Facial Recognition API vs SDK's: Which One to Choose for Onboarding Resiliency

Consider this: 40% of customers abandon onboarding processes that take longer than five minutes. As customers demand swift, frictionless services, traditional onboarding processes—laden with extensive paperwork and prolonged verification—are becoming obsolete. 

Enter facial recognition technology, which has become the linchpin of modern identity verification, enables institutions to slash fraud rates while cutting onboarding time from days to minutes. But here’s the catch: Not all facial recognition solutions are equal. Choosing between a cloud-based API and an on-device SDK isn’t just technical—it’s strategic. It shapes everything from compliance resilience to customer lifetime value.

The Rise of Facial Recognition in Financial Services

Facial recognition has emerged as a pivotal tool in modern banking, offering a harmonious blend of security and convenience. By analyzing unique facial features, this technology facilitates rapid identity verification, enabling customers to access services without the delays associated with traditional methods. This advancement enhances user satisfaction and significantly reduces operational costs for financial institutions by automating the verification process. 

The API vs. SDK Dilemma: Navigating Integration Choices

As financial institutions contemplate integrating facial recognition into their systems, a critical decision arises: implementing the technology via Application Programming Interfaces (APIs) or Software Development Kits (SDKs). Each approach offers distinct advantages and considerations:​

• APIs provide cloud-based solutions that facilitate easy integration and scalability, allowing institutions to leverage external servers for processing. This approach particularly benefits organizations seeking rapid deployment without extensive in-house development. ​
• Conversely, SDKs offer on-premise solutions that grant more significant control over data processing and customization. This method is ideal for institutions with stringent compliance requirements and a need for tailored functionalities. ​ 

Charting the Course Ahead

The integration of facial recognition technology is not merely a technological upgrade but a strategic imperative for financial institutions aiming to thrive in a digital-first world. By carefully evaluating the merits of APIs versus SDKs in the context of their unique operational needs and regulatory landscapes, BFSI leaders can make informed decisions that bolster security, enhance customer satisfaction, and drive sustainable growth.​

In the subsequent sections, we will delve deeper into the nuances of APIs and SDKs, exploring their respective benefits, challenges, and ideal use cases within the BFSI sector. This comprehensive analysis will equip decision-makers with insights to help them choose the optimal path for integrating facial recognition technology into their digital onboarding processes.

What is a Facial Recognition API?

A Facial Recognition API is a cloud-based solution that allows businesses to integrate facial recognition capabilities into their systems via API calls. This means that the image processing and identity verification occur on external servers managed by the API provider.

How it works:

1. The user uploads a selfie or video during digital onboarding.
2. The API sends this data to the cloud for processing.
3. The system verifies the identity and returns the results.

What is a Facial Recognition SDK?

A Facial Recognition SDK software package allows businesses to integrate facial recognition technology directly into their applications. Unlike APIs, SDKs offer on-device or on-premise processing, giving BFSI institutions complete control over their data.

How it works:

1. The SDK is installed within the bank’s app or internal system.
2. Image processing happens locally on the device or the institution’s servers.
3. The system verifies the user’s identity without sending data to external servers.

APIs vs. SDKs

The battle between APIs and SDKs isn’t about which is better—it’s about which is better for you. Let’s break down five critical dimensions where these tools clash, using real-world BFSI scenarios to reveal their strengths and weaknesses.

Decision-Making Framework: Which Solution Fits Your Use Case?

Choosing between APIs and SDKs isn’t about picking a “winner” but aligning with your institution’s risk appetite, resources, and growth strategy. Below is a battle-tested framework that BFSI firms can use to navigate this crossroads.

Step 1: Ask These 5 Critical Questions

Step 2: Map Your Answers to Decision Pathways

Pathway A: Choose an API If…

• Priorities: Speed-to-market, low IT overhead, elastic scaling.
• Ideal Scenarios:
  
  • Launching an MVP within weeks.
  • Serving regions with unstable compliance laws.
  • Managing unpredictable demand (e.g., crypto exchange during bull runs).
• Red Flags:
  
  • Data residency conflicts.
  • Rising API costs at scale.

Pathway B: Choose an SDK If…

• Priorities: Data control, regulatory compliance, brand differentiation.
• Ideal Scenarios:
  
  • Operating in India, EU, or other strict data markets.
  • Targeting high-net-worth clients needing bespoke security.
  • Building a proprietary fraud engine (e.g., combining face + voice + behavior).
• Red Flags:
  
  • Underestimating maintenance costs (budget 2–3x initial estimates).
  • Lacking DevOps/AI talent to manage updates.

Pathway C: Hybrid Model

• Blend APIs + SDKs: Use APIs for scalability in low-risk markets and for regulated/high-value segments.

Step 3: Pilot, Measure, Iterate

• Run a 90-Day Pilot: Test both solutions on 5–10% of user traffic.
• Key Metrics to Track:
  
  • Fraud detection rate (target >98%).
  • Onboarding drop-off (benchmark: <15%).
  • Cost per verification (APIs) vs total cost of ownership (SDKs).

Final Thoughts

Facial recognition transforms BFSI security, making identity verification faster, safer, and more seamless. However, implementation success depends on choosing the right solution—APIs for speed and scalability or SDKs for security and control. 

Arya.ai gives you the best of both worlds. Our AI APIs are scalable and provide the relevant encryption needed for data security. We also offer on-premise solutions for better data security. Talk to us if you need an on-premise solution, and refer to our AI onboarding solutions.