The sector has organized itself to catalyze innovation and create new services that consumers value highly, through a framework of open standards and developer portals.
The enabling catalyst is open standards. The Open Banking Implementation Entity was created by the UK’s Competition and Markets Authority to create software standards and industry guidelines that drive competition and innovation in UK retail banking.
These standards enable banks to adopt more flexible API-based methods of systems integration, providing open specifications for functions such as API integrations, data quality, directory services and customer interactions, and critically also define the ecosystem business model, such as the roles of Account Providers, FinTechs and Technical Service Providers.
In this documentary experts including the RBS explain how they’ve shifted from ‘point to point’ integrations between business systems, to APIs because these are more efficient and critically, enable the open ecosystems that stimulate creative innovations that power new products that customers value.
The practical implementation of these standards is achieved through Developer Portals.
As the term suggests this is a web site that aggregates the functions and resources required for software developers to create new applications that build upon these standards, providing API keys and documentation.
Nordic API, an Open Banking expert, provides this helpful review of six developer portals they admire, of VISA, Spotify, Plaid, Wells Fargo, Xero and Twilio, highlighting key features including:
- A stand out feature of Visa’s portal is their partner showcase. It showcases particular implementations across many partners, noting how partners solved complex issues using the API.
- Plaid’s portal excels through their inclusion of a sandbox section, a great way to teach from doing rather than reading and which offers event simulation and live data testing.
Other notable examples include Swift‘s and Mastercard‘s developer portals. These initiatives offer tremendous opportunity for FinTech entrepreneurs, where their core payment services can be extended into innovative new digital business models.