The UK government has issued a call for comment on the establishment of an open API standard across UK banks. This follows a report last year, Data Sharing and Open Data for Banks, which discussed the benefits of such a policy.
The UK ambition is quite remarkable:
“..the government wants to go beyond how APIs are currently used in other countries, to deliver an open API standard in UK banking. An open API standard would entail UK banks developing a single and common API, which is publicly available and can be used by any fintech firm or app developer to design products or apps which work for all UK banks.”
— Open Consultation (01/28/15)
Assuming all the privacy, security and industry cost concerns could be addressed, this would remove a huge barrier that firms face when initially starting up — how to get access to data without bespoke integration and lengthy negotiations.
There are many personal finance, expense management and comparative banking products in existence today (see FinTech Market Map) that would stand to benefit.
Of course, common standards sound good on paper but will need to resolve several issues:
- who sets the standards?
- how are the standards going to evolve over time?
- who bears the initial cost and maintenance cost?
- who gets to monetize the data, and its derivations?
It will be interesting to see if similar initiatives gain traction in other markets, and if the momentum continues or ends up falling short.