Author: Laura Heritage, Solutions Architect, Financial Services, Tyk
Over the past 15 years in the US financial services industry, I’ve launched new platforms, defined regulatory-compliant product lines, built go-to-market strategies, and scaled ecosystems. It’s been a busy and exciting time to be in financial services tech, but as I look forward, there’s so much more to come. Right now, rapid market shifts, accelerating AI adoption (including agentic AI), and the rise of open finance are driving the most transformative period in finance. At the center of it all? APIs.
APIs are at the core of modern finance, central to how financial services organizations are defining competitive advantage and driving new and increased revenue streams. Here in the US, we’ve seen API availability surge by 56% in the past year alone. Meanwhile, over in the UK, the Middle East, Africa, and Asia-Pacific, financial services businesses are using APIs to push new boundaries in payments, accounts, loyalty credits, and more.
Underpinning this accelerated innovation is APIs’ ability to support smoother regulatory compliance. APIs are empowering businesses to innovate while also delivering the security and stability that earns regulators’, and by extension customers’, trust. The fact that APIs also support seamless customer experiences further increases that trust.
All of this means that financial institutions are rethinking APIs, and every bank, credit union, and fintech leader I speak with knows APIs are critical. But, too often, organizations are still treating APIs as technical afterthoughts.
APIs have become about so much more than connectivity. They’ve become levers of control, compliance, and competitive advantage. This is resulting in an increasing focus on turning them into commercially valuable products as financial institutions shift towards new monetization models. We’re already seeing this play out here in the US, with one leading bank taking a bold new stance on the strategic monetization of API data access.
This shift demands a renewed focus on security, compliance, and governance-first API platforms, while agility and scalability are more important than ever for organizations focused on future-proofing their API management strategy.
Key challenges financial institutions must address
The pressures are piling up, with several significant challenges that financial services institutions must address if they are to embrace the opportunities that APIs present in 2025 and beyond. Getting your APIs in order is more crucial than ever. It’s the first, foundational step towards successful AI implementation, so even if organizations aren’t ready to embrace AI today, they’ll still need to get their APIs in order ready to face tomorrow. The roadmap below ensures they can be ready to accelerate with confidence.
FDX-ready API management
In January 2025, the Consumer Financial Protection Bureau (CFPB) officially recognized Financial Data Exchange, Inc. (FDX) as a standard-setting body. It means FDX is now the recognized open banking standard, making interoperability and compliance non-negotiable. Jean-Paul LaClair, SVP of Product at FDX, told me:
“The convergence of AI and standardized APIs is reshaping financial data sharing. At FDX, our role is to ensure that the data foundation for this innovation is secure, transparent, and interoperable. As AI tools unlock new ways to analyze and deliver value from financial data, FDX standards provide the common framework that enables industry adoption at scale while protecting consumers.”
FDX is already in use across more than 114 million customer accounts (as of April 2025), ensuring organizations share financial data in a way that supports the unification of the financial services ecosystem.
This means API strategists in financial services must focus on FDX-readiness as a key priority, both for current open banking operations and to be ready for what’s coming next as open finance expands innovation considerably.
Preparing for open finance, not just open banking
The final challenge that financial institutions must embrace in 2025 and beyond is preparing for open finance. Open banking has enabled financial organizations to deliver new products and reach new customers, driving measurable business outcomes – but it’s just the start. In the US, with the FDX API supporting a full spectrum of financial services, we’re seeing immense innovation. The next era of open finance expands into investments, pensions, insurance, tax, fraud and more.
Brazil started down the open insurance route in 2021. It’s been stalled a little, but they are leading the way there.
Of course, organizations at the forefront of this expansion and innovation will stand to reap notable rewards – provided they have solid foundations in place. Preparing for open finance means evolving API management. Financial institutions will be faced with new data types, complex consent mechanisms, and cross-domain interoperability challenges. They must manage their APIs in a way that rises to the challenge while maintaining security compliance commitments and delivering high-quality customer and third-party developer experiences.
Data sovereignty and ownership
There’s been an interesting tug-of-war recently between legacy API management vendors and financial services institutions. Many legacy vendors have been pushing their product strategies along a cloud-only path. However, this has created compliance and governance risks for organizations managing sensitive financial data, with cloud-based models failing to meet their data sovereignty and ownership requirements.
As such, we’ve seen a resurgence of demand for hybrid and on-premises API management solutions from the financial sector. Institutions are pushing back against the cloud-only direction of travel and demanding sovereignty over sensitive data. They need greater control over their data than cloud-only solutions allow. After all, when your regulators question where your data lives, don’t you want to respond with confidence? This is driving a steady demand for hybrid and on-premises solutions, as we’re seeing (and serving) here at Tyk.
Harnessing AI responsibly
We can’t look at future trends in financial services APIs without talking about AI. APIs are the foundation for AI adoption. They enable everything from data integration with AI models to emerging agentic AI use cases.
The challenge with embracing the operational efficiencies and innovations that AI offers is, of course, maintaining ethical and regulatory oversight. APIs are fundamental to enabling this, with AI readiness starting at the API layer. Well-governed APIs deliver the security and consistency that your data demands when you’re feeding it into AI models, all while giving you full control and visibility of your data assets and services. It means that harnessing AI responsibly starts with solid API governance.
Security and governance in volatile times
While I’m a strong advocate for the transformative potential of APIs in financial services, it’s also important to address the fact that APIs can expand exposure to fraud and compliance risks. Every new endpoint means greater potential exposure and we’ve all seen examples of the financial and reputational damage that occurs when businesses’ poorly governed APIs expose them to data leaks and attacks.
Strong governance frameworks are critical to addressing this as we look to the future of API management in financial services. API usage continues to expand at an unprecedented pace, and as financial institutions push boundaries with new products and models, robust governance is essential.
That doesn’t mean locking everything down in a way that stifles developer creativity and agility. Indeed, that creativity is essential to progressing new API monetization models and strategies. Fail to achieve it, and you’ll have to answer to your developers when they’re slowed down by governance bottlenecks, while your competitors ship innovations at speed.
This means API governance must balance openness with security, supporting organizations to evolve and flex their services and giving them greater capacity to cope with volatile times and market shifts.
Commercial models and API sustainability
The recent move towards monetization of API access in the US signals a shift in the economics of open finance – one likely to be swiftly replicated around the globe. Banks and other financial institutions are focusing not just on customer-facing APIs but on those providing third-party access, including to their valuable data troves. They are moving beyond the open banking regulation of deposit accounts and transactions to more premium APIs in areas such as Know Your Customer (KYC) and fraud.
Another crucial consideration here is the fact that financial institutions aren’t just data providers, offering their data to fintechs. They’re also data consumers, which introduces a whole other area of API management. When financial institutions consume data from third parties, they have to manage the consents they’ve been given and the way they control their access, as well as the cost of doing so. The issue of data sovereignty also raises its head once more in relation to this.
If commercial models are to support long-term API sustainability, financial institutions must tie together innovation, third-party access, and profitability in a way that future-proofs their models and validates ongoing market fit. The role of API governance in doing so securely and in line with regulatory requirements is critical to this.
Face the future with confidence
The challenges that financial services organizations face are substantial, but also far from impossible to overcome. With the right API management strategy, financial institutions can achieve the flexibility in deployment (cloud/hybrid/on-premises) and demand the data sovereignty that they need to thrive while remaining compliant. They can securely showcase their commitment to open standards such as FDX while maintaining full ownership and control of their API ecosystem.
Doing so will provide financial institutions with the commercial agility to adapt to new access and monetization models, flexing in response to emerging opportunities, including building APIs as the foundation for responsible AI adoption.
APIs aren’t just another integration project. Treating them as such means organizations are exposing themselves to operational, regulatory, and reputational risks. Tyk’s flexibility, interoperability (based on native support for open standards), and data sovereignty by design make it a natural partner for financial institutions navigating this transformative period. We believe API management should give financial institutions control, not take it away.
While the challenges facing financial services may seem daunting, we have a collective opportunity not just to overcome them but to drive change and excel, setting out a roadmap for the future of the industry. It’s a roadmap that not only meets today’s open banking mandates but positions you for the broader open finance ecosystem, spanning payments, savings, investments, insurance, and so much more.
Accelerating into this new era successfully is all about right-sizing – something that’s eminently achievable with Tyk, even when your resources are limited. With a right-size roadmap, Tyk can help you reach your goals. In the US, for example, financial services institutions can adopt just enough of the FDX specification that they can improve customer experiences while reducing security risks, without implementing the entire specification at once. Tyk is there to help every step of the way.
Join us at LEAPxFinance for further insight
If you’re ready to design governance and monetization models that balance openness with profitability, empowering your institution to thrive in 2025 and beyond, join us at LEAPxFinance on October 16th, 2025. This free online conference is all about navigating the next era of financial services with APIs and AI. Developed specifically for strategic decision makers and expert practitioners, it’s this year’s unmissable event for anyone seeking actionable frameworks for API governance, deployment, sovereignty, scaling, and monetization in the financial services industry.
Register for your free place at LEAPxFinance now.
