With newer technologies like artificial intelligence (AI), machine learning, blockchain, and predictive analytics, banks are developing new resources to lower costs and quicker turnaround. To be able to cater to this new ecosystem, banks have to digitally transform their legacy systems, address microservices.ДЇocusing on customersвЂ™ needs, banks are creating unique partnerships with technology companies to develop value add services. Today, the banking ecosystem comprises an eclectic mix of financial institutions, FinTechs, vendors, and a diverse customer base. APIs can be used in different ways, but the core of digital transformation relies on creating value addition to the customer.

The development of APIs needs to be in line with the companyвЂ™s business strategy, specifically its strategies for digital transformation. Most banks have rushed into API development without a defined API strategy. Development of API should be in line with digital banking strategy:.

But how can we reduce the risk of API overload in open banking? We take a look at strategies to attenuate the risk of API overload. Without proper security protocols, API weak points can be exposed to operational risks and data breaches. Creating a multitude of APIs opens banking landscape to security risks and overloading the underlying IT infrastructure. By doing so, banks are able to build on value-added services to a set of consumer base directly or indirectly which they would have taken longer time to acquire & develop.Д«ut banks have to be aware of the risk of overdeveloping APIs. They form the backbone for information exchange between banks and third-party providers (TPPs) or non-financial service providers. At the heart of open banking strategies lie application programming interfaces (APIs).

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