If you’re looking for an API for bank transactions, you may be in one of the following situations:
- You’re still using manual processes to access financial transactions and account data, making it difficult to get insights on a user’s affordability, for example.
- You’re already using an open banking API for payment initiation, but you also want to access data on bank transactions.
- You’re using an API, but it doesn’t provide the coverage or depth of data you need.
Whatever situation you’re currently in, using an API for bank transaction data gives you access to deeper insights into how account holders are spending and saving their money.
But what should you look for when looking for a bank transaction data solution? What do you need to know about APIs? Read on to find out.
In this article:
- How an API for bank transactions works
- What to look for in an API for bank transactions
- Why choose Yapily’s API for bank transactions
- How Yonder uses Yapily’s open banking API to access customer data
Want to talk with an open banking expert about your financial data needs? Reach out to us at Yapily.
How an API for bank transactions works
An API (Application Programming Interface) allows computer systems and applications to communicate securely and in a standarised way. It’s essentially a set of rules and protocols that allow one application to seamlessly work with another.
What makes an API useful—particularly in a financial context, where data privacy is a priority—is that data can be shared in small packets. Through the API, one application requests a specific packet of data, so that the other application doesn’t have to share all its data.
The result is a much more secure method for data sharing. The data received through our API is machine-readable, so it can easily be automated to do further processing.
That’s why APIs have become the central element of open banking solutions.
For example, say a fintech company wanted to offer a personal finance app that aggregated a user’s spending habits from across their different bank accounts.
It could use an open banking API to request data on a customer’s transactions from all the different banks and financial institutions that the customer used, which is a lot better than the old method, screen scraping.
Screen scraping requires a lot more maintenance, often collects incorrect information and can easily break. It’s also always had security concerns, as user credentials had to be shared with a third-party.
Imagine a lender wanted a way to understand a customer’s affordability or creditworthiness in more detail. They could use the API to see that customer’s bank transaction data, understand their spending, and get real-time insights into their credit usage.
This would then allow them to make more informed lending decisions, offer tailored loan products, and reduce the risk of default by accurately assessing the customer’s financial health.
Through an API, the fintech or lender can request just the relevant data it needs, such as account owner details, account balance, account number, and transaction data.
This means you can provide personalised financial services, streamline KYC checks, and enhance the overall customer experience by offering only the most relevant financial products to your customers.
The role of open banking platforms
APIs simplify, standardise, and make the collection of bank transaction data more secure. However, as a fintech, lender, or other organisation, if you want to access that data in real-time, it’s unlikely that you’ll have the infrastructure in place to do so.
Every bank and financial institution will likely have their own API. So, if you want to access data on as many customers as possible, you’ll need an API that connects to all of them.
That’s precisely why open banking platforms like Yapily exist. We aggregate different APIs in one solution so that you can easily access accounts data (such as transaction data) from many different financial institutions.
Typically, open banking platforms come in two main forms:
Account information service providers (AISPs). If you’re looking for an API for bank transaction data, you’ll need an AISP. These are entities that are licensed specifically to enable you to access banking data.
These services are often used by lenders, credit bureaus, personal budgeting apps, government agencies, and anyone else who wants to gain a picture of someone’s financial transactions (with their permission).
Payment initiation service (PISPs). Where PISPs differ from AISPs is that they’re not licensed to read account transaction data. Instead, they’re authorised for payment initiation.
So, rather than providing bank transaction information, they enable account-to-account payment via open banking.
That means if you’re looking for an API for bank transactions, you’ll want to find a provider that offers account information services, or an open banking API that’s licensed as both an AISP and PISP.
Looking for an open banking API that is both an AISP and PISP? Check out Yapily – book a call to talk to one of our open banking experts
What to look for in an API for bank transactions
If you’re comparing various APIs for bank transactions—or AISPs—it’s not always easy to understand how various solutions actually differ in functionality and which is best for your use case.
To choose the right API for bank transactions, there are three key factors to look for:
1. Coverage. Coverage refers to the number of different banks and financial institutions that an open banking provider can connect you to. Whether you’re a fintech app, a credit agency, or someone else, this is an important consideration, as it determines the number and location of different end users you can serve.
For instance, an API may have substantial data coverage in the UK, meaning that it can give you access to transaction data from the majority of banks and financial institutions in the UK. However, it may have much weaker coverage in other geographies, such as the EU or US.
If you want to enter these markets and your API coverage is weak, you may only be able to serve a limited number of users. Or, you may need to use an additional API with better local coverage.
2. Depth of data. Some open banking platforms don’t offer account information services at all, while others only have minimal data features. For instance, many APIs don’t allow you to access data from all types of bank accounts (such as corporate or business accounts, alongside personal accounts), while others won’t perform any data enrichment, meaning you get only a basic picture of transactions.
Yet the depth and quality of data an API offers determines the services you can provide to your customers. If you’re a fintech, you may want sophisticated transaction categorisation, for instance. Or, if you’re a credit agency, you may want to see historical data. An API should also be able to support and simplify KYC (Know Your Customer) checks.
3. Strength of infrastructure. Another key area where APIs can differ is in the strength of their infrastructure. Is the API enterprise-ready? If you’re serving many customers yourself, you’ll send a large volume of data requests across the API. As such, you’ll need an API that can handle this volume quickly and reliably.
Why choose Yapily’s API for bank transactions
At Yapily, our API securely connects payment service providers, fintechs, lenders, credit agencies, and other organisations to thousands of banks and financial institutions across the UK and the EU. Through the power of open banking, we can help you access both transaction data and initiate payments.
Unlike other APIs and AISPs, we’re 100% focused on building infrastructure rather than apps at the product level. This way, we can support your products and brand to take centre-stage while allowing you to access the data you need.
Here are three reasons why you should choose Yapily:
1. You’ll get access to deep data and extensive coverage to nearly2,000 banks and financial institutions
At Yapily, we have some of the deepest data and most extensive coverage of any open banking platform in Europe.
We can connect you to nearly 2,000 banks and financial institutions in 19 different European countries, including key markets in the UK, Germany, Netherlands, and France.
Many open banking platforms focus on data intelligence or broad insights. At Yapily, we build the most detailed transaction data available. We connect with consumer, corporate, business, and wealth accounts at every bank we cover. And we don’t just provide you with the raw data—we ensure it’s accurate, complete, and up to date, too. Unlike with other AISPs, you can see exactly where our data comes from with Yapily.
2. You get white-label infrastructure that scales with your enterprise
If they receive too many requests, some APIs can slow down or fail entirely. If you’re depending on an API for your data products and services, this can undermine your own user experience.
At Yapily, our API is built to be enterprise-ready. Our infrastructure is robust and well-tested and can handle high volumes of requests. Plus, we’re ISO certified and PSD2 compliant, with all the security infrastructure you’ll need as an enterprise. Our API can also enable and simplify KYC checks ensuring that your customer verification processes are seamlessly integrated into your operations.
It’s really easy to get started. Our onboarding team and engineers are here to help you get set up. We’ll help you authenticate API requests, and we’ll walk you through how to register in the regions where you want to operate.
What’s more, you can use our API as a white-label product, meaning you can build a customer interface that’s entirely based on your branding. So, if you’re using our API for identity verification, you retain full control over the customer experience, and we’ll do the work behind the scenes to power the API requests.
3. You can combine bank transaction data with payment initiation services
Many APIs only have a licence either to offer AIS services or PIS. That means that you’ll be able to access bank transaction data through their API, but you’ll need an alternative service if you want to offer payment as well. It means that you’ll be paying for two services, often with different coverage.
At Yapily, we’re licensed as both an AISP and PISP, meaning we can offer both payment initiation and data services. Our coverage is in both data and payments, meaning that
whichever geography you’re accessing data in, you can also offer pay-by-bank services.
We’re the only provider to offer bulk payments in the UK, while we can provide both sweeping and commercial VRP too.
By choosing an API that can do both AIS and PIS, you can use your existing infrastructure to gather payments more easily. If you’re a lender, checking a customer’s creditworthiness is important, but a key task is to gather payments from your customers. Having your API for bank transaction data and being able to also collect payments makes this much easier.
How Yonder uses Yapily’s open banking API to access customer data
Yonder is a fintech company in the UK that offers credit cards to consumers who are traditionally excluded from accessing credit.
When people come to the UK, even if they have a well-paid job, they may not have any evidence of their creditworthiness. It means that banks are reluctant to offer them loans, credit cards, or other types of credit.
Yonder improves access to these consumers by using open banking via Yapily. Yapily Data lets Yonder access bank account information via our secure API, so that the fintech can visualise their customers’ income and expenses in real-time and then build a credit profile.
This lets Yonder offer more credit to their customers at better rates. For instance, according to The Times, credit conventionally offered to people looking to build their history is around £1,200 at around 30-34% APR. Through Yapily, Yonder can offer up to £4,500 at 24% APR.
Yapily Payments also lets Yonder’s customers pay off their credit. Through our PIS, we’ve enabled Yonder to offer pay-by-bank payments—and today, over £3.5 million in transactions have been supported by Yapily.
Read the full case study: How Yonder + Yapily are making credit more inclusive
Looking for an API for bank transaction data? Choose Yapily
In this guide, we’ve shared how you can use an open banking API to gain access to bank transaction data—as well as what makes particular solutions stand out. If you’re looking for an API with deep data, extensive coverage, and robust infrastructure, choose Yapily.
Speak with our open banking experts to get started.
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