Smile API Weblog

What is an API and how does it work? Watch below video as our CPO, Jan Pabellon explains what APIs are and how they work in an excerpt from a Webinar we held last November 18, 2021 on how customers can get started with Smile API. Find out more about APIs and how they work by joining us in our next Webinar! https://youtu.be/xBFwZ55mE4M

Watch an excerpt from an online Webinar we did last November 18, 2021 in which our CEO, Jerome Eger, explains what Smile API is, particularly how we can help solve problems commonly experienced by many financial services and financial technology companies. He also went into detail about what differentiates Smile from other solutions out there for KYC, identity and employment verification, and traditional credit scoring. https://youtu.be/WiO3TSeUayI

Why Financial Inclusion Matters Financial inclusion is one of the most important things that can happen to a society. It means enabling access to financial services to those who were previously denied access to them. It is not just about giving people access to banking services, but it is ultimately about giving them more control over their lives, providing them with more opportunities, and helping them better prepare for uncertainties and risk. By giving people access to financial services, they can make better financial decisions, better manage their liabilities and obligations, borrow money for emergencies, save for retirement, provide education for their children, and achieve their dreams and aspirations. Besides social benefits, financial inclusion also matters for economic development. It improves the quality of life for everyone. It enables transparency, reduces graft and corruption, and reduces poverty. It helps grow economies by creating business efficiency and improved resiliency. In fact, the UN has identified financial inclusion as being a key enabler in their 2030 Sustainable Development Goals. it is featured as a key element in eight of the seventeen goals which includes eliminating poverty, achieving food security, promoting equality, achieving good health and well-being. These goals for sustainable development according to the UN, would be impossible without access to affordable financial services. How APIs Provide the Foundation for Financial Inclusion to Happen APIs provide a new way of accessing financial services. Financial services were traditionally provided by banks and other traditional financial institutions. It used to be that these services were costly to develop and operate, and often saddled with inefficiencies, making it economically infeasible to bring and offer to the lowest economic segments of society. However, with technology, this is quickly changing. Technologies such as mobile devices, cloud computing, robotic process automation, and artificial intelligence have transformed how these services are being conceived, managed, and delivered. The glue that links these technologies together are something called “APIs” or “Application Programming Interfaces.” APIs are really just a set of tools that allow for systems to connect with one other easily: to be able to exchange data or orchestrate processes or workflows. With APIs, these data exchange methods, processes and workflows can be done in an automated way, at much less cost, In addition, they provide better consumer experiences, enabling faster and more engaging transactions than traditional means. A good example would be how payments are done today. In the last few months, you have probably shopped or ordered food online. It is likely that you have paid for these transactions via one of the various electronic, contactless payment methods out there—such as an e-wallet, online bank transfer, or a credit card. All of these are made possible by APIs. The Rise of the API Economy The API economy basically refers to the use of APIs to enable innovation and new business models. By making data and services more accessible and flexible, new products and services can be quickly brought to market. By using APIs, new business can launch and rapidly scale up in ways that were simply not possible before. Such is the case of Twilio which is revolutionizing telecommunications by allowing developer

During the rise of the occupy wall street movement in New York City, about a decade ago, Zach Perret thought about ways to improve the financial lives of people that were struck by the financial crisis of 2008. At the time, thousands had lost their homes due to personal bankruptcies. Like many founders at the time, Zach and his partner William Hockey wanted to build an app to improve financial wellbeing. The aim was to aggregate customers’ bank information in one place to provide valuable advice in order to make healthier financial decisions. As to no surprise, the advice often would boil down to the standard of ‘spending less and saving more’, a platitude that let many users to delete the app. Their idea was not an immediate success, and the two founders were struggling to keep the company alive. It was now, when the funds were running out and the partners even had a hard time to make ends meet themselves, they got a call from a fintech entrepreneur friend. He did not hold back with his opinion, and basically told Zach he thought the app was rather useless. However, he would be willing to pay for getting access to their centralized bank infrastructure the company leveraged to get insights into their client’s financial situation. In this moment, Zach and William realized the business had the potential of bringing real value to the end user and themselves, by serving potential clients through a single access point. Thus, the company Plaid was born. By supporting fintechs with user bank data, Zach and William have unwittingly built the infrastructure that enabled the US Fintech industry to gradually evolve into a multibillion-dollar market. The rise of Open Banking Fast forward to 2021, Plaid has become the industry leader connecting thousands of apps with data from over 10,000 financial institutions enabling millions of users to expand their access to more diverse financial services. After receiving several large VC investments and attempted acquisition through Visa, Zach Perret and Willian Hockey’s Plaid is now estimated to be worth around USD $15 Billion dollars. While similar success stories in the tech industry would yield a great deal of media attention, Plaid is still a name most consumers never heard of. This is perhaps mainly due to the rather unspectacular nature of Plaid’s customer interaction, a simple white screen in the client’s app that lets users type in their login credentials of their bank account and confirm the information transfer. Nevertheless, the business model they have created in the ‘information space’ is well known amongst operators and investors alike as the ‘Plaid Playbook’. The ‘Plaid Playbook,’ which in many ways has truly enabled the vision of 'Open Banking,' describes a pathway to more financial inclusion through accessibility of bank data, thereby reducing entry barriers for new, innovative financial apps in the market. More apps mean increased competition, giving end users better products and resulting in greater financial inclusion. But does the Plaid model really apply around the world? From Open Banking to Open Finance With some exceptions, the pandemic has the unfortunate tendency tohit the developing world more than other countries. Quarantines and other restrictions do not only limit the everyday lives of millions, it also affects and changes employment, commerce and financial transactions. In developed countries, where banking and f