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API as a customer product: Realising open banking potential

Everyday banking has fundamentally changed in the last 10 years, with online and mobile becoming predominant methods by which customers interact with their banks. Now, banking is set to be radically disrupted again. Just as digital applications have displaced branch visits, in the near future customers may not even use banks’ digital applications at all. This is the Open Banking revolution.

The catalyst for change has been the forthcoming enactment of new Open Banking regulation in the UK by the Competition and Markets Authority (CMA), and across Europe - the second Directive on Payment Services (PSD2). Both are driving a new wave of innovation. To comply with each piece of legislation, banks must allow trusted third parties access to customer account data and the ability to initiate payments. Application Programming Interfaces (APIs) are seen as the most effective mechanism for achieving this, allowing third-party providers access to banks’ data infrastructures in a way that is both open and secure.

APIs represent as great a threat and opportunity to banks today as the advent of the digital era once did, opening the market to greater competition around customer loyalty and engagement. Banks should not consider these APIs as simply technical interfaces that expose data to third parties but rather as radical enablers for creating new and attractive customer experiences. APIs are already commonplace across many industry sectors, where they are in fact viewed as customer products. Banks will have to follow suit if they want to remain competitive.

To continue your Open Banking journey, read the second paper in our Open Banking thought leadership series PSD2 and Open Banking: Are you open to opportunities?

Read media coverage on Capco’s views on Open Banking and APIs:


To get in touch with our experts, please contact Jeffrey Tijssen, Warren Macdonald or Jack Burrows.