API and its relevance to open banking (500)


Application Programming Interface or API open banking is a confirmed set of common points that allow different systems to communicate with each other. It was created much earlier than open banking was made up. Nowadays one of the biggest API application areas is open banking.

At first, the API was used for investments management. This interface helped to import data on rates and scan information from third parties in a much faster way than it takes to do it manually. First use cases for home users appeared in the early 2000s, and it was valuable. Ebay was one of the first API users and spreaders. Ebay selected their partners who met their own requirements and then built a brand new ecosystem along with the partners. Other service providers started to promote their cloud services that include Application Programming Interface. But the best example of successful usage goes to Google Maps and Facebook. They significantly expanded platforms‘ reach and grew popularity among users.

From a developer‘s perspective, the API is divided into open and proprietary. This indicates whether the institution creates API terms and conditions itself or just applies it from other more powerful partners. Super large companies such as Google or Ebay have needs and conditions to issue a set of API itself and create a partners list, who could cooperate together. Smaller companies or other institutions have to select their partners according to their main goal and apply their regulations using API.

API open banking has brought fresh attention to existing API possibilities of use. This innovation has a huge potential in different spheres, including open banking. Banking remains a highly restricted activity, and sometimes that‘s the main reason why innovative usage of API open banking takes time, especially in real cases. But that‘s understandable, all the procedures with personal information and secret data must be extra safe and tested several times before public launch. Anyway, it is hard to imagine other technology that is more favorable to the banking sector.

Screen scraping technology is being phased out by API. Screen scraping and Application Programming Interface are used for the same goal – to access web data. But the implementation method differs. By API only provided information can be taken because the owner of the system or web-site selects what is designated to be shared and what is not. For example, if you want to collect data about goods published on Amazon, the API scanner won‘t work because Amazon do not share such info. Using screen scraping, all the information must be shown on the screen in an easy to understand way. If not, collected info was hard to understand or even worthless. Let‘s say that the best solution for collecting depends on how the information is provided. But if the owner of the website is sharing information – API never lies.

Several decades existing API technology was reborn and now is of service for open banking. Growing fin-techs and unconventional financial organizations apply best practice of API in the real world cases.