• Why the Financial Industry Uses Low-code/No-code APIs Now

    Why the financial industry uses low-code/no-code APIs now

    Application programming interfaces (API) have emerged as a pivotal force in an era where digital transformation is no longer a luxury but a necessity. Thanks to APIs, banks and financial institutions (FIs) can now easily integrate new applications with their existing software systems, expanding their digital banking capabilities, and empowering consumers with a more diverse range of financial tools and services. According to Gartner, a recent report states that 70% of Gen Z and millennial consumers switch banks based on digital capabilities. In other words, banks and FIs need to transform digitally to remain competitive as technological advancements and changing consumer expectations are reshaping the financial industry. Moreover, terms like open banking, financial inclusion, microservice architecture, composable banking, and embedded finance have become buzzwords, reflecting the industry’s shift towards more agile, customer-centric approaches. Low-code/no-code APIs, in particular, have played a crucial role in turning these widely discussed concepts into reality. This technology has revolutionised how banks and FIs operate and deliver services, enabling them to adapt quickly to market demands and enhance customer experiences.

    The Rise of APIs in the Financial Industry

    According to Allied Market Research, the global API banking market is expected to grow at a compound annual growth rate (CAGR) of 24.7% from 2023 to 2032, with an anticipated value of $217.3 billion by 2032. This growth highlights the increasing trend of banks opening up their APIs, facilitating open banking, financial inclusion, and embedded finance. This is because APIs enable different software systems to communicate and interact with each other, allowing banks and FIs to share data securely and efficiently. By opening up their APIs, banks and FIs can create more financial products and services that benefit both themselves and their customers.

    As open banking, embedded finance, and composable banking gain more attention, it is crucial to focus on the “bridge” that turns these concepts into reality—APIs. Given that APIs are the driving force behind these innovations, it raises important questions: “Can low-code/no-code APIs replace traditional APIs?” and “Why should banks and FIs consider this replacement?”

    Why Low-code/No-code APIs are Replacing Traditional APIs

    Why Low-codeNo-code APIs are Replacing Traditional APIs

    With the global API banking market on the rise, banks and FIs might be facing various challenges in using traditional APIs. Specifically, it would result in lengthy development cycles and higher costs due to specialised skills and extensive manual coding. Other than that, it would also lead to maintenance difficulties in keeping APIs updated with changing regulations and market demands, and integration issues with legacy systems. These challenges hinder the agility and efficiency required for financial institutions to innovate and meet the dynamic needs of their customers in today’s digital landscape.

    1) Lengthy Development Cycles

    Traditional API development often involves extensive coding, rigorous testing, and multiple iterations, which can be time-consuming. Developers must write and debug thousands of lines of code, and each phase from design to deployment requires meticulous work to ensure functionality and security. This lengthy process delays the launch of new services, hindering the ability of financial institutions to respond swiftly to market demands.

    2) Higher Costs

    Developing traditional APIs is expensive due to the need for highly skilled developers proficient in multiple programming languages and system architectures. These specialised skills come at a premium, significantly inflating development costs. Additionally, extensive manual coding increases the likelihood of errors, leading to further expenditures on debugging and quality assurance. Continuous maintenance and updates to accommodate new regulations and market needs also add to the financial burden.

    3) Maintenance Challenges

    Maintaining traditional APIs is an ongoing challenge, particularly with evolving regulatory requirements and market demands. Financial regulations frequently change, necessitating continuous updates to ensure compliance. Recent research has found that most banks in the US and UK acknowledge that their financial control processes lack robustness and flexibility to adapt to increased regulatory changes or scrutiny. Traditional APIs, with their complex codebases, require significant effort to modify and test for each regulatory change. This constant need for maintenance can detract from the bank’s and financial institution’s ability to innovate and improve other areas of the business.

    4) Integration with Legacy Systems

    Integrating traditional APIs with legacy systems poses significant challenges. Legacy systems often run on outdated technologies that aren’t easily compatible with modern APIs, requiring extensive custom coding and resources. This process is plagued by compatibility issues, increased complexity, and a higher likelihood of errors. Additionally, legacy systems create data silos, isolating data within specific departments, which hampers seamless data flow and real-time decision-making. These complexities highlight the need for more flexible and accessible solutions, driven by low-code/no-code APIs.

    Why JurisTech Uses Low-code/No-code APIs and How It Benefits Your Business

    Why JurisTech Uses Low-codeNo-code APIs and How It Benefits Your Business

    1) Accelerated Time-to-Market

    Low-code/no-code APIs significantly shorten development cycles by leveraging visual interfaces and configuration rather than extensive manual coding. This enables rapid prototyping and development, allowing financial institutions to quickly iterate on new features and services. The reduced dependency on developers means that business analysts and citizen developers can contribute to the API development process, speeding up time-to-market. This agility is crucial in the financial industry, where the ability to swiftly deploy new solutions can provide a competitive edge.

    2) Seamless Integration

    Low-code/no-code APIs facilitate seamless integration with existing systems, third-party applications, and legacy systems. By avoiding hard-coded integrations, these APIs enhance interoperability, allowing different software components to communicate effortlessly. This ease of integration helps financial institutions streamline operations, improve data flow, and reduce the complexity and cost associated with maintaining custom code for each integration point.

    3) Enhanced Scalability and Flexibility

    Low-code/no-code APIs support dynamic scaling, enabling applications to automatically adjust to varying loads, which enhances performance and reliability. This scalability ensures that banks and FIs can handle increased user activity without compromising service quality. Additionally, the flexibility of low-code/no-code APIs allows banks and FIs to quickly adapt to market changes and new business requirements, fostering innovation and responsiveness in a fast-paced financial industry.

    4) Cost Efficiency

    The use of low-code/no-code APIs reduces development costs by minimising the need for extensive manual coding and specialised development skills. This approach lowers the overall cost of API development and maintenance, making it more accessible for banks and FIs of all sizes. Simplified maintenance and updates further reduce costs, as changes can be implemented with fewer resources and less time, allowing banks and FIs to allocate funds to other strategic initiatives.

    5) Improved Customer Experience

    Low-code/no-code APIs enable banks and FIs to respond more quickly to market needs, facilitating the rapid deployment of new features and services that enhance customer satisfaction and competitiveness. The ability to integrate artificial intelligence (AI) and other advanced technologies via low-code/no-code AP also supports hyper-personalisation, creating tailored services and experiences for customers. This focus on personalised customer interactions can drive loyalty and differentiation in the financial industry.

    How Low-code/No-code APIs are Related to the Emerging Financial Industry Trends

    How Low-codeNo-code APIs are Related to the Emerging Financial Industry Trends

    Emerging technologies, such as AI and machine learning, are set to further revolutionise the financial industry by seamlessly integrating with existing systems through low-code/no-code APIs. These technologies have the potential to enhance automation, streamline data analysis, and elevate customer engagement, creating new avenues for innovation and operational efficiency. For example, an increasing number of banks and financial institutions are adopting generative AI (GenAI) to enhance decision-making, improve risk management, and elevate customer service. 

    For instance, OCBC is among the first banks globally to deploy a GenAI chatbot to its 30,000 employees for risk management, customer service and sales. Other than that, Wells Fargo has also introduced and integrated its virtual assistant into their Wells Fargo Mobile app, providing users with a personalised, helpful and simplified banking experience. These case studies clearly show that the financial industry is embracing advanced AI technologies to maintain competitiveness. To achieve this, banks and FIs must prioritise operational speed and development agility, where low-code/no-code APIs play a pivotal role in enabling rapid innovation and responsiveness.

    Conclusion

    The adoption of low-code/no-code APIs is essential for banks and FIs seeking to stay competitive and meet evolving market demands. These APIs offer a more accessible, efficient, and cost-effective way to develop and deploy APIs, addressing the challenges associated with traditional methods. By leveraging low-code/no-code APIs, banks and FIs can enhance their agility, innovation, and customer experiences, positioning themselves at the forefront of the digital transformation in the financial industry. JurisTech’s composable software solutions aim to deliver transformational technology that provides superior value to our customers and stakeholders by expanding your digital capabilities. Embracing low-code/no-code APIs is not just a strategic advantage; it is a necessity for those looking to shape the future of finance.

    About JurisTech

    JurisTech is a leading fintech company, specialising in enterprise-class software solutions for banks, financial institutions, telecommunications, and automobile companies globally.

    We power economies by reimagining financial services with cutting-edge software solutions, which includes artificial intelligence (AI), auto-decisioning, digital customer onboarding, loan origination, credit scoring, loan documentation, litigation, and debt collection.

    Our solutions have enabled businesses across a broad array of industries to undergo digital transformation, providing enhanced customer experiences and, most importantly, achieving their business goals.

    By | 2024-07-04T11:58:09+00:00 21st June, 2024|Artificial Intelligence, Featured, Insights|

    About the Author:

    The team at JurisTech's Marketing & Communications, a group of digital marketing strategists and content creators, delivers invaluable insights and expertise drawn from fintech experts across the entire JurisTech team. For media queries, get in touch at mac@juristech.net.