What is an API?

API is a tool that allows different software applications to communicate with each other and exchange information.

🔧 Simple Example:

Imagine you're at a restaurant, and you're looking at the menu. The menu is your application.
The waiter is the API.
The chef and kitchen are the other system.

You order a dish (for example, a pizza) through the waiter (API), and the waiter takes your order to the kitchen and brings the finished dish to you.

🏦 How Does an API Work in Banking?

Banks use APIs to connect their systems to external applications or services (like mobile apps, payment systems, or fintech services).

Examples:

• You see your bank balance in a mobile app — this works via an API.

• You check your credit report via another service — the API connects the bank and the service.

• When you make a payment at an online store, the bank uses an API to process the transaction.

🔐 API Security

APIs need to be secure because they handle sensitive and confidential information. Therefore, banks and companies use:

• Tokens or API keys for authentication.

• Encryption to protect data.

• Restricting access to only necessary services.

✅ Advantages of APIs

🧠 In Summary:

API is the bridge between applications, allowing them to exchange data and work together.