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Banking API - What, Why and How?


For laymen, Banking API brings user request, such as "What is my account balance?", to the bank’s server. Then the programs on the server work out the response of the request, such as "Your account balance is 1000". Then it sends the request back to the users.

In technical terms, its a message transmission and processing system.

We can classify banking API into 4 categories: 

1. Non-sensitive information Enquiry, such as product information
2. Sensitive information Enquiry, such as account balance
3. Non-Realtime based Transaction, such as loan application 
4. Realtime based Transaction, such as payment

Banking API is not something new, but extensive adoption of Banking API will change the landscape of the banking industry. Whoever seizes this opportunity are the winners in the future.

In fact, the major implementations of the Banking API are done by FinTech companies. When users use the Fintech applications, they will use the Banking API indirectly. Hence banks could have new channels to provide service to potential clients.

Currently, there are two approaches for Banking API Implementation. They are 

1. API Embedding 
2. API Collaboration

The typical example of "API Embedding" is product comparison, such as loan product comparison. The FinTech application will call the API from different banks to request loan information, then consolidates the information, and passes the comparison to end-users. That may help them make decisions efficiently.

For API Collaboration, Fintech will build their own API based on Banking API, and other Fintech or even banks will call their API. That forms an API network, hundreds and thousands of API are collaborating.

Currently, regulators in global financial centres, such as Singapore and Hong Kong, are advocating the Banking API.

In Singapore, the Monetary Authority of Singapore has formed an API Exchange (APIX). It is a global Banking API marketplace that links up Fintech with Banks. In 2020, Axisoft was invited to joined APIX and provide her Banking API to banks in the global market. 

In Hong Kong, HKMA has asked banks to launch Banking API in four phases. At the time of this video was prepared, banks had been planning the phases of Account Information and Transaction.

For more information on Banking API, please contact Axisoft. Thank You.

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