On Tuesday (Feb. 21), NACHA completed its exploratory effort to identify the value of API standardization for the U.S. financial services industry. The comprehensive research project, which was done in collaboration with Accenture, included analyzing the U.S. financial services market, examining potential roles and responsibilities of industry stakeholders, identifying potential use cases and evaluating the opportunities and challenges of API standardization.
The results of the research determined that a standard set of APIs could provide the industry with improved security and transparency of transactions, increased efficiencies and speed of communications, and enhanced support of payments innovations.
“APIs are not new to the payments industry,” George Throckmorton, managing director at NACHA, said in a statement. “Many payments providers and leading financial services firms have been using APIs to broaden and enhance services, and increase automation and strengthen security. But what’s lacking is standardization. Standardization opens the door for ubiquity, which will drive adoption and use, and allow the industry to reap the full potential APIs can provide to all stakeholders. Through our various forums for discussion and debate, we plan to continue the evaluation, dialogue and education around API standardization to help support the automation, security and service enhancement goals of the industry.”
Not only can API Standardization deliver benefits to the entire payments ecosystem, but NACHA also said the effort could address ACH Network pain points.
“Use of APIs can add significant value to the U.S. financial services industry and payments,” Kevin Kohut, API strategy lead at Accenture Mobility, part of Accenture Digital, explained. “Across the globe, we have seen strong demand for API standardization, as the value and opportunity that strategic API approaches enable is considerable. Given NACHA’s role as administrator of the ACH Network and its ability to facilitate inclusive dialogue and engagement of diverse stakeholders, we feel that NACHA is well positioned to advance the discussion around API standardization and help identify a path forward.”