An API is a defined set of rules that lets one software system request data or services from another, for example a payment initiation or an account balance query. In finance, APIs support open banking under PSD2, system integration and real-time data exchange.
Batch processingBatch processing runs a group of records or jobs together at a scheduled time, such as the end-of-day run that books interest, revalues positions and produces reports. It is efficient for large volumes but data is only as fresh as the last run.
Real-time processingReal-time processing handles each event as it arrives, within seconds or less, instead of waiting for a scheduled batch. Instant payments, fraud scoring and intraday liquidity monitoring depend on it. Streaming is the common technical pattern.
Core banking systemA core banking system is the central application that holds customer accounts and processes deposits, loans, interest, fees and postings to the ledger. Replacing it is among the largest and riskiest change programmes a bank can run.
Open bankingOpen banking is the secure sharing of payment account data, and the initiation of payments, by authorised third-party providers with the customer's consent, through bank interfaces that are usually APIs. In the EU it stems from PSD2, and in the UK from a 2017 competition order. Its extension to savings, investments and pensions is called open finance.
PSD2 (Second Payment Services Directive)The second Payment Services Directive, Directive (EU) 2015/2366 (PSD2), is the EU law on payment services and their providers, applicable since January 2018. It sets authorisation, transparency, execution time and liability rules, created regulated payment initiation and account information services, and required strong customer authentication. PSD3 and the PSR will replace it.