3 Ways Large Corporates Can Benefit From Open APIs
Open APIs are quickly becoming the defacto standard for businesses aiming to transform and embrace digital strategies. The transition towards open banking and open finance, with the adoption of Open Banking APIs, quickly accelerated in the last few years with the introduction of PSD2 regulation.
Banking APIs are crucial for corporations to lay out the building blocks for payment initiation, financial data, account aggregation, business insights, and analytics. These technologies allow corporates to securely distribute authentication credentials to partners and external developers with minimal risk. But also to open up new business models through innovation amongst their large customer ecosystem.
It's conceptually a significant change in the mentality needed for those who want to stay ahead of the competition and keep innovating. Here we take a look at three of the main benefits for corporates that embrace Open Banking APIs.
1. Transactions monitoring and reconciliation
Automating the monitoring and reconciliation of the transactions can free hundreds of hours to corporates' teams, allowing them to dedicate their time just to exceptions instead of going full time on working on every single transaction. Something that represents a massive advantage in terms of costs for large corporates and financial institutions processing many transactions every minute.
The practical implementation of this process just becomes a lot easier with Open Banking APIs because of the modularity capabilities that make the integration of third-party services quick and painless. At PaymentComponents, we have a solution that permits the creation of an advanced transaction matching API and the possibility to build a reconciliation engine for TRXs with account information receivable in a fraction of the time.
Besides a simple monitoring and reconciliation process advantage for corporates is that, in this way, they can also reap the benefits of advanced Business Financial Management (BFM) products without the need for a TPP license. These can be based on APIs created and implemented specifically for business clients.
2. Instant access to loans for investments
Opening up access to loans for investments is another critical benefit of banking APIs for corporates. The possibility of integrating third-party components and having access to a vast amount of financial data from customers who are explicitly permitted to use it, that's something completely changing the scenario. Using different components (e.g. AML, credit scoring, etc.) with a unique system that connects data from multiple bank accounts and that automates loans approval, making the whole process digital and super fast, is now becoming the new normal.
3. Business Payments through APIs just with a couple of clicks
Payment Initiation APIs dramatically simplify the way business payments are managed. Thanks to that, executing payments is now just a few clicks away for every kind of business. The benefits are multiple and still not understood by many corporates, with an evident disruption in the way things worked before the Open Banking APIs era.
Nowadays, through the availability of APIs from financial institutions, any company can automatically execute payments, instantly transfer funds between distinct accounts, in multiple currencies, within different banks. It’s not difficult to imagine the difference that this will make to corporates that need to proceed with thousands of payments every day and at the same time to monitor payment initiation performances and Account balances instantly.
Moreover, at Payment Components we went a step further. With our UNUapi SDK we let corporates and banks customize their offering in connecting multiple banks through APIs.