The ability to rapidly integrate and utilize novel functionality in compliance with internal and regulatory agency controls is what leveraged use of APIs offers to Financial Institutions. The regulatory mandates to direction in the U.K. (Open Banking) and the E.U. (PSD2) will provide the global financial services industry with a view in to the impact and effects of enacting a comprehensive expansion of access to data via API.
This technology allows for innovation and customisation in scenarios that institutions cannot possibly predict. Almost like building an architecture without a precise end goal, APIs can take banks into different markets, open up innovation and allow the capability to build something unique. In time, the need to personalise services will become the new norm. APIs offer the best route to effectively meeting these changing needs, and it will be necessary for institutions to fall in line or be left behind.
Mercator Advisory Group understand the movement to more customer direction in the use of personal transactional data is already underway. The driving force behind the advancement which determines the velocity of the change varies from region to region, but at the core it is the expansion of access to available tools and solutions to personalize service to consumers that API promises and appears to be delivering. FIs that are actively providing themselves with greater technological and operational flexibility stand to benefit from these market changes. We discuss some of these approaches at greater length in the report Banking as a Platform: API Technology Presents Opportunity to Financial Institutions.
Overview by Joseph Walent, Associate Director, Customer Interactions Advisory Service at Mercator Advisory Group
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