API Products : The New Revenue Channel for the Traditional Bank
We all familiar with banking products. They all start with every day accounts, savings, cards, term deposits and the list go on. Banks add flavours in to these products types such as Super Saver, Student Saver, Pensioner Saver in to Savings product. Following image is from one of largest banks in the world showing their banking products.
Traditionally, transactions on savings accounts were widely recorded in a passbook, and were sometimes called passbook savings accounts, and bank statements were not provided. Now things are different, transactions are recorded electronically and accessible online through devices. An old pass book from Commonwealth Savings Bank of Australia is shown below.
In this digital society the way we bank is changing rapidly. Additional to the standard banking products, we see “API” products coming up. Following picture show API Products advertised by ABN AMRO in their developer portal.
API products builds new revenue channels and a partner community that innovate on top of your API Products.
Payment API Product
Most popular API products are Payment APIs. With Open Banking regulations under PSD2 the payment landscape got liberalized. Further with Single Euro Payment Area (SEPA) you easily make a frictionless payment across geographical boundaries. Bank can expose payment capability on top of open banking framework as shown below.
Banks go one step further in business banking and provide adaptors to CRM and Cashflow Management tools that business is using. This is known as embeddable banking. So they can do payments using the Payment APIs through their existing tools as shown below.
Account Information and Aggregation API Product
Users have multiple accounts : Everyday, Checking, Savings, Term Deposits, Credit Card, Mortage or Brokerage in a bank. This API provide aggregated information of account profiles, balances and transactions of these accounts held by the user. API can be used provide a holistic view of your customers’ financial picture for them to assess their financial situation and to suggest appropriate financial products. Additionally API produces historical and current data for your customers to prepare their own financial projections to plan and budget.
How much does a 30 year old woman spend on restaurants, at which times and on which days of the week? What is the average bill for a meal in zip code 28100? If I close a road to traffic, will people’s consumer habits change? What impact does a big event like World Pride have? Where do my buying customers come from? Where do they go? These are just some of the questions answered by PayStats.
BBVA — API_Market Platform
Image Retrieval API
This API facilitate activities that require check or deposit slip image retrieval and transfer for research, reconciliation, collections, adjustments, and client servicing. This API can be used to enable service representatives to answer questions regarding payments with real-time image review. Immediately retrieve and email a paid check image to a customer to verify proof of payment.
Virtual Ledger and Virtual Accounts API
Virtual accounts organize data within a bank account so that it looks as if it’s divided into mini-accounts or sub-ledgers (i.e., virtual accounts). Just like a real bank account, each virtual account has an opening balance, a closing balance, incoming receipts and outgoing payments. These APIs provide life cycle management capability of virtual accounts.
Financial Instrument APIs
Banks provide many financial instruments as listed below.
- Savings Calculators
- Term deposit calculator
- Budget planner
- Salary sacrifice calculator (superannuation)
- Co-contribution calculator
- Home loan calculator
- Mortgage calculator
- Refinancing calculator
The loan repayment calculator from ING Bank is shown below.
These API provide capabilities of these tools as an APIs or group of APIs.
Statistical APIs
Provides aggregated and anonymized statistical data like transactions. Provides historical data and time ranging. As an example transaction history APIs provide five main dimensions to improve customer behaviour analysis: Territorial unit, Time, Merchant Category, Gender and Age.
Discovery APIs for ATMs and Branches
API provides capability to search an area using a location-based search criteria such as address, city, ZIP code, or the name of a financial institution. It provides a list of available ATMs or branches within the provided search criteria for use in applications.
Notification APIs
These APIs provide a way of receiving enriched information of the various events related to your customers’ banking operations in real time.
Credit / Debit Card Servicing APIs
These APIs provide standard card life cycle management capabilities.
