Business

API standardisation shifts from optional to strategic in financial sector

Sunday, 21 September 2025 4:06AM UTC

As financial institutions face mounting regulatory and technological pressures, industry experts emphasise the urgent need to treat API standardisation as a core strategic priority to boost security, efficiency, and innovation.

Application Programming Interfaces (APIs) have evolved far beyond mere technical tools to become the essential infrastructure underpinning today’s digital financial services. From mobile payments to real-time credit checks, APIs form the critical connective tissue that enables the diverse systems financial institutions rely on. Yet according to Alexander Goncharuk, Managing Director, UK, and Global Head of BFSI at Intellias, many financial organisations still regard API standardisation as an optional technical detail rather than a strategic imperative—a perspective that must urgently change. In an era of stringent regulation and heightened competition, establishing consistent standards for API design, communication, and security is foundational to innovation, compliance, and sustainable growth.

The need for API standardisation becomes clear when considering the complications posed by heterogeneous and incompatible APIs. Goncharuk illustrates the plight of fintech startups struggling to integrate with multiple banks each using different API structures—resulting in months-long integrations, development delays, and security vulnerabilities. Frameworks such as OpenAPI for RESTful APIs, JSON Schema for data modelling, and AsyncAPI for event-driven architectures offer a shared language that promotes seamless interoperability and developer efficiency. Industry data supports this: 97% of enterprise leaders acknowledge a successful API strategy as critical to future revenue growth. Standardised APIs also improve security compliance, facilitating adherence to regulations like PSD2, GDPR, and HIPAA by embedding secure authentication and access controls into API design, thereby simplifying audits and reducing exposure to breaches.

Beyond efficiency and security, standardisation enables scalable, future-proof technology ecosystems. With the growing adoption of microservices and multi-channel environments—spanning cloud, mobile, and IoT—standard APIs ensure compatibility and reliable service interaction. Proper versioning allows systems to evolve without disruption to existing users or processes, helping institutions modernise incrementally by wrapping legacy platforms with API gateways where necessary.

Despite these clear benefits, barriers remain. Many financial institutions grapple with legacy IT environments ill-suited to modern API architectures. Large mainframes and monolithic applications do not naturally support API-first integration, necessitating careful modernization strategies incorporating API wrappers and microservices transitions. Cultural challenges also persist, as developers’ desire for rapid innovation often clashes with compliance teams’ demand for stringent controls. Establishing robust API governance frameworks that set clear policies, documentation standards, versioning protocols, and automated testing can reconcile these interests by fostering secure yet agile development environments. Additionally, organisational resistance to change, especially in large firms, can be mitigated through education and leadership that connect API standardisation with demonstrable risk reduction, cost savings, and speed improvements.

The practical importance of API standardisation is evident across the financial sector. Large banks with sprawling IT ecosystems comprising hundreds of SaaS and legacy systems rely on standardised APIs to avoid integration bottlenecks that can stall digital transformation efforts. The open banking mandate under PSD2 hinges on secure, standardised APIs to enable seamless data sharing with third-party providers, underpinning customer expectations for instant payments and up-to-date financial insights. Furthermore, Regulatory Technology (RegTech) increasingly leverages APIs to automate compliance and risk reporting, where consistent data structures reduce costly errors and facilitate timely submissions.

Security remains a paramount concern, with recent academic research underscoring vulnerabilities like Broken Object Level Authorization (BOLA) in APIs. Innovations to embed declarative security controls and authorization modules directly within OpenAPI specifications aim to strengthen object-level access protections and mitigate data breach risks, reinforcing the argument that standardisation must also encompass robust security frameworks.

Looking ahead, the financial industry's API strategies must embrace emerging technologies such as artificial intelligence and machine learning. These advancements promise to automate governance, compliance enforcement, API testing, and documentation updates, even enabling self-healing APIs that autonomously detect and repair issues—significantly reducing manual workloads. Concurrently, low-code and no-code API platforms democratise development, expanding the pool of talent able to contribute to innovation without sacrificing standardisation. The maturation of industry-specific standards will further empower firms to negotiate the balance between flexibility and the sector’s demanding security and compliance requirements.

Despite evident challenges—from legacy systems to cultural resistance—the consensus among industry observers is clear: API standardisation is no longer optional but a strategic necessity. It determines how rapidly institutions can innovate, how securely they can operate, and how effectively they can scale to meet future demands. Financial organisations that elevate APIs from a back-office technical concern to a governed, strategic asset will be best positioned to lead the next generation of digital financial services.

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Source: Noah Wire Services

More on this

https://financialit.net/blog/openbanking-apistandards/why-standardising-apis-no-longer-optional-financial-institutions - Please view link - unable to able to access data
https://financialit.net/blog/openbanking-apistandards/why-standardising-apis-no-longer-optional-financial-institutions - This article discusses the critical importance of API standardisation for financial institutions. It highlights how standardised APIs enhance collaboration, improve security and regulatory compliance, and provide scalable, future-proof technology. The piece also addresses challenges such as legacy technology, cultural resistance, and the need for clear governance frameworks. It concludes by emphasising that standardising APIs is foundational to innovation, compliance, and growth in the financial sector.
https://financialit.net/blog/banking-openbanking-transactions/open-banking-needs-interoperability-fulfil-its-true-potential - This article examines the necessity of interoperability in open banking to realise its full potential. It highlights the lack of standardised APIs as a significant barrier to achieving seamless integration between banks and third-party providers. The piece discusses the challenges of developing common rules and technical standards and suggests that regulatory intervention may be required to overcome these obstacles and promote interoperability.
https://arxiv.org/abs/2212.06606 - This academic paper proposes an extended security scheme for the OpenAPI Specification to address the prevalence of Broken Object Level Authorization (BOLA) vulnerabilities. It introduces declarative security controls for objects in OpenAPI and an authorization module for API services to enforce object-level authorization checks, aiming to enhance API security and reduce potential data breaches.
https://financialit.net/blog/data/iso-20022-enhanced-data-golden-standard - This article discusses the adoption of ISO 20022 enhanced data standards in the financial industry. It highlights the challenges institutions face in adopting new data elements and the risks of implementing standards in isolation. The piece advocates for a unified approach to standardisation to realise the benefits of ISO 20022, including benchmarking, modernisation, and improved decision-making.
https://financialit.net/news/apis/80-financial-services-organisations-do-not-provide-completely-connected-user-experiences - This report reveals that 80% of financial services organisations struggle to provide fully connected user experiences across all channels. It highlights challenges such as data silos, outdated IT infrastructure, and security and governance issues. The study underscores the need for a clear integration and API strategy to enhance digital experiences and drive growth.
https://financialit.net/blog/banking/three-ingredients-success-core-banking - This article explores the essential components for success in core banking, focusing on the importance of an API-led approach. It discusses how APIs can enable innovation and integration but notes that many banks still treat APIs as isolated IT matters rather than central to their digital strategy. The piece advocates for a shift towards an API-first strategy to offer best-in-class banking services.

Noah Fact Check Pro

The draft above was created using the information available at the time the story first emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed below. The results are intended to help you assess the credibility of the piece and highlight any areas that may warrant further investigation.

Freshness check

Score: 10

Notes: ✅ The narrative was published on 18 September 2025, making it highly fresh. The article is a recent blog post by Alexander Goncharuk, Managing Director, UK, and Global Head of BFSI at Intellias, on Financial IT's website.

Quotes check

Score: 10

Notes: ✅ No direct quotes are present in the narrative, indicating original content. The article presents Goncharuk's perspectives without direct citations.

Source reliability

Score: 8

Notes: ⚠️ The narrative originates from Financial IT, a specialised publication focusing on financial technology. While it is a niche source, it is known within the fintech community. However, Financial IT is not as widely recognised as major outlets like the Financial Times or Reuters. The author's affiliation with Intellias, a global technology consulting firm, adds credibility.

Plausability check

Score: 9

Notes: ✅ The claims about the importance of API standardisation in the financial sector are plausible and align with industry trends. For instance, a 2022 survey found that 97% of enterprise leaders agree that a successful API strategy is essential for future revenue growth. ([businesswire.com](https://www.businesswire.com/news/home/20220131005216/en/97-of-Enterprise-Leaders-Agree-APIs-Are-Essential-for-Survival-but-Most-Face-Challenges-in-Rollout-of-Comprehensive-API-Strategy?utm_source=openai)) The article's focus on API standardisation addresses real challenges faced by financial institutions.

Overall assessment

Verdict (FAIL, OPEN, PASS): PASS

Confidence (LOW, MEDIUM, HIGH): HIGH

Summary: ✅ The narrative is fresh, original, and presents plausible claims supported by industry data. While the source is niche, it is credible within the fintech community. The absence of direct quotes and the author's professional background further support the narrative's authenticity.

APIs
Financial Services
Standardisation