Five years ago, the launch of Open Banking in the UK and Europe promised a revolution in customer choice, convenience and security.
In a new report, payments technology specialists BPC outline progress made so far towards Open Banking (OB) across a range of markets, and explore why flexible API infrastructures are a prerequisite for success in this new era.
The BPC study finds that Open Banking is already having a dramatic effect on consumer finance, with services such as instant payments, credit scoring, refunds and subscription payments becoming reality in markets as diverse as China and Norway.
The UK’s Open Banking Implementation Entity (OBIE) report that adoption of OB services doubled in that country between 2021 and 2022, and that more than 11% of British consumers now use at least one OB service, with OB payments – to take one example – rising at around 10% every month.
Open, flexible API infrastructures are key to success in Open Banking.
Open APIs are sets of software code made available to third-party providers (TPPs) to facilitate interaction between a bank, its customer and third parties.
The new report from explains how Open APIs enable banks to function as platforms, permitting their customers to engage with third parties that have been security-vetted and are therefore trusted by the bank.
The end result is a wider range of services for customers such as those highlighted above – delivered through their bank’s trusted platform.
In their new study Why Open Banking needs flexible API connectivity, BPC review the different Open API strategies adopted by a range of countries and regions.
Some markets such as Poland, the UK and Ireland and Germany (via The Berlin Group) have created national or regional API standards, while others have no pan-industry API standard, meaning banks need to create single integrations between their systems and those of third parties.
This situation creates significant variations in API templates, with differences between both national standards such as PolishAPI and NextGen PSD2 and individual bank integrations.
The report gives an overview of the different strategies banks can adopt to make sure their approach to OB is successful.
It also gives real-world examples of where individual banks and entire national financial ecosystems have engaged with outside providers to make the OB revolution happen.
To find out how you can unlock the future of digital finance with flexible API management and Open Banking, download the new report from now.
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