6 ms·

Towards an Open Banking API Standard

136 points by jackgavigan 11y ago

Johnie 11y ago
When are US banks going to come around to open banking? They need to come around to the model where they provide the infrastructure and let third parties manage the customer interaction. RobinHood's model[1] is pretty interesting in this respect. They are managing the highly regulated part of stock trading and letting API clients deal with the customer experience. This enable trading to be done from any number of apps that consumers are using without those app developers from having to deal with the regulated investment management component. This is the model that banks should adopt. Unfortunately, it will take incumbent a long time to come around to this. I've written about opening up bank data here: https://www.linkedin.com/pulse/let-my-financial-data-free-johnie-lee https://www.linkedin.com/pulse/let-my-financial-data-free-jo... [1] http://www.financemagnates.com/fintech/investing/robinhood-goes-open-with-openfolio-quantopian-stocktwits-and-rubicoin-integration/ http://www.financemagnates.com/fintech/investing/robinhood-g...
- toomuchtodo 11y ago
  > When are US banks going to come around to open banking? They need to come around to the model where they provide the infrastructure and let third parties manage the customer interaction. When they have an incentive to. No one is going to change their business unless financially incentivized to do so. To your other point, you can use Bancorp bank if you want to build a tech platform on top of a real bank. That's how BankSimple (now just Simple.com) built their platform.
  - Animats 11y ago
    "Let third parties manage the customer interaction." Bad idea. Dealing directly with a regulated bank, you know who to blame and have more legal protections. With some third-party intermediary, who pays for fraud? App developers will try to wiggle out of taking any responsibility. PayPal and WePay, for example, have routinely done that. Read "simple.com"'s user contract.[1] [1] https://www.simple.com/policies/bancorp-account-agreement https://www.simple.com/policies/bancorp-account-agreement
    - toomuchtodo 11y ago
      +1. APIs have created this false confidence that every action is an API call away, until you run up against real-life, necessary regulations (financial, life safety, etc).
    - jackgavigan 11y ago
      > Bad idea. Dealing directly with a regulated bank, you know who to blame... This is definitely a key factor. As I mentioned in the blog post, when the customer is using technology provided by the bank, determining who is liable for any losses is relatively straightforward. When you start adding third parties to the mix, it becomes more complicated. If a customer downloads a snazzy-looking banking app built by criminals who then use their credentials to empty their bank account, who is liable?
    - Johnie 11y ago
      API banking and third party apps is already happening in Germany and Europe. Look at Fidor Bank and Mondo Bank. It's not like anyone can get access to the API. The marketplace/app store and access to the API can be controlled. https://developer.fidor.de/ https://developer.fidor.de/ https://getmondo.co.uk/docs/ https://getmondo.co.uk/docs/
  - yo-code-sucks 11y ago
    Thay are called credit unions, the major players are DigitalInsight(Services) -> acquired from Intuit by NCR and FIServ(Data Storage). They are both slow moving beasts, but because of regulations in the US nothing will ever change.
- tdaltonc 11y ago
  No one wants to be dumb pipes.
- deleted 11y ago
  [deleted]
- patio11 11y ago
  RobinHood actually uses Apex Clearing Corporation on the backend, which you'll find is true of a lot of tech-forward retail-facing brokerage. (Other examples include OptionsHouse, TradeMonster, etc.) This is an optimization which reduces, but certainly does not eliminate, the red tape that the brokerage has to deal with.
aledalgrande 11y ago
I so wish this was true, banks are the dinosaurs of IT. I understand they have security in mind, but it's not possible that in 2016 I still have to go to a branch of my UK bank to get some things done. An open API would allow 3rd parties to revolutionize the UX.
- Symbiote 11y ago
  Consider switching banks. It's really easy with the "current account switching service" (they close the old account, redirect any payments to the new one for 13 months, and switch over all direct debit and standing orders). That that service exists shows they're not quite the dinosaurs you imagine.
  - aledalgrande 11y ago
    Unfortunately I am abroad very often, so it's difficult to find the time to switch banks. Also, I checked the mobile apps of other banks and they are even worse.
PaulHoule 11y ago
How about ISO 20022?
Symbiote 11y ago
I wonder if it's government regulation that's driven British banks to be innovators. "Faster payments" (electronic payments that clear within 2 hours, usually minutes) were requested by the government. [1]. The Current Accounts Switching Service [2] makes it much easier (zero effort for the customer) to transfer a current account to a different bank, which the government also required. In fact, that's led me to "7 ways banking has been made easier", [3], from the government. So, some open data standards seem the natural progression from this. [1] https://en.wikipedia.org/wiki/Faster_Payments_Service#Background https://en.wikipedia.org/wiki/Faster_Payments_Service#Backgr... [2] https://www.gov.uk/government/news/bank-account-switching-service-set-to-launch https://www.gov.uk/government/news/bank-account-switching-se... [3] https://www.gov.uk/government/news/7-ways-banking-has-been-made-easier https://www.gov.uk/government/news/7-ways-banking-has-been-m... Edit to add: The first paragraph of the executive summary of the report is "In the 2015 Budget HM Treasury announced its commitment to delivering an open standard for Application Programming Interfaces in UK banking, to help customers have more control over their data and to make it easier for financial technology companies (FinTechs) or other businesses to make use of bank data on behalf of customers in a variety of helpful and innovative ways."
whockey 11y ago
Total transparency, I'm one of the co-founders of Plaid[1]. Plaid's at the center of this in the US so we've been following this standard closely. It's exciting to see Europe and the UK taking this step forward - I'm hopeful that there will be some exciting news coming from the US pretty soon. More transparency and accessibility in this space is crucial - at the end of the day it has to be about enabling developers to build new products and enabling consumers to have real choice, while at the same time preserving (sometime arduous) compliance and security needs. If anyone ever wants to nerd out about banking standards or get involved feel free to shoot me an email at william[at]plaid.com. [1] https://www.plaid.com https://www.plaid.com
- deleted 11y ago
  [deleted]
- jackgavigan 11y ago
  If there is something happening in the US, it would be great if the UK and US efforts could align.
sjtgraham 11y ago
If you're in the UK and want a banking API, I'm building http://teller.io/ http://teller.io/. It's been in private beta about 2.5 months and access will be opening more broadly soon. I couldn't wait for banks to get themselves into gear so I reverse engineered all of their mobile apps, took their private APIs and expose a single unified API through Teller. So far the RBS banks, e.g. Natwest are in prod. If you bank with them, want super early access, understand it's beta product and will give some feedback: sg <> @ <> teller.io
- smt88 11y ago
  There is no way I'd trust my users' security with you when you can't even be bothered to use SSL.
  - sjtgraham 11y ago
    The landing page is a GitHub page. The app itself is https://developer.teller.io/ https://developer.teller.io/ and we don't even listen on port 80 on the API host. Happy to answer any questions you have, security related or otherwise.
    - asabjorn 11y ago
      you might be better off using http://netlify.com http://netlify.com since they support ssl for static sites
      - sjtgraham 11y ago
        Thanks for the tip. The current static site is being taken out of service soon and the app being moved to the main domain.
- breakingcups 11y ago
  I'm willing to bet the moment you move from private beta to a more open beta, you'll be getting Cease and Desists.
CptMauli 11y ago
For Germany there is HBCI (now FinTS), which is relatively old. Its not really web oriented, but rather used by banking Software like Quicken. https://en.m.wikipedia.org/wiki/FinTS https://en.m.wikipedia.org/wiki/FinTS
- jackgavigan 11y ago
  The interesting thing about the availability of HBCI/FinTS in Germany is that it seems to have fostered a fintech sector there, first with PFM apps and now with the Open Bank Project and startup banks like Fidor, Avuba and Number26.
known 11y ago
Transparency Begets Trust; However banks make lots of money with privacy/secrecy;
alfalfasprout 11y ago
Hopefully the result isn't as horribly complex as the FIX protocol...

136 points by jackgavigan 11y ago

When are US banks going to come around to open banking? They need to come around to the model where they provide the infrastructure and let third parties manage the customer interaction. RobinHood's model[1] is pretty interesting in this respect. They are managing the highly regulated part of stock trading and letting API clients deal with the customer experience. This enable trading to be done from any number of apps that consumers are using without those app developers from having to deal with the regulated investment management component. This is the model that banks should adopt. Unfortunately, it will take incumbent a long time to come around to this. I've written about opening up bank data here: https://www.linkedin.com/pulse/let-my-financial-data-free-johnie-lee https://www.linkedin.com/pulse/let-my-financial-data-free-jo... [1] http://www.financemagnates.com/fintech/investing/robinhood-goes-open-with-openfolio-quantopian-stocktwits-and-rubicoin-integration/ http://www.financemagnates.com/fintech/investing/robinhood-g...

toomuchtodo 11y ago
> When are US banks going to come around to open banking? They need to come around to the model where they provide the infrastructure and let third parties manage the customer interaction. When they have an incentive to. No one is going to change their business unless financially incentivized to do so. To your other point, you can use Bancorp bank if you want to build a tech platform on top of a real bank. That's how BankSimple (now just Simple.com) built their platform.
- Animats 11y ago
  "Let third parties manage the customer interaction." Bad idea. Dealing directly with a regulated bank, you know who to blame and have more legal protections. With some third-party intermediary, who pays for fraud? App developers will try to wiggle out of taking any responsibility. PayPal and WePay, for example, have routinely done that. Read "simple.com"'s user contract.[1] [1] https://www.simple.com/policies/bancorp-account-agreement https://www.simple.com/policies/bancorp-account-agreement
  - toomuchtodo 11y ago
    +1. APIs have created this false confidence that every action is an API call away, until you run up against real-life, necessary regulations (financial, life safety, etc).
  - jackgavigan 11y ago
    > Bad idea. Dealing directly with a regulated bank, you know who to blame... This is definitely a key factor. As I mentioned in the blog post, when the customer is using technology provided by the bank, determining who is liable for any losses is relatively straightforward. When you start adding third parties to the mix, it becomes more complicated. If a customer downloads a snazzy-looking banking app built by criminals who then use their credentials to empty their bank account, who is liable?
  - Johnie 11y ago
    API banking and third party apps is already happening in Germany and Europe. Look at Fidor Bank and Mondo Bank. It's not like anyone can get access to the API. The marketplace/app store and access to the API can be controlled. https://developer.fidor.de/ https://developer.fidor.de/ https://getmondo.co.uk/docs/ https://getmondo.co.uk/docs/
- yo-code-sucks 11y ago
  Thay are called credit unions, the major players are DigitalInsight(Services) -> acquired from Intuit by NCR and FIServ(Data Storage). They are both slow moving beasts, but because of regulations in the US nothing will ever change.
tdaltonc 11y ago
No one wants to be dumb pipes.
deleted 11y ago
[deleted]
patio11 11y ago
RobinHood actually uses Apex Clearing Corporation on the backend, which you'll find is true of a lot of tech-forward retail-facing brokerage. (Other examples include OptionsHouse, TradeMonster, etc.) This is an optimization which reduces, but certainly does not eliminate, the red tape that the brokerage has to deal with.

aledalgrande 11y ago

I so wish this was true, banks are the dinosaurs of IT. I understand they have security in mind, but it's not possible that in 2016 I still have to go to a branch of my UK bank to get some things done. An open API would allow 3rd parties to revolutionize the UX.

Symbiote 11y ago
Consider switching banks. It's really easy with the "current account switching service" (they close the old account, redirect any payments to the new one for 13 months, and switch over all direct debit and standing orders). That that service exists shows they're not quite the dinosaurs you imagine.
- aledalgrande 11y ago
  Unfortunately I am abroad very often, so it's difficult to find the time to switch banks. Also, I checked the mobile apps of other banks and they are even worse.

PaulHoule 11y ago

How about ISO 20022?

Symbiote 11y ago

I wonder if it's government regulation that's driven British banks to be innovators. "Faster payments" (electronic payments that clear within 2 hours, usually minutes) were requested by the government. [1]. The Current Accounts Switching Service [2] makes it much easier (zero effort for the customer) to transfer a current account to a different bank, which the government also required. In fact, that's led me to "7 ways banking has been made easier", [3], from the government. So, some open data standards seem the natural progression from this. [1] https://en.wikipedia.org/wiki/Faster_Payments_Service#Background https://en.wikipedia.org/wiki/Faster_Payments_Service#Backgr... [2] https://www.gov.uk/government/news/bank-account-switching-service-set-to-launch https://www.gov.uk/government/news/bank-account-switching-se... [3] https://www.gov.uk/government/news/7-ways-banking-has-been-made-easier https://www.gov.uk/government/news/7-ways-banking-has-been-m... Edit to add: The first paragraph of the executive summary of the report is "In the 2015 Budget HM Treasury announced its commitment to delivering an open standard for Application Programming Interfaces in UK banking, to help customers have more control over their data and to make it easier for financial technology companies (FinTechs) or other businesses to make use of bank data on behalf of customers in a variety of helpful and innovative ways."

whockey 11y ago

Total transparency, I'm one of the co-founders of Plaid[1]. Plaid's at the center of this in the US so we've been following this standard closely. It's exciting to see Europe and the UK taking this step forward - I'm hopeful that there will be some exciting news coming from the US pretty soon. More transparency and accessibility in this space is crucial - at the end of the day it has to be about enabling developers to build new products and enabling consumers to have real choice, while at the same time preserving (sometime arduous) compliance and security needs. If anyone ever wants to nerd out about banking standards or get involved feel free to shoot me an email at william[at]plaid.com. [1] https://www.plaid.com https://www.plaid.com

deleted 11y ago
[deleted]
jackgavigan 11y ago
If there is something happening in the US, it would be great if the UK and US efforts could align.

sjtgraham 11y ago

If you're in the UK and want a banking API, I'm building http://teller.io/ http://teller.io/. It's been in private beta about 2.5 months and access will be opening more broadly soon. I couldn't wait for banks to get themselves into gear so I reverse engineered all of their mobile apps, took their private APIs and expose a single unified API through Teller. So far the RBS banks, e.g. Natwest are in prod. If you bank with them, want super early access, understand it's beta product and will give some feedback: sg <> @ <> teller.io

smt88 11y ago
There is no way I'd trust my users' security with you when you can't even be bothered to use SSL.
- sjtgraham 11y ago
  The landing page is a GitHub page. The app itself is https://developer.teller.io/ https://developer.teller.io/ and we don't even listen on port 80 on the API host. Happy to answer any questions you have, security related or otherwise.
  - asabjorn 11y ago
    you might be better off using http://netlify.com http://netlify.com since they support ssl for static sites
    - sjtgraham 11y ago
      Thanks for the tip. The current static site is being taken out of service soon and the app being moved to the main domain.
breakingcups 11y ago
I'm willing to bet the moment you move from private beta to a more open beta, you'll be getting Cease and Desists.

CptMauli 11y ago

For Germany there is HBCI (now FinTS), which is relatively old. Its not really web oriented, but rather used by banking Software like Quicken. https://en.m.wikipedia.org/wiki/FinTS https://en.m.wikipedia.org/wiki/FinTS

jackgavigan 11y ago
The interesting thing about the availability of HBCI/FinTS in Germany is that it seems to have fostered a fintech sector there, first with PFM apps and now with the Open Bank Project and startup banks like Fidor, Avuba and Number26.

known 11y ago

Transparency Begets Trust; However banks make lots of money with privacy/secrecy;

alfalfasprout 11y ago

Hopefully the result isn't as horribly complex as the FIX protocol...