Imagine you sign in to an app to access your profile. But have you wondered how this process works so effortlessly?
The app calls an API (Application Programming Interfaces) to retrieve your account and its credentials, which then access this information from one of its servers and return the data to the application. So, APIs are essentially strands of code communicating with each other, forming a connection to exchange data.
Consent-driven payroll data exchange — The next wave of innovation in Fintech
The opportunities for Fintech to serve unmet financial needs and services for consumers are becoming imperative. APIs are important because they facilitate the seamless flow of data across multiple systems (silos), performing various tasks with various purposes. Essentially, payroll APIs change how banking, employers, and fintech companies make business transactions embracing secured data-sharing solutions for better connectivity.
Real-time payroll data exchange will enable organizations to build specific products that run payroll, calculate taxes, transfer money and inform relevant agencies. Moreover, accessing salary & employment data through these third-party APIs can directly provide personalized financial services (like payroll-linked loans) or employee benefits.
Payroll APIs for endless opportunities
Traditional systems used for data verification could potentially cause data breaches and can compromise employees’ private information. With payroll APIs, the data is only accessed at the time of verification (real-time) helping maintain the security and privacy standards.
While payroll providers can get access to payroll data which is secured with transparency showing how and who is accessing data. Providers can use these connections to add new services and applications that benefit consumers, employees, and payroll companies.
Using payroll data, banking institutions can quickly surpass both underwriting and servicing loans. Banks can verify income and employment information more rapidly and efficiently than existing methods. This access to real-time work and income data can enable them to reduce friction and accelerate customer onboarding.
How does this benefit?
Loan repayments directly accessed from a consumer’s or applicant’s paycheck de-risks a loan significantly (also known as payroll-attached lending). It further reduces fraud, improves credit quality, and decreases charge-offs.
Payroll attached API solutions will dramatically improve verification speed for background checks, coverage rate, and quality leads. In addition, it also helps in a faster and smoother employee onboarding process.
Other essential advantages of Payroll APIs for employers are:
1. Employers can provide holistic and flexible employee benefits aligned to their employees’ custom requirements, powered by payroll APIs. These employee benefits depend on the coverage (number of employers and employees on the API platform) connecting the fragmented landscape of payroll providers.
2. Can be used to access historical data — Payroll attached APIs can help build historical data of employees and help in saving time from re-authenticating frequently.
Fintech companies can get more seamless and secure access to payroll and HR systems to pull all employee data into one place. It significantly saves time for a need to build one-off integrations, as customers may be on different payroll and HR system providers. Resulting in payroll access providing a rich set of additional and quality data. In addition, fintech companies are sanctioning loans to their consumers within five mins post-checking the credit score in real-time.
For example, payroll attached APIs can help directly access and pull out employee headcount expenses from payroll data, allowing underwriting insurance or commercial lending for business quickly.
Tartan’s mission to improve customers financial lives
In today’s world, you need agile systems that are fast, adaptive, and change according to requirements. Tartan enables user consent-driven income and employment data connectivity in real-time directly from the payroll and work systems to streamline verification, enhance user experience and reduce risks.
Tartan’s solution strengthens the gap by providing a payroll API solution that is well-positioned for growth with organizations. If you’re interested in seeing a demo of our payroll API solution, get in touch.