accent graphic
accent graphic
Back to Blog

Bank API Examples and Benefits

November 9, 2020|0 min read
linkedin iconfacebook iconx iconlink icon



With tens of thousands of fintech companies and banks around the world, the financial services industry is fragmented. There’s a near limitless combination of services in the space, which can feel overwhelming. This is one reason why web-based bank APIs are increasingly standard. All of the largest banks in the United States have implemented them, 53% of credit unions have, and 21% of community banks have, according to research from Cornerstone Advisors.

Put simply, APIs are the future of banking. As Vincent Bastid, Secretary General at Efma says, “The most successful banks will use open APIs to generate new customer insights and revenue streams, while also improving customer experience. Many banks currently use APIs internally to improve information flow between legacy systems. In fact, we are already seeing early adopter banks asserting their role in open banking by proactively making their systems and data available to third parties and creating new revenue streams.”

[For more on this topic, read our Ultimate Guide to Bank APIs.]

In a similar vein, banks and fintechs offer open APIs because they seek secure industry standards that allow for greater innovation and experimentation. Bradley Leimer, co-founder at Unconventional Ventures, writes that “the real prize in Open Banking is where bank APIs help banking fall to the background to people's everyday lives.” 

We see this around the world, particularly in China. Alipay from Ant Financial, for instance, is an amazing example of this. With more than a billion users and over 1,500 APIs, Alipay enables paying via scanning a QR code, investing in money market accounts, integrations with Stripe, personalized recommendations, incentive schemes for vendors, and much more. Ant Financial Chief Executive Officer Simon Hu says, “Building a one-stop digital lifestyle platform not only creates immense value for our users. It will also play an essential role in accelerating the digital transformation of the service industry and unlocking more growth opportunities.” 

WeChat Pay from Tencent Holdings mirrors this vision as well as many of these innovations. Innovations include the ability to skip checkout lines, shop via their phone in native languages while in other countries, consolidate rewards points across venues, unify the payment experience via the web and store, and much more. Like Alipay, WeChat Pay aims to be a one-stop platform. As Jim Marous, editor at The Financial Brand, asks, “Why shouldn’t my bank combine my shopping, my travel, my hospitality — all the different components of my life — as it has all my overarching financial data to get me from point A to point B?” That’s what’s possible with open finance.

In the United States, FDX gives a range of examples of what open finance makes possible. Examples include:

  • Pre-filling tax forms
  • Aggregating accounts for PFM
  • Replacing physical documents with instant access to digital data for the lending process
  • Moving money
  • Automating the auditing process
  • Flagging fraudulent activity

In addition, Apex Clearinghouse has changed the nature of investments in the United States via their suite of APIs and open developer portal. They enable financial institutions and fintechs to improve the relationship to their customers without forcing them to do it their way. They give a set of customizable tools and then let organizations and their customers work with those tools to design their own solutions. They position themselves directly against closed systems, saying that “closed systems attempt to own the end customer and control the intermediary,” and that they “dictate versus facilitate, with legacy systems built on legacy technology driven by legacy thinking.”


Each of these examples showcases the range of what’s possible with an open finance that's driven by bank APIs. If you're part of a financial services company but aren’t set up to offer these services or integrate into the one-stop platform of the future, you risk becoming irrelevant.

Keep in mind that customer-permissioned data sharing via open banking is bi-directional, meaning that financial institutions and fintech companies receive data from the sources they connect with via API. This sets them up to use that data in creative ways to best serve their customers. 

To further understand these benefits, consider your own financial life. You likely have a combination of credit cards, debit cards, insurance products, retirement accounts, and more — all with multiple financial institutions and fintech companies. There’s a lot going on. Open Finance makes it easier to securely enjoy a single view of your accounts and even make direct payments from these accounts. 

Open Finance also lets you choose services from a wide competitive set and easily try out new financial products. You can link bank accounts to loyalty programs, share data with accountants and advisors, speed up the loan process by automatically and safely transferring data into application forms, and more. In addition, it tears down data silos by providing financial services companies with insights into held-away accounts and enabling data sharing across departments. It even helps create a unified approach to digital identity management and reduces data resale and data exhaust issues. 

Finally, Open Finance brings added security by replacing sharing credentials (such as username and password) with anonymized, single-use digital tokens. This means that bad actors can’t access the personal information of end users during a transaction. Tokens de-identify user data, greatly increasing the chances that personal data will not be subject to risk. 

With Open Finance, customers must give consent and permissions before their data is shared. These permissions are set on a case-by-case basis by the customer, so each customer chooses what they do and don’t want people to see. For example, customers setting up a budgeting app can grant permission to share a particular subset of data rather than share everything.

In short, Open Finance — driven by bank APIs — lays the foundation for the future of banking. The longer that financial services companies wait to move on it, the further behind they’ll fall on a range of fronts.

For more on this topic, read our Ultimate Guide to Bank APIs.

Bank APIs Ultimate Guide

Related Blog Posts
accent graphic