Nordic APIs published a new eBook: API Strategy for Open Banking!

For this volume, we’ve compiled our top articles on open banking, featuring best practices and case studies from some of the world’s leading open banking initiatives. We’ve also included a foreword by Mr. Open Banking himself, Eyal Sivan.

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by Eyal Sivan, Head of Open Banking at Axway, Podcast Host: Mr. Open Banking

Foreword: Embracing Open Banking

It is with great pride that I write this foreword, for it is no exaggeration to say that Nordic APIs played a pivotal role in my journey, which led me to dedicate my life to open banking.

The first time I ever heard of open banking was while presenting at the Nordic APIs Summit event in Stockholm, where I met Gunnar Berger from Nordea, featured here in this book. After listening to him speak, describing large banks as battleships and fintechs as speedboats, I discovered he had a curious title that I had never heard of before: Head of Open Banking.

After speaking to Gunnar, doing some reading, and listening to European politicians argue about PSD2 on YouTube, I became immediately fascinated with open banking and its seeming contradictions. Here was a situation where governments were the ones driving innovation while market forces were slowing it down, a situation where regulation was trying to reduce barriers to entry instead of erecting them. In open banking, there seems to be an attempt to create a financial system that is both more competitive and healthier at the same time. In short, a better way to handle money.

Upon further research, it became clear open banking activity was taking place everywhere, not just in Europe. Moreover, regardless of whether the approach being taken was driven by regulation or by the market, the aim seemed to be the same: to develop a common standard, enabling all the players in the financial ecosystem to communicate with each other seamlessly and universally, acting as a foundation not only for great innovation but also for the establishment of modern data rights.

So, what exactly does this common standard called open banking look like? If you are reading this book, you probably already know that open banking standards are implemented as a set of open APIs. Today, in most open banking implementations, there are two main types of APIs: one to get information about you or your banking activity and another to move money around using payments. But that is just the beginning — already, based on those two basic functions, we are seeing moves into premium APIs, data-driven aggregation, and AI-powered smart money. Mature markets like the UK are seeing exponential growth in usage. Despite some bumps in the road, open banking has already proven that a strong standard acting as a base can lead to explosive innovation, increased competition, and a modernized financial market. Make no mistake: open banking is here now, and it is here to stay.

To those building the APIs that power open banking, understand that you are building the future. The APIs you build will form the digital economy’s roads and bridges, the bedrock of the 21st century. Your APIs will control how all of us trade, save, and invest to build ourselves better lives. In this book, you will find articles by some of the smartest open banking pioneers out there, like Chris Wood, who was one of my early teachers. But rest assured, much of this story has yet to be written, and much of open banking has yet to be built. Perhaps you will be the next one to add a piece of the puzzle.

Open banking appears to be a rare opportunity to raise all boats if done right — a true nonzero-sum gain. Creating a common standard for the financial services ecosystem means that: Consumers win through better, cheaper, more innovative financial products; governments win through effective regulation that defends both competition and consumer data rights; technology companies, large and small, win because they can create and build on open standards; and banks win (although many don’t know it yet) because there is more banking activity overall. A win-win-win-win.

Today, I am fortunate enough to hold the same title as my friend Gunnar, Head of Open Banking, and I cannot help but smile at the thought of it. Not merely because I have a good job at a great company, but because it feels like I am helping to build something bigger.

It is my distinguished pleasure to assist Nordic APIs in spreading knowledge of open banking. I sincerely hope that you come away from this book as excited as I am about the possibilities of open banking and the open data future it makes possible.

Preface: APIs Support the Open Banking Movement

Since Nordic APIs ran our first story on open banking and FinTech in early 2016, our writers have been carefully attuned to the world of banking software architecture.

We’ve traced the EU’s Payment Services Directive 2.0 (PSD2) regulation, and the rise of Application Programming Interfaces (APIs) to help externalize personal data for end consumers. We’ve also followed the modularization of banking components, as valuable infrastructure becomes reusable through modern microservices designs.

Not only are financial institutions opening up with APIs to meet global regulations, but innovative banks are finding success in fully-fledged API-driven banking products, supplementing core business models. Though there are many new opportunities, banks must apply a keen strategy to accel in this new paradigm. New entrants must be made aware of open banking pitfalls and marketing gaps.

At Nordic APIs, we live for new strategies and technologies and strive to introduce the benefits of API-first platforms to technical and non-technical audiences. In our volume, API Strategy for Open Banking, we compile our top articles on open banking from the Nordic APIs writing team.

Within each chapter of API Strategy for Open Banking, a Nordic APIs blogger digs into a niche aspect of open banking, covering PSD2, open banking benefits, developer experience tips, frameworks for high-grade security, and access management, and more. We’ve featured best practices as well as case studies from our conference speakers, who represent some of the largest open banking initiatives in the world.

So, please enjoy API Strategy for Open Banking, and let us know how we can improve!