Five Benefits of APIs That Can Help Credit Unions Meet Their Service Goals

Sponsored by Envisant

Application programming interfaces have been around for more than two decades, but their importance is only growing, at least according to 88% of IT banking executives in a report done by Mckinsey. That’s not surprising since APIs help save time, target services, improve efficiency and compliance, enhance member experience, and expand core processor functionality and features. A better understanding of these benefits can help your credit union build an API strategy that matches its own distinct, high standards of member service.

First, there are three types of APIs. Internal APIs are created and used within an organization for its own business purposes while external APIs, both partner and public, allow for collaboration with third parties. 

APIs enable credit unions to:

1. Save time. APIs help systems interact with one another, creating faster, smoother collaboration and a streamlined user experience. 
2. Target services. Consumers increasingly expect personalized marketing that speaks directly to their needs. With the help of APIs, a core data processor can collect data from external sources for a more complete understanding of member needs. A management tool, for example, that allows members to view and track all their credit card debt in one place can provide the credit union with data to help pinpoint members who might benefit from other debt management services like personal loans.
3. Improve efficiency and compliance. APIs help credit unions integrate with third-party data providers and services to augment core data and validate accuracy to meet compliance standards. It also ensures member data is current, which is important to communicating and serving members effectively.
4. Enhance the member experience. APIs enable core processors to obtain real-time updates about data changes from external systems. This empowers members to better manage their finances and accounts; helps detect fraud as it happens; and allows credit unions to engage with card users as they make purchases through timely offers and rewards.
5. Expand functionality and features. APIs help expand core data processor capabilities by connecting to third-party services that offer more advanced data analysis for deeper insights.

While APIs bring many benefits, they can also be difficult and costly to implement. Still, the role of API is something that every credit union needs to consider. An API strategy doesn’t need to be ambitious. Credit unions can begin with reviewing what API services their core processor already offers and whether additional features are needed to advance member service goals.

Once clearly defined, those targeted needs can be used to create a realistic ongoing strategy. Credit unions can build relevant internal APIs to match specific goals or forge partnerships with organizations that offer API-based services and insights that enhance their own.

Jamie Conrad is SVP/debit and credit cards at Envisant, managing the partner processors for debit and credit cards for the CUES Supplier member company. Conrad has more than 20 years of experience within the credit union industry. Since joining Envisant in 1996, Conrad has held various key roles in sales, implementations, training and billing.