What are the advantages of open API-technology and multi banking in Switzerland?

"If data is the new gold, then APIs are the new gold mines..."

1) WHAT is a BANKING API?

APIs ("application programming interface") are software connections through which two computer programs can communicate digitally in a process called "integration".

According to the definition given by IBM (here), an "API enables companies to open up their applications’ data and functionality to external third-party developers, business partners, and internal departments within their companies. This allows services and products to communicate with each other and leverage each other’s data and functionality [...] Whereas a user interface is designed for use by humans, APIs are designed for use by a computer or application".

The dictionary defines "modules" as "each of a set of standardized parts or independent units that can be used to construct a more complex structure". Thus, APIs constitute an important technological basis for the efficient exchange of data (customer, financial, etc.) between companies through the request-response mechanism surrounding an API data transfer over the internet ("Web API") using HTTP, JavaScript or XML.

In the banking industry, API are instrumental in the shift towards digital business ecosystems emerging around a shared purpose (e.g., process simplification, automation) and embedding best-in-class financial products and services ("embedded finance") in order to cut red tape and enhance customer experience.

2) What are the advantages of the API technolgoy in banking and finance?

3) What are the use cases of open API technology?

4) What is the API economy?

Further reading

Deloitte Consulting (2015) API Economy: From Systems to Business Service (here)

Brenda Jin, Saurabh Sahni, Amir Shevat (2018) Designing Web APIs, O'Reilly Media (here)

EU (2015) Payment Services Directive, PSD2 (here)

Explore our catalogue of Swiss APIs for transaction banking

Our Swiss APIs allow our ecosystem partners to link their platform with ours and access our services without using our web UI.