The Role of APIs in Bank Connectivity Today
APIs promise to revolutionize treasury. Open banking is opening the door for wider access to streamlined bank connectivity, and much of that is via APIs. Faster integration. Real-time information. Easier process automation. But as API development and adoption increases, so will the complexity of maintaining all those different connections.
Drivers for API adoption in treasury
For both banks and corporates, automation is the primary goal — effectively removing friction from cash management processes. APIs hold the promise of easy integration, the elimination of challenging, time-consuming software implementations, minimizing repetitive manual tasks, potential cost savings from cutting out the middle man, the holy grail of real-time information, and reduced risk as there are fewer parties involved.
And then of course there’s regulatory compliance. For the European Economic Area and Australia, PSD2 mandates that banks must make their data available to be shared digitally between authorized organizations — which is typically done via Open APIs.
But ironically, given the promise of reduced risk, Gartner predicts that by 2022, API abuses will be the most-frequent attack vector resulting in data breaches for enterprise applications. So as corporate treasurers look at adopting new bank treasury API solutions, they need to be aware of potential security issues — especially where payments are concerned.
Cutting through the API hype
With all the talk of APIs, one thing is often not mentioned — the fact that the vast majority of bank APIs aren’t yet ready for prime time. Of the few banks that do offer APIs today, most if not all are still only offering beta functionality.
I recently presented a breakout session at the Treasury Leaders Summit, and asked my session attendees how many of them were currently using APIs. Only one person out of the approximately 60 delegates raised his hand — and said that he still wasn’t able to connect to all his banks.
While technology in our industry is advancing more rapidly than ever before, it will still take some time before every bank has a fully functional API for corporate-to-bank connectivity. And in some cases — especially for smaller banks in emerging markets — treasurers will still need to have alternative methods of communication in place.
Ensuring secure, reliable bank connectivity
For corporations with connections to more than a handful of banks, one way to simplify connectivity is through a trusted multi-bank connectivity provider like Fides. With Fides, you don’t need to worry about API security or compatibility with new API releases. Because bank connectivity is Fides’ business, our security, risk and compliance and technology experts understand exactly what goes into each type of connection and work to safeguard our clients. Plus, we are experts at managing a large volume of bank connections, which gives you the freedom to scale and change banks to suit the changing needs of your business.
Data security is of the utmost importance to us at Fides, and we are continuously vigilant about the security of our products and customer data. For example, we require clients to use personalized logins with two-factor authentication for our web-based Multi-banking Suite solutions.
Fides has been in business for more than a century, and has specialized in multi-bank connectivity for the past 35 years. We have relationships with hundreds of banks around the globe, and will be working closely with them as they develop their APIs, to offer additional host-to-host connectivity options.
Choose from a range of connectivity options
Fides offers a number of secure bank connectivity options, including SFTP, SWIFT, EBICs, APIs and more. In addition to supporting SWIFT for Corporates onboarding and hosting of corporate BICs as a member of the SWIFT Shared Infrastructure program, our clients have the ability to use the Credit Suisse Group financial BIC. This can help speed up onboarding for corporates and also provides additional connectivity options including multi-network, dual-BIC solutions. You aren’t locked in to any one communication method, and there is no limit to the number or type of connections you can have.
We work with clients to determine the best method of connectivity for each bank, and then implement and manage that connection. Fides also connects to the leading TMS and ERP systems for seamless straight-through-processing. Plus, with these integrations, if customers want to change their front-end systems, there is no need (and no lost time and money) to recreate bank connections from scratch. Whether you need to connect to one, 100 or 1,000 banks, Fides can manage all your connections so you can spend your time on business-critical work instead.
Contact us today to learn how we are helping 3,000+ corporate treasuries reach further and connect faster!