Open banking is the process whereby banks and other institutions share financial data through application programming interfaces (APIs) with trusted entities. Well, when everyone talks about the data, the question arises, what kind of data? Generally, the bank shares information associated with you like the account holder’s name, account type, currency, account open date & transaction details. Your data will only be shared with your consent. The banks always ask you either via mail or by a pop-up box to give your approval to allow open banking. To improve user experience and networking, open banking encourages interoperability and networking between banking information and service providers.
Open banking API plays a very significant role here; even a minor error in the application programming interface can deprive thousands of users of enjoying open banking.
Open banking is essential to the evolution of financial services, especially as consumer tastes change and their expectations for innovation increase. In this fragmented space, open banking could be just what the industry needs to standardize and democratize access to financial accounts, foster new partnerships between banks and fintech, and deliver innovative services and partnerships.
There are three parties involved in the API ecosystem;
- The one that gives access to your data to other fintech entities.
- The second one is the fintech entities that take your data to offer their service to you.
- A business that develops software solutions and creates products that support open banking API architecture
Can You Trust Open Banking API Blindly?
Bank APIs have improved significantly over time, but that doesn’t ensure they are secure and can function without errors. There are still a lot of technical issues bank APIs are facing that need to be tackled.
When you go through the API performance stats, you will see that many banking API calls fail in the UK because of technical errors. The number exceeds even a million.
When you go through the research conducted by Accenture in Hong Kong, you will discover that many regional banks still do not have any policies for exchanging sensitive information with third parties outside their internal banking systems.
According to Cifas (the fraud prevention company in the UK), the fraudsters could target open banking API. Users might not be familiar with the expected behavior of open banking platforms, which allows fraudsters to take advantage.
Open Banking API Failure; What Could be the Results?
As earlier said, a minor glitch can create a great hassle! Are you aware of the Amazon API shutdown in 2015? This is the most relevant example of an API glitch that caused thousands of websites to go off.
A similar situation occurs with a bank’s API causing trouble for their open banking partners delivering service. It can result in higher client attrition and broken alliances. It can create the worst situation if the same condition arises in a broad open banking ecosystem. Because in that circumstance, it is difficult to comprehend from which party the error is coming. This could result in higher litigation costs to determine who is at fault.
This situation mandates the requirement of real-time API monitoring. Read on to get more details on this.
Open Banking API Monitoring: What Do You Need to Know?
Open banking API monitoring is gathering and examining data about a banking API’s performance to spot issues that can spoil users’ experience. This allows you to track the internal and external APIs to check if they function at their best. Three aspects could be employed to monitor banking API;
- Monitoring Uptime
- Response rate
Monitoring Uptime – The most straightforward API monitoring metric, uptime, refers to confirming that your application programming interfaces are operational or even initially capable of operating. Though it sounds like it is not necessary, you will understand the importance when the API is down.
Functioning- Your API should perform as promised in any circumstance. To monitor this, you must monitor factors such as;
- How much average time does it take to respond to a request?
- The capacity to handle requests per minute, the more it is, the better it is.
Due to traffic congestion or the great distance between the server and the user, your API transactions will take longer than usual. So, it is strongly advised to monitor API performance from multiple places and under various loads; this will provide you with a better understanding of why your APIs perform poorly and precisely how to address this.
Response Rate – Monitoring metrics like the number of successful API calls and responses is crucial to maintain customer satisfaction and prevent security risks. The response rate should be up to the mark as the users expect.
Banking API monitoring acts as fuel to open banking and activates the factors essential to keep the open banking ecosystem running smoothly. We at DigitalAPICraft, build an advanced API ecosystem with our one APIMarketplace to offer customer satisfaction. Our solution provides an enterprise-grade gateway with a large variety of pre-built compliant APIs, accelerators, sandboxes, a vast range of connectors, and much more. Open Banking APIs are offered “as-a-service” by our solution.