Jürgen Petry Discusses SFTI’s Common Swiss API Initiative

Jürgen Petry Discusses SFTI’s Common Swiss API Initiative

by October 10, 2018
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Open banking is a major shift in the retail banking industry to give customers greater control over their data and create a new connected ecosystem where banks, fintechs and other third parties collaborate to deliver seamless financial services.

In Switzerland, the Swiss Fintech Innovation Association (SFTI) has been vocal in supporting the concept. Nearly two years ago, it commissioned a working group to implement standardized APIs for the industry.

The aim was to stimulate the development of new, innovative products without compromising the security and self determination of both financial institutions and their customers. – the Swiss version of open banking, so to speak.

Jürgen Petry, new business innovator at Raiffeisen Schweiz, co-director of the Swiss Fintech Innovations and head of the SFTI’s Common API Working Group

Jürgen Petry, New Business Innovator at Raiffeisen Schweiz, co-director of the Swiss Fintech Innovations and head of the SFTI’s Common API Working Group

Jürgen Petry, New Business Innovator at Raiffeisen Schweiz and co-director of the Swiss Fintech Innovations, has been managing SFTI’s Common API Working Group since its creation.

According to him, it is crucial for Switzerland to adopt so-called “common APIs” to foster fintech innovation.

Why Switzerland needs Common API?

“If you take Switzerland’s position as a top banking hub, and add to it Swiss banks as API-based drivers of innovation, then Switzerland becoming a prime location for fintech should not be too far off,” Petry told Fintechnews.

“As a trade association with a focus on innovation, we strive to collaborate with all other relevant market players to mobilize the necessary energies to achieve the stated goal quickly and sustainably.”

Last month, SFTI released the first components of its common API specification for banks which aims to take an existing layer of communication and supplement it with API functionalities.

“The SFTI approach is a fundamental one: we aim to standardize interface specifications within the banks’ own back-end systems. This allows banks to choose freely their own service providers, as well as the services they wish to offer themselves, whether as proprietary developments or as purchased white-label solutions.”

Petry said that the common API approach will benefit all stakeholders including fintech companies, banks and software vendors. It will have an effect on, for instance, the integration of peripheral systems into banks’ back-end systems, as well as the development and integration of innovative front-end apps.

For software vendors, the common API will reduce the effort required for release management and simplifying the acquisition of new customers. Traditional third party providers, such as providers of e-banking solutions, will be able to reach a large pool of banks via a single interface implementation.

“The future will show which of these stakeholder groups is the first to implement solutions based on ‘common API’ concepts,” Petry said. “However, widespread use in what remains of this year is unlikely, as API specifications have yet to be implemented, and an effective approach will undoubtedly take time.”

Most major Swiss banks are already represented in SFTI, Petry said, adding that the inclusion of Avaloq, Finnova, Finstar and Temenos in the Common API Working Group further extended the organization’s reach. Around three-quarters of the Swiss banking market for core banking software is covered by these four firms, the market leaders in this area.

“The common API concept can be made available to banks that are customers of these software houses but not yet members of the SFTI. In this way, we already cover the vast majority of all financial institutions in the Swiss banking industry,” Petry said.

“Finally, the recent decision by SFTI and SIX to merge their activities further enhances the scope of the ‘common API’ approach. This should also help to convince – the still undecided banks.”

 

Image by ScandinavianStock via Shutterstock.com and Freepik

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