API – Can it actually make you start absolutely loving banking?

Just as a follow-up to the Open API initiative conversation in the UK, I decided to see what’s available in Germany. Berlin is known for its very vibrant start-up scene.

So it wasn’t like looking for a needle in the haystack when I decided to take a look at startups that are making a difference with banking APIs. The Open Bank Project, launched by Berlin startup Tesobe, is such a leading banking API example. Its technology is based on the open source ‘RESTful’ API and uses the OAuth standard for secure authentication. Tosebe also helps banks create branded app stores, through which they can distribute the new breed of apps that result.

API Transparency as an asset

With a slogan like “Transparency as an asset”, I have to admit that I was compelled to investigate a bit more. I teamed up with a software developer and engineer, Amir Duran, to dig into what the Open Bank Project API offers.

On the face of it, a simple API is not sufficient, but only a first step towards modern banking in a real customer context. In recent years, there have been calls for an open API ecosystem that functions on more layers than a bank-to-consumer model and additionally functions as a distributed economy, particularly with added applications where data moves into any direction. That’s why you will find the premise of the Open Bank Project API very appealing. Here is a list some of the application concepts enabled by the Open Bank Project API that you will agree are interesting:

  1. Replacing a debit card with a NFC enabled device for ATM withdrawals.
  2. Connecting CRM to customers through Social Messaging Applications like Whatsapp, Viber
  3. Calculating how much money you could potentially save on your monthly bills
  4. Getting alternatives to the services you are currently using
  5. Making a choice with whom you would like to share transaction data with, such as your accountant
  6. Playing music with your bank account! (making banking cool!)
  7. Providing banking for kids with a PFM for children.
  8. Using voice command with the Speaking Bank and getting your bank account balance vocally.

The Open Bank Project API is secure. Why? Because you only ever log in through your bank itself. You are then free to grant the app read-only access to specific account details. The process is similar to when you let an app have access to your camera or your location.

Open Bank ProjectP.S. For developers who want to get a technical perspective on the Open Bank Project API, please check out Amir Duran’s outlook on the Open Bank Project API.

“The key thing for developers is a single unified banking API. Developers do not want to have to integrate a completely different API in order to support all of their users. Developers integrate one API and get all the banks. The benefits to customers are innumerable,”
– Stevie Graham, Teller

The need for functional banking APIs stems from the need to retire redundant, monolithic bank applications which is necessary to improve agility and efficiency, but also to prevent what you and I know to be out-of-control complexity.

“The banking industry has lost its way, both in the services it provides to customers and its future profitability to stockholders. Banks need to transform both their delivery models and architectures to remain profitable and relevant in the financial services’ value chain. Applications are preventing transformation in the banking industry because they are rigid and reactive.” 
– Kristin Moyer, research director at Gartner

What the Open Bank Project API is starting to do is make the financial system more dynamic and efficient for customers. Standards are the key to linking disconnected systems. The ultimate beneficiary is you and me, the customer. Their slogan should be “For Banks, For Developers, For Customers, and For Society”

I would love to get your opinion of the Open Bank Project API and other banking APIs. Use the comments section below.

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About 

A marketing expert for the first-to-be-licensed E-Money institute in Germany, PayCenter GmbH. He has experience in developing online marketing campaigns, online & mobile product launches, and EU funding regulation. He is an active fintech blogger with interests in online banking, mobile banking, mobile payment, and insurance.

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