EBA Understanding the business relevance of Open APIs and Open Banking for banks

This information paper explains the most relevant concepts and offers some strategic insights for bank business leaders, with regard to the business relevance of APIs. The key observation of this information paper is that Open APIs and Open Banking could change the way banks think about products and distribution, two key dimensions in every business. APIs and digitisation in general allow value to be created in a distributed fashion, through an ecosystem of partners. Co-creating value is likely to prove to be a major change and challenge for banks in the near future. 

The EBA’s activity stream on electronic alternative payments focuses on payment innovation taking place in the consumer and retail ecommerce space and the implications/challenges of the changes this innovation entails. A dedicated working group was set up in 2013 to help the EBA membership gain a deeper understanding of the changing structure of retail payments and the impact of electronic alternative (e-AP) payment products on traditional cash, cards and ACH payments.

Chapter 3 describes Open APIs and how they can create value for businesses and their customers. Examples from the non-financial sector are also included. Chapter 4 elaborates what this could mean for individual banks and chapter 5 discusses the current situation of banks regarding Open API and Open Banking. Key observations are summarised in chapter 6.