With the innovations in the fintech sector improving the financial inclusion quotient of India, there’s been a lot of focus on open banking standards and banking APIs to extend the reach of financial services to those who have been left out of the net. While the government’s official regulatory sandbox has been welcomed by many fintech players, banking major YES BANK is taking the lead in helping developers and businesses create meaningful fintech products with the API Sandbox which boasts of 50+ virtual APIs.

The platform is expected to host 100+ APIs by the end of FY20. The API Sandbox is just a precursor for YES BANK’s plans for digital banking as it is also set to launch an Innovation Lab soon.

What Is YES BANK’s API Sandbox

The API sandbox builds on the bank’s strategy of using API banking as an enabler to customise digital solutions for its clients. According to the bank, this will not only help corporates, MSMEs and startups to identify ‘best-fit’ APIs based on their sectors, but also allow them to test the APIs with their app in a secure environment. The sandbox will enable clients across sectors to visualise multiple banking use cases, customised for their application and understand possible integrations and functionalities of the bank’s APIs.

Through the API sandbox, YES BANK will grant access to APIs across various usage categories including account management, payments, cards and CRM. This includes:

Accounts: Account opening; account management; customer portfolio
Payments: Beneficiary management; funds transfer; bill payments; recurring payments
Cards: Credit cards; debit cards
CRM: Lead management; customer service

Speaking to Inc42, Ritesh Pai, chief digital officer, YES BANK said, “In our attempt to create banking-as-a-service, we actually started our API journey, way back in June 2015. The last four and a half years of learning has been that while this has worked, and we almost have a thousand plus corporates who are already using these services, it is important to be ahead of the curve.”

Pai added that the YES BANK sandbox will ease the concerns of financial sector businesses that are worried about implementing technology into their operations, by providing a secure virtual environment to test, train and develop solutions with banking integrations. “Developers can complete integrations in the environment and mimic how their solutions would work in a ‘live’ environment. Once they are comfortable, they can move to subscribing to the APIs,” said Pai.

With the platform, YES BANK intends to co-create innovations with fintech startups and the developer ecosystem to enhance its customer experience too. While API suites from banks have helped such partnerships, it is often difficult for fintech startups to experiment with live APIs to build new features and capabilities.

YES BANK: Other Initiatives Taken To Boost Banking Innovation

For the past few years, YES BANK has taken a slew of initiatives bridging the gap between banking and fintech innovations. In July, the bank had facilitated the issuance of a commercial paper (CP) of INR 100 Cr using blockchain technology for Vedanta, a natural resources conglomerate. Besides having launched a fintech app store in association with iSPIRT, back in 2015, the bank has been running a host of programmes to encourage banking-as-a-service. A few are:

• YES Fintech: A platform for startups to co-create innovative solutions for the bank’s 2 Mn+ customers and 20 global markets.
• YES SCALE: A cross-sector innovation programme focussed on co-creating solutions with startups across the value chain using AI, IoT and data analytics, with banking API integrations. The program addresses business use cases across sectors.

Stepping Towards Open Banking

At the launch, during a panel discussion on “APIs: The Power of Open Banking” moderated by Pai, WhatsApp CEO Abhijit Bose said, “I think the flywheel in any ecosystem happens when we are incubating and launching startups innovation faster than you can keep counting and you can only get that with the depth of scale. This [API Sandbox] is a critically important piece to help the stakeholders come in and get involved in the power of what we believe we can do.”

Seconding this, Rahul Chari, cofounder and CTO of Phonepe, added that India has come a long way ahead for sure, specifically in payments. However, there’s so much that can be done in the umbrella of managing and using money that’s on the B2C side or the B2B side. “Not having the kind of APIs we need to actually work with the financial institution is the biggest problem,” Chari said.

But Pai said that while open banking is going to be the future, there is still so much to be done in the Indian banking space and the API sandbox is just the first step.