What are API Banking Services?

API or Application Programming Interface makes it possible for 3rd party applications to access a common set of tools or services using the particular interface. In Banking, this means a bank, a digital bank or an e-wallet can offer their customers 3rd party services through dedicated APIs and connect to other service providers’ pre-existing technology or services.

There are 2 main types of Banking APIs that fintech companies use: APIs to services providers and Open APIs.

Banking APIs to service providers

These APIs allow fintech companies to access third-party partners and facilitate growth for fintech companies, especially about new functionalities, products, process automation or efficiency increase.  

Which services and functionalities can be provided through APIs? 

In Banking, there are many different services delivered through API, such as KYC/AML and onboarding, identity verification, payments, currency exchange, card issuing, virtual IBANs, transactional SMS and others. 

Some APIs also help merchants to expand the list of payment methods on their website. It allows PSP customers to pay for goods and services directly from their personal account. To receive and process payments, merchants first need to open an account with a PSP.  

Opportunities of Banking API to service providers

New services & functionalities

APIs represent a great market opportunity for digital banks as they allow fintechs to introduce new functionalities and products fast by connecting to ready-to-use solutions. Ultimately, this helps in the overall growth of financial companies and improves the quality and variety of services available on the platform. For example, with our Macrobank Core Banking solution, fintech companies can expand and improve their services by picking ready-to-deploy integrations or making integrations with new services providers. Connecting different services through APIs means that you can build your custom solution that will be powered by tools and features through APIs in no time. 

Easy and fast service launch  

Partner APIs marketplaces or ready-to-use APIs and gateways permit payment companies to become an unstoppable force of speed and efficiency when starting new operations. Meanwhile, because of Core Banking software, it is possible to make new integrations with service providers and become the powerhouse of business development.  

Greater customer experience  

APIs enables banks and fintechs to offer a more efficient and seamless customer experience because the majority of innovative solutions are created to solve specific banking problems. It means, with greater freedom, flexibility, and personalization, APIs improve the overall customer experience. 

Open API

Ever since the Revised Payment Service Directive (PSD2) came into effect across Europe in January 2018, Open APIs have become incredibly important for several reasons. This directive has encouraged the development of APIs. Third parties such as fintech (financial technology) companies and online financial-services vendors started developing apps and services that benefit from the data they can now procure from financial institutions. 

The Open API interface enables third-party applications to access the most common banking tools, services, and valuable assets, such as financial information, customer accounts, and product catalogs.  

Designed to meet the PSD2 requirements, Advapay Open API offers a secure and reliable way to access open customer data and interact with Third-Party Providers (TTP). 

Open API’s opportunities

Improve the customer experience

With Open APIs, data are available to third parties. It allows fintech businesses to improve customer experience when they offer additional services. Additionally, by facilitating access to valuable shared customer data, customers would have a better overall experience when conducting their financial affairs.

Increase customer base

APIs might ultimately have a profound transformative effect on the future of banking. They would connect financial institutions with businesses and consumers and help securely and conveniently transfer the information. As a result, it would increase the scope of products and services financial institutions can offer to potentially wider customer base.  


Advapay assists financial institutions by providing cutting edge Core Banking software Macrobank. Get in touch with us to find out more about our solution and APIs.

Share this post