In this guidebook we’ll walk you through what you need to know about why APIs matter in today’s banking environment. First we’ll discuss the basics, then we’ll dive into details about what specific features you should look for when using a fintech provider’s API or when building your own. Also download the official guidebook version of this presentation: https://www.mx.com/api-guidebook

1. The API Slideshare
for Bankers and
Fintech Executives

2. Welcome!
In this SlideShare we’ll walk you through
what you need to know about why APIs
matter in today’s banking environment.
First we’ll discuss the basics, then
we’ll dive into details about what specific
features you should look for when
using a fintech provider’s API or when
building your own.

3. Application Program Interfaces (APIs) have
been a major part of banking for decades.
That’s because they enable developers to use
financial data without having to get bogged
down with core systems and legacy software.
APIs can also provide ready-made libraries of
code that help developers focus on the products
they want to build instead of starting everything
from scratch.
It’s similar to how concert pianists don’t build
their own pianos, how painters don’t create their
own paint or brushes, or how construction
workers don’t cut down their own trees for
boards or melt their own metal for nails.
People in every profession use shortcuts.
It’s the best way to work.
In other words, APIs give developers a way
to build products more quickly. They enable
developers to take something that another
team has spent 5 years on, and put it to use
in a few days or weeks.
Introduction to APIs

4. Examples of Popular APIs
Now that we’ve covered the basic
definition of what an API is, let’s look
at a few examples.

5. uses this method. It’s a simple API, but it has
big payoffs for Facebook and the companies
that use it. For instance, TripAdvisor saw a
27% increase in engagement once they
started using this API.
Facebook
Chances are that you’ve seen a website login
screen that asks if you want to create an account
via Facebook, as shown below.
This is one of the most popular APIs in the world.
It enables companies to offer an easier signup
process, and it gives Facebook free advertising
since their logo is centerstage on every site that

6. Google Maps
Another well-known API comes from Google, with their
maps product. This API is featured in banking apps that
have branch locator, as well as many GPS apps and fitness
apps such as Map My Run.
With this API, developers don’t have to launch satellites
into orbit or drive cars around every street in the world like
Google did to build a digital map. Instead, they can just use
Google’s API and immediately build something new on top
of it. In return, Google gets subtle advertising (as seen at
the bottom of the image) and they also collect data on users
from a wide range of apps.

7. Walgreens
With the Walgreens API, developers can create apps that
send in-app photos to Walgreens for printing.
In addition to being able to tap into a network of more
than 8,200 Walgreens stores, developers who use the
Walgreens API get 20% commission each time a user
prints something with the service. In return, Walgreens
has seen increased store traffic and publicity—which was
a factor in their dramatic stock price surge after their API
was released in 2012.

8. With these examples, you can see
how APIs can be used to benefit
both sides of a partnership. In every
instance, it’s a win-win.

9. What to look for in selecting
or building an API
Now let’s cover a few things to loo
for when selecting an API. While it’s
not necessary for an API to have all
these components, each can be
helpful — especially when it comes
to financial services.

10. High Availability: Upwards of 99.97+% uptime
Impenetrable Security Layers: SOC-2 Type II
and PCI DSS compliant
RESTful architecture: Not SOAP, which tends to
be cumbersome
Data Format: JSON or XML
In-house Support: Immediately available to
answer your questions
Versioning: Non-breaking API changes, so your
app doesn’t experience problems when the API
is updated
Scalable: Ready for however many calls you
want to make
Real-time: Pushes data as it comes in rather
than batch-processing it
What to look for in an API

11. Programmable Web has created a directory
of 62 real-time APIs. You can see that REST
is the overwhelming choice for protocols,
and JSON and XML are the overwhelming
choice for data formats.

12. There are many more things to
consider beyond those previous charts.
For instance, Joshua Bloch, Principal
Software Engineer at Google, has
published a keynote titled “How to
Design a Good API and Why it Matters.”
Here a few of his points:

13. General Principals
API should be as small as possible
but no smaller
• You can always add, but you can
never remove
Names Matter — API is a little language
• Names should be largely self-explanatory
Document Religiously
• Document every class, interface,
method, constructor, parameter,
and exception
API must coexist peacefully with platform
• Obey standard naming conventions
Method Design
Don’t make the client do anything the
module could do
• Reduce need for boilerplate code,
generally done via cut-and-paste
Don’t violate the principle of least astonishment
• User of API should not be surprised
by behavior
Avoid Long Parameter Lists
• Three or fewer parameters is ideal
Avoid return values that demand
exceptional processing
• Return zero-length array or
empty collection,
not null

14. In other words, whether you’re looking to
select or build an API, it’s crucial to review the
documentation over and over again for clarity.
If an API uses language that’s ambiguous or
unclear, avoid it. If your own API has those
same qualities, then you know it needs more
revisions before it goes live. As Bloch
says, “code should read like prose.”
When you’ve found an API that meets all
of this criteria, you know you’ve found
something worthwhile.

15. Financial institutions that
are doing interesting things
with APIs
In the final section of this SlideShare,
we’ll look at some API examples within
financial services. Hopefully, this will
spark some ideas to help you succeed
in your own endeavors.

16. BBVA API_Market
BBVA created a program named API_Market so fintech companies can use BBVA data to
create new applications. For instance, Dwolla uses this program for their FiSync protocol,
enabling BBVA customers to enjoy the benefits of real-time transfers and bypas outdated
systems like ACH. Again, this is an instance where two companies are using APIs to create
a stronger product.
bbvaapimarket.com

17. Capital One Hackathon API
Capital One created a hackathon that gives developers access to a
mix of public facing and mock account data — all structured the
same way Capital One “actually runs things.” This enables develop-
ers to prove their chops and possibly get a job at Capital One, but it
also allows the bank to see innovative ways to “re-imagine banking.”
api.reimaginebanking.com

18. Chase Paymentech
Chase has built an API that developers can use to add a payments layer to their application.
By using this API, developers tap into the Chase network of 300,000 merchants and can
authorize transactions in more than 130 countries.
chasepaymentech.com

19. Fintech companies that
are doing interesting
things with APIs

20. Square
Like Chase Paymentech, Square lets developers add a simple way to make payments directly
within their app. Square stands out from the competition because of the simplicity of their
design and their network of physical Square readers.
squareup.com/developers

21. Apple Pay API
Apple Pay has an edge in the payments world because
it’s connected to Touch ID and is therefore is part of the
hardware that many users already have at their fingertips.
In addition, Apple has built a simple way for users to select
their product at checkout as shown in the example with
Groupon (who uses this API in their product).
developer.apple.com/apple-pay/

22. Coinbase
The Coinbase API enables developers to add a
digital currency component to their application.
They’ve processed more than $5 billion in
payments in 33 countries and are set on making
Bitcoin and Ethereum easier to understand and use.

23. Conclusion: APIs are the future of banking
The lines between fintech and banking are blurring as
APIs increasingly take center stage. As you can see from
this white paper, fintech startups are interested in APIs
from banks and vice versa. It’s no longer a matter of
whether fintech startups or banks will win some sup-
posed fight against each other. Instead it’s a matter of
which companies will offer and use the right combination
of APIs to create something that consumers really want.
In short, APIs are the future of banking.

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25. Power your business
with APIs from MX
If you want to learn more about
the range of APIs that MX offers
for financial institutions and
fintech companies, contact us:
801.669.5500 or sales@mx.com