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15 Open Banking APIs State of the Market Report 2020 USE CASES The bank's Open API products focus on Banking as a Services APIs including: • Line of Credit API for external lenders to use to offer the bank's loan services to their business customers • Market Data API and tooling to assist with risk analytics and investment strategy decisions. CONSUMERS & PARTNERS CUSTOMERS: The ecosystem customer base drawing on API products has grown from 0.2 million in 2016 grew to 5 million in 2019. PARTNERSHIPS: The bank has signed deals with Amazon to provide lines of credit to merchants and with Apple to provide credit cards. MONETIZATION The bank provides a range of Banking as a Service APIs so that external partners can create their own financial services built off the bank's core functionalities. Individual partnership payment agreements are created with each API consumer. VALUE GENERATED Indirect revenue from offering banking services via APIs has grown both deposit balances amongst ecosystem consumers from USD12 billion to USD60 billion, and loans/cards balances amongst ecosystem participants growing from USD2 billion to USD7 billion. Direct revenue from the bank's ecosystem platform has grown from USD2.0 million in 2016 to USD860 million in 2019. Banking-as-a-service aims to expose a bank's functionalities as a suite of open APIs that can be used by businesses and other organizations. In this scenario, the bank may act as an underwriter, providing a white-labeled version of their services to their business customer. For example, an enterprise may wish to offer their customers a branded savings account, credit card or personal loan, that will be underwritten by the bank. Enterprises may wish to offer high value customers a financial account where they can manage their high volume transactions in one place. The enterprise might use the bank's APIs to create their own credit card application and distribution service, and can even manage monthly repayments through their own website or card processing accounts. The bank receives some payment from this, either: \ An agreed share of the processing fees, \ A fee for providing the service to the enterprise, \ via API call fees, or \ A combinator of any of the above. Enterprises extend their offering into financial services to their customers who wish to buy their banking-related services from the brand, for reputational, loyalty, high volume transaction, or other reasons. The bank gains revenue from new business model sources by offering their banking services in a modular fashion. They can also partner with fintech to enable a specialized financial service to extend to wider offerings. Banks that are unable to invest in the customer experience layer, or that cannot reach particularly customer segments may be able to spur new growth by being the underlying infrastructure for these new players. North American banks including JP Morgan Chase, BBVA Compass and Goldman Sachs are all moving towards opening a suite of Banking-as-a-Service APIs for corporate customers. A LEADING U.S. COMMERCIAL BANK WITH OVER US$35 BILLION, AND 1.5 MILLION CUSTOMERS, OFFERS A PARTNERSHIP AND OPEN API PLATFORM WITH 10 OPEN APIS 3 . BANK EXAMPLE 3: US BANK WHAT IS BANKING-AS-A-SERVICE?