Open Banking & APIs for Transformation in Banking

Open Banking and Open APIs have gained momentum and have grown from purely technical capabilities to being of business relevance. Open Banking is an innovative model for the financial industry not only from competition perspective but also from customer engagement perspective. Banks will have to help their customers with superior and more agile offerings. Banks should enable their customers to manage their financial affairs, make better decisions, save money etc. Digital disruption, FinTechs and Regulatory compliance such as Revised Payment Services Directive (PSD2) have accelerated the competition and forced banks to open up their systems. Using API, banks can transform their core systems for innovations and can integrate with internal system and external partners in a simpler, secure and controlled way.This paper takes a look at why open API is the foundation of open banking, values creating using open APIs, open banking framework/building blocks, and challenges faced by banks in implementing the open banking. It also highlights the various initiatives taken for API standardization.