Open banking and standardised interfaces (APIs)

Open banking and standardised interfaces (APIs)

Open banking is an opportunity for the Swiss financial centre. Swiss financial institutions are in-novative and well equipped to meet the emerging needs of customers to the greatest extent pos-sible. Standardised interfaces make an important contribution to the efficient development of open banking services.

Standardised interfaces to ensure inter-compatibility

Open banking is the term used to describe the opening of banks and the provision of segments of their customer data to third-party providers. The standardisation of programming interfaces, so-called application programming interfaces (APIs), form the basis for this. They enable the overarching use of various products and services across different platforms and systems. Swiss banking institutions are actively working on this type of interface solution, which addresses real customer needs.

It is in this context that the EU adopted the payment directive PSD2 (Payment Services Directive 2) at the beginning of 2018. The EU regulation obliges banks in the EU to provide third-party providers access to bank accounts free of charge. As a non-EU member, this regulation does not apply to Switzerland.

Innovative financial institutions rewarded

Open banking provides proactive Swiss financial institutions with easy access to innovative and customer-focused services, and therefore ultimately with access to new sources of revenue. The innovation that goes hand in hand with this will establish itself in Switzerland even without a regulatory obligation. If third-party providers develop services and solutions that genuinely benefit customers, this will create demand, which the banks will be happy to cater to.

Something that should not be disregarded is the cost side of the equation. Without access to customer accounts and the guarantee of security and data protection at all times, open banking does not work. As a rule, it is the established financial institutions that supply, update and maintain payment accounts for customers nationwide. This infrastructure provides the raw materials for open banking. The notion that third-party providers can draw on these raw materials at any time and at no cost – and charge their end clients fees for their own services – is commercially questionable.

There are currently a number of projects dedicated to the development of standardised APIs in Switzerland. This demonstrates the potential for innovation of the Swiss financial centre, which is well-prepared for the future.

Position of the Swiss Bankers Association (SBA)

The Swiss Bankers Association (SBA) sees significant potential for the Swiss financial centre in open banking. The compulsory opening of interfaces is, however, unnecessary, as there is no need for action; competition is having the desired effect and the banks are already offering numerous innovations in this area. Banks should be able to decide for themselves which third-party providers they wish to open their interfaces to. A state-prescribed, general opening of the banks is therefore currently not advisable.