Fintech Insights

Core Banking in the Age of APIs

April 02, 2018

Two of the hottest topics in global banking are Application Program Interfaces (APIs) and the Payment Services Directive II (PSD2), as they’re central to the Open Banking agenda and enable banks to innovate using their current systems.

Open APIs can allow for banks to work with tech partners to quickly add new services, grow revenues by extending their ecosystem, and push more bank functions to the secure cloud, reduce operating costs.

APIs provide a secure gateway to the data and transactions that flow through a bank’s core system. However, every bank’s core is different and each bank must define its own set of APIs based on its unique core architecture. This means every engagement with a third party is a custom engagement and may cause additional and even unexpected work for both parties.

One solution is to develop an API handler to connect a bank’s backend to available APIs, though this should only serve as a short-term fix. For financial institutions with a core solution from FIS, this is not an issue, as they have access to a hub of 300 “plug and play” APIs that work with their existing systems right away.

Tags: Data Management & Analytics, Innovation, Technology