Banks are opening up their API’s15. July 2015
What was once unthinkable is now fashionable: a bank exposing its proprietary software to outside developers so they can develop their own applications on top of it.
Citigroup, BBVA Compass, Bank of America and Capital One are among the large U.S. banks that have been making pieces of their internally developed software code available to outsiders. Other banks are likely to follow.
The banks and others are sharing code through application programming interfaces — software gateways that let applications work together. Some consider APIs a key to banks’ survival and relevance in a mobile-first world. By sharing APIs to their proprietary software with nimbler, unregulated tech companies, the argument goes, banks can innovate much faster than they could by limiting application development to their own compliance-inhibited, resourced-strapped IT organizations.
“It’s like breaking a few windows to let free air and light in,” said Andres Wolberg-Stok, global head of emerging platforms and services at Citi. “It ends up benefiting fintech as a space.”