How are APIs implemented in open banking?
By sharing customer data with authorised TPPs via APIs, financial institutions can create new products and services that can assist bank customers in managing their finances in new and innovative ways. APIs act as a secure channel for financial institutions to share customer data with authorised TPPs. Using a mobile app, a TPP can help users manage their spending across multiple accounts or create a budget based on their income and expenditures.
Do Banks have an open API?
The answer to this question isn't 100% correct Open bank account online. As part of PSD2, European banks are required to develop their own open banking APIs and make them freely available to the public.
These APIs will not be free to end users or companies creating business strategies to leverage OB capabilities. Account Information Service Providers (AISPs) and Payment Initiation Service Providers (PISPs) need to comply with multiple requisites to be able to access and use these APIs, with the majority charging their customers to access their own API.
Currently, Paymentsclarity is the only OB provider that offers free access to its API, with the belief that it should be available to everyone, so the banking industry can make the most out of OB.
Banks have had APIs for some time now, but PSD2 has made them more important than ever. PSD2 requires banks to provide APIs that allow TTPs to access customer account data. This has created a whole new ecosystem of banking apps and services that can be used by consumers.
Banks are still figuring out how to best take advantage of this new requirement, but it is clear that APIs are here to stay. This is good news for consumers, who will benefit from the increased competition and innovation that PSD2 is sure to bring.
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