An overview of Open Banking Ecosystem

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It has become obvious that banks need to embrace new technologies, whether APIs, blockchain, AI, Machine Learning, the cloud, or others. In addition, they need to reinvent their business model around the digital distribution of data (payments, transactions, customer info) to be part of the emerging Open Banking Ecosystem move.

Creating an Open Banking Community

The primary condition for these partnerships is to supply the right information and provide adequate tools (APIs) that would enable the bank or fintech collaboration to craft the invisible banking functionalities every consumer dreams of. These partnerships don’t just work on paper. Banks need to attract these partners, build, grow, and nurture their open banking community to strengthen their position and accelerate their commercial efforts, says Open Banking Ecosystem. Offering high-quality documentation, sandboxes, developer tools, and seamless access to APIs, as well as the establishment of different events, such as hackathons and knowledge-sharing workshops, are therefore considered as important as the bank’s delivery efforts themselves.

What’s more, by focusing on providing a solid Developer Experience, banks can entice collaboration and innovation within a wider community of API consumers (developers and businesses). A solid Developer Experience is based on financial entities having a blog or article section on their developer portal. In addition, they publish news items about updates, recaps, teasers about events, or other open banking-related topics. All these developments are centered around increased communication towards the existing and potential visitors to the API portal.

As developer portals are now also used by less technically skilled and more business-oriented visitors, banks increasingly cater to a wider audience on their API portals. Online or offline –at industry events– Open Banking Ecosystem has started to share partner use cases and testimonials that promote the creditability of brands and products and substantiate customer satisfaction. Furthermore, financial institutions reveal greater awareness of their target groups by choosing to publish these stories on their API portals.

Key Considerations

Banks need to combine a rich API offering with a solid community-building and engagement strategy to position themselves at the heart of this vibrant Open Baking Ecosystem. Some key considerations to support this strategy include deciding on a target audience, on purpose (what banks would like to leverage through their developer portal), and the scope of the API offering.

In premium programs, relevant developing parties can improve current offerings and help banks expand their business by bringing in their network of potential clients. However, some banks prefer community-based programs, where community access is relatively open, and input from the community is leading. Benefits of such community-based programs include the broad availability of content to a wider audience and increased contact between developers, sometimes resulting in innovative solutions.

Going beyond technical considerations and focusing on commercial aspects, participants in the open banking ecosystem (regulators, banks, TPPs) need to find ways to benefit from the API economy. API monetization is the first step in this direction. But, unfortunately, regulators have taken different views on commercializing APIs across the globe when it comes to regulators. 

Therefore, if banks and other TPPs benefit from investment in APIs, they need to set a strategic participatory framework, which can be more important than monetization models.
Open Banking Ecosystem can be viewed as a crossroad where financial institutions, consumers, technology providers, and regulators meet and want to safely and timely take part in the traffic. To make this happen, both banks and API consumers should maintain a strong community that explores new ideas and brings use cases to life at scale.