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Sun, 01 Jun 2025

Banking APIs Explained: What Product Teams Need to Know

APIs have become the backbone of digital financial services. But for Product Managers navigating Open Banking or launching new fintech features, “Banking API” can still feel like a catch-all term. In this post, we’ll break down what Banking APIs actually are, how they work, and what product teams need to consider when integrating them into consumer-facing experiences.

What is a Banking API?

A Banking API is a software interface that allows third-party applications to access banking data or functionality in a secure and standardised way.

With the rise of Open Banking and the Consumer Data Right (CDR) in Australia, these APIs are no longer optional — they’re mandated. Banks and accredited data holders must expose APIs that enable:

  • Access to account and transaction data
  • Product reference data (like fees and rates)
  • Consent and authorisation flows for data sharing

These APIs are designed to give consumers greater control over their financial data and allow fintechs and third parties to build smarter, more personalised products.

How Banking APIs Work (In Plain English)

At a high level, here’s what happens:

  1. User gives consent
    A customer chooses to connect their bank account to your app (e.g. to power budgeting, credit scoring, or onboarding).

  2. Your app requests access
    You (as a Data Recipient) make a secure API call to the customer’s bank (the Data Holder).

  3. Bank validates and responds
    If the consent is valid, the bank shares the requested data (e.g. transaction history) via a standardised, real-time API.

These APIs typically follow RESTful design and use OAuth 2.0 for secure authentication. In CDR-compliant APIs, request/response formats are governed by the Data Standards Body.

Why Banking APIs Matter to Product Teams

Banking APIs unlock real-time, reliable access to financial data — but they also introduce new complexities.

Here’s what PMs need to consider:

✅ Use Cases

What are you building? Some popular use cases include:

  • Account linking and verification
  • Personal finance dashboards
  • Lending and credit decisioning
  • Customer onboarding and income validation

⚙️ Integration complexity

Are you integrating one bank, or all of them? A CDR-compliant Banking API provider like Fiskil abstracts away the mess of dealing with multiple endpoints, data formats, and consent flows.

🔐 Compliance and consent

You can’t just “collect data” — you must manage user consent in line with CDR regulations and provide

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