10 Financial-grade APIs
This chapter covers
- Open banking for the financial services industry
- Delivering highly secure APIs with FAPI
- Securing the authorization process
- Adding non-repudiation capabilities to APIs
In recent years, we have witnessed a revolution in the financial technology (fintech) space. We have seen the emergence of organizations like Plaid, Bud, TrueLayer, Yappily, Yodlee, Stripe, and others, that provide financial market infrastructure. Financial market infrastructure is a critical component of today’s economy that allows businesses to easily manage financial transactions via APIs. We have seen the emergence of so-called NeoBanks or challenger banks, which are banks that operate exclusively online. We have seen businesses provide banking-like services without having a banking license.
All of this is possible thanks to financial APIs. Organizations that otherwise wouldn’t be able to process online payments due to the strict regulatory requirements can do that by using payment processors like Stripe and GoCardless. Payment processors take care of building a secure financial infrastructure that connects directly with banks to manage payments and other financial transactions, including refunds, chargebacks, and so on. The processor exposes an API that we use to set up a payment, and they process the operation by leveraging their direct integrations with the banks.