The Importance of APIs in FinTech Ecosystems

How Fintech Succeeds

Fintech is an interesting industry in the sense that it bridges two very different worlds. On the one hand, you have the finance sector, a storied market with historical roots, long-term players, and established corporations. On the other hand, you have the technology sector, which has, since its inception, rapidly evolved almost day-by-day, with small startups catapulting to global brands in mere years.

This industry is thus one of contradictions – partnerships that favor history and large client databases looking for innovative startups that can actually use this data in new ways to create new products, services and insight. In order to succeed in this industry, a good fintech solution needs to understand the market as it exists while leveraging new technology to compete and expand in the financial sector. 

APIs are the single most innovative tool in the modern fintech arsenal. APIs enable traditional functions and access to existing systems, but they also offer a methodology for rapid evolution and innovation, the likes of which simply do not exist in any other industry.

Let’s take a look at just why these APIs are so important to the fintech ecosystem.

The Value of Real-Time Data

Fintech lives and dies by data. Data is a critical source of targeting information, product evolution data, and information, but data also serves as a medium by which institutions and solutions can connect with and transact with one another.

Without data, fintech literally cannot exist.

With this in mind, there is a very clear carve out in terms of data value when you consider the element of freshness. Financial data is useful, but fresh financial data is even more useful – fresh data can help you stay ahead of the curve, utilizing aggregation and analysis to help guide development in a holistic and market-correct way.

Integrations and Value Compounding

APIs aren’t just about bringing data in – APIs are a bidirectional technology in the fintech space, creating connections and integrations across services and platforms. This connective tissue is incredibly important, as it not only allows substantial data operations and functions to end users, it also allows developers to connect to third-party services and platforms to build better service and offerings.

As an example, consider launching a platform that provides real-time investment analysis. This is a highly valuable offering that could be an incredible tool for the average user, but in order to get to that useful state, you’d need to build an entire trading platform on top of the tools you’ve created. With an API, however, you can simply find a partner offering and connect directly through an integration – and in no time at all, you have rapidly iterated the creation of a fintech app without hefty development costs and time to market.

Flexibility through Scalability and Extensibility

In the world of business, scalability and extensibility deliver the incredibly important quality of flexibility to any product offering. 

Accessing services over an API means that those services can be scaled directly and individually against real traffic, reducing the cost and complexity required to scale a monolith. This allows for rapid response to market conditions, user demands, and the general state of health and system performance. In this way, scalability provides flexibility to the core service.

Extensibility, by contrast, provides flexibility to what the service actually represents and what it can do. By leveraging modular, API-first approaches, new functionality can be added to the core offering with very little functional resistance.

In the fintech space, this core attribute – being able to scale quickly and efficiently – is absolutely vital. Fintech needs to respond quickly to market demands, but often, efficiency is a core principle behind development. These seemingly competing interests can actually be mutually supportive by planning for extensive scalability and extensibility through proper API modalities and paradigms.

Considerations for Security and Compliance

While APIs provide some incredible value for fintech solutions, they do also carry some significant risks.

Firstly, it bears consideration that fintech itself is already covered by substantial regulation. There are the obvious regulations governing payments, credit products, etc., such as the Payment Card Industry Data Security Standard (PCI DSS) and the Payment Services Directive (PSD2), but there are also substantial regulatory agreements on consumer privacy such as the General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA). This is of course not to mention the various international commerce agreements, regulatory sandboxes, anti-racketeering practices, and more that financial institutions must be aware of.

Even beyond this, there are substantial security compliance considerations that any fintech solution must adhere to. Fintech solutions must have robust authentication and authorization controls, they must encrypt data adequately at rest and in transit, and they must safeguard personal private information (PII) in a variety of locations. 

To get to proper compliance, adopting the right architectures and approaches is a key step. API visibility, security, risk assessment and monitoring are incredibly important for both the long-term financial as well as regulatory and legal health of your organization.

Conclusion

FireTail is an incredibly effective and comprehensive solution for securing your APIs and fintech products. With its simple-to-use yet powerful security systems, it provides real-time in-line visibility and security at scale, helping you to achieve regulatory compliance while offering world-class products that can scale and grow with ease.

API Security and Visibility

FireTail provides real-time, effective protection by giving you unprecedented visibility. Utilizing innovative solutions, you can get full in-line inspection, block malicious calls and operations, log and track activity across the ecosystem, and much more! Don’t just settle for “good enough” visibility – get actual visibility!

Be Proactive with API Alerting & Monitoring

FireTail's API Alerting & Monitoring is a highly customizable solution set for detecting and responding to API security events. Gain control over your alerting and monitoring process and defeat alert fatigue by delivering these alerts where, when, and how you want them.

Manage Your Security Posture

FireTail allows you to own and manage your Security Posture through comprehensive visibility, assessment, and management tools – all in a single centralized dashboard! Measure your progress towards an effective security posture and confidently deploy your product securely at scale.

API Logging and Auditing Done Right

Utilizing FireTail’s API audit solution, you can create a centralized and automatic cloud-based API auditing trail. Gain full insight into what’s happening across your ecosystem, discover and mitigate vulnerabilities, flaws, and data breaches, and create a world class toolkit of incident response processes with just a few clicks!

Comprehensive Inventory Management

Half of the battle with API security is knowing the full slate of APIs in your landscape. Utilizing FireTail, you can easily and automatically discover, track, and manage your APIs at scale, delivering a strong platform for robust security and efficient governance.

Better Visibility and Seamless Integration

FireTail offers seamless integrations, unlocking API visibility behind AWS’ native API gateway without the need for additional agents or complex solutions. Gain full and true visibility in just a few steps!

Effortless Deployment and Management

FireTail makes deploying securely easy. By leveraging Simple Deployment, developers can easily utilize open and common standards to build modern, world-class, API-first applications at scale that are secure and robust.

Getting Started

Best of all, it’s never been easier to get started with FireTail. To get started, simply reach out to get your free demo today!