How Does MuleSoft API Integration Resolve the Challenges in Banking and Finance?

The days of toggling between multiple applications for information access are well past us. As CFOs strive to globalize, they realize the importance of working closely with IT. A recent but more significant addition to this new-found coordination is MuleSoft API integration in finance . The digital transformation that banking and finance have achieved in the last decade is no ordinary feat. Neither is this piece of technology that has powered this newly connected financial ecosystem.

Let’s understand what API integration means for finance and how its various use cases mitigate the issues faced by decision-makers in banking and finance.

What Value Does API Integration in Finance Hold?

In the past few years, open banking and finance have become the trend. Not only has it brought much-needed financial democratization, but it has also provided opportunities for businesses and end-users to do more with their finances. All this has been possible because of API management and integration.

An API in finance is a set of codes and protocols that facilitates communication between two or more applications. A study revealed that over half of CFOs worry about data sharing and access. MuleSoft API addresses this pain point for them. By integrating applications, they see a considerable improvement in their efficiency and data management.

A recent global survey revealed that over 88 percent of respondents believe that API in finance has become an integral part of businesses in the last couple of years. Another 81 percent believed APIs were a priority for business and IT functions.

Major banks and financial institutions, on average, are allocating about 14 percent of their IT budget to APIs. The intent is clear. APIs are easy, fast, and secure. Banks and other financial institutions are looking for ways to deploy API analytics in their day-to-day operations for increased efficiency and productivity.

What are the Benefits of Financial API Integration?

Better Productivity

APIs are a good way to integrate business applications with the digital frameworks being used by the organization. A 2020 report on API integration points to the fact that 59% of MuleSoft API integration users found their businesses had better productivity.

Improved Transparency

MuleSoft API integration is a great way to instill transparency in the system. Since APIs tend to reduce the complexity as well as players of these digital ecosystems, there is a lesser risk of fraud happening.  

Better Reporting and Analysis Capabilities

When you gain real-time data insights by connecting with third-party applications, you hit a goldmine. This can help finance teams dramatically improve reporting and data analysis, allowing them to make better financial decisions.  

Saves Time with Automation

A lot of time and effort is wasted on manually entering data. With MuleSoft API integrations, manual data entries have become a thing of the past. Since there is automatic data flow between systems and applications, finance teams can focus on innovation.

Makes Processes Error-Free

Large financial institutions run payrolls that can carry error rates as high as 30%. API integrations streamline the entire accounts payable process, invoicing, and reconciliation process, leading to an error-free accounting.

What Challenges Lie Before the Financial Services Industry?

Delivering Connected Experiences to Customers

In this day and age, when everything is a single click away, how can banking and finance not be? A unified customer experience is what users want.

While most institutions have gone digital, customer expectations continue to grow. In the coming years, banks and financial institutions will have to find ways to securely manage and deliver on this promise.

Keeping up with the advancements in technology

Improving efficiency and reducing costs are vital to this industry. To achieve these goals, financial organizations would have to keep up or at least catch up with the latest advancements in technology.

A PwC survey claimed that more than 70 percent of the people surveyed said that “not missing the tech train” was a concern for banking and finance.

Detecting Frauds and Cybersecurity

Finance is always at risk because of the sensitive nature of the data it deals with. As the digital transformation bandwagon moves ahead and more and more online transactions happen, so do the chances of data breaches and fraud.

This is a major challenge that this industry grapples with almost every day.

What Are the Use Cases of MuleSoft API Integration in Finance?

Front-end and Back-end Digitization

In the days of digital era, customers expect to have their customer portfolios and accounts on the go, and rightly so.

One of the best use cases of MuleSoft API integration in finance is that it offers easy-to-use and connected digital experiences to end users.

To enable such an experience, banking and finance need to integrate their front and back-end operations. MuleSoft API integrations are a great way of doing that.

Account Origination Process

A decade ago, you walked into a bank with a bunch of filled forms and still were told to wait for something as mere as an account opening. Fast forward to 2024, and you are doing all your banking transactions while enjoying your favorite Netflix show and a cup of hot tea. That’s API integration for you.

Customer onboarding is a vital part of banking and finance, and API in finance ensures that it is taken care of. Banks today unlock and integrate their siloed data with client databases and other on-premises, legacy, and cloud systems to streamline the entire process.

Scaling of Lending Operations

With the manual lending processes, lenders are often under tremendous pressure to meet the demands. Surging mortgage demands and thin margins make the process even more cumbersome. Banks and other lending institutions, in such a scenario, face difficulties scaling their operations.

API management solves the intricacies of an expensive manual process and helps lenders deliver a more connected experience to the borrower.

Fraud Risk Detection

It does exactly what it says it is. One of the ways APIs can detect banking fraud is through identity checks.

For instance, if someone tries to connect funds from one of the bank accounts to a new account, an API will retrieve the information from the new account and check it against the information provided at the time of onboarding.

Insurance

Finance API can be a helping hand in insurance. It can enable faster claims processing through an efficient claims management process by integrating internal and external systems.

API in finance can also largely improve the data sharing in the insurance process. It can also help integrate new technologies such as IoT, which can help with notifying banks in case of an accident, etc.

Investing

Investments, once a prerogative of the wealthy class, have now been accessible to every individual holding a smartphone.

Finance API, along with trading software, take it a step further. We call it automated investing. Automated investing not only reduces the time and complexity of manual investing procedures but also reduces the cost associated with it.

What are the Takeaways?

The banking and finance industry is running a marathon like a sprint. Changes that could have taken a decade are happening in a matter of months. Data crunching in finance has become the norm. According to a report by Deloitte, “Getting serious about data prioritization is no longer an incremental need for Finance. It’s a transformative one—or a reason transformation might fail. “

In such a fast-paced environment of change, BluEnt is maximizing the potential of its clients with services such as data analytics, MuleSoft integration, data engineering, and data science. Our data analytics and Mulesoft support have been known to transform our clients' businesses.

With two decades of IT experience, we help clients (both large and mid-sized) win their digital transformation journey. Looking forward to an exciting partnership with us? Contact us to get started.