The marriage of application programming interface conformance and trust frameworks: Balancing innovation and security in open banking

Mike Woods and Todd Schweitzer
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Mike Woods: Konsentus Ltd, UK
Todd Schweitzer: Brankas Digital Technologies Inc., Philippines

Journal of Digital Banking, 2025, vol. 9, issue 4, 373-382

Abstract: In the rapidly evolving world of open ecosystems, the advent of application programming interfaces (APIs) has transformed how banks and third-party providers interact. This paper explores how innovation and security must be successfully balanced so that end users can seamlessly access new and exciting open banking products and services within a safe and trusted environment. The benefits and impact of APIs are discussed, alongside the role of API standardisation and conformance in mitigating risk. The importance of integrating a bank’s open API strategy within its broader API strategy is emphasised, to maximise value and align with overarching organisational goals. A centralised approach to conformance and the need for robust and efficient trust frameworks are the bedrock of successful open banking ecosystems. Trust, built upon reliability, security and transparency, verifies that rules have been agreed upon and enables their enforcement. Central directories ensure compliance with regulation, streamlining complexities associated with open banking and facilitating secure communication and data exchange between the various participants. The interplay between centralised API conformance and a robust trust framework is explored, highlighting their role in enhancing the integrity of open banking and open data initiatives, with regulators and market infrastructures playing a vital role. They are responsible for mandating open banking and ensuring that safety and security are maintained in this new and interconnected financial landscape. The effective integration of open APIs, the establishment of trust and the commitment to compliance and standardisation all pave the way for a more inclusive and innovative banking experience for all stakeholders.

Keywords: APIs; API conformance; data sharing; directory services; open banking; trust frameworks (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2025
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