Technology Trend: Banking API’s

Trends

• Trends: What do we look for?
• Technology Trend: Cloud Computing
• Industry Trend: Unbundling of banks – Lending Club
• Regulatory Trend: Deregulation – RBI granting banking licenses
• Industry Trend: Immediate everything – Payments
• Market Trend: Branchless Banking
• Market Trend: New Market Entrants
• Market Trend: Banks Extending Their Reach
• Industry Trend: Bank White-Label Services
• Industry Trend: Dual Strategies
• Societal Trend: Exploding Data
• Technology Trend: Banking API’s
• Market Trend: Digital Natives
• Market Trend: Mobile Adoption
• Technology Trend: Digital KYC
• Potential Technology Trend: Internet of Things
• Industry Trend: The Bank Finds You
• Potential Industry Trend: Mobile Wallets Replace Cards
• Industry Trend: Social & Mobile Payments
• Industry Trend: Virtual Currencies
• Industry Trend: Social Finance
• Technology Trend: Big Data
• Potential Industry Trend: Bank as Data Manager
• Technology Trend: WiFi Availability
• Technology Trend: Fast Cycle of Consumer Technology
• Technology Trend: Biometric Authentication
• Industry Trend: Social Servicing
• Industry Trend: Social Reputations
• Market Trend: Increased Substitution with Capital Markets
• Industry Trend: Aggregator / Comparison Sites

Closely related to the “Cloud” trend, it makes sense that banking services running in the cloud would be offered for consumption by the computer systems of other organizations (as an API) in addition to humans (as in a mobile app).

From Digital Bank by Chris Skinner…

“PayPal launched X, a developer-based service for PayPal processes as application program interfaces (APIs), … The result is that PayPal’s relevance increased greatly overnight and led to Citi following a similar approach when it announced that its transaction services would be offered as APIs at the SWIFT International Banking Operations Seminar (SIBOS) in 2013. In other words, all bank processing is just open-source coding, offered to anyone to plug and play with their offerings through APIs.”

I am not sure that I would equate an API with open source code, but I agree with his points — Such as the need to open the API’s up to start-up developers.  This will make sure the bank is involved in the “next big thing” and reduce the pressure on the bank to keep on top of everything going on in the industry.