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Guide to Banking APIs

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedJan 20222 min read

The banking sector has developed rapidly with the rise of technology, and a number of different fintech solutions have streamlined all aspects of financial services. It’s important for banks to stay at the cutting edge of technology, not only in order to offer convenience to users, but also to provide advanced levels of security for the sensitive data that they handle.

Banking APIs are one example of a technological innovation that is essential to the industry. These are software applications that allow banks to conveniently access important information and integrate with pre-existing technology. Keep reading to find out more about bank APIs and their importance to financial services.

What are bank APIs?

In simple terms, an API is a software application that can be used to improve the customer experience. They can be used to solve a number of different problems that may arise when using banking services, such as failed payments, difficulties with international payments, short notice cancellation of payments and much more.

There are various different types of APIs:

Private APIs are used by traditional banks and are a way to maximise operational efficiency. They are considered an essential part of business operations by the majority of banks.
Partner APIs are created in collaboration between third-party partners and banks, allowing for expansion and the use of new channels or products. One example might be a collaboration with a loan company to automatically generate documentation and therefore streamline the process.
Open APIs are used to make business data accessible for third parties. For open APIs, data privacy and cyber security are more significant concerns.

Open banking APIs

One of the most important aspects of APIs is the relationship they have to open banking. The term open banking describes the processes carried out by banks and other financial institutions in order to make data easier to access and share. This means that, when a customer chooses to share their data with a third party, this is easily facilitated by the bank.

It’s important to note that, although this may sound like a security risk, all exchanges of data occur when the customer chooses to authorise them. The intention is not to steal data from customers, but rather to make essential processes easier.

Open banking APIs can make these processes even more efficient. This software is designed to share data with third-party financial solution providers, whether these are payment initiators, account aggregators or any other kind of fintech service provider.

Is there a list of banking APIs?

A quick search online will give you complete lists of banking APIs, and there are a huge number of these provided by a variety of different organisations. Most major banks offer these, including Barclays, HSBC, Santander, Lloyds and NatWest, among many more.

When deciding which banking APIs to make use of, it’s important to consider a few different factors. Security should be central to your decision, so you should always make sure that the provider has the correct measures in place to protect data. In addition, you should look at the segments in which the provider operates in, as well as the functionality that the bank API offers.

What are the benefits of banking APIs?

There are various benefits of using banking APIs, most of which relate to the customer experience. These advantages include:

Customers no longer have to deal with extensive paperwork when they are accessing financial services, such as applying for a loan. Banking APIs shorten this process and allow third-party providers to easily access financial information.
Banks are able to expand their ecosystem and address new groups of customers by partnering with third-party platforms.
Third-party platforms themselves are able to offer a better service to their customers, which can in turn boost their revenue.

We can help

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