 Open data and API adoption of U.S. banksXiangyu Lin, S. Sarah Zhang and Markos Zachariadis Journal of Financial Intermediation, 2025, vol. 63, issue C Abstract: Bank adoption of external application programming interfaces (APIs) enables bank customers to share their data more efficiently and securely with other third-party financial institutions and FinTechs, thus enabling open banking and bank data portability. Analyzing determinants of API adoption by U.S. banks from 2007 to 2022, we show that banks that adopt APIs tend to be larger and face lower competitive pressures. The announcement of President Biden’s executive order in July 2021 encouraged increased bank data portability and led to an acceleration in bank API adoption. Banks that adopt APIs experience an increase in Return on Assets (ROA) and Tobin’s Q and a decrease in loan loss provisions, particularly after President Biden’s executive order. We find that APIs’ ability to facilitate data access and sharing improves bank information flows and supports banks’ loan and deposit services which form the foundation of notable improvements in bank performance. Overall, our results on the determinants and implications of API adoption have important policy implications for the discussion on open banking regulation and bank data portability. Keywords: API adoption; Open banking; Data portability; FinTech; Bank performance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinin:v:63:y:2025:i:c:s1042957325000300 DOI: 10.1016/j.jfi.2025.101162 Access Statistics for this article Journal of Financial Intermediation is currently edited by Elu von Thadden More articles in Journal of Financial Intermediation from Elsevier |
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