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Why are these API banks always in the UK? I've been waiting to do my banking using curl for years and no one has made it available in the US.
by teamspirit 3y ago
Why are these API banks always in the UK? I've been waiting to do my banking using curl for years and no one has made it available in the US.
- tazjin 3y agoIt's fairly common in Russia, too. Mostly because some "challenger banks" forced everyone else to modernise.
- edent 3y agoIn part because of the "Regulatory Sandbox" - https://www.fca.org.uk/firms/innovation/regulatory-sandbox https://www.fca.org.uk/firms/innovation/regulatory-sandbox
- venantius 3y agoActually, no - the regulatory sandbox cannot be used by prospective banks.
- ctdean 3y agoGetting a new banking charter in the US is hard, but it's straightforward to be a challenger bank in the UK. Jarvis moved (back) to London from SF to start Griffin. The banks in the US that have APIs tend to focus on large fintech partnerships, so even simple APIs will be expensive compared to a regular bank account. Grasshopper Bank in the US (for example) is one of the few that will do APIs on top of regular commercial bank accounts. (I work at Treasury Prime, which powers many US banks that do APIs.)
- venantius 3y agoIt’s hard in the UK too! Just not “infeasible” hard. (Plus, it’s easier to finance as you don’t have those pesky Bank Holding Company Act regs dinging your investors)
- ensignavenger 3y agoI see new banks popping up all the time in the US. I would enjoy seeing a comparison of the process in the US vs the UK.
- ghayes 3y agoDo you mean Neobanks that generally attach to existing banks through partnerships? The OCC nearly stopped granting de novo banking charters since 2008: https://crsreports.congress.gov/product/pdf/R/R47014 https://crsreports.congress.gov/product/pdf/R/R47014 (see Figure 1 on page 21)
- ensignavenger 3y agoNah, real banks, but I did some looking and it seems they have state charters rather than national ones from the OCC. What the implications of that would be are rather unclear to me, other than that state banks are regulated by both the state and the FDIC, and national banks are regulated by the OCC.
- downWidOutaFite 3y agoUK has government mandated API requirements for banks. In the USA it's left to the "free market" which in practice means having to trust unreliable 3rd parties like Yodlee or Plaid.
- matt3210 3y agoLol plaid wanted my username and password for access to my bank for a third party. No way
- vermilingua 3y agoDoes anyone know why this is the case in Australia too? Is there a regulatory reason or is it just a matter of market size?
- ungamedplayer 3y agoIirc nab has an API
- orra 3y ago> Why are these API banks always in the UK? I can think of 835 million reasons: https://www.reuters.com/article/eu-rbs-britain/corrected-uk-agrees-1-1-bln-deal-with-eu-to-settle-rbs-state-aid-concerns-idUSL9N1JB01D https://www.reuters.com/article/eu-rbs-britain/corrected-uk-... Plus, Open Banking and Faster Payments (which were EU initiatives before Brexit) maybe helped.
- blibble 3y agofaster payments had nothing to do with the EU "open" banking did (and accordingly you have to be a large company to participate at all)
- j16sdiz 3y agoInstant interbank transfer is basically everywhere[1] - China, India, Korea, Singapore, Malaysia, Indonesia, etc... [1] https://www.imf.org/-/media/Files/Publications/WP/2022/English/wpiea2022228-print-pdf.ashx https://www.imf.org/-/media/Files/Publications/WP/2022/Engli...
- sumek83 3y agohttps://en.wikipedia.org/wiki/Single_Euro_Payments_Area https://en.wikipedia.org/wiki/Single_Euro_Payments_Area
- blibble 3y agoyes, the EU launched a separate instant payment scheme a decade later doesn't mean the EU had anything to do with the UK's domestic faster payments scheme (SEPA is also euro only)
- orra 3y agoI was thinking of PSD (the original one), but it turns out that only required end of next business day settlement.
- avianlyric 3y agoU.S. banking is surprisingly far behind the curve, and hasn’t led the world from a tech or innovation perspective for many decades. The UK on the other hand has actively encouraged new banks and new tech. It’s had things like instant, free, payments between personal accounts for almost two decades. Contactless transactions for at least a decade, mobile banking for decades, and government mandated banking API for almost 5 years. In short, the UK has a very active banking sector that’s been rapidly (for banks) innovating for many decades. So the environment and ecosystem are well developed for further and faster innovation. In the U.S., it seems banks gave up on tech innovation decades ago, and decided that innovation in fees and punitive treatment of customers was their preferred approach. As a result there just isn’t an environment for new innovation, the incumbents find it much easier to crush competition, rather than compete. Why the same isn’t true in UK (which until recently had remarkably few distinct banks), is probably down to the nature of law and regulation, which gives customers lots of rights, and actively punishes banks that don’t uphold them.
- BurningFrog 3y agoUS banks are very tightly regulated, and the regulators haven't ordered these inventions yet.
- avianlyric 3y agoU.S. bank regulation is a joke compared to the UK and EU. Regulation isn’t the reason US banks are lagging so far behind.
- scarby2 3y ago> It’s had things like instant, free, payments between personal accounts for almost two decades. Thanks for making me feel old I was thinking "it hasn't been anywhere near that long, I remember the rollout like it was yesterday". Turns out that rollout was 15 years ago.
- 8fingerlouie 3y ago> The UK on the other hand has actively encouraged new banks and new tech. It’s had things like instant, free, payments between personal accounts for almost two decades. Contactless transactions for at least a decade, mobile banking for decades, and government mandated banking API for almost 5 years. I think most of those things are EU initiatives, which the UK was a member of at the time. At least we have all of them in Denmark as well.
- matt3210 3y agoYes! I need an api bank for personal use too!!
- seabass-labrax 3y agoAfter the financial crash of 2008 and the subsequent succession of banking scandals, in which the taxpayer bailed out multiple prominent banks, the UK's government at the time introduced a series of measures to promote smaller banks. For individual personal accounts, Monzo and Starling are probably the most well-known of these so-called 'challenger banks'[1]. [1]: https://en.wikipedia.org/wiki/Challenger_bank https://en.wikipedia.org/wiki/Challenger_bank
- harel 3y agoFurther more, banks that were bailed out signed a deal to actively help those smaller banks by transitioning clients to them. I know that because my bank offered me a few times to the point of nagging to switch my business accounts from them to one of the smaller ones. They offered to pay me a sum of a few thousand pounds to do that. I declined at the time due to me liking my bank and appreciating one app for all my business and personal accounts. When I pushed why are they willing to pay me large sums to leave them, the told me the above.
- seabass-labrax 3y agoI learnt about this situation, as it happens, from the founder of Griffin, so was particularly interested in this blog post. It seems like the initial excitement of developing a banking system in Clojure might have transitioned to more bread-and-butter aspects of banking now, but immutable data is an ideal match for their mandatory audit trails. I have to admit that I wouldn't mind being paid a large sum to switch to Griffin, but then again, my current provider is one of the more responsible ones which didn't have to be bailed out in the crisis :)
- harel 3y agoThere are benefits to being with irresponsible banks :-)
- rkeene2 3y agoHi. My company, Keeta [0], is making this available in many countries, including the US. [0] https://keeta.com/ https://keeta.com/
- j16sdiz 3y agoIt's not. Doing payment or wire transfer is not same as being a bank in most country, even to the customers
- rkeene2 3y agoI have a bit more information than you on the topic. We provide bank accounts, this includes checking and savings in the US.
- sachin9 3y agoCan people from other countries opt for this bank account?
- rkeene2 3y agoHi. The short answer is no. The way our system works, the legal address of the end-user determines which bank the bank account is within -- this is largely due to regulatory requirements within the various banking systems. There is one mechanism by which this could potentially be done from my understanding, but it will take us a few years to fully explore and integrate into that kind of model. Another model we explored (but again, do not implement) is that instead of holding end-user funds in FDIC-insured bank accounts (in the US -- bank accounts in other countries are not FDIC insured) is treating the funds as a security backed against deposits, which is significantly different, but could make non-US users able to open US-based accounts, but they would not at that point be bank accounts.
- nwatson 3y agoThe UK is friendly to money-laundering, presenting the more respectable faces of an international network of questionable banks and financial institutions. API banking will allow a faster cycle of wash, rinse, repeat, an innovation in shady.
- seabass-labrax 3y agoWe shouldn't avoid making finance easier and more efficient simply because it might make criminals more effective by the same ratio!
- jwr 3y agoThe US banking world seems to be firmly stuck in the 80s and banks need to be dragged kicking and screaming to implement anything recent, so this doesn't surprise me at all.
- hbcondo714 3y agoNow there's https://column.com https://column.com as discussed here last year: Column – a chartered bank for developers https://news.ycombinator.com/item?id=31109170 https://news.ycombinator.com/item?id=31109170
- richardw 3y ago67m people in UK in a far more homogenous market. US is a lot more complicated, has a lot more legacy and more parties to get anything done. See e.g. the sluggish move to chip and pin, sluggish death of checks, slow move to real-time payments. Hard to turn a supertanker with many states and thousands of banks.