SWIFT leads the industry on Open Banking with library of API standard

Brussels, 5September2019

SWIFT today publishesa new API standard for thePre-authorisation of funds, paving the way for further innovation in financial services enabled by open banking.

The new standard allows a payer’s bank to earmark funds for apurchase in advance, guaranteeing that the future payment will be honoured. It is the second of SWIFT’s Open Banking Extensions API standards,and is the latest addition to a global library of APIsthat SWIFT is building in collaboration with banks, merchants and fintechs.SWIFT published a Pay Later API standard earlier this year.

API standards play an important role in open banking because theyhelp speed the rollout of new services while reducingincremental investment. If each bank offers a distinct API, merchants and fintechs have to adapt to different data structures, workflows and security considerations for each one – adding complexity, cost and time for implementation. SWIFT has long been at the forefront ofbanking standardisation and is well suited to lend its expertise and experience to this work in APIs.

The new Pre-authorisation standard is now available for developers of APIs to adopt and use.

Stephen Lindsay, Head of Standards at SWIFT, said: “SWIFTis uniquely positioned to tackle theproblem of fragmentation in standards globally and we are pleased to expand our current role to include the global standardisation of open banking APIs. Our work on the pre-authorisation of funds API is another example of thecentral partwe are playing in ensuring the industry can make the most of the new open banking landscape.”

Kirstine Nilsson, Head of Business Infrastructure, Consumer Payments & Cash Management, Swedbank said: "In the Nordics we know the benefits of collaboration in the standards space. We have built the world leading BankID service and the Swish payment method. We are now collaborating on the P27 pan-Nordic clearing system. The banking industry must come together for the benefit of the digital economy to standardise retail and wholesale banking APIs. Developers these days don’t want to do host connections or SFTP connections – APIs are the way forward and SWIFT is the perfect body to deliver global consistency."

Hiroshi Kawagoe, General Manager, Transaction Business Planning Department, Sumitomo Mitsui Banking Corporation said: “Every country is following the developments of ‘Open Banking’ with great interest, beginning with a regulatory regime designed to catalyse developments.  We can already see that each country is developing their own formats and that sometimes individual banks are developing their own formats.  This kind of fragmentation may not be ideal as the banking industry progressively opens up more advanced services through API.  Therefore, there is a need to discuss standards, just as we have achieved with the Legal Entity Identifier (LEI) and in many other areas.”

Tony McLaughlin,Managing Director, Treasury and Trade Solutions, Citi said: “The SWIFT Pre-Authorization API is further validation that banks, Fintechs and merchants can collaborate to build Open Banking APIs that go beyond the regulatory minimums to support vitally important use-cases.  The global banking community must come together to provide the full suite of retail and wholesale banking APIs so that we can provide the financial layer of the digital economy. The world of platforms provides unlimited new opportunities for banks if they adopt an ‘API first’ mindset.”

About SWIFT

SWIFT is a global member owned cooperative and the world’s leading provider of secure financial messaging services. We provide our community with a platform for messaging and standards for communicating, and we offer products and services to facilitate access and integration, identification, analysis and regulatory compliance.

Our messaging platform, products and services connect more than 11,000 banking and securities organisations, market infrastructures and corporate customers in more than 200 countries and territories. While SWIFT does not hold funds or manage accounts on behalf of customers, we enable our global community of users to communicate securely, exchanging standardised financial messages in a reliable way, thereby supporting global and local financial flows, as well as trade and commerce all around the world.

As their trusted provider, we relentlessly pursue operational excellence; we support our community in addressing cyber threats; and we continually seek ways to lower costs, reduce risks and eliminate operational inefficiencies. Our products and services support our community’s access and integration, business intelligence, reference data and financial crime compliance needs. SWIFT also brings the financial community together – at global, regional and local levels – to shape market practice, define standards and debate issues of mutual interest or concern. SWIFT’s strategic five year plan, SWIFT2020, challenges SWIFT to continue investing in the security, reliability and growth of its core messaging platform, while making additional investments in existing services and delivering new and innovative solutions.

Headquartered in Belgium, SWIFT’s international governance and oversight reinforces the neutral, global character of its cooperative structure. SWIFT’s global office network ensures an active presence in all the major financial centres.