What Are Open Banking APIs

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What Are Open Banking APIs
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• Banks and financial institutions are under
  intense pressure to ensure their infrastructure
  is ready for the change with the tides of open
  banking (such as Oracle Flexcube universal
  banking) rolling in. APIs have become a critical
  component of these preparations and a gateway for
  smarter banking engagements with consumers.

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• Open banking APIs have brought about major
  changes in the financial sector. Here's
  everything you need to know about them if you're
  interested in opening your business to
  third-party payment solutions.

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What Are Open Banking APIs?

• Open banking APIs enable secure and automated
  access to a bank's backend. The aim behind open
  banking APIs is to allow third-party developers
  to build and launch new services or applications
  that will enable consumers to access financial
  services faster and more efficiently.

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• Open banking APIs are a new model that makes it
  possible for banks to take advantage of the
  success of FinTech apps without the usual
  restrictions that include long timeframes to set
  up, high costs, and an inability to modify the
  API.

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Why Are Open Banking APIs Important for
Consumer-Directed Finance?
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1. Speed to Market

• Traditional bank infrastructure prevents speed,
  agility, and flexibility from supporting the
  demands of modern consumers. By adopting the
  Oracle Flexcube 14.x, banks will be able to
  launch new services and products much faster and
  in a more agile and cost-effective manner.

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2. Innovation

• Open banking allows banks to partner with
  innovative FinTech companies to build new
  solutions tailored to meet customer demands and
  improve customer satisfaction.

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3. Risk Management

• Open banking APIs and Flexcube implementation
  allow banks to offload non-core risk to fintech
  companies willing to accept the risk while
  allowing the bank to focus on maximizing customer
  satisfaction and the business's core competencies.

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4. Extended Reach

• Open banking APIs allow banks to reach out to a
  larger customer base by allowing them to leverage
  the distribution channels of FinTech companies
  that can reach customers outside of the bank's
  traditional footprint.

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5. Market Growth

• Open banking APIs help FinTech companies grow
  their businesses by allowing them to pull data
  from the banks and access potential customers,
  helping them to build new Flexcube products and
  services to meet the demands of a larger customer
  base.

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How Banks Can Prepare for Open Banking Success
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1. Get rid of your legacy systems

• Open banking APIs are designed to work with
  modern technologies. So banks need to ensure that
  they have updated their legacy systems to adhere
  to the latest technologies to take full advantage
  of these APIs' benefits.

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2. Seek out partnerships with FinTechs

• With the increase in competition, the banks will
  need to ensure that they have the support and
  knowledge of FinTechs to meet this challenge and
  help them develop the proper infrastructure to
  utilize these APIs.

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3. Develop an API strategy

• With the new developments in open banking, banks
  will need to get their house in order by having a
  strategy for using these APIs. This will help
  them ensure that they are ready for the changes
  that the new regulations will bring about for
  financial institutions.

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4. Ensure security standards

• To prevent any security breaches, banks will need
  to ensure that they have the right technology in
  place and will also need to hire the right people
  who are well-versed in the new technology.

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Conclusion

• Each startup and financial institution is
  measured by the quality of its API, which allows
  users to quickly get accustomed to using the
  service. The possibilities of such Open Banking
  API systems like Oracle Flexcube are virtually
  endless, as the technology allows for new
  business models and innovations.

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