Over the last few years, Fintech has seen a sharp rise across the African continent, with South Africa seeing the biggest growth spurt. We’ve had cryptocurrency exchanges, rapid payment systems, an influx of payment gateways, our own Finch Technologies ecosystem, and much more. On the consumer and business level, this has been beneficial: more ways to transact, with more kinds of people at all income levels. The driver of all this forward momentum is a thriving technology environment, with both big and small players. The biggest players here of course are the major banks. Today we’ll be taking a closer look at one slice of this industry: banking Application Programming Interface (API) access.
The major serves majority of South Africans, and can offer the widest array of products. However, even they cannot do everything – that’s where platform systems come in.
Building accessible platforms for third parties to build upon and improve is a win-win situation for platform owners. It’s why we have apps on our app stores, games on our gaming marketplaces, and extensions to our social media tools. Mutual growth is ensured by opening the doors to collaboration and innovation.
However, what does “building accessible platforms” mean? In this context, it is an API that offers access to fetch and create information with the platform (bank). APIs are how cross-system integrations are driven. For example, consider social media scheduling tools. They interact with each social media platform’s API to control content publishing to that platform for the user.
We now have a basic understanding of platforms and how they are accessed (APIs). The question now becomes, what APIs do businesses potentially have access to in the South African banking landscape?
Our intent is not to name and shame here. The answer is roughly “it depends”.
Many banks aren’t dedicating resources to any form of API access. They either consider it an issue of security, complexity (important for later) or don’t want to invite any potential competition. Some are still on the fence. Some will consider requests on a case-by-case basis. This is usually only available to businesses and not consumers.
At the time of writing this in early 2023, there is only one bank with access available to both consumers and businesses: Investec. Investec has been investing in the API platform space for a few years now, starting with the Programmable Banking Community they run in collaboration with Offerzen. The system has grown beyond consumer access to your own data, and can now be used by businesses to access data on consumers (with consent and initiation by the consumer, of course).
Investec’s API is still evolving with new features regularly. There is direct communication between the Investec team and the software development community via Offerzen’s community Slack, which I’ve been impressed with so far. On a technical level the API itself is easy to understand and straightfoward in its flow; something that can be rare in the tight security and compliance space of banking and finance.
As a business needing to interact with consumer data from other banks, are there any other options? Without individualised bank partnerships to API access, not really. The only option I can mention that doesn’t violate any bank’s terms of agreement is to have consumers send your business their bank statements. You then either process them manually (and using each bank’s separate statement verification method) or do some form of automated PDF parsing. The former is slow and involves a person at every step. The latter requires sizeable technology investment or partnering with a solution that will do it for you, such as Finch’s own Gathr.
In today’s age, things change rapidly. Hopefully, by the end of 2023, we can expect at least one more bank to be more transparent in how they will offer platforms for third parties to collaborate on. The tech community has been waiting for this for years. We’ve been watching our counterparts abroad build with these tools, such as the UK’s Open Banking framework, and we eagerly await our turn…