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How Fintechs Use APIs and Microservices to Meet Demand for Efficient Financial Management

A modular approach to delivering a full range of business and financial services means scalability, continuous deployment, and resilient service architecture. The result is the flexibility to meet evolving market needs swiftly and cost-effectively.

In the ever-evolving fintech landscape, the ability to swiftly and cost-efficiently adapt to changing customer demands is paramount. After all, this is one of the driving forces behind why fintech even exists. 

Traditional banking systems, hampered by legacy infrastructure, have struggled to keep pace with the rapid evolution of business customer expectations. In contrast, APIs (Application Programming Interfaces) and microservices have become the cornerstones of fintechs, driving innovation, maintaining agility and allowing them to respond to market needs with remarkable speed and efficiency.  

In 2021, there were 795 million successful API calls performed utilizing banking APIs. In 2023 – 1.13 billion.  

Open Banking

While banks are catching up, actively expanding their API accessibility to enable seamless integration with third-party services – fintechs are still at an advantage. By offering a unified digital platform, business can gather valuable insights into customer behavior and preferences which can inform personalized service offerings and targeted marketing campaigns – and a whole lot more.  

The Flexibility of APIs in Fintech 

APIs are powerful tools that enable different software applications to communicate seamlessly. In the fintech sector, APIs provide the flexibility needed to integrate various services, platforms, and third-party applications, creating a more interconnected and efficient ecosystem. 

  • Rapid Integration and Deployment. APIs enable fintechs to integrate with third-party services quickly, allowing them to launch new features and services without a complete infrastructure overhaul. This rapid deployment is crucial in meeting business customer demands promptly. For instance, integrating a new payment method, enhancing security measures or adding a new service can be achieved swiftly through API connections, ensuring customers have access to the latest functionalities. 
  • Enhanced Customer Experience. By utilizing APIs, fintech companies can offer a comprehensive range of services within a single platform. This integration leads to a seamless and enriched customer experience. For example, a fintech app can connect with accountancy software, investment platforms, and payment gateways, providing customers with a one-stop solution for all their financial needs. Such a holistic approach not only improves user experience but also fosters customer loyalty. 
  • Cost Efficiency. APIs enable fintechs to leverage existing services and infrastructure rather than building new solutions from scratch. This modular development approach reduces costs and shortens development cycles, allowing fintechs to allocate resources more efficiently, focus on innovation and customer satisfaction, and pass these cost-savings onto their clients.  
  • Open Banking and Innovation. Open banking initiatives, driven by regulatory changes, rely heavily on APIs to provide third-party developers access to financial institutions' data. This openness drives efficiences, with a broader range of choices and personalized financial solutions on offer. 

Microservices: The Embodiment of Flexibility and Efficiency 

Microservices architecture represents the epitome of flexibility and efficiency in fintech. This architectural style structures applications as a collection of small, independent services, each responsible for a specific function. These services communicate with each other through APIs, ensuring seamless interaction and integration. 

  • Scalability and Flexibility. Microservices allow fintech companies to scale individual components independently, providing unmatched flexibility. For instance, during peak transaction periods, the payment processing service can be scaled up without impacting other parts of the system. This scalability ensures fintech applications handle varying loads efficiently while maintaining optimal performance. 
  • Continuous Deployment and Innovation. Microservices facilitate continuous integration and continuous deployment (CI/CD), allowing new updates and features to be rolled out frequently. This iterative approach ensures that feedback from businesses is quickly incorporated. It and improvements are continually made, keeping the product relevant and competitive. The ability to deploy changes incrementally reduces downtime and enhances the overall user experience. 
  • Resilience and Reliability. A microservices architecture is inherently resilient, as the failure of one service does not compromise the entire system. This reliability is critical for fintech applications, where uptime and consistent service availability are paramount. Services can be designed with redundancy and failover mechanisms, ensuring uninterrupted service and robust performance. 
  • Development Efficiency. Microservices promote a decentralized development process, enabling different teams to work on various services simultaneously. This parallel development accelerates the overall timeline and allows specialized teams to focus on their areas of expertise. The result is enhanced productivity and faster time-to-market for new features and services. 

As business customer demands evolve – in part driven by advances in the consumer space - the fintech industry must remain agile and responsive. APIs and microservices provide the technological foundation needed to achieve this agility. By enabling seamless integration, rapid innovation, and cost-efficient development, these technologies are transforming how fintechs operate and compete. 

Find out how Qorbis’s microservice architecture and use of APIs empower our clients