Fintech and APIs appear to be a winning combination for the foreseeable future. Moreover, the infrastructure-based technology and APIs are reshaping the future of the financial services industry.

A Research and Markets report said it anticipates the global fintech market report to observe progressive growth and reach the market value of about $305 billion by 2025. The main reason for the growth of the fintech market includes a surge in investment in technology-based solutions by financial institutions and financial technology companies. They want to supply low-cost personalized products due to evolving advances in the technology sector and respond to rising customer expectations.

The report maintained the emerging fintech market splits into API, artificial intelligence, blockchain and distributed computing lines with some overlap. Artificial intelligence and blockchain should experience significant growth with AI interfaces and chatbots mostly redefining customer service. The expanding AI-oriented fintech market should put it at a compound annual growth rate of around 21% in the next 5 years.

The Research and Markets report identified some of the major players operating in the global fintech market include Robinhood, Ant Financial, Paytm, Shanghai Lujiazui International Financial Asset Exchange, Oscar Insurance Corporation, Credit Karma, Kabbage, Atom Bank, Onfido, UiPath, and Microsoft. In additional other major companies are developing advanced technologies in order to stay competitive in the market. Other viable strategies include mergers and acquisitions.

A number of financial institutions have already entered the fintech realm by offering banking-as-a service (BaaS) APIs. These institutions identified the movement toward embedded fintech early on and opened up their banking capabilities directly to software companies through APIs to produce protection against tech competition and to realize a broader deposit share.

Many other credit unions and banks seek a fintech partnership to stay competitive. Many pursue help in areas to improve their mobile banking and payment channels, personal digital assistants, saving and investment tools, fraud mitigation, payment processing, and artificial intelligence/machine learning capabilities (including chatbots). They also want upgrades to their digital banking platforms to provide real-time and same-day banking services, big data access through open banking to provide customers with personal and actionable insights; and robotic process automation to power existing processes.

That is why partnerships between fintechs and financial institutions are mutually beneficial. They can work together to benefits both organizations. For credit unions and banks, a solution using fintech is an opportunity to extend their market reach and connectivity to its customers and provide new revenue opportunities.

Traditional financial institutions can present API access and package payment and financial services to fintech organizations making market moves. Meanwhile, partnering with financial institutions to gain access to financial service APIs and payments capabilities allows fintechs to strengthen their offerings.

NXTsoft’s vendor agnostic OmniConnect Platform, the premier open banking marketplace for all API needs, uses cutting-edge cloud technology to connect fintech solutions to financial institutions, ensuring that NXTsoft clients have the most secure and reliable integration environment in the industry. OmniConnect provides the access needed to the financial institutions information, removing integration obstacles and providing a seamless connection between third-party API solutions and financial institutions’ core digital banking, item processing and financial systems.