Open APIs to Drive Fintech
The UK is leading the way to open up access to its financial system, according to the UK Payments System Regulator which published its annual report yesterday. The UK has been a prime mover in the effort to ensure that new financial services providers (such as Fintech payment startups) can compete by forcing banks to agree and publish a set of Open APIs that allow access to a range of information and services that would otherwise have been closed off to challengers to the status quo.
This approach is being rapidly copied right around the world, with new announcements about API access to bank data being made almost every day.
Hannah Nixon, MD at the regulator says that the Open API initiative ‘…will not only give customers more choice, but also give them the opportunity to use a wide range of new and innovative personal banking and payment services.
We expect this year will be the most successful, with more challenger banks and fintech companies expected to gain either direct or more innovative ways of accessing the interbank payment systems than in any other year. They’ll also be able to do this cheaper and quicker than ever before.’
The APIs aim to deliver far ranging capabilities. For example, they can open up access (once permission is provided by a customer) to details about the people and organisations that they make payments to. Fine grained security means that a business might be able to give its auditors access to every transaction that went through their accounts, while suppliers might just have access to an e-billing portal. Read more from the annual report here.
Call us crazy, but at XBRL International we think that open APIs could make the valuable information contained in taxonomies and reports much easier to use.