The API Economy and Digital Transformation in Financial Services: The Case of Open Banking

28 Pages Posted: 26 May 2017 Last revised: 14 Jul 2017

See all articles by Markos Zachariadis

Markos Zachariadis

University of Cambridge, Centre for Digital Innovation; Alliance Manchester Business School; London School of Economics; World Economic Forum

Pinar Ozcan

Warwick Business School

Date Written: June 15, 2017


In this paper we seek to do two things. Firstly, by exploring the fundamental properties and various applications of open application programming interfaces (APIs) mentioned in extant literature, we articulate what are the relevant theories that give rise to the new organisational structures and platform business models we observe in the digital age. Understanding such phenomena will help us anticipate, and in some ways predict, the implications of public APIs’ adoption in the financial services sector. The second part of our paper exposes some of our findings around the key challenges and opportunities that open APIs pose for the banking sector in the UK and the EU following the introduction of the Open Banking Working Group (OBWG) and Second Payments Services Directive (PSD2) regulatory frameworks. Our insights were produced from extensive field research and interviews with key industry experts between July 2016 and February 2017. Our use of theory helps us translate these findings and provide recommendations for financial institutions, FinTech startups, technology companies, and regulators. We hope to help them prepare for some of the key changes and issues that the financial sector may be facing in the next few years as the use of open APIs becomes more ‘mainstream’.

Keywords: Open Banking; APIs; Digital Platforms; Banking as a Platform; Digital Strategy

Suggested Citation

Zachariadis, Markos and Zachariadis, Markos and Ozcan, Pinar, The API Economy and Digital Transformation in Financial Services: The Case of Open Banking (June 15, 2017). SWIFT Institute Working Paper No. 2016-001, Available at SSRN: or

Markos Zachariadis (Contact Author)

University of Cambridge, Centre for Digital Innovation

Trumpington Street
Cambridge, CB2 1AG
United Kingdom

Alliance Manchester Business School ( email )

Booth Street West
Manchester, M15 6PB
United Kingdom
M15 6PB (Fax)

London School of Economics ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

World Economic Forum ( email )

CH - 1223 Cologny/Geneva
United States

Pinar Ozcan

Warwick Business School ( email )

Coventry CV4 7AL
United Kingdom


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