While Open Banking is Creating a Buzz in Europe and Several Countries, Bankers in India Are Curious to Know the Progress and the Prospects. Banking Frontiers Spoke to a Few Banking Technocrats and Discovered a Promising Scenario:
Application programming interfaces, or APIs, are leading a wave that’s transforming today’s banking scenario. Standardized and easy-to-implement APIs are supplementing several other disruptive technologies that are making inroads into banks. Most banks are adopting such technologies whole heartedly to gain agility and move ahead of the competition. APIs could actually become the greatest banking innovation in the current generation. If there is any resistance to mass proliferation, it could be the slower evolution of standards and regulation whose support is critical.
APIs are today heralding what is described as open banking, which is enabling third-party developers to build apps and services around more traditional banking and financial services. Open banking leverages open data to create better financial transparency. It is crucial because a bank customer can access his or her data, facilitating better and informed decisions on choice of bank products and services. It is also a key factor in creating competition among banks, which means better products and services.
ADVENT OF PSD2
What has indeed become a fillip for open banking is the revised Payment Services Directive 2, or PSD2, a regulation enforced by the European Union, which came into effect in January 2019. It seeks banks to open their services to third parties so that they can initiate payments and aggregate information for customers. European Payments Council has asked developers to make banking APIs follow certain uniform standards. This is expected to create a banking system where services of banks can be availed of by individuals, corporates, other banks and market players in a more cohesive, transparent and efficient manner.
This story is from the August 2019 edition of Banking Frontiers.
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This story is from the August 2019 edition of Banking Frontiers.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
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