Without standardisation of technical interfaces in place, corporates, banks and fintechs all stand to lose out on the potential benefits of the move towards Open Banking
Application programming interfaces (APIs) seem set to usher in a new era of payments solutions, particularly with the advent of regulations such as the Second Payment Services Directive (PSD2) in Europe. However, standardisation of technical interfaces constitutes a crucial building block in enabling compliance with PSD2 and accessing the full benefits of API technology, says Deutsche Bank’s white paper, “Unlocking opportunities in the API economy”, produced in collaboration with payments consultancy Innopay.
From September 2019, PSD2 will see banks provide authorised payments providers with access to client bank accounts, most likely through APIs. The directive is seen as one step on the journey towards Open Banking, which promises to bring new financial products and services, as well as new business models and revenue streams for banks and financial services companies.
“Many corporates are only just beginning to wake up to the opportunities that European regulations such as PSD2 will open up to them in terms of streamlining and reducing the cost of their payments, while gaining access to exciting new services,” says Shahrokh Moinian, Head of Cash Products at Deutsche Bank. “Of course, there are also significant rewards on offer for the banks and fintechs that best provide this enhanced payments service.”
Click here to read the whitepaper.