Open Banking APIs

Even though (many) banks have seen #openbanking as an unnecessary and costly regulatory burden, the truth is that they would have to invent it had it not existed – to rephrase Voltaire. Let’s take a look. Open banking brings a mentality change: from a traditional, vertically integrated, static set-up to a dynamic environment where APIs offer ubiquitous, easy and straightforward connectivity among incumbent and challenger players alike. For banks it is their best chance in decades to transform by leveraging the enormous potential of the API #economy. Despite the different approaches, open banking is about facilitating #innovation by democratizing the flow of #data. But it's not a business model in itself. It does, however, facilitate the introduction of new, revolutionary concepts, which change how financial services are delivered and consumed. The most impactful new business models are what we call Banking as a Platform (BaaP) and Banking as a Service (BaaS). Even though they are sometimes confused, they are not quite the same, but they are the two (different) sides of the same coin. Let me explain: - Banking as a Platform: the bank is actually the platform and owns the delivery channel, however it does not (necessarily) own all the services but rather aggregates them (via APIs) from third parties (i.e. fintech players). The model could be relevant for larger and smaller banks alike: larger players that have the resources and the customer base to build an ecosystem around them or small challengers that want to grow and cannot afford to develop any of the offerings in-house. - Banking as a Service: the bank takes a back-seat role and provides the infrastructure (technical platform, licensing or additional services), so that client-facing partners can do the customer acquisition. Essentially BaaS is what sits behind the huge transformation of embedded #finance. You can think of BaaS as the bottom layer, the enabler behind embedded finance, which, in turn, refers to the outcome and is normally to be found one (or more) layers above BaaS. What is not yet fully understood is that the BaaS model creates opportunities not only across the entire value chain but also for very different banking players, i.e. from Goldman Sachs sitting behind Stripe Treasury and Apple Card to smaller banks without innovation expertise. Although it might sound controversial, banks today are not in lack of choice. On the contrary, their spectrum of choice as to what they might become is the richest they ever had. But it depends on 3 factors: 1) their willingness to adjust 2) having the right strategy in place and 3) (above all) execution. Look at each one separately and none seems beyond reach. Put them together and they become tricky, however it is the combination that will set apart winners from losers for years to come. Opinions: my own, Graphic source: Kapronasia, Embedded Finance Future in Asia

In a world of real-time finance, visibility is power. camt.087 is the unsung hero of ISO 20022, enabling instant account insight for smarter liquidity, payment validation, and embedded banking. Message Type: Request Purpose:To request account-related information, such as balances, account status, or availability of funds, from another financial institution or account servicer.   Use Case Examples 1. Real-Time Balance Inquiry A corporate treasury system sends a camt.087 to its bank to retrieve current balances across multiple accounts. Response: camt.088 - ReturnAccount. 2. Sweeping / Pooling / Liquidity Management Used as a pre-check to see if sufficient funds are available before executing cash concentration, zero-balancing, or sweeping instructions.  3. Pre-Validation in Payment Initiation Before sending a high-value pacs.008, a bank may issue a camt.087 to validate the available balance or account status.  4. Embedded Banking & APIs Fintech apps or platforms can use camt.087 over APIs (ISO 20022 RESTful implementation) to power real-time dashboards, wallets, or spending analytics.   Technical Structure Highlights GroupHeader: Message identification, creation date/time. AccountRequest: AcctId: Account identifier (IBAN or BBAN). AcctOwnr: Party requesting information. AcctSvcr: Financial institution being queried. Acct sub-elements: Currency, product type, etc. Optional fields for filtering: date ranges, balance type, etc. Response Message: camt.088 (ReturnAccount) Returns account details, balances, product info, servicing status. Supports multiple balance types (interim, closing, forward available, etc.) Explore how this aligns with Open Banking APIs: https://lnkd.in/gb_AgEkQ (official ISO spec) https://openbanking.org.uk (Open Banking ecosystem) #camt087 #OpenBanking #BankingAPIs #LiquidityManagement #EmbeddedFinance #FintechTools #BankingTransformation #CashVisibility

In 2010, U.S. consumers were guaranteed by law a critical right to access and control the data describing their financial lives. Fourteen years later, they still don’t have it. But all that’s about to change. In what will be one of its most significant regulatory rulemakings since its inception, the Consumer Financial Protection Bureau is poised to issue a final rule for consumer data access rights—otherwise known as Open Banking—next month.  The new rule is expected to do the following: 1. Enable consumers to safely access their historical financial transaction data and share it with third parties for use in financial products of their choosing, including personal financial management services and applications for loan products utilizing cash flow underwriting (like those powered by Prism Data); 2. Require banks and other financial providers to make at least 2 years of covered data readily available in a standardized format, at no charge, through secure and reliable developer interfaces that are built to a qualified industry standard; and 3. Establish a framework for third parties to provide clear and meaningful disclosures to consumers when obtaining their authorization to use their covered data, and set limits on how that data can be used, including prohibiting the sale of such data and using it for targeted advertising. We’ve been advocating for this rulemaking for years. Not only will it establish essential consumer rights and protections for the 21st century, but it will simultaneously provide a foundation for healthy competition and myriad consumer-friendly innovations such as cash flow underwriting.

Excited to share some of the work from my independent study last quarter ahead of the CFPB’s potential announcement next month! 🎉 -- The Consumer Financial Protection Bureau (CFPB) is set to release new open banking regulations requiring financial institutions to share consumer data via APIs. While open banking is already progressing in the U.S.—with 75% of Plaid's transactions now API-based—most data has been flowing out of banks to fintechs and Big Tech. This regulatory push, applying to both financial institutions AND fintechs, is likely to commoditize customer transaction data. Fintechs that have relied on faster data retrieval and underwriting may find their competitive edge diminishing. On the flip side, this shift presents a significant opportunity for startups that serve financial institutions' open banking needs. As access to transaction data becomes standardized, financial institutions and fintechs are turning to AI to leverage proprietary data and improve client engagement. J.P. Morgan reported a 10-20% increase in application completion rates after integrating AI solutions. American Express's new AI tools have boosted response rates to targeted offers by 30%. These improvements in customer experience, personalization, and automation are expected to continue. ✨ The next frontier of open banking is merging it with AI to deliver hyper-personalized and automated financial services. ✨ Read my full article here: https://lnkd.in/g7WYi2Um

𝗪𝗵𝗮𝘁'𝘀 𝗗𝗿𝗶𝘃𝗶𝗻𝗴 𝘁𝗵𝗲 𝗚𝗹𝗼𝗯𝗮𝗹 𝗢𝗽𝗲𝗻 𝗕𝗮𝗻𝗸𝗶𝗻𝗴 𝗠𝗼𝘃𝗲𝗺𝗲𝗻𝘁? 🏦 Open Banking initiatives are reshaping finance worldwide. These frameworks aim to give consumers control over their financial data, foster competition, and enable innovation through standardized APIs. While the goals are similar, the execution and nuances vary by region, let's take a look 👇 𝗣𝗦𝗗𝟯 (𝗘𝗨) — 𝗧𝗶𝗴𝗵𝘁𝗲𝗿 𝗦𝗲𝗰𝘂𝗿𝗶𝘁𝘆, 𝗠𝗼𝗿𝗲 𝗧𝗲𝗰𝗵𝗻𝗶𝗰𝗮𝗹 𝗦𝘁𝗮𝗻𝗱𝗮𝗿𝗱𝗶𝘇𝗮𝘁𝗶𝗼𝗻 ▪️𝗠𝗮𝗻𝗱𝗮𝘁𝗼𝗿𝘆 𝗔𝗣𝗜 𝗣𝗲𝗿𝗳𝗼𝗿𝗺𝗮𝗻𝗰𝗲 𝗠𝗲𝘁𝗿𝗶𝗰𝘀 → PSD3 will enforce specific uptime and availability standards for APIs, reducing merchant reliance on fallback mechanisms like screen scraping. ▪️𝗦𝘁𝗿𝗼𝗻𝗴𝗲𝗿 𝗦𝗖𝗔 𝗥𝗲𝗾𝘂𝗶𝗿𝗲𝗺𝗲𝗻𝘁𝘀 → New measures to authenticate payments and account access even more securely, tightening gaps left by PSD2. 𝗨𝗞’𝘀 𝗙𝘂𝘁𝘂𝗿𝗲 𝗘𝗻𝘁𝗶𝘁𝘆 — 𝗘𝘅𝗽𝗮𝗻𝗱𝗶𝗻𝗴 𝗯𝗲𝘆𝗼𝗻𝗱 𝗣𝗮𝘆𝗺𝗲𝗻𝘁𝘀 🔹𝗦𝘁𝗿𝗲𝗻𝗴𝘁𝗵𝗲𝗻𝗲𝗱 𝗟𝗶𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗙𝗿𝗮𝗺𝗲𝘄𝗼𝗿𝗸𝘀 → Greater clarity around who bears responsibility when third-party providers or banks mishandle data. 🔹𝗜𝗻𝘁𝗲𝗿𝗼𝗽𝗲𝗿𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗙𝗼𝗰𝘂𝘀 → The UK Future Entity will prioritize ensuring that different industries beyond banking can interact seamlessly. 𝗨𝗦 𝗖𝗙𝗣𝗕 𝟭𝟬𝟯𝟯 𝗥𝘂𝗹𝗲 — 𝗖𝗼𝗻𝘀𝘂𝗺𝗲𝗿 𝗥𝗶𝗴𝗵𝘁𝘀 𝗔𝗯𝗼𝘃𝗲 𝗔𝗹𝗹 ▪️𝗖𝗼𝗻𝘀𝘂𝗺𝗲𝗿 𝗣𝗲𝗿𝗺𝗶𝘀𝘀𝗶𝗼𝗻𝗲𝗱 𝗔𝗰𝗰𝗲𝘀𝘀 → The emphasis is on giving consumers full control over which entities can access checking, mortgage, and credit card data. ▪️𝗦𝘁𝗮𝗻𝗱𝗮𝗿𝗱𝗶𝘇𝗮𝘁𝗶𝗼𝗻 𝗪𝗶𝘁𝗵𝗼𝘂𝘁 𝗖𝗲𝗻𝘁𝗿𝗮𝗹 𝗔𝘂𝘁𝗵𝗼𝗿𝗶𝘁𝘆 → Unlike PSD3, the US won't create a centralized technical standard. Instead, the market will drive API format innovation under CFPB oversight. 𝗢𝘁𝗵𝗲𝗿 𝗚𝗹𝗼𝗯𝗮𝗹 𝗠𝗼𝘃𝗲𝗺𝗲𝗻𝘁𝘀 🔹𝗖𝗮𝗻𝗮𝗱𝗮 → Open Banking framework development is underway, with full consumer-directed finance expected to launch this year. 🔹𝗦𝗶𝗻𝗴𝗮𝗽𝗼𝗿𝗲 → SGFinDex standardizes consent-driven financial data aggregation without mandating participation from every bank. 𝗦𝗶𝗺𝗶𝗹𝗮𝗿𝗶𝘁𝗶𝗲𝘀 𝗔𝗰𝗿𝗼𝘀𝘀 𝗥𝗲𝗴𝘂𝗹𝗮𝘁𝗶𝗼𝗻𝘀: ✔️𝗙𝗼𝗰𝘂𝘀 𝗼𝗻 𝗖𝗼𝗻𝘀𝘂𝗺𝗲𝗿 𝗖𝗼𝗻𝘁𝗿𝗼𝗹 → Across all markets, the central theme is empowering consumers with ownership over their financial data. ✔️𝗘𝗻𝗵𝗮𝗻𝗰𝗲𝗱 𝗟𝗶𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗮𝗻𝗱 𝗦𝗲𝗰𝘂𝗿𝗶𝘁𝘆 → Frameworks are introducing stricter security measures and clarifying liability in case of breaches or misuse. 𝗞𝗲𝘆 𝗗𝗶𝗳𝗳𝗲𝗿𝗲𝗻𝗰𝗲𝘀: 📍𝗖𝗲𝗻𝘁𝗿𝗮𝗹𝗶𝘇𝗮𝘁𝗶𝗼𝗻 𝘃𝘀. 𝗠𝗮𝗿𝗸𝗲𝘁-𝗗𝗿𝗶𝘃𝗲𝗻 → The EU and UK push for heavy regulatory oversight, while the US takes a more decentralized, private sector-driven approach. 📍𝗧𝗲𝗰𝗵𝗻𝗶𝗰𝗮𝗹 𝗦𝘁𝗮𝗻𝗱𝗮𝗿𝗱𝘀 → PSD3 will likely impose stricter technical performance standards compared to the US CFPB 1033 framework. Source: European Commission 🚨Follow Jason Heister for daily #Fintech and #Payments guides, technical breakdowns, and industry insights.

𝑶𝒑𝒆𝒏 𝑩𝒂𝒏𝒌𝒊𝒏𝒈 is charting a new course by establishing more direct transaction routes that can circumvent conventional card-based systems. The consequences of this evolution are profound and multifaceted. Open Banking is a concept that enables customers share their financial information across various financial institutions and third-party providers (TPPs). This exchange of data fosters the creation of innovative, value-added services. This represents a shift from an isolated model, where financial institutions operated independently, to a more collaborative model that facilitates data sharing across the banking ecosystem, with customer consent. Under the umbrella of Open Banking, fintechs and banks can interconnect through the pooling of accounts and data from various institutions. This data is then utilized by consumers, financial institutions, and TPPs. A salient feature of Open Banking is its ability to initiate payments straight from bank accounts. This could sidestep the need for traditional card-based payment networks, which are largely controlled by few major players who levy significant fees for their services. Open Banking can pave the way for direct settlements between consumers and merchants, dispensing with the need for intermediaries, thereby leading to cost reductions. Additionally, Open Banking brings with it a host of benefits like heightened security, convenience, instantaneous transactions, and a superior user experience. All these elements position it as a formidable rival to conventional card payments. An intriguing prospect of Open Banking is its potential to build an additional infrastructure layer within the financial services sector. While several contemporary fintech solutions are constructed over preexisting infrastructure, Open Banking holds the potential to propel the creation of a truly novel platform that could mold the future of finance. Nevertheless, there remain hurdles to overcome. Although account-to-account (A2A) payments have gained traction in certain regions, their wider acceptance has been impeded by fragmentation and the absence of a coherent clearing strategy. The amalgamation of Open Banking, the rise in 'APIsation' of financial services, the growing platform economy, and the progression towards more advanced open finance use cases could potentially tackle these obstacles. The transition towards a diversified payments landscape will likely be incremental, with new services co-existing alongside traditional methods. The rate of change will be dictated by several factors, such as regulatory backing, technological advancements, consumer acceptance, and the capacity of financial institutions and fintechs to innovate and collaborate efficiently. What the future holds beyond this transition remains to be seen, but the potential of Open Banking to revolutionize payments and the broader financial services landscape is indeed profound. #fintech #openbanking #disruption

The advent of open banking has fundamentally transformed the financial landscape. It’s worth bringing up, because it offers customers more control over their financial data and the ability to access a wider range of services. Yet while it holds exciting potential to help customers better manage their finances, it also brings significant risks when paired with legacy software systems. At its core, open banking gives banks the ability to share customer data securely with third-party service providers (TPPs) like fintechs and other online financial service vendors. Once customers provide authorization, third-party providers can access their financial data to offer a range of services, from comparison tools, to account aggregation and the ability to initiate payments on the customer’s behalf. This data-sharing capability provides an untapped opportunity for financial organizations to improve debt collection, too. By gaining insight into a customer’s financial situation, especially in the pre-delinquency phase, companies can tailor their approach, improving outcomes for customers, lenders, and collections teams. It also exposes significant vulnerabilities, especially for banks relying on outdated legacy systems. Older systems weren’t built to manage the demands of the modern financial ecosystem, including the secure and efficient sharing of data across platforms. The risks involved with relying on legacy systems include security vulnerabilities, reputational damage, and non-compliance. Cloud-native, secure systems are designed to meet the demands of open banking by offering flexibility, scalability, and compliance, essential when it comes to managing sensitive customer data. Modern systems support better opportunities to improve debt collection performance, too. When it comes to legacy software, it’s a matter of when, not if. Failing to stay current puts your reputation, customer trust, and data at great risk.

🌍 The World of Open Banking is Evolving — One Regulation at a Time (🔁 A continuation of my earlier post: The Open Banking Battle is On…) Three years ago, Open Banking was gaining headlines. Today? It’s gaining global ground — structurally, strategically, and socially. Let’s break down what’s really happening 👇 📌U.S. Consumers Are Already There… They Just Don’t Know It 📊Visa reports that 87% of U.S. consumers connect financial accounts to 3rd-party apps. 📌But only 34% realize that’s powered by Open Banking. ⚠️That’s not a flaw — that’s a massive opportunity to build trust through transparency. 💡 When consumers: ✅ Understand the value ✅ Feel in control ✅ Have clear consent flows ➡️ Comfort and adoption skyrocket. 🌐Global Pulse — The Open Banking Map Speaks Volumes My research 🗺️ Konsentus' world map shows a kaleidoscope of strategies: 🌏 🇪🇺 Europe: Deep roots with PSD2, OBIE, and evolving API ecosystems 🌏 🇧🇷 LATAM: Regulation-led speed (Brazil, Mexico, Colombia stepping up) 🌏 🇺🇸 U.S.: Consumer-led innovation — still waiting for coherent regulation 🌏 Asia: A mix of sandboxing (India, Hong Kong) and frameworks (Singapore, Japan) 📣 The message? There’s no single path, but there’s one shared destination: A trusted, interoperable, consumer-first data economy. 🧑⚖️Regulation Is Not a Barrier — It’s the Bridge As Mahdi Madadi puts it: 🧩 “A well-crafted regulatory framework balances innovation, data security, competition, and consumer rights.”- 🔐 It’s what turns Open Banking from a tech stack into a trust stack. 📌 Standardized APIs 📌 Opt-in data sharing 📌 Interoperability 📌 Consumer control ➡️ These aren’t “features.” They’re foundations. 💭What’s Next? Build for Trust, Not Just Features 💬Ask yourself and your teams: 🤝Are we building services that feel empowering, not extractive? 🌐Are we designing for global interoperability from day one? 🧠Are we educating consumers as much as we’re integrating APIs? This is no longer about "keeping up." It’s about leading with clarity, vision, and trust-first design. 📣Your Turn — What Are You Seeing? 📌Are your products Open Banking–powered? 📌 How is your region approaching regulation? 📌 Where do you see the biggest opportunities for innovation? -Let’s connect, compare notes, and collaborate. Because the Open Banking battle isn’t over — it’s just getting smarter. 👇Drop your thoughts, share insights, or tag someone building in this space. Let’s keep the momentum going. #OpenBanking #FintechStrategy #ConsumerTrust #VisaInsights #Konsentus #PSD2 #LATAMFintech #DigitalBanking #DataEmpowerment #ConsentDrivenDesign #APIeconomy #TrustEconomy #FinancialInclusion #GlobalFinance #OpenFinance Mastercard - Visa - American Express - Apple - Marqeta

Open Finance and APIs present a transformative opportunity, urging banks to view Open Banking beyond regulatory compliance and recognize its potential for new, API-driven business models. This exploration outlines four key strategic paths banks can consider as they navigate the evolving API-led financial services ecosystem. API Banking Models: - Compliance: Meeting the Minimum: Some banks will adopt a purely compliance-driven approach, providing only the legally required APIs for regional Open Finance initiatives, essentially acting solely as data providers. - Monetization - Leveraging AISP/PISP Roles: Beyond mandatory APIs, incumbent banks can also actively participate as Data Recipients, similar to fintechs, to monetize Open Banking data. - Monetization - Embracing BaaS: Banking as a Service (BaaS) offers an emerging API-led monetization strategy where regulated banks offer their core financial capabilities to non-financial institutions. - Monetization - Integrating Embedded Finance: Embedded Finance allows banks to seamlessly integrate their services into third-party platforms, expanding their reach and enabling non-regulated entities to offer financial services. https://buff.ly/VwIaeXu #Innovation #Fintech #Banking #DigitalBanking #OpenBanking #API #FinancialServices #CoreBanking #Architecture #Data #Tech #Security #Compliance #genAI #AI