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Banking APIs Resources and Blockchain: Getting Into the Weeds

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Every week, financial services companies are launching new and improved APIs (Application Program Interfaces). Some APIs are aggressively targeting service lines or sector market share and others are targeting customers by addressing needs with greater efficiency. Financial firms have been late to the game, but most now realize that business sectors and revenue centers could be disrupted if they do not launch progressive API and Banking as a Platform (BaaP) initiatives.

The rapid pace of development may seem overwhelming if your bank or financial institution has only recently decided to join the party. Fear not! There are still plenty of ways to grab a piece of this space using best practices from the existing marketplace.

Three Resources to Get Started

Recently, our blog has covered API strategy and development basics. This week, we provide three resources which should help your organization assess API strategies:

  1. If your firm is completely new to API development, CA Technologies has published a framework entitled, “5 Ways to Get Top Mobile App Developer Talent for Your Open APIs” to help companies define API goals and build a community of developers around their API strategy.
  2. If your firm is a bit further along in the strategic development process, Apigee’s resource defines interface standards for your B2D (business to developer) strategy in a design book entitled, “Web API Design: Crafting Interfaces that Developers Love”.
  3. You may notice that the CA and Apigee resources are a bit dated. While API technologies have improved since these resources were published, most bank and financial services APIs are just now catching up to technology sector API development frameworks from a few years back. If you need a bit more hands on support transitioning to a modern banking or financial services API system architecture, or if you would like to learn more about how to protect your customer data, contact our MX team. Our Nexus API and our Atrium API can meet all of your needs.

Technology Cross-Cutting Trends: Mastercard and Visa are Deploying Blockchain APIs

In addition to considering basic API strategy resources, it can also be helpful to monitor other financial services firms API announcements (and products) when designing a multi-faceted bank API strategy. Integration and partnership within API sandboxes can be a great way to leverage technologies, minimize development costs, and create brand value with likeminded companies.

A few examples: cryptocurrencies, distributed ledgers, smart contracts, and payments

This week, Mastercard made headlines when it deployed three blockchain APIs focused on payments, smart contracts, and a blockchain core. Visa recently invited banks to test their distributed ledger/blockchain API initiatives as well. Hendrik Kleinsmiede, the co-founder of Visa Europe Collab, believes that these initiatives will reduce costs on cross-border transfers and payments. He says that, “Through the use of smart contracts and blockchains I believe we can create a fast, compliant and low-cost interbank payment and settlement service, with embedded regional compliance.”

Why do these developments matter to your bank and for your API strategy?

Mastercard and Visa are not the first companies to develop blockchain based APIs for payments or smart contracts. Fintech firms, IBM, and the Hyperledger project have built more robust offerings. However, we highlight the Mastercard and Visa announcements simply to demonstrate that competition for financial API real estate is becoming stronger and larger system players are forming partnerships in the hopes of claiming a piece of the API pie. Both Mastercard and Visa have realized that to be successful, they need to integrate outside partners into their development processes. Smaller, more flexible firms gain large scale distribution, customer access, and brand awareness. Larger firms gain innovation. Both gain revenue and market share. No matter where your firm sits on the size and capabilities scale, developing a strong API platform with the right partnerships can help grow your business, revenue, and customer base.