APIs continuing to drive financial engagement
The use of application programming interfaces (APIs) is continuing to create more alliances between financial institutions according to George Parks Davie, senior product manager at Klarna at this year’s Open Banking Expo Digifest.
Speaking at this year’s Open Banking Expo Digifest, he said regulators and the market continue to embed APIs across networks.
“There have been the sandboxes around the second payments directive, then they had the production PSD2 APIs to dealing with those kinds of things and discussions with the banks.
“Aligning that PSD2 world and what has been offered from the banks with your current offering that you’ve been building up on yourself independently in the past. It was a little bit tricky combining those two and normalising the data.”
APIs developed under PSD2 provide confidence among organisations and continue to fuel data management capabilities.
“First of all, looking at a PSD2 interfaces, we see stability around API. The API design is there and it’s not going to change too drastically. It’s great. It’s much more reliable.
“One of the key features that those PSD2 APIs come along with is you are able to access the bank data without the consumer being present at any time.”
He also said API requests were “much faster” than using traditional fallback mechanisms.
A Finastra survey, conducted in May, found that 86 percent of global banks wanted to use open APIs to enable Open Banking capabilities in the next 12 months. It also found 30 percent of banks believe Open Banking is already providing a tangible impact offering an improved customer experience.
Parks Davie said there is a “big need for companies to offer their services globally.”
“We have also big companies from the US looking at Europe trying to establish business here using the banking data we have at hand due to PSD2. But they must also ask themselves, how can we now also leverage the same kind of technology that we have in Europe in the US market?
“It is a must for the US to establish some sort of PSD2 framework or a new way of accessing the data.”
“We do expect that there will be a lot of these services available from the banks, but at a certain price. They will be tracking the cost in the market of providing such an open banking API.”