API Benefits for Businesses | What Are APIs? | Axos Bank

APIs: The Proven Tool for Efficient Business Growth


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Time. It’s a resource that can’t be renewed, only saved. As a technology-driven financial institution, Axos Bank understands the value that time-saving tools bring to businesses operating in an ever-changing e-commerce environment.

Enter Axos APIs — our simple solution that minimizes the time spent building products from the ground up and maximizes the time spent selling and managing your book of business. For more than 20 years, APIs have offered smart businesses the ability to leverage existing ideas to build innovative products. However, APIs’ multifaceted applications are still widely misunderstood.

As a busy business owner, you deserve a cut-and-dried explanation of how APIs can benefit your business. In this article, we’ll explain what APIs are and why they’re important, when to use them, and how can position you ahead of the competition.

What Are APIs?

An API, or application programming interface, is a tool that lets you use a company’s data and software functions. Think of an API as a wire – one that allows you to plug another company’s data directly into your own platform. By utilizing existing resources, you can build new tools easier and faster.

APIs surround us, everywhere. When you check Apple News or Google News in the morning, these platforms rest on dozens of APIs to deliver the latest trending news. When you order an Uber or Lyft, those apps use Google Maps API to send updates on your driver’s whereabouts and communicate when you’ll arrive at your destination. Even high-tech vehicles use APIs, which allow their dashboards to report on fuel efficiency, maintenance needs, and driving habits.

There is no shortage of APIs, and more diverse applications are being created every day.

Why APIs Are Important

The success of your business depends on an optimal customer experience. Launching new features to keep pace with your customers’ changing needs is a surefire strategy to ensure you don’t lose customers to usability gaps that can be easily resolved with APIs. Rather than invest time and talent into ground-up development, APIs offer a plug-and-play solution that saves time, labor hours, and additional costs that can be reallocated elsewhere.

At Axos Bank, we offer APIs to help clients create custom banking solutions. Instead of building an entire money-movement platform from the ground up, our clients can leverage hundreds of thousands of staff hours and millions of dollars’ worth of programming to place our backend code directly into their system. Axos Bank’s secure environment and FDIC-insurance are also extended to associated accounts.

APIs vs. File Transfers: When to Use Them

APIs are clearly an excellent tool for building new features and accessing real-time data. But, APIs may not always be the right solution for your business. Depending on your IT infrastructure and the needs of your project, you may find APIs too robust of a solution for a more simple need. In these cases, flat files (such as Excel spreadsheets and CSVs) might be a better option.

Here are some questions to ask before you decide to incorporate APIs into your business:

Am I building a new feature or product?

Before you rush to include APIs, examine your use cases. Are you using APIs to build a new product or feature? Or do you just need access to information? If your reasoning encompasses the latter, flat files may be the better answer.

Let’s compare two examples to further explain:

Example 1: Imagining Uber without Google Maps

The ride-sharing app, Uber, is a prime example of how APIs can power a new product or feature. Uber rests on at least a dozen APIs – one of which is from Google Maps. With this API, Uber provides drivers with efficient routes while offering customers valuable information on wait times.

But, could Uber survive without the Google Maps API?

Let’s answer this question with a thought experiment. Imagine that Uber launched in 2009 – without Google Maps. What would this mean for Uber?

Perhaps, as a solution, Uber would create its own proprietary mapping software. This would require a herculean amount of time, effort, and money. For perspective, the Google Maps team had over 7,000 employees in 2012 – that’s one-third of Uber’s current employee base! Maybe today’s Uber could withstand such a large increase in staff. But, considering Uber launched with less than 15 employees, it’s unlikely that an early Uber could have managed this monumental task.

Maybe, instead, Uber would forego the mapping software altogether. This would require drivers to be responsible for their own routes. And customers would need to guess their arrival times. As a basic mobile application, this could possibly work. But, it wouldn’t be revolutionary enough to propel Uber into the $3.81B-generating company that it is today.

In the case of Uber, APIs aren’t just “nice to have” features. They are the very foundation that drives Uber’s core business. Therefore, it is necessary for Uber to integrate APIs into their platform. Let’s see how this example compares to our next example.

Example 2: Conducting Market Research Without APIs

The U.S. Bureau of Labor Statistics (BLS) is an excellent resource for information. This is especially true if a business must examine employment trends, consumer price index, or produce price index. Because it is a public institution, the BLS publishes this data freely. Businesses can navigate the website, download a flat file, or – of course – access the BLS APIs.

But, are the BLS APIs necessary?

Let’s answer this question with another thought experiment. Imagine your team has a market research dashboard that integrates the consumer price index (CPI) API. This CPI information is vital to the success of your business. Because of this, you have analysts with the necessary programming skills to create and maintain this sophisticated dashboard.

But, what would happen if this CPI API was no longer available? Would it collapse your business?

Absolutely not. And here’s why:

  • The CPI information isn’t just available via API – it’s also available on the website, where users can download a flat .txt file. This file can be imported into any data-processing platform – both quickly and easily.
  • Unlike traffic changes, which the Google Maps API updates every millisecond of the day, the consumer price index is updated on a monthly basis. Therefore, a CPI API with real-time updates is unnecessary.
  • Without an API, your analysts have no need to program an API call into your market research dashboard. If the CPI API is the only API that your business uses, your team members won’t have the need to possess these specialized programming skills. Depending on the needs of your business, this may save your business money with respect to labor costs. It’s far more expensive to hire analysts with specialized skills than it is to hire those without.

In this specific use case, the BLS API is a “nice to have” feature. It’s unnecessary and would likely overcomplicate your (hypothetical) business operations.

When deciding whether you should integrate APIs into your business, always examine your use cases first. Data is vital, but there are many ways to gather it. If it makes business sense to access data without APIs, don’t use them. However, if an API can save you time, money, and labor resources, then APIs may be the competitive edge you need to disrupt your industry.

How large is the data? How frequently will it be updated?

In our earlier Uber example, we discussed how the real-time nature of the Google Maps API made it necessary for Uber to incorporate the API into its ride-sharing app. The same concept applies for your business. If you need to access a company’s tools or data with high frequency, opt for an API. By the same token, if you’re pulling enormous sets of data, it will likely be more efficient to plug an API directly into your platform.

Do I have the IT infrastructure to support API integration?

When explaining APIs to clients, we like to use the analogy that using an API is similar to plugging a wire into your computer. In reality, it’s more complicated. That’s because you need the necessary staff on hand to manage your API consumption.

When determining if you have the infrastructure to support APIs, ask yourself if your team has the capacity to:

Review API Documentation

An API’s documentation is essentially a manual that explains how the API works. Regardless of how technical your staff is, each API is different. Your team will need enough time to review all of the examples and tutorials to ensure the API will integrate seamlessly with your platform. This sounds simple in theory, but amidst heavy workloads and pressing deadlines, it can be difficult to achieve.

Write Requests and Receive Responses

To plug the API into your platform, your team will need the technical know-how to write API requests and parse through API responses. If your team has programming skills, this should be simple. Otherwise, make sure your team has enough time to develop (or hire for) these skills.

Monitor Your Usage

APIs require many resources to create and maintain. As such, API providers must earn revenue from their users – either directly or indirectly. For private APIs, this usually means a paid subscription plan based on usage. If your business is using pay-to-play APIs, you’ll need to monitor your usage to ensure it’s within your established consumption limits.

Public APIs are typically free of charge – but this doesn’t always mean they are free of cost. Some “free” APIs earn revenue by collecting and repackaging data about your search patterns, usage, location, etc. If this is the case for your chosen API, you’ll need to ensure the API provider is not selling sensitive business data to third parties. Your team will also need to regularly review the API terms of use to ensure new clauses do not conflict with your business needs.

Manage API Security

APIs are an efficient way to connect software platforms and send large batches of data instantaneously. Because of this, it’s no wonder that APIs are a target for hackers. With this in mind, it’s important to encrypt sensitive data that you will send to API providers. Likewise, each API response should be treated as an attack – your team must verify that the data you receive is indeed the data you expected. If not, your team must be able to investigate the issue and contact the API provider if they believe the service has been compromised.

If your team has the capacity to handle these tasks, then API integration is likely a good idea.

Using Axos Bank APIs

If you’re in the business of creating innovative banking products, our team has a collection of ever-evolving APIs to help you advance your goals. These include:

  • Account enrollment functions to help you open new bank accounts quickly
  • Payment solution APIs to help your clients send payments and transfer funds between accounts
  • Account maintenance tools that enable clients to check balances, update information, and close accounts
  • Reporting functions that help you identify client accounts and allow clients to review transactions

As an API client, you also have access to our IT team that will support your development and troubleshoot any issues. In addition to this, our dedicated API team will continuously build new tools to meet your needs. We are committed to delivering the support and tools you need to build the next generation of banking software.

It’s time to stop reinventing the wheel. Visit our API Store and contact our team to start building your next great idea.


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APIs: The Proven Tool for Efficient Business Growth