6 min read

APIs and the Fintech Revolution

Apr 19, 2021 2:44:09 PM

Cryptocurrency, online banking, peer-to-peer lending: Each of these terms emerged in the last decade under the umbrella of fintech, the fast-emerging industry that combines finance and technology. The day-to-day impact of fintech can be seen in all aspects of business, such as contactless payments, cheaper and quicker international transfers, and more efficient and easy-to-use accounting software. Fintech has also seen the banking sector’s democratization, with startups including Monzo and Starling Bank offering more flexible, mobile-friendly options. The established players like Citi and Bank of America are racing to catch up.

As ever with finance and digitization, data is at the heart of fintech’s rise. The ability to track, monitor, and manage data in real-time in a few clicks has enabled companies to process and automate financial transactions quickly. With 69% of SME owners stating that cash flow is the main issue keeping them awake at night, the importance of quick and accurate transactions cannot be overstated. 

For SMEs, API management platforms can play a pivotal role in maximizing the impact of fintech products on business operations. Solutions like Universal Adapter can support the digitization of financial processes in small-to-medium-sized companies. 


Fintech and SMEs 

The fintech industry is experiencing a 25% annual growth rate and is expected to be valued at $310 billion globally by the end of 2022. This matters for SMEs because it demonstrates the transformation of the financial landscape and the opportunities it brings. 

The Global Financial Crisis triggered the first explosion of companies looking beyond reluctant banks for financing options. The following decade then saw several tech firms offer a new way of doing business. PayPal, for example, has moved beyond its money transfer roots to become a leading lender to small businesses 


As the digital era continues to evolve, the integration of fintech into SMEs will only grow. The Covid-19 pandemic has forced previously reluctant companies to embrace technology that allows people to work flexibly and remotely. The accelerated innovation will push fintech further into the mainstream as businesses seek to streamline financial processes. 

Academics at the University of Pennsylvania’s world-leading Wharton Business School identified six ways fintech can revolutionize SMEs: 

    • Payment Processing: Fintech companies have come up with multiple methods that allow small businesses to accept payments. For instance, enable SMEs to use mobile phones to accept card payments rather than using bulky sale machines. In the future, the variety of commonly used payment methods will widen - such as mobile wallets and other third-party platforms. Fintech can support businesses to be ready for the coming trends. 
    • Ecommerce: Small businesses can use fintech to remove some of the barriers to setting up online retail stores. With accessible and easy payment processing options, it opens up a new revenue generation opportunity. 
  • International Money Transfers: Platforms such as Wise (Formerly TransferWise) and PayPal offer cheap and painless alternatives to banks in terms of international transfers. Instead of taking several days, costing up to several hundred dollars, transfers can now be done within minutes at much more reasonable rates. 
  • Funding: With cashflow being a number one issue for many small businesses, access to funding can be critical. Lending platforms, including Fundbox and Kabbage allow SMEs to circumvent traditional banks’ lengthy process, approving small business loans within minutes. 
  • Accounting: Managing finances daily can be a difficult task for small business owners having to wear multiple hats. Solutions like QuickBooks can make this task more manageable and increase accuracy with real-time information. Having the overall picture of business operations on one dashboard allows businesses to identify and resolve issues quickly while building towards growth. 
  • Customer Insights: One of the positive side-effects of using financial technology is access to customer data. It enables SMEs to gain insight into customer behavior, buying patterns, and trends. Taking the data from fintech programs, companies can improve their marketing and sales strategies. 

A common denominator in the six ways fintech can support SMEs is flexibility. Instead of relying on lengthy, stringent processes to achieve key goals, businesses can take advantage of digital technology to speed up time to revenue and growth.  


Where APIs Come In 

Digitizing the critical financial processes can help streamline business operations in terms of cost efficiency and steady cash flow. Using an advanced API management platform, companies can easily integrate fintech products with other platforms such as Netsuite and Salesforce. 

In doing so, SMEs will be able to track the complete customer journey from the first interaction right through to payment and delivery. The advantages are two-fold: 

  • Communication: Being able to track the customer journey in real-time enables SMEs to be more responsive and support customers through the process. 
  • Analysis: The data generated can be used to identify typical customer behavior and trends, allowing SMEs to adjust processes to increase conversions and revenue. 

APIs facilitate this ability by allowing multiple programs to pass information to each other, regardless of the format they use. An API management solution enables SMEs to use existing APIs and quickly create new, customized ones. 

With cloud technology and the ever-increasing importance of data management, SMEs worldwide embrace the digital revolution. Time and time again, APIs have been proven to be the hidden engine behind the digitization of the economy. The corresponding rise of fintech has also generated opportunities to streamline financial operations. 

By combining APIs and the latest fintech products, SMEs can operate efficiently in the global economy. The digital era allows the smallest companies to sell products and services across borders effortlessly, increasing the potential for growth and profits. Fully integrated, digitized businesses powered by APIs and fintech will be best placed to take advantage. 

Peter Edlund

Written by Peter Edlund