Bank as a Platform Concept. How to Develop an Application Using Open Bank APIs

Bank as a Platform Concept. How to Develop an Application Using Open Bank APIs
Feb 28

What is open banking? Open Bank APIs are an emerging trend in fintech based on using application programming interfaces that allow third party developers to build applications and services around a financial institution services. Open Bank APIs promote higher financial transparency and help financial institutions retool and build new revenue models. The Open Bank APIs have had a significant impact across the globe, especially in the European banking industry driven by changing regulatory credentials.

 

The revised Directive on Payment Services (PSD2) is one such regulatory credential that aims to standardise, integrate and improve payment efficiency in European countries. PSD2 has been developed by the European Commission (EC) is a recent main policy development that is placed to impact Europe’s payments industry.

 

PSD2 aims to standardise and make card, internet, and mobile payments. The directive is to accelerate open banking APIs, because they require banks to open up data and transactions to certain new payment market entrants.

Banking as a platform examples

The delivery of successful API channel services requires banks to focus on offering the best secure user experience possible for their customers balanced against the risks of fraud risk. Here we have a list of the most popular open bank APIs

BNP Paribas

The Open Bank Project API provides RESTful interfaces to data and services offered by the bank and additional functionality (such as entitlements and metadata) that allows you to quickly create financial applications using APIs and to build innovative applications and services. The Open Bank Project provides over 120 API endpoints.

 

The main functionalities are:

  • Authorization via OAuth or Direct Login

  • Access account information and transaction history of bank accounts

  • Transaction and Counterparty metadata enrichment (add tags, comments, urls and geolocation) - for example to link a receipt or video to a transaction.

  • Flexible “views” on accounts. Each view grants access to a subset of the data and account actions allowed. Users can be granted access to zero or more views. For example, a customer could offer a read only view on his account to his accountants, auditors or regulators. A charity might open their accounts to the public and allow public comments on transactions.

  • Initiate payments. In the sandbox, cross currency transfers can be made. See Transaction Requests in the API Explorer.

  • On-board customers: e.g. Create a User, Customer and setup an on-boarding Meeting via the API

  • Add “Know Your Customer” (KYC) resources including Media, Documents and Status

  • Other PSD2 EU Regulation compliant features including Information about payment charges, etc.

  • Send messages to Customers

  • Manage credit/debit cards (ask for a new pin, ask for a new card etc.)

  • Open data related to branches, ATMs or financial products

 

The Open Bank Project provides starter kits for popular web and mobile development frameworks. The SDKs are open source (under apache license). Available languages: iOS, Android, Python, Django, Node, C#, and PHP.

Fidor Bank Germany

Open-code APIs allow easy and secure access to bank accounts, customer data, many payment methods, and much more. Many functions are publicly available, others are available upon request. This APIs are RESTful and use the JSON format and OAuth2.0 authorization.

 

Most applications must go through a manual approval process, in particular if you require non-AGB services (e.g., SEPA direct debit) or your application needs access to other people’s accounts and data. In some cases, you must sign additional contracts before your application can be approved and go live.

 

Main functionality:

  • Digital onboarding is accomplished through video and card scans.

  • 60-second P2P Payments are available between those in the Fidor community, or through social media, email or phone.

  • Transfers include Instant SEPA, ACH Payments or country-specific transfers.

  • Credit solutions include credit card, emergency loans, social lending, and more.

  • The community banking platform encourages deep customer engagement with your brand.

  • A marketplace for partner offerings enables crowdfunding, trading and more for your customers, and new revenue streams for you.

  • A real-time dashboard gives you invaluable insights into customer needs and behaviors.

  • A loyalty program can be customized to fit any industry, offering air miles, free data or whatever your customers appreciate from you.

Monzo – The Mondo API

 

The API

will let any Mondo customer quickly download and play with their own data. People have already made their own finance apps using this bank API.

 

The Monzo API has so far served two purposes. First - to actually power the mobile banking app: iPhone and Android apps use it to talk to backend systems.

 

Second, a large subset of this API is also documented as the Developer API. It’s accessible to developers who can build things on top and develop a financial application.

 

The three core functions supported, are:

  • Getting a list of accounts

  • Listing account balances, including any money in pots

  • Listing account transactions

 

Saxo Bank API

 

Saxo OpenAPI offers access to all the resources and functionality required to build a high-performance multi-asset trading platform. Most of the functionality which you find in the SaxoTraderGO platform is available through this API. It is for for better bank API integration with Saxo Bank for partners and affiliates, such as an On-boarding API through a growing set of resources.

 

JSON is currently the only supported format, which by nature is fairly lenient, but in order to ensure a consistent API, most data types are only accepted in one or a few formats.

 

OpenAPI Resources are grouped into Service Groups such as the

  • Reference Data group giving reference information about the instrument universe, exchanges, sectors, etc.

  • Portfolio service group giving information about the current status of clients and their accounts in a live trading system, such as open orders, positions, balances, etc.

  • Trade service group giving streaming prices and the ability to place orders and trades.

 

By now developers are, in fact, the most important thing in banking APIs. If banking platform providers treat their APIs like a product and developers as their target customers, banks will be able to offer them a better experience. Banking APIs are a reflection of the product they’re selling. An API alone won’t be able to change what bank products and services are and their quality.

 

One way to attract developers is bank-sponsored developer hackathons. For example, Barclays API Store - Digital Banking Hackathon with MuleSoft: MuleSoft partnered with Barclays to host a digital banking hackathon to foster innovation and harness technology to build a range of new financial service solutions.

 

There are also several well-known industry forums where financial service firms promote their APIs or compete directly in hackathon challenges. Like Developerweek Hackathon:  DeveloperWeek 2018 is the world’s largest developer expo and conference series with over 8,000 participants across the DeveloperWeek 2018 Conference & Expo, the DeveloperWeek Hackathon, and Official Hiring Mixer.

 

Archer Software has extensive experience using open bank APIs. For example, we successfully developed Earn.org from scratch.

 

Founded in 2001, EARN is a national award-winning nonprofit. They work at the intersection of financial technology and economic inclusion to empower low-income Americans to take charge of their financial lives. EARN's savings technology and programs support working families in setting aside the savings they need to achieve financial security and take advantage of other opportunities.

 

Archer’s developer team included 4 frontend and backend developers. It took 6 month to develop the system using banking APIs on one of the stages of the project. Now the system has 100K registered users.

 

If you have any questions about using bank APIs for app development please contact us via email info@archer-soft.com.

 

 

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