APIs: The Foundation of Digital Banking

APIs have become the connective tissue of modern digital banking, enabling embedded finance, real-time payments, open banking compliance, and seamless integration with fintech partners. It’s a trend that will continue; according to Juniper Research, the number of global Open Banking API calls will increase a whopping 427%—from 137 billion in 2025 to 722 billion in 2029. As banks and financial institutions strive to deliver more agile, connected experiences to clients, APIs have emerged as both strategic assets and potential points of vulnerability.

Most institutions have embraced API development, but fewer have mastered API testing and integration at scale. Banks must look beyond the challenge of building APIs to ensure they work consistently and remain secure across complex banking ecosystems, because the quality of an API’s delivery can make or break a digital banking experience.

The New Complexity: Bigger, Faster, Riskier API Ecosystems

Modern banking APIs are everywhere. Commercial banks are often managing hundreds of internal and external APIs across systems like payments, treasury, onboarding, lending, and digital channels. McKinsey estimates big banks spend close to 14% of their IT budget on APIs on average. Each new initiative whether launching a virtual account product or integrating a fintech partner adds more complexity.

What’s more, bank clients expect real-time, always-on service. APIs must deliver instant responses, process high volumes, and interface cleanly with both legacy systems and cutting-edge front ends. All it takes is one small API failure—such as an unavailable payment endpoint or a malformed onboarding payload—to wreak a disproportionate business impact: failed transactions, broken SLAs, compliance breaches, or reputational harm.

Institutions must also contend with third-party interdependencies: vendors, processors, aggregators, and external platforms that expand functionality but introduce risk. The more open the ecosystem, the more critical it becomes to test APIs rigorously and integrate them smartly from day one.