How can open APIs advance financial inclusion for low-income customers? Experts from the financial inclusion community share their perspectives and experiences. For more insights into how financial services providers can open APIs, visit https://www.cgap.org/OpenAPI. #DigitalFinancialServices #openAPIs #FinTech
There’s a a guiding belief that there
are some problems that are too big for any one organization to solve. And open APIs provides us with a platform for more willing and talented organizations to come in to tackle this really important challenge. APIs are really sort of a
technical way of driving digital transformation in an organization.
and when that digital transformation happens then financial services providers are
able to open up their platforms to serve a lot of different kinds of people. So the way it can benefit poor people is that financial services can be made more widely available to a broader group of people. But more importantly,.
you get developers putting new services onto that platform so you have both sellers and buyers. So it can be good for poor people who are selling services and products, but it’s also good for people who want to buy those services and products. They could start with a payment service, but then a track record that’s
tracked through the digital trail.
means that they might be able to
get credit eventually. They may be able to get insurance because a provider can gather information about them. So, I think, APIs are kind of at the core of transforming financial services providers into something that can be
much more friendly towards the poor. There’s definitely a pathway for low-income people to benefit from open APIs,.
and the proof is just in the fact that
they’re already benefiting from private APIs. And so when I say that I mean digital financial services today are exposed to to customers through private APIs controlled by the service providers, whether a mobile money organization, a bank, etc. When we talk about open APIs,.
it’s just about accessing the same channels with an experience that customer already knows but with more competition. So you have more people competing for that customer, and the economics for doing that become lower and lower when infrastructure becomes more available. So, an API makes it an open API makes it cheaper for me to serve that customer,.
and it may in fact make it profitable for me to do that. That may open entirely new income segments where then you can see the markets follow. Poor people benefit from open APIs by
increased choice. When APIs were difficult and there was a closed community of very few organizations making use of APIs with our organization,.
people had fewer choices. They can get loans from only two companies. With an open API platform, you can open that up in a
marketplace to multiple lenders and customers and get a choice to go for the
best deal that suits them. If it’s paid for, rented, paid by the
day solar power — if you’ve got a closed API environment, you may only have one company doing it..
But with open APIs, you can have multiple companies, and there’s then more opportunity for entrepreneurs, and there’s more choice for consumers. That’s good for all people, not just poor people. I do believe open APIs will impact the lives of poor people because as mobile money providers, we cannot solve the problem for everyone in all businesses..
I believe that open APIs will connect the world of information the world of content with the world of payments. And so a farmer, for example, living in a very
remote area would be able to access through our platform information, for example, on the weather provided by someone who we don’t even know about.