DBS Bank, Southeast Asia’s largest bank by market cap, has claimed the honour of having the world’s biggest banking API (application programming interface) platform with over 155 APIs that developers can plug into to create a variety of services.
These APIs run the gamut, from mortgage loan APIs that can be used to create and save, retrieve, update, cancel and search for mortgage loan applications, to fund transfer APIs for transferring money between own accounts or to third parties within or outside the bank.
The bank claims its API platform is the largest of its kind in the world, having counted the number of APIs made available to developers by rival banks, its executives told the media during a briefing earlier this week.
Banks and the financial services industry are in the midst of a gold rush to ramp up their digitisation and fintech efforts, in a bid to stay relevant to customers and better compete against disruptive fintech start-ups rivals looking to bypass traditional financial services.
Ireland’s Currencyfair, for example, has been offering a foreign exchange service that claims to offer better exchange rates and lower fees than banks for several years now. Then, there’s also PayPal, one of the earliest fintech companies even before the term fintech was coined.
By opening up an extensive library of APIs, DBS hopes organisations with products and services that touch some aspects of the financial system – be it payments, fund transfers or payroll processing – will plug into its platform rather than turn to fintech upstarts.
The API platform is already off to a good start. DBS claims over 50 companies including household names such as AIG, McDonald’s, MSIG, PropertyGuru, as well as start-ups like FoodPanda, Homage and soCash have already hopped onto the platform.
McDonald’s, for one, is using DBS’ APIs under the PayLah payments category, enabling to offer the PayLah payment option to McDelivery customers. Online property portal PropertyGuru is also tapping DBS’ APIs to provide users with instant loan affordability assessments.
DBS’ group CIO David Gledhill says the bank started to transform its technology infrastructure as early as nine years ago, noting that the head-start has given it the ability operate with fintech-like agility and nimbleness.
While so-called “open banking” efforts by DBS and others can be a force for innovation, the risks of sharing data with a wider ecosystem beyond a bank’s reaches should not be ignored.
Banks must put in place measures to ensure that customer data is used in line with existing compliance and data protection rules, as well as upcoming ones such as the Payment Service Directive (PSD2) in the EU. In addition, customers should also provide consent in one way or another (whether it’s implied or direct consent) for the use of their data by third-party services.