Created in 2017, the API Standardization Industry Group has begun developing an application program interface (API) standardization “playbook” to help enhance support for payments and the business needs of financial institutions, companies, FinTechs and other industry stakeholders and participants.
National Automated Clearing House Association (NACHA) — the Electronic Payments Association — and the Payments Innovation Alliance recently released a summary report from the API Standardization Industry Group’s inaugural meeting, which took place in May. The meeting brought together 40 leaders from more than 30 organizations to help identify and prioritize API use cases to be explored in the generation of the Playbook.
“Application Programming Interfaces (APIs) enable secure and controlled communications between software applications,” said the report. “As such, they can help improve the safety, efficiency and speed of communications. Despite the obvious benefits of APIs, adoption — particularly within the U.S. financial services industry — has been slow. The question remains. . . why?”
Institutions may feel they do not have enough information for proper cost-benefit analysis, lack understanding about the technology itself or simply do not have commitment from leadership. NACHA and the Industry Group believe one of the biggest challenges is a lack of standardization. Improving this through the API Playbook would create transparency into transactions, automate process elements and support innovation.
“API standardization can have a transformative effect on the financial services industry,” said George Throckmorton, managing director of network development at NACHA and API Standardization Industry Group lead. “Our work is really just beginning, but we are excited to share the outcomes of the inaugural meeting. We look forward to keeping the industry informed of progress as we move forward.”
The API Standardization Industry Group meets next on August 24, 2017, in Atlanta, Georgia. It is still seeking participants, and any stakeholder wishing to shape transformation in the financial services industry through standardizing APIs is eligible.