional banks and new-age neo banks compete for customer attention and retention. Traditional banks are now making the hard choice of restructuring the legacy systems. But, they face the unique challenge of data management and processing.

Just to render swift and intelligent services, they need to leverage analytics, break down data silos and restructure data according to the needs of the business. The vast amount of data generated brings the points of scalability and flexibility into focus. It has driven banks towards a service-based delivery model.

The primary challenge that banks face is in consolidating data and offering contextual banking. The legacy systems are often limited by performance and horizontal scalability. They also have a minimal understanding of polymorphic data handling capabilities.

This is where APIs come to the rescue; as banking is a global transaction exercise, they seamlessly integrate as a plug-n-play platform. With neo-banking and open banking on the rise, banking APIs offer the following benefits:

• Multiple platform data aggregation and gain a higher share of target customers
• Enhanced operational efficiencies with automated processes
• Niche digital user experience
• Potential to scale complex operations with minimal effort

Many banks have integrated APIs as microservices and adapt cloud-based processes whilst reducing their dependency on the core banking system. Furthermore, APIs have helped improve a bank’s or any financial institution’s native service and offerings.

To sum up, APIs have enhanced banking services and have helped craft a user-driven experience that focuses on experiential generation.