Unresponsive bank APIs causing open banking challenges

Structural issues could damage market competition, say market participants

By Aoife Morgan | 26 January 2021

Unreliable payment rails still pose a challenge for third party providers, according to Luke Massie, CEO of VibePay.

Problems with the technical infrastructure of open banking is experienced “most weeks”, says Massie.

The instability of the APIs creates friction, impacting negatively on consumers’ payment process. “If the bank’s API isn't reliable - or it goes down quite a lot - for the third party who build directly on top of that, it means that our systems go down for that bank.

“This means the quality of service, depending on the banking provider, varies and it's very hard to build a reliable business or solution on top of that,” he says.

According to Jack Wilson, head of policy and regulatory affairs at TrueLayer, bank APIs frequently suffer periods of unresponsiveness.

“PSD2 requires banks to stress-test their APIs, such as to prepare for their APIs to handle thousands of calls per minute,” he says. “We often see that this has not been done when high volumes of calls cause reliability issues.”

In November, there were more than 5.7 million failed API calls in the UK., according to statistics by Open Banking Implementation Entity (OBIE). Barclays, HSBC personal, Lloyds, Santander and NatWestBank (NWB) were among the banks with the highest recorded failed API calls.

When an API goes down, the bank returns an error. However, most of the time these are not clear messages to open banking providers. “We see various different types of error codes and vague messaging in failure,” said Wilson.

“This makes it more difficult for us to communicate what is happening back to our customer. It also requires constant contact with individual banks to diagnose issues on a case by case basis.”

However, VibePay’s Massie says communicating with certain banks is still a challenge. The most supportive banks have been the neo banks but some “traditional banks are really slow to get back to us,” says Massie. “If there's a problem with one of the API's, we raise a support ticket online and it sometimes takes 24 to 48 hours to even get to get a response. Never mind a solution.”

Rafa Plantier, UK and Ireland country manager at Tink, said these types of errors are often not reflected in the sandbox environment or in the documentation.

“The response errors do not always provide the details required in order for the third-party providers to fully understand the root-cause of the issue. In turn, that means that they can only discover the true scope of APIs through continuous trial-and-error in a production environment.”

The instability around certain banks API’s could mean consumers chose alternative and more reliable payment methods, according to TrueLayer’s Wilson.

“API outages and unscheduled downtime from banks can be incredibly disruptive to consumers and damaging to open banking-based businesses. Reliability is particularly important for open banking payments, as opposed to data services. If a bank is not available at the check-out for an open banking payment, customers will revert to other payment methods like cards. 

“Ultimately, poor bank API reliability can hold back open banking payments as an alternative to traditional methods, damaging competition."

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