What is Open Banking
Let’s compose a list third party banking API providers and also add open banking APIs from the banks. I will start with two that I know well. 3rd party providers. Kontomatik Banking API. Coverage: UK, Poland, Czech Republic, Slovakia, Spain, Portugal, Mexico, Brazil, Russia.
Open banking is a system that provides a user with a network of financial institutions’ data through the use of application programming interfaces (APIs). The Open Banking Standard defines how financial data should be created, shared and accessed. By relying on networks instead of centralization, open banking helps financial services customers to securely share their financial data with other financial institutions. Benefits include more easily transferring funds and comparing product offerings to create a banking experience that best meets each user’s needs in the most cost effective way. Open banking is also known as 'open bank data.'
Breaking Down Open Banking
Open banking is meant to improve customers’ banking experience in several ways. It forces large, established banks to be more competitive with smaller and newer banks, ideally resulting in lower costs, better technology, and better customer service. Open banking regulations require banks to publish, both online and inside their branches, accurate and unbiased information that lets consumers evaluate their service quality, a move towards transparency designed to motivate banks to provide the best possible customer experience. Banks also have to notify customers about unforeseen overdrafts and give them a grace period to correct the problem and avoid overdraft charges.
Open Banking and Modern Banking Practices
Open banking is a major source of innovation in the banking industry. For example, open banking APIs can facilitate the sometimes onerous process of switching from using one bank’s checking account service to another bank’s. The API can also look at consumers’ transaction data to identify the best financial products and services for them, such as a new savings account that would earn a higher interest rate than the current savings account or a different credit card with a lower interest rate.
Through the use of networked accounts, open banking could also help lenders get a more accurate picture of a consumer’s financial situation and risk level in order to offer more appropriate loan terms. It could also help consumers get a more accurate picture of their own finances before taking on debt. An open banking app for customers who want to buy a home could automatically calculate what customers can afford based on all the information in their accounts, perhaps providing a more reliable picture than mortgage lending guidelines currently provide. Another app might help visually impaired customers better understand their finances through voice commands. Open banking can also help small businesses save time through online accounting and help fraud detection companies better monitor customer accounts and identify problems sooner.
Open Banking and Threats to Legacy Banks
Open banking threatens long-established banks by increasing competition, requiring older banks to do things in new ways that they are not currently set up to handle and requiring that these banks spend money to adopt new technology. However, banks can take advantage of this new technology to strengthen customer relationships and customer retention by better helping customers to manage their finances instead of simply facilitating transactions.
Before banks offered open banking, the closest thing available was an aggregation site like Mint or Personal Capital that combines users’ account information from all their financial institutions so they can see it in one place. Such services accomplish this by requiring users to hand over their usernames and passwords for each account, then scraping the data off the screens of those accounts. This practice has security risks and the results of screen scraping are not always entirely accurate, making it difficult at times for users to identify transactions. In addition, users may find that not all of their financial accounts are compatible with account aggregation services, preventing them from getting a true or complete picture of their finances. APIs are considered a more secure option because they enable applications to share data without sharing account credentials.
Open banking APIs are not without security risks, such as the potential for a malicious third-party app to clean out a customer’s account.
I'm using CHASE bank. (Also Bank of America)and I want to get my bank transactions and my balance if I can.Is there an API for that? in PHP or JAVA?If so, please let me know how to get them.
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3 Answers
Just a helpful hint, there is a company called Yodlee.com who provides this data. They do charge for the API. Companies like Mint.com use this API to gather bank and financial account data.
Also, checkout https://plaid.com/, they are a similar company Yodlee.com and provide both authentication API for several banks and REST-based transaction fetching endpoints.
I use GNU Cash and it uses Open Financial Exchange (ofx) http://www.ofx.net/ to download complete transactions and balances from each account of each bank.
Let me emphasize that again, you get a huge list of transactions with OFX into the GNU Cash. Depending on the account type these transactions can be very detailed description of your transactions (purchases+paycheques), investments, interests, etc.
In my case, even though I have Chase debit card I had to choose Chase Credit to make it work. But Chase wants you to enable this OFX feature by logging into your online banking and enable Quicken/MS Money/etc. somewhere in your profile or preferences. Don't call Chase customer support because they know nothing about it.
This service for OFX and GNU Cash is free. I have heard that they charge $10 a month for other platforms.
OFX can download transactions from 348 banks so far. http://www.ofxhome.com/index.php/home/directory
Actualy, OFX also supports making bill payments, stop a check, intrabank and interbank transfers etc. It is quite extensive. See it here:http://ofx.net/AboutOFX/ServicesSupported.aspx
Also check out the open financial exchange (ofx)http://www.ofx.net/
This is what apps like quicken, ms money etc use.