Digital Transactions Authoritative, insightful and timely information for payments professionals
The Financial Data Exchange (FDX), a non-profit standards body for providers of open-banking and open-finance applications, announced on Wednesday that the number of consumer accounts using its application programming interface has swelled to 22 million, up from 16 million in April, an increase of more than one million accounts per month.
In addition, API calls within the FDX API have surged to nearly 2 billion per month. An API call occurs whenever an app connects to a server.
Driving the rapid rise in adoption is that financial institutions, financial-technology providers, and consumers desire a better way to access and share data through applications that connect to consumers bank accounts rather than through the outdated method of screen scraping, FDX says.
At the same time, the explosive growth of API calls is being powered by the ease of use the standard creates for open-banking and open-finance applications that allow consumers to see all their accounts in one place and track their spending.
“When there is data sharing, a common API drives a better user experience,” says Tom Carpenter, director of public affairs for FDX. “Consumers have been using fintech apps for open banking for years, so it’s not as though they are waiting around for regulators to act. FDX was created out of concerns around the data quality of screen scraping. If there was no value in the standard, it wouldn’t be used.”
Besides improving the quality of data being shared, the standard makes it possible for developers of open-banking apps to start with a baseline that enables them to more easily connect to financial networks and other partners, which in turn reduces connectivity costs. The standard also enables app developers to add value on top of the baseline coding to create unique user experiences, Carpenter says.
FDX, which has 197 members, plans to release an updated version of its API this fall. The updated version will expand the number of financial-data elements that can be shared. Currently, the FDX API defines more than 620 unique financial-data elements that consumers can use and share. The update will also include changes to meet regulatory requirements around data sharing in Canada, which differ from those in the United States.
In addition, version 5.0 of the FDX API will include new guidelines for creating a consistent user experience. For example, guidelines will be provided for creating user dashboards. “The goal is to define the look and feel of data sharing across the industry,” Carpenter says.
