What is it, and what does it mean for me?
As APIs play an increasingly significant role in facilitating Open Banking, corporates should understand the importance of APIs and why they matter.
APIs (Application Programming Interfaces) are widely talked about today, partly because of the important role they play in facilitating Open Banking. They are not a new phenomenon, however. In fact, they date back to the 1960s, predating the invention of the World Wide Web. Some of the world’s most popular websites and smartphone apps, including Amazon, eBay and Facebook, have long used APIs to make their user journeys more seamless.
Put simply, an API can be described as a piece of code that enables two different systems to communicate with each other. Sometimes described as digital messengers, they connect an underlying data source – for example, a source that provides information about the weather – with a presentation layer that conveys data in a visually appealing way. APIs are powerful business tools because they enable organisations to partner with each other to deliver better experiences and services to their customers so that they can generate growth and gain market share. For that reason, many large organisations, including Barclays, have set up their own dedicated platforms to make their APIs available to external developers.
APIs and Open Banking
A particularly powerful use case for APIs is Open Banking because of the way in which APIs are being used to transform the payments landscape. Open Banking was launched in January 2018, the same month as the implementation of the Second Payment Services Directive (PSD2). Open Banking enables clients to access the same level of functionality through Third Party Provider (TPP) applications, as they would have otherwise accessed via their bank’s online channels. As a result of Open Banking, consumers may be able to shop online without using a payment card since they will be able to initiate payments directly from their bank accounts. They will also be able to take advantage of services provided by aggregators to get a consolidated view of all their financial accounts, including their current accounts, credit cards and mortgages.
APIs work together at multiple levels to provide experience, process and system functionality. They enable:
When it comes to managing payments and other cash management-related workflow, APIs present corporate treasurers with a convenient alternative to traditional online channels (for example, Barclays.net and business online banking), SWIFT and host-to-host connectivity. While these traditional channels all allow treasurers to view their balances and transactions, and to initiate payments, APIs offer a potentially more convenient and user-friendly way for corporates to integrate their back-office operations with those of their bank, to achieve a two-way data flow.
For this reason, Barclays is exploring API functionality for products and solutions that we currently offer to our customers through traditional online, host-to-host or SWIFT channels. Our objective is to achieve integration and straight-through processing with our customers’ back offices so that we can provide services to them on a near real-time basis.
The benefits to our corporate customers of using an API-based cash management services include:
Barclays welcomes innovation and we publish all our open-source APIs, together with standards for using them, on the Barclays API Exchange.
A number of direct-to-corporate APIs are also being developed, which enable our corporate customers to directly access Barclays’ functionality and services via an API that is integrated with their back office, rather than by specifically logging in to our banking channels. The benefits of our APIs include:
Our four direct-to-corporate APIs that will be available for our corporate customers to use in 2019 are:
What is it, and what does it mean for me?
Helping developers create next generation digital experiences using secure, innovative APIs.
From the first cash point to the growth of a cashless society, Barclays has always been at the forefront of innovation in the payment landscape.
Barclays discusses the key technologies causing digital disruption and promoting innovation for treasurers.