APIs in Open Banking

What is an API?

An API (Application Programming Interface) is a set of rules that allow two software programs to communicate with each other. APIs are used in a wide variety of industries, including #epayments, #Finance, #Healthcare, and #Retail.

In epayments for instance, APIs allow a customer to make a payment on a third-party platform using their bank account information.

What is Open Banking?

Open Banking is a system enabling interoperability in the banking industry by allowing third-party financial service providers (TPPs) to access #CustomerBankingData (account balances, transactions, and spending patterns ...), directly from banks through secure APIs.

Successful Open Banking ecosystems require countries to set regulation and data-sharing frameworks in banking like Financial Conduct Authority in the UK, and #PSD2 in Europe.

What is the Role of APIs in Open Banking?

APIs play a critical role in open banking. They are the mechanism that allows TPPs to access customer banking data. APIs also ensure that the data is transferred securely and that #CustomerPrivacy is protected.

There are a number of different APIs that can be used in open banking. Some of the most common APIs include:

• Account information APIs: Allowing TPPs to access customer account information, such as account balances and transaction history.
• Payment initiation APIs: These APIs allow TPPs to initiate payments on behalf of customers.
• Account aggregation APIs: Data collection from multiple financial institutions to present it to customers in a single view.

How do APIs enable financial inclusion?

Giving other financial institutions access to banking data and services allows them to bring innovative payment and finance solutions to unbanked or underbanked populations.

For example, APIs can be used to create mobile banking apps that allow people to make payments, transfer money, and access other financial services without a bank account.

APIs can also make it easier for people to switch banks. By transferring account information from one bank to another.

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M2M Group Group empowers financial institutions with cutting-edge electronic payment technology, tailored to each organization's specific needs. Providing On-Premise payment infrastructure, a cloud-based #PaaS (Payment as a Service) set of solutions, and a wide library of APIs designed for seamless integration with existing infrastructure and international compliance.

Get in touch with our experts now, and discover how APIs can future-proof your financial institution! [email protected]