Open Banking Trends: “The old guard are embracing new opportunities”
INNOPAY, a leading consultancy firm in digital identity, data sharing and payments, just updated its renowned and recognized “Open Banking Monitor” report. It notably highlights the steps banks have taken over the past year, who the newcomers are and what are the very latest API capabilities, in a continuously evolving landscape.
#1 Community development is driving differentiation in DevEx
As explained in the report, “Community Development is defined as a way for banks to inform and actively engage their communities of users”. Several leading banks in Europe are making significant efforts to increase this notion of Community Development.
Maintaining and growing a community around a bank’s developer portal “incentivises” users to drive innovation, leading to a greater variety of functionalities in a reduced time span. “This can be achieved by actively collaborating with the community by, for example, creating direct interaction channels with a respective bank, enabling users to suggest new API features or functionalities, or organizing events and hackathons,” underline the INNOPAY experts.
In this respect, it becomes a way for banks to differentiate but also to drive adoption in an increasingly competitive European market.
#2 Payment APIs are on the rise, Account APIs stable and significant
Over the past 12 months, we have seen the launch of localized and specialized payment APIs, such as cross-border payments, instant payments, BNLP, request to pay, etc. Overall, payment APIs now account for 34% of all observed API functionalities.
Moreover, as the EC is pushing for instant payment, the number of such specific APIs is expected to continue to rise. The launch of a similar scheme in the US, “FedNow” – an instant payment service to be launched next July – backs this story.
When it comes to bank and account information APIs, these account for 23% of all observed API functionalities. They notably focus on Transaction History, Account Balance, List of User Accounts, etc. Such functionalities, which were driven by regulation, are also being offered by banks outside of our continent. Yet, “the adoption of these APIs is not driven by regulation but rather by the industry itself in some markets, due to the value they can create for end-users, security enhancements and banks’ revenue streams”.
#3 European Open Banking is still leading the way…but the US is catching up
Over the last year, US banks have invested significantly in developing their Open Banking capabilities. North American banks now make up for 14% of available APIs, or the second-biggest geographic share in the Open Banking Monitor, behind Europe (50% of available APIs).
The monitor also notes that one key differentiator for US banks is the extensive offering of Investment and Foreign Exchange APIs: “these APIs allow end-users to directly access relevant data and insights into different investment vehicles such as stocks, bonds, exchange rates and currency pairs offered by the banks”.
Source: INNOPAY
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