What is API Integration?
API (Application Programming Interface) is the set of protocols and tools that enable different applications to communicate with each other. APIs facilitate connectivity between devices, applications, and programs by serving as a software intermediary that allows us to combine data in more meaningful and useful ways.
APIs also serves as a liaison between applications and API integration platforms, allowing businesses to communicate information between them.
Before APIs, data was traditionally stored in a siloed fashion, where it became difficult (or even impossible) for the data to communicate or interact with other data. An information silo occurs when individuals or groups within a company generate or record new data, but don’t take steps to integrate that data for other parts of the business to view or use strategically. Not unlike two people speaking different languages, if applications can’t communicate, the data remains siloed.
When data isn’t shared between departments or divisions within a business, there can be significant adverse effects on productivity and efficiency. For example, there may be duplication of effort in scenarios where one employee is unaware that another employee has already completed a particular action. Some employees may be working on misguided, outdated, or inaccurate information because another group of employees failed to share crucial data with them.
Siloed information can cost your organization time and money without you even being aware that it’s a problem. Information silos can also negatively affect customer experience, which can drastically impact a company’s bottom line.
Here is a straightforward scenario to consider:
A customer opens a savings account with a bank, and a few weeks later, he decides he also wishes to apply for a credit card. When he visits the bank’s credit card department, he is asked to provide much of the same information that he provided when opening the savings account. Frustrated, he asks why he has to go through this process again when he just provided the same information at account services. The bank employee informs him that the accounts department is separate from the credit card department, and they use different databases, so he will have to provide the information again.
This is not only an annoying experience for the customer, but it is also an inefficient use of time for the bank’s employees. It would be far more useful for all the bank’s departments to have access to customer information to equip employees with all the information they need to provide excellent customer service.
API integrations are an effective method of eliminating information silos by freeing up data to communicate across devices and departments. If the bank in the example above had properly used an API integration, the customer would have been able to quickly and easily complete the credit card application because the entire organization would share a database to retrieve the customer’s information.
Types of APIs1
- Open APIs
- Internal APIs
- Partner APIs
There are open APIs (also known as ‘public APIs’) that can be used to do everything from checking traffic, sports scores, the stock market, and the weather to updating social media profiles and making payments across several platforms. An app developer may, for example, utilize a open weather API to create an application that automatically reminds users to bring an umbrella when rain is in the forecast. Open APIs are a popular option as they allow for increased production without investing heavily in development efforts.
Many large technology companies, such as Twitter, LinkedIn, and Facebook, allow the use of their API by third parties and even competitors. For example, the ability to create an account on an external website using one’s Facebook credentials is made possible by using Facebook’s open API.
Twitter’s open API allows businesses to evaluate and analyze Twitter data for market research, audience insights, and trend detection. Use cases for LinkedIn’s API include allowing members to share professional content with their LinkedIn network from across the web by leveraging the LinkedIn Share API.
On the other hand, internal APIs (also known as ‘private APIs’) are developed within a company’s organization for exclusive use by developers working within that organization. An internal API provides significant benefits for companies, such as improved internal collaboration and a reduction in the time needed to develop internal systems. Because an internal API is only used and manipulated by persons within an organization, API publishers and developers have greater control over the application development process.
To access partner APIs, a developer needs to have specific access rights or licenses to that API. Like internal APIs, partner APIs are not available to the public. Unlike internal APIs, partner APIs are only accessible to strategic business partners that have an interest in the integration. A partner API is a great way to foster connectivity between the two applications/interfaces.
Advantages of API Integration for Businesses
Many modern businesses are no strangers to APIs. They are a ubiquitous and necessary element of 21st-century enterprise information technology. With more than 16,000 openly available APIs in existence today, and hundreds of thousands of internal APIs being developed by companies, there is a definite need for a structured and systematic way to communicate information across multiple APIs.
This is where API integration comes in. An API integration is the method by which multiple APIs communicate and share data without human intervention.
API integrations offer many advantages for businesses. They allow the company’s products or services to communicate with each other, simplifying the app development process while saving a lot of time and money. As a result, app development teams can place their time and energy on more complex and lucrative tasks.
API integration platforms also allow companies to quickly and easily create a new API from an existing integration, saving time and money via automation while allowing companies to get a higher return on their technological investments.
Not too long ago, when a company needed an API, it could either use what was readily available to them or build a new one from scratch. Both methods are time-consuming and prone to error. With an API integration platform, companies can create APIs easily with just a click. This saves time, money, and increases organizational efficiency.
Another distinct advantage of an API integration is its ability to allow companies to access legacy data to merge it into current systems easily. With API integrations, companies can create their APIs for internal usage, enabling them to obtain valuable data from older databases far quicker.
Finally, an API integration promotes innovation and creativity as developers come up with new and exciting ways of combining data to make our lives easier.