Unlock open banking success with API assessment & benchmarking

Imagine a world where your financial data moves seamlessly between banks and third-party apps. A world of hyper-personalized experiences and innovative services that goes beyond today’s imagination. Open Banking is reshaping the financial services landscape — providing greater transparency, enhancing customer experiences, and fostering seamless collaboration between banks, fintechs, and third-party providers.

At the core of this transformation lies — the Application Programming Interface (API), the key enabler of data sharing and service innovation. But open banking is not just about deploying APIs, it’s success hinges on ensuring its effectiveness, security, performance and scalability to meet the evolving needs of the industry.

The future of finance is Open, and it's knocking on our digital doors.

Realizing the full potential of Open Banking starts with intelligent API assessment and benchmarking — in this blog why this is more important today than ever. It is a deep dive into how API assessments help to identify strengths and weaknesses in current implementations — ensuring compliance with regulatory standards such as PSD2 while improving the user experience. Benchmarking goes one step further by providing a comparative view that allows companies to compare their APIs with industry standards and competitors. This enables continuous improvement and leads to better performance across the board.

Shifting dynamics in open banking

Open Banking has firmly established itself in the financial ecosystem, evolving into a transformative force that has redefined financial services through API-driven innovation. Banks, fintechs, and regulators are collaborating to enhance financial accessibility, foster competition, and unlock new revenue models.

Key trends shaping Open Banking

• Embedded Finance & BaaS Expansion – Non-financial platforms are integrating banking services like payments, lending and accounts directly, creating frictionless experiences and new revenue opportunities.
• API Monetization & Open Finance – Banks are transitioning from traditional models to commercial API offerings, expanding their services across industries and leveraging the fintech and partner ecosystem to build holistic financial system.
• AI & GenAI in Open Banking – AI is making hyper-personalization, predictive analytics, and intelligent financial planning are becoming mainstream to enhance user engagement and increase customer retention.
• Cross-Border & Interoperable APIs—Standardization efforts support seamless international transactions, expand global financial inclusion, and reduce remittance costs.
• CBDCs, Digital Identity & Consent Management – Governments are integrating Open Banking with Central Bank Digital Currencies (CBDCs) and digital identity frameworks to enhance security, transparency and fraud prevention.

As Open Banking evolves into Open Finance, financial institutions must prioritize these three aspects to capitalize in this new digital economy

1. API assessment,
2. Benchmarking, and
3. Security

The role of ASPSPs & Regulatory Compliance

 Financial Institutions (FIs) also known as ASPSPs i.e. Account Servicing Payment Service Providers. ASPSPs play a crucial role in open banking. ASPSPs maintain customer payment accounts and provide third-party providers (TPPS) such as Account Information Service Providers (AISPs) and Payment Initiation Service Providers (PISPs)—secure access to financial data via APIs, always with user consent. Acting as API producers and distributors, they provide access to their customer’s data in their core systems.

Regulations like PSD2 (and soon, PSD3) encourage data transparency. They mandate that traditional institutions share data with authorized external entities and prioritize end users’ data privacy and security. Financial institutions must uphold these regulations while actively pursuing innovation. While regulations outline how data should be shared, they also dictate how it should be stored and safeguarded.

To help navigate this evolving financial landscape, financial institutions need a technology partner that ensures regulatory compliance while fostering innovation-moreover helping them navigate the complex requirements without faltering on agility or compromising customer trust.

Components of Open Banking Technology Framework

The open banking landscape operates on a highly integrated architecture that ought to ensure seamless information flow between banks, fintechs, and third-party providers. For smooth implementation of open banking, financial institutions must thoroughly assess their existing capabilities in terms of integration, data exposure, product linkages, etc., prior to finalizing a vendor or launching their open banking initiatives.

Here's a snapshot of the core components of the open banking technology framework.

1.    API Management Platform

An API Management Platform is crucial for Open Banking. It enables secure, efficient API interactions between banks and third-party providers (AISP/PISPs).

Key modules include:

• API Gateway Operations Management – Ensures secure API communication, enforcing authentication, authorization, and traffic policies to protect sensitive data.
• API Consumption Management – Provides developer portals for API discovery, onboarding, documentation, and access token management.
• API Service Mesh – Orchestrates and integrates APIs, allowing seamless banking service aggregation for third-party providers.
• Microservices Link – Supports modular and scalable banking services by exposing microservices as APIs, enabling rapid innovation and updates.
• Data Stores – Captures API metadata, usage statistics, and performance insights to optimize services and ensure compliance with Open Banking regulations.

This platform enhances customer experience, fosters innovation, and ensures compliance while supporting the seamless integration of banking services.

2.    Consent Management Platform

Under the data protection laws and guidelines in PSD3, customer consent is mandatory for all use cases to prevent unauthorized data usage. A Consent Management Platform (CMP) enables institutions to

• Collect, track, monitor and manage consumer consent
• Respond to data requests and consent preferences efficiently
• Maintain the functionalities of consent collection, consent management, and data processing.

CMPs are essential for secure and transparent data sharing, reinforcing user control over their financial data.

Building a robust framework for API assessment & benchmarking

With open banking and embedded finance gaining traction, financial institutions must assess and benchmark their APIs. A robust framework ensures APIs are secure, high-performing, and compliant with industry standards while enabling seamless integrations.

Key objectives of API assessment & benchmarking

• Regulatory Compliance – Ensure adherence to PSD2, GDPR, RBI, Open Banking UK, and other regional frameworks.
• Security & Data Privacy – Evaluate authentication, encryption, and fraud prevention mechanisms.
• Performance & Reliability – Measure uptime, response times, and transaction success rates.
• Interoperability & Ecosystem Readiness – Ensure seamless integration with third-party providers (TPPs) and fintechs.
• Developer Experience & Adoption – Assess documentation, ease of onboarding, and sandbox environments.
• Business Value & Monetization – Benchmark API-driven revenue models and ecosystem engagement.

Framework for Open Banking API assessment & benchmarking

Open Banking APIs are transforming financial services by enabling secure data sharing, seamless third-party integrations, and innovative financial products. However, for banks and financial institutions, assessing and benchmarking these APIs is critical to ensuring compliance, security, performance, and business value.

Framework Components for API Assessment & Benchmarking

• Identify key API types: Account Information, Payment Initiation, Lending, Identity & Consent, and Banking-as-a-Service (BaaS).
• Assess API exposure: Public, partner-only, or marketplace-based APIs.

• Ensure adherence to PSD2, GDPR, Open Banking UK, RBI, ISO 20022 and other regional frameworks.
• Implement OAuth 2.0, OpenID Connect, MFA, and FAPI security.
• Secure APIs with WAF, DDoS protection, and encryption (TLS 1.2/1.3, AES-256).

• Key benchmarks e.g. response time, uptime, API rate limits, error rate as per industry standards. Eg. Central bank of UAE benchmark uptime of 99.5%, API average response time as 500ms per response, payment execution within 3 Sec ; Availability, Performance and Usage Benchmarks - Standards v1.0-final - Confluence
  
  The UK's Open Banking Implementation Entity (OBIE) has set benchmarks for API availability and performance, including a quarterly uptime of 99.5% and an average Time to Last Byte (TTLB) of 750 milliseconds per endpoint response. Data-collection-framework-for-API-availability-and-performance.pdf
• Conduct load testing & auto-scaling for high transaction volumes.

• Provide OpenAPI (Swagger) documentation, SDKs, sample code, and sandbox environments.
• Ensure easy onboarding, version control, and real-time support.

• Ensure compatibility with fintechs, aggregators (Plaid, Tink, TrueLayer), and open banking directories.
• Adopt ISO 20022, FDX, GraphQL, or RESTful APIs for seamless integration.

• Revenue models: Freemium, transaction-based, subscription-based, and revenue-sharing.
• Use API analytics to track adoption, usage trends, and revenue contribution.

• Compare performance with Visa, Mastercard, Stripe, PayPal, Plaid, and Open Banking UK.
• Track API latency, developer satisfaction, and business impact.

• Implement real-time API monitoring, version control, and security audits.
• Use automated alerts & analytics dashboards for proactive issue resolution.

To unleash the value potential of open banking-centric product and business model development, it is necessary to think holistically about it, from API strategy to API-enabled architecture. 

Monetization through Open Banking

To thrive in this new landscape, financial institutions have no choice but to adapt. They need to move away from their product-centric models and embrace an open ecosystem that integrates third-party solutions and fintech innovations through APIs. 

Four strategic ways banks can unlock monetization opportunities in the open banking era:

• Partnering with external developers: By offering premium APIs, banks can encourage innovation and earn revenue through subscription and usage fees.

• Leveraging infrastructure and licensing: Providing Banking-as-a-Service APIs to fintechs, merchants, and other partners opens new income streams. 

• Becoming a marketplace enabler: Acting as intermediaries by building platforms for fintechs and developers to connect with customers through tools like lead generation, product management, and recommendation systems. 

• Using APIs to create new services: Developing enhanced customer-focused solutions that generate additional revenue while improving the overall experience.
  
  

Banks that successfully implement these strategies will rise to the top of the new value chain, unlocking diverse revenue opportunities and solidifying their market position in the process.

Conclusion

The financial industry is at an inflection point—Open Banking is no longer an option but a necessity. Institutions that proactively assess, benchmark, and optimize their APIs will ensure compliance and security, unlock new revenue streams, drive innovation, and enhance customer experiences. Embracing a well-structured Open Banking API Assessment & Benchmarking Framework ensures that banks can:

• Deliver secure, scalable, and high-performance APIs.
• Meet regulatory compliance across global banking ecosystems.
• Enhance developer experience & third-party integrations.
• Monetize APIs effectively while ensuring business growth.
• Benchmark against industry leaders for competitive advantage.

The future belongs to those who leverage Open Banking not just as a regulatory mandate but as a strategic opportunity to redefine financial services. Banks can strengthen their open banking strategies by implementing a robust framework, driving fintech partnerships, and enhancing customer-centric innovation.