Since the first APIs started appearing in the bank-to-treasury space a few years ago, driven in part by the open banking revolution, there has been much talk of their transformational power. We consider the reality behind the claim, exploring the possibilities and the limitations.
The promise of system flexibility, agility, and scalability is a potent lure into the world of APIs. And with business models striving to offer a more online and immediate experience, and data- sharing now an essential part of this new economy, APIs do seem to be much in demand. Indeed, banks are willingly offering access to their new libraries – albeit with a regulatory push to get them going. But on the treasury front line, are they delivering?
APIs serve to facilitate communication between two systems, enabling the integration of third-party software and technology into new applications. “In layman’s terms, think of it as a communication channel that allows two computers to speak to one another. They are akin to the old-fashioned telephone operator who used to connect callers to the relevant parties,” explains Ken Bugayong, Financial Technology Instructor, University of Washington, and Senior Treasury Manager, Bloom Energy. In fact, the API request for communication is referred to as a ‘call.’
Financial Technology Instructor, University of Washington, Senior Treasury Manager, Bloom Energy