API Architecture

API architecture refers to the IT software systems and network design that enable a business to share its capabilities and data through open APIs. When a business progresses toward an open API strategy, it must review its current stack of IT tools, legacy software, data servers, communication and transfer protocols, and security techniques. Understanding the building blocks of its systems architecture helps a company make technical decisions about how best to expose business assets via APIs for both internal and third-party use.  

A digital financial services provider can take a variety of approaches when building open APIs on top of its legacy enterprise software architecture. The approach taken can affect the security, scalability, and robustness of its digital financial services IT architecture in addition to the business potential of its open APIs. Making good API architecture decisions can speed up new product development, reduce the cost of onboarding new partners, and ensure data is collected to measure an API product's influence and effectiveness.

As competition among providers in developing countries (existing players and new entrants) intensifies, third-party developers will be in a position to choose which companies to align with based on the range of APIs available and their ease of use. API architecture can be a key factor in determining how effectively and efficiently third-party developers are able to build products with a provider’s open APIs. This will impact whether a provider is able to position itself at the center of the emerging digital financial services ecosystem.

Adopting open APIs involves both a business and a technical approach. A business strategy helps define business goals and achieve organizational agreement on the business case of opening APIs. A technical roadmap is then necessary to put in place a robust, secure, flexible technical architecture that can facilitate API access.

CGAP’s work on open API architecture focuses on:

  • Mapping existing enterprise software architecture
  • Making API architecture decisions, including API specification format and architecture styles
  • Implementing robust security policies and prioritizing additional security layers as required
  • Selecting an API management provider
  • Evaluating and selecting technical tools, including API lifecycle design tools


18 April 2017
By opening up their payments platforms to third parties—such as financial technology companies, software developers, startups, and digital banks—providers can open the door to the development of innovative products that can be brought to market quickly.
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04 May 2017
1 comment
Is “going open” worth the risk for payment providers? A money transfer business in India shares how allowing other companies to deliver financial services based on its systems has fueled its recent growth.
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06 March 2017
Open APIs have potential to spur innovation in digital finance and grow business for payment providers. But to realize these benefits, providers must design open APIs that meet the needs of the developers who use them.