Wells Fargo escalates the API race
Big banks are in a race to have the most-used application programming interfaces, and Wells Fargo says it's off to a fast start.
Its APIs were called 1.5 billion times last year, according to Imran Haider, head of open APIs for Wells Fargo.
“For me personally, this validates the idea that APIs are a viable method for distributing bank services,” Haider said. “This isn't a science experiment. There's real potential with APIs to create customer value.”
Until Tuesday, the bank had not previously shared a number for its API calls, whereas others such as Citigroup have. In September, Citi said it had handled 157 million API calls globally and was getting 15 million a month.
The majority of the API calls are from consumer apps pulling Wells Fargo customers’ account data through aggregators, Haider said. Wells Fargo has signed 15 agreements with data aggregators like Plaid and accounting software providers like Intuit (covering Mint, QuickBooks Online, and TurboTax) and Xero. They all use the Financial Data Exchange’s standard for data sharing.
The bank was one of the first to sign such agreements with aggregators. Wells Fargo has said for years that it wants to put an end to the practice of screen scraping, where third parties such as personal financial management app providers and online lenders obtain bank customers’ usernames and passwords, log in as them and copy and paste their banking transaction information into their own software.
Screen scraping can cause technical and security problems, and some experts say it is unsafe for consumers to hand out their private credentials to third parties.
At Wells, account information is sent — with customer consent — directly from the bank to aggregators through APIs; the data set is often limited.
Once customers are migrated to an API, “the credential sharing stops,” said Ben Soccorsy, head of digital payments at Wells Fargo Virtual Channels.
But besides being an antidote to screen scraping, APIs are also a way to work more closely with customers and tie the apps and software they use in their daily lives to the bank, Soccorsy and Haider said.
“You've got a particular workflow that a customer has, be it a commercial customer or consumer retail customer, and banking is a couple of steps in that broader flow,” Haider said. “If we can get bank products and services embedded in the digital experiences that are valuable and relevant to customers and make banking a part of that customer's workflow, we create value for our customers. That's the ultimate story on APIs and these numbers really begin to validate that strategy.”
All told, Wells Fargo has about 40 use cases for APIs. These include treasury management solutions, credit card products, brokerage and payments. In each case, a banking function — say, a payment or an account validation — can happen quietly behind the scenes using an API, rather than requiring users to exit their application, go into a banking app or site and return to what they were doing.
“If you think about the history of our industry, we're on a constant journey to bring convenience of our products to our customers, especially on the consumer side, where our focus and our distribution strategy started with branches in a way, went to ATM machines and it went to online banking, then it went to mobile banking,” Soccorsy said. “I think this is the next logical phase of the industry as we're bringing your banking to you via APIs.”
APIs play an important role in Wells' Control Tower, a tool within the bank's mobile app and online banking site that lets customers see recurring payments being made from a bank account or card. Millions of customers use the app, mostly to remind themselves of all the subscriptions they have. Control Tower has a data sharing controls feature that is API-driven; it lets customers turn off or back on third-party app access to their Wells Fargo account information and control at the account level which data is shared; for instance, a third-party app might be allowed to use all account data or just credit card information.