Unlocking Growth: The Future of APIs in Finance

APIs have been foundational to banking technology for well over a decade, enabling seamless communication between systems and powering financial services. What’s new is the unprecedented scale and sophistication with which modern banks use APIs, not just to comply with regulations like PSD2, but as engines of innovation that enable real-time finance.

In 2025, open banking APIs handle over 137 billion calls globally, a number projected to surpass 720 billion by 2029, supporting everything from instant payments to dynamic product bundling.

A Holistic Financial Picture

In traditional banking models, customers with accounts at multiple financial institutions found it difficult to quickly generate a picture of their overall financial situation; clients who wanted such an accounting lens for their personal finances were forced to combine transaction histories from individual sources themselves. Open banking, by contrast, allows applications to pull data from all the institutions where an end-user holds accounts, creating a more holistic financial view of—and for—a customer. And technology, once limited to specialized aggregators and other third parties, is now entering the mainstream.

Specific Applications of API Banking

API banking is now the backbone for next-generation financial experiences, powering both consumer convenience and operational efficiency across the sector. In 2025, banks and fintechs are leveraging APIs across a diverse set of high-impact use cases:

• Payments and Account-to-Account Transfers: API banking lets retailers, platforms, and third parties process payments directly from customers’ bank accounts, often in real time, bypassing card networks and reducing costs. Growing rapidly, A2A payments improve speed and lower fees, as seen in platforms like Jam Doughnut and challenger banks.
• Instant Lending and Enhanced Credit Scoring: Real-time API access to transaction histories, account balances and client credit histories from credit bureaus lets lenders instantly assess risk and approve loans, reducing decision times from days to seconds. AI and ML models now enhance this by automating application processing and offering dynamic credit terms.
• Aggregated Banking and Holistic Financial Views: Open banking APIs consolidate account data across multiple institutions, giving individuals, SMBs, and enterprises a single, holistic view of their finances. Providers like Plaid, Tink, and MX use this data to power insights, budgeting tools, and financial health recommendations, acting as middleware that banks and fintechs can embed to enable embedded finance and personalized products such as loans or investments.
  In conventional banking, especially on the commercial side, this need has traditionally been met by aggregating end-of-day MT/MX account statements from various account-holding institutions into a client’s primary bank. This batch-based approach is now being challenged by real-time, API-driven models. As open banking matures, many of these legacy statement-consolidation practices are likely to become obsolete.
• Specialist Tools for Niche Consumer Needs: APIs power apps focused on budgeting, automated invoice reconciliation, and bill sharing. Solutions like Monarch Money and Cleo combine transaction data with AI to deliver personalized tips, savings automation, and alerts embedded in daily routines.
• Personalized Cross-Selling and Embedded Finance: Banks and fintechs leverage customer-permissioned data on assets, liabilities, and spending patterns to tailor product bundles, timely offers, and embedded finance services like insurance or BNPL.
• Automated Compliance, Fraud Prevention, and Onboarding: APIs connect to global KYC/KYB and monitoring networks for seamless identity verification, fraud detection, and regulatory compliance. Leading APIs from Trulioo, Sift, and Experian streamline onboarding and risk workflows. Near home, UIDAI offered AUA/ KUA services, and NPCI offered AEPS services are other examples of such API enabled services for authentication, KYC and payments.

With this broadening application set, API banking is the critical infrastructure for delivering real-time, data-rich, and personalized financial services at scale.

The total number of Open Banking users globally is set to reach over 645 million by 2029.

Co-founder Madhusudanan R was recently featured in Inc42 Media as part of a showcase of leading founders shaping Tamil Nadu’s vibrant, future-ready startup ecosystem.

At Global Fintech Fest 2025, Abhishek Arun, President – Platform Strategy & Commercialization, moderated a panel discussion on “Collections 2.0: Compliance-First Collections + Gamification, UPI-Pull, and Conversational AI,” where industry leaders explored how technology and regulation are reshaping collections into a more transparent, consumer-friendly framework.

M2P has partnered with Visa to simplify and accelerate debit card issuance for rural banks in the Philippines, combining M2P’s technology and operational support with Visa’s network and CTBC Bank’s BIN sponsorship to boost efficiency and better serve customers.