• Alexander Goncharuk, Managing Director, UK, and Global Head of BFSI at Intellias


• 18.09.2025 10:45 am
#OpenBanking #APIStandards

Application Performance Interfaces (APIs) are the invisible backbone of today’s digital services. They quietly power the services we all take for granted; from sending a payment on your mobile banking app to checking your credit score in real time. Yet despite their ubiquity, many financial institutions still treat API standardisation as a technical afterthought rather than a strategic imperative.

That mindset must change.

APIs are no longer just snippets of code, they’re the digital glue holding entire IT ecosystems together. Without consistent standards for data formatting, communication and security, businesses face mounting inefficiencies, spiralling costs, and increased security risk. For financial services providers operating in highly regulated and competitive markets, this is not a risk worth taking.

I say this without exaggeration: standardising APIs is no longer optional – it’s now foundational to innovation, compliance and growth.

Why standards matter

To understand why API standardisation matters, it helps to look at what happens when it’s missing. Imagine a fintech startup trying to connect with multiple banking platforms – only to find each API follows a different structure. The result? Developers spend more time building workarounds than innovating, integration takes months instead of days, and security gaps emerge.

API standardisation eliminates this friction. Frameworks like OpenAPI (for describing RESTful APIs), JSON Schema (for consistent data modelling), and AsyncAPI (for event-driven APIs) provide a shared language for developers, enabling seamless interoperability between systems.

There are three core benefits to standardisation that deserve a closer look:

1. Improved collaboration and developer efficiency: When everyone speaks the same API “language”, developers can work faster and with fewer errors. Standardised documentation and naming conventions accelerate onboarding for new team members and reduce the risk of miscommunication between internal teams and third-party partners.

2. Enhanced security and regulatory compliance: Financial institutions operate under strict rules such as PSD2, GDPR and HIPAA. Weak or inconsistent API management can expose sensitive data. Standardised APIs make it easier to enforce secure authentication, access controls and encryption. They also simplify audits by ensuring compliance is embedded in the design, not bolted on later.

3. Scalable, future-proofed technology: Standardised APIs enable organisations to scale seamlessly across cloud, mobile, and IoT environments. They are also essential for microservices architectures, where independent services - such as payments or authentication - must interact reliably. Versioning ensures upgrades can be introduced without breaking existing systems or disrupting users.

Overcoming barriers: governance, culture, and legacy tech

The benefits of standardising APIs are crystal clear, so why is it that so many financial institutions still struggle to make it happen?

Arguably the biggest barrier is legacy technology. In reality, older mainframes and monolithic applications weren’t designed for today’s API-first world, and connecting them to modern, standardised APIs can feel like forcing two puzzle pieces from different sets to fit. 

The solution is to modernise incrementally – using API gateways and wrappers to bridge the gap, and progressively pivoting towards microservices architectures. This approach brings legacy systems into line with modern API standards, while minimising disruption to day-to-day operations.

Another barrier is cultural. Developers often want the freedom to move fast and innovate, while security and compliance teams push for strict control. Without a clear governance framework, the tension between the two can stifle progress. Establishing well-defined API governance - including clear policies, documentation standards, versioning, and automated testing - strikes the right balance, because it enforces consistency and security without slowing innovation or creativity among developers.

And finally, there often exists a resistance to change. In large organisations in-particular, decision-makers worry about disruption to business-critical systems or lack in-house expertise to drive the shift. As is often the case, the key to overcoming this is education. By focusing on the ‘why’ as well as the ‘how’, and backing decisions with clear data on risk reduction, speed gains, and cost savings, leaders can build buy-in from both technical teams and business stakeholders. 

As is often the case with worthwhile initiatives, overcoming these challenges won’t be easy, but the payoff is significant: modernised systems, improved security, greater developer agility, and ultimately, faster innovation.

Real-world use cases in finance

Standardised APIs aren’t just a technical nicety, they underpin the entire digital financial ecosystem – and there are multiple examples that prove this to be the case.

Enterprise IT ecosystems: Large banks often run hundreds of SaaS applications, proprietary systems and decades-old legacy platforms. If these can’t communicate seamlessly, digital transformation grinds to a halt. Standardised APIs remove integration bottlenecks, allowing financial institutions to build efficient, interconnected workflows that scale.

Open banking: PSD2 mandates secure data sharing between banks and third-party providers. Standardised APIs are the only way to achieve this securely and reliably. They enable the instant digital payments, real-time credit checks and investment dashboards that customers now expect as standard.

RegTech and compliance automation: APIs are increasingly used to automate regulatory reporting and risk management. Standardised structures ensure data flows accurately and securely between compliance systems, reducing the risk of costly errors or penalties.

It’s no surprise that 97% of enterprise leaders say a successful API strategy is critical to future revenue growth.

The road ahead: AI, automation, and low-code APIs

Financial services firms must keep pace with the fast evolving pace of API development; AI is already transforming API governance; machine learning can automate testing, enforce compliance rules, and even create self-healing APIs that detect and resolve issues without human intervention; AI tools can also automatically update API documentation as changes are made, reducing manual effort and errors.

Meanwhile, low-code and no-code API platforms are democratising development. What was once the domain of specialist engineers is now accessible to a far wider pool of talent, accelerating innovation while maintaining standardisation. Industry-specific standards will also continue to mature, helping financial institutions balance flexibility with the rigorous security and compliance their sector demands.

Standardisation as a growth strategy

Here’s the reality check: Standardising APIs determines how quickly you can innovate, how securely you can operate, and how effectively you can scale. The organisations that succeed won’t be the ones treating APIs as a technical-only factor. They’ll be the ones seeing APIs as strategic assets, governed, standardised, and ready to power the next generation of financial services.