Having trouble with your finances? There is an app for that. Or at least there soon will be.
Ulster Bank has announced the country's first banking open application programme interface (API). The move is set to change the way in which customers engage with their finances by enabling developers to create new products and services using banking data.
For those unfamiliar with them, APIs are essentially portals that allow information to be safely and easily exchanged with trusted third parties. While relatively new to the world of banking, APIs have been used for years with internet giants such as Google having long provided a platform on which developers can build applications. MyTaxi (formerly Hailo), Deliveroo and others that rely on Google Maps for location purposes for example, have been able to incorporate the technology using APIs.
Services
Ulster Bank's API, which has been developed using technology from the bank's parent RBS, gives approved companies limited access to individual account balances and transaction history, providing that customers give permission. The result is that developers are expected to unleash a slew of new finance-related services to help consumers better manage their money.
Based on the OAuth industry standard protocol, Ulster Bank’s API aims to provide a seamless and secure method of linking customers’ accounts with third parties. Initially, third parties such as fintech start-ups who want to create new apps, will be restricted to data related to a customer’s balance and last six transactions.
“With our API we’re providing a portal so that developers can build applications that will hopefully be useful to our customers. We are not going to be approving everyone who expresses an interest, we’ll be accessing all interested parties to ensure they are credible and authentic,” said Ciarán Coyle, chief administrative officer (CAO) at Ulster Bank.
Mr Coyle said the arrival of APIs will help to bring about proper open banking by making data and functionality more accessible to both customers and companies.
Legislation
While Ulster Bank is first out of the traps with its API locally, other banks here and further afield are are also prepping them ahead of the introduction of two new key pieces of legislation – the Second Payment Service Directive (PSD2) in the EU and the Open Banking Standard in the UK. Both of these effectively force banks to open up their interfaces to third parties.
"Disruption is being driven at an industry level by regulations but we aren't just doing this because of that. We want to be leaders in this and rather than simply being responsive to industry trends, we want to set them," said Mr Coyle, also noting Ulster Bank's participation in a new blockchain initiative and its recent introduction of Apple Pay.
RBS was famously fined £56 million by regulators in the UK in late 2014 after a software glitch two years earlier left millions of customers unable to access accounts. Given this, there may be some who are surprised by its decision to take the lead on introducing APIs.
“We invested hundreds of millions of pounds to make sure the issues that occurred in 2012 were resolved and that investment continues because we never want to be in the situation that we found ourselves in the past,” said RBS’s chief administrative officer, Simon McNamara.
He said he was excited at the prospect of the bank opening its data up to third parties who will hopefully create additional value for customers.
“Apple did something similar when it created the App Store. It opened up the store without knowing what might come from it and now there are millions of applications, many of which were unimaginable beforehand. As we see it, the possibilities are endless,” said Mr McNamara.
