How mature do you think bank connectivity APIs are today?

Can APIs Improve Bank Connectivity?

That’s the primary question that a panel of corporate practitioners discussed, with active engagement from a full house audience, in a panel session at the 2023 AFP Conference in San Diego.

Mark O’Toole, Fides’ Head of Sales & Partnerships, Americas, moderated “Why APIs Alone Cannot Guarantee Improved Bank Connectivity: A Candid Discussion of Myth vs. Reality” featuring Fides customers Cathy Cantasano, Executive Director, Treasurer at W. P. Carey; Kelly Carpenter, Senior Manager, Treasury at The AES Corporation; and Janko Hahn, Head of Treasury Operations at Autoneum.

We crafted this session specifically to help other corporate treasurers gain a thorough understanding of today’s API reality, and learn more about alternative options. Cathy, Kelly, Janko, and Mark all have extensive experience with global payments and liquidity management, and each had unique insights to share based on their years of treasury expertise.

Survey Says: The Real Truth About Treasury API Adoption

We went into the session with some ideas about API usage — but we wanted to see what our audience had to say. To do so, we conducted several polls during the session, and the responses from our 400-plus attendees likely offer a representative perspective of the current landscape for most corporate treasury teams.

Which best describes your experience with API implementation?

We asked a broad question about treasury API usage. Only 14% of respondents already have APIs in place, but another 42% are in the process of implementation. So by this time next year, chances are high that more than 50% of corporations will have at least some APIs in place. However, 28% have no plans for API implementation at this time.

One very interesting fact quickly became clear: when it comes to APIs, demand exceeds supply. During the panel discussion, even the treasurers who had implemented APIs acknowledged that very few banks actually have an API to offer. And unfortunately, even the APIs that are available  still have some significant gaps when it comes to payments. There is no standardization, and some of the bank APIs don’t offer the full slate of payment options, leaving some significant gaps in multibank connectivity.

Which is the primary method you are using to connect to your banks today?

We then narrowed down the questions, to find out how many treasurers are using APIs for bank connectivity (including payments). Interestingly enough, half of the respondents are still using bank portals to get the information they need from their banks — and only 4% are using APIs! This was a surprise, given that the manual process for bank balance reporting can be entirely automated, and is often part of digital/treasury transformation efforts. This can have an extremely positive impact on cash management — and is just one of many areas where working with a treasury aggregator like Fides can add value.

What is the primary challenge you have encountered when implementing APIs for bank connectivity?

Then, we narrowed it down even more. These answers showed why only 4% of respondents are using APIs for bank connectivity. It’s not that they don’t want to — either there just aren’t the right resources in-house, the right APIs don’t (yet) exist, or it’s just too much work and effort to deal with legacy systems, format conversions, protocols etc.

This opened the door for the panel to discuss the use case for APIs where solid bank connectivity is already in place, and whether the cost-reduction benefit would still be realized given that existing platforms and ecosystems would be impacted.

More Key Takeaways from the Session

Our panelists had a lot to share on the current state of APIs and the treasury landscape, as well as their predictions for the future. Here’s a summary of the key discussion points and conclusions:

• APIs do offer value, including real time capabilities, data insights, and increased automation
• API adoption is still slow-moving — landscape domination could be years away
• There are differences in API use between Europe & USA, and even between one bank and the next
• APIs can reduce risk in certain areas, but also introduce new potential vulnerabilities and complexities
• Treasury aggregators continue to fill the gap in API connectivity, helping treasury with transparent cash views and real time payments

Do treasury APIs promise to change the financial landscape? Absolutely. Can they do so? Absolutely. We just aren’t there yet.

Fides — Your One-Stop Shop.

Whether you plan to use APIs or not, Fides can help you connect to financial institutions and payment providers faster, more efficiently, and more cost-effectively — and give you a single portal for payments and central visibility into all your transactions with all your banks. As the leading multibank connectivity provider, you can rest assured that our team has expertise in all areas of bank connectivity, along with the widest global network of banks, financial institutions, and payment providers.

We’ll work with you to determine the right channels (or mix of channels), handle bank setup, format conversions and more. You’ll get peace of mind knowing that your connections are secure, compliant, and portable, giving you flexibility to swap out treasury management or ERP systems without losing connectivity to your banks.

Contact us to schedule an overview conversation or demo today!

Fides is the world leader in multibank connectivity, payments and transaction communications. A market leader for more than a century, Fides is committed to the principles of Open Banking, making treasury and financial operations as efficient, transparent and secure as possible for all organizations.

Fides provides everything organizations need for efficient cash and liquidity management, all through a single platform — along with connectivity to more than 13,000 financial institutions through an unmatched range of methods and channels. Thousands of companies around the globe rely on Fides’ connectivity capabilities and comprehensive workflow, reporting, conversion, validation and security services, for their own businesses and for extending services to their clients.

Whether you access via the secure Fides ONEHub or take advantage of our seamless integration with third-party ERP, TMS and other backend systems, Fides is the only platform you need.