This post is the second in a series discussing Open Banking, its implementations, and its implications. Part 1 is here.
APIs or “Application Programming Interfaces” are everywhere in ecommerce, and they provide the building blocks in the primordial soup of innovations that may stem from open banking.
Among other roles, APIs provide a protocol allowing one computer system to talk with another. For example, The Weather Channel (“TWC”) has invested heavily in providing detailed meteorological information and forecasts by region. TWC could conceivably require people to visit its website as the exclusive way to access this information. Instead, however, TWC permits some of its information to be accessed automatically across apps, websites, and services and in ways third-party developers can predictably map (e.g., certain tagged data reflects values like “75°F” or “Partly Cloudy”). TWC has determined such use advances the TWC business plan. Conversely, the developers of apps, websites, and services have determined using the TWC API is superior to reinventing what TWC has accomplished—or not offering weather information at all.