API BANKING IN INDIA
Brief History –
The seeds were sown in 2016 when the UK asked several top banks like Barclays, Santander, Lloyds, and others to provide access to their core data to licensed third parties. In India, the RBI governor launched the Unified Payments Interface (UPI) developed by the National Payments Corporation of India.
This set the stage for the development of the Application Programming Interface which is set to revolutionize the retail banking scene.
What is API Banking Software?
Application Programming Interface involves a bank sharing a part of their systems with a third party to offer customers a service that is built on existing infrastructure. The analogy of railway tracks being shared for a new train service is appropriate in this case.
API or Application Programming Interface enables your business server to communicate seamlessly with the Bank Server in real-time. This helps you to transfer data effortlessly and securely at all times without switching between the inhouse ERP and the Banking system.
How does it help companies?
Well, API Banking helps companies in multiple ways depending on the nature of business.
If you are in the business of lending, you can use the API banking to check the CIBIL score to make a credit assessment. You can use the interface to match PAN card details.
In the case of normal business, you can use API banking to manage your cash receivables and payables by integrating the ERP and API.
API Banking can be used for inward remittances
Partner payments through NEFT/ IMPS will help make vendor payments and process customer refunds
Electronic collections, payroll, prepaid cards, and cardless cash withdrawals can be managed through API Banking.
API Banking can be used for accounts and deposits and for managing Payment Gateways.
What are the benefits of API Banking?
API banking ensures
Seamless integration and Real-time solution – It gives you direct access to the banking system without the hassle of logging into a separate server. This can save considerable time in daily operations
Hassle-Free mechanism – It eliminates the requirement of visiting the bank and saves time and costs. Over time, this leads to efficiencies in business processes and even reduces manpower requirements.
Secured mechanism of integration – Completely encrypted data transfer ensures data safety which is the primary concern. This is perhaps one of the most important benefits of using API banking.
Improvement in the efficiency of operations – Use of API banking reduces turnaround time as it obviates the need to toggle between two systems
Time and cost savings – The entire process, being seamless, saves time, ensures easy reconciliation, and in the long run saves operational costs.
Compliance with Regulatory Guidelines– API provides a safer option to share consumer data with the outside world without putting the entire system at risk. This makes it a win-win for all parties involved and is the most convenient way to use data without effort duplication.
Meeting Consumer Demand -Consumers of today are a demanding lot. They expect products and services to be delivered in a jiffy. They cannot wait around for businesses to develop their APIs one at a time. Getting a suite of prebuilt microservices makes a lot of sense in such cases.
Customer Delight – When your digital platform is equipped with prebuilt microservices, the turnaround time for services crashes dramatically which enhances the customer experience. Time is of essence to everyone, be it a business or a customer. Anything which contributes to significant time reduction is always a must have for a business.
Business dexterity – Today’s dynamic business environment doesn’t allow any enterprise to rest. Unless you keep pace and stay on the cutting edge of technology, you run the risk of losing business to more adaptable peers.
Focus on core business strengths – The basic advantage of making financial APIs an integral part of your system is to let automation manage some of the basic activities while you can focus on building the business. It is amazing how much time and effort is freed up by this innovation.
Why should I choose API Banking?
API banking is definitely a value add to existing ERP systems in any business.
The entire process takes only a few days.
API Banking is a cheaper and more efficient way of doing business as it eliminates the shuffling between own servers and Banking servers, reduces manual file loading and associated time and errors, and is more convenient compared to building a process from scratch.
What can Celusion Technologies do for you?
At Celusion, we have developed a Financial API gateway which has a pre-built suite of 25 microservices.
· Reduction in time- to-market with various ready made connectors
· Linkages built with credit bureaus like CIBIl, Equifax, CRIF High Mark and Experian
· “Know your customer” made easier with KRA ,CKYC, Aadhaar eKYC and PAN authentication
Bank Account Authentication
· Penny Drop to verify bank accounts
Bank Statement Analysis
· Consume Banking API to fetch and analyze bank statements
· OTP and biometric based eSign
· Machine Learning based OCR to fetch data from Identification Documents
If you are interested in checking out the Financial API solutions that we can provide for your business, do pop in at www.celusion.com. We will be delighted to address your queries and tailor make a solution for you.