BIS Group Issues Report on API Standards for Data-Sharing
The Consultative Group on Innovation and the Digital Economy (CGIDE) at the Bank for International Settlements (BIS) published a report that aims to serve as a useful general reference for central banks seeking to develop their own data-sharing initiatives related to account aggregation in the context of open finance. An account aggregator is an intermediate technological platform responsible for managing and transferring data flows between data providers and data consumers.
After setting a context, the report describes a data-sharing implementation process for central banking purposes and looks into the associated models, interactions, and data flows. The report then presents technological considerations such as design patterns, protocols, technical standards, and a demo, for the application programming interface (API) implementations. In this report, the CGIDE Technical Task Force explores multiple data-sharing models: centralized, decentralized, hybrid, trust ecosystem, regulation-driven, and market-driven. Other key points developed in this report are related to data serialization, API content, metadata, API protocols, messaging formats, and access to services. The report notes that data-sharing is one of the main pillars of the open banking initiatives that are emerging in financial services. Innovations include the involvement of third-party providers, also known as payment service providers, which facilitate access to banking records with user consent. The results of a survey of CGIDE central bank members show that there is a common interest in implementing data-sharing with the aim of increasing efficiency and promoting competition within their ecosystems.
The main challenges to data-sharing are coordination among participants, standardization, and technological infrastructure. The report states that cooperative technical work can help to mitigate these challenges. However, the greatest challenges in selecting an adequate model are establishing where the data will be stored, who the consumers are, and which communication interfaces to use. The report presents account aggregator functionality and possible arrangements for implementation in the open finance ecosystem. The report shows the successful implementation of a demo based on a microservices architecture that promotes high availability, scalability, and resilience. The designs and results (JSON) are part of the report. The use case was based on the accessing of personal account balances by data consumers, which were made available by three banks (also simulated in the demo). Other organizations, mainly central banks, participated through presentations about their national experiences. These were the cases of Australia, Brazil, India, Korea, and the United Kingdom. Additionally, Raidiam Services Limited presented its experiences and perspectives as a private technology provider for open banking and data-sharing initiatives.
This is the third report in a series of reports on enabling open finance through APIs. The work of the CGIDE task force does not review all possible alternatives for data-sharing through APIs. Instead, this report is intended to serve as a general reference for individual countries seeking to develop their own data-sharing projects, though it is to be noted that the report does not recommend one solution over another.
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Keywords: International, Banking, Open Finance, Data Sharing, API, Account Aggregator, Regtech, Suptech, Central Banks, BIS
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