As I explained in my first post, the PSD2 (Directive on Payment Services) is about giving banking power back to customers, including increased transparency about charges and speed of operations. Large companies and banks as well as individuals with growing worry of online robbery would welcome real-time notifications that would allow them to react quickly to any fraudulent transactions. As José discussed it in his post, API streaming could be the solution. In addition, the pushed information from these streaming APIs could be used to trigger another API – resulting in a mashup. Mashups have benefited from the growth of publicly available APIs. Developers can pick multiple APIs from this pool to mash up into one, accelerating the development of applications and their flexibility.
Streaming APIs become particularly important in stock trading where the frequency of changes and importance of having real-time information makes communication with servers both bandwidth- and CPU-intensive. Streamdata.io perfectly illustrates the benefits of using streaming APIs for financial quotes – including cost reduction – in this tutorial which explains how to build cards which displays currencies rates in real-time. Conscious of the potential to combine streaming APIs into mashups, Streamdata.io joined the Xignite initiative to create the first financial API marketplace.
Psychsignal API is another example of an API that be used to support traders with semantic analysis. The application scans the web for articles, quotes or mentions in social media about a specific stock. It uses semantic technologies to positively or negatively score the wording. The scale on which this is applied gives the score statistical validity. This API could benefit from streaming by sending alerts each time the public mood on a stock changes. It could also be combined with stock history into a powerful mashup. Imagine having access to the current market mood, its historical mood and the stock price history – this could support decision making in an unprecedented way.
Banks have access to an ever-growing range of APIs that can help them to offset overhead costs while fostering innovation. The wide variety of web APIs available can be combined into an infinite number of new products, limited only by the imagination of developers. These mashups are likely to bring banks closer to their customers, reducing the risk described in the Millennial Disruption Index (which we discussed it in this previous post).
Many financial companies already understand the importance of centering their product development around an API. For instance, 3scale customer Finicity provides a flexible platform to empower mobile apps with a variety of services. They offer a catalog containing services such as stock quotes, bank account access, money transfers, news feed, and more which can be combined according to customers wants. In this case, their API strategy gives them the agility to adapt quickly to any disruptions in the market, as it would be easy for them to integrate a new service.
ProgrammableWeb maintains a non-exhaustive list of financial API mashups. For instance, financial institutions such as CareFinancial built a system with the NationBuilder API which gives back 25% of their fees to non-profit organizations. Another example would be Kreditech, which uses social network APIs in order to better serve its customers. The potential seems unlimited, and a financial API marketplace would certainly unlock even more innovation. The #fintechrevolution is ongoing, and APIs are definitely going to be a part of it!
Imagine tomorrow’s banking as a platform, either provided by our banks or by third-parties, where we would be able to combine services in order to create the applications that we really need. I imagine combining:
- Weekly notifications from an investment digest
- The stocks prices I believe in
- An instantaneous payment service to transfer money to family, friends or pay any bill
- A price comparison tool to make sure that I get the best deal
- The ability to share (on my own terms) my banking history with my banker in case I want a loan
- Facial identification
- (And certainly other services that we can’t even think of now.)
Mondo provides other examples here, including the identification service that they offer. All of this would be made possible through APIs backed with streaming technologies, which would greatly reduce the resources needed for such a platform while increasing its agility.
Which APIs would you mash up to create your ultimate financial service? Would you take advantage of streaming APIs?