API IN FINANCE ANALYTICS

 

USE OF API IN FINANCE ANALYTICS

 

INTRODUCTION

Financial data APIs (application programming interfaces) are pieces of software that interact with financial applications to facilitate information access, transactions, and payments.

What is API?

An API, or application programming interface, is a set of defined rules that enable different applications to communicate with each other. It acts as an intermediary layer that processes data transfers between systems, letting companies open their application data and functionality to external third-party developers, business partners, and internal departments within their companies.

 The banking sector is becoming more open and transparent. To have an overview of the type of APIs that banks and FinTech’s are able to use, we can divide them into the following categories: 

Type of API

Definition

ℹ️ Information

Access is given to information about the profile of authenticated users (individuals or companies), speeding up registration.

💡 Product

Those that give access to detailed information about the entity’s available products, such as currencies, loans, or investment products, among others. 

💵 Payments

Allow the institution to obtain all the information related to the payments made as well as to execute operations on behalf of the user in a secure way.

⚙️ Accounts

Allow to obtain details of the account of individuals or companies such as transactions, balance, and history of movements.

📊 Investments

They give access to information about users’ investments, investment portfolios, products, or financial market data. 

💳 Cards

They provide information about the movements made with the cards and the status of availability as well as deferrals. 

⚖️ Loans

They provide information about the granting of loans and the credit analysis of customers.

 

 

Here are some use cases of API in financial analytics:

·       Market Data Retrieval: APIs allow developers to access real-time and historical market data, such as stock prices, exchange rates, commodity prices, and market indices. This data can be used to analyze market trends, perform technical analysis, and build trading strategies.

·       Financial Statement Analysis: APIs provide access to financial statements, including balance sheets, income statements, and cash flow statements of companies. These APIs enable developers to extract financial data, calculate financial ratios, and perform fundamental analysis to evaluate the financial health of a company.

·       Trading and Execution: APIs offered by brokerages and financial institutions allow developers to connect to trading platforms and execute trades programmatically. Traders can use these APIs to automate trading strategies, place orders, monitor positions, and retrieve trade-related information.

·       Risk Management: APIs facilitate the integration of risk management systems with external data sources. By accessing relevant market and financial data, risk models can be developed and executed to assess and mitigate risks associated with investments, portfolios, and financial transactions.

 

CONCLUSION:

APIs in finance analytics have enhanced data accessibility, streamlined processes, and empowered individuals and organizations to make data-driven decisions. As the financial industry continues to evolve, APIs will play an increasingly vital role in driving innovation, collaboration, and efficiency in finance analytics.

 

REFERENCES

https://www.ibm.com/topics/api

https://shorturl.at/arB19

https://belvo.com/blog/what-is-financial-api-how-they-change-fintech-latam/

 

 

 

Narsima Ahmed

@INTERNATIONAL SCHOOL OF MANAGEMENT EXCELLENCE

Intern @Hunnarvi Technologies under guidance of Nanobi data and analytics pvt ltd.

Views are personal.

#financial analytics #API #nanobi #hunnarvi #ISME

 

 

 

 

 

 

 

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