The Future of Banking Is Open: Key Takeaways from the EDGE25 API Session

By Finn O’Potamus

The financial landscape is rapidly evolving, and the future of banking hinges on embracing secure, member-centric innovation. This was the resounding message from a recent session at the EDGE25 conference. Held at the Aria Resort in Las Vegas from May 6 to 9, one session explored the power of application programming interfaces (APIs) and the shift towards open banking.

Billed as the Instant Payments Maven, CEO of FinTech Consulting Marcia Klingensmith kicked off the session by highlighting a common scenario: a credit union is left to reimburse a member, Emily, $4,300 after she shared banking credentials with a hacked budgeting app. This costly mishap underscores the critical need for secure data sharing in the digital age. “But guess who’s left fixing the mess? The [credit union] has to reimburse Emily for that $4,300,” Klingensmith stated. 

Marcia Klingensmith

The solution, Klingensmith emphasized, lies in secure APIs, which would have allowed Emily to share only specific data, like transaction history and balance, through a secure token bound to her device. This prevents unauthorized access even if credentials are compromised. “Same app, same convenience, a totally safer outcome,” she explained.

This isn’t a hypothetical scenario, as Section 1033 of the Dodd-Frank Act, finalized by the CFPB last year, mandates consumers’ legal right to safely access and share their financial data. This means members decide exactly what data to share and with whom, and these connections must be secure. Compliance deadlines begin in April 2026 for Tier 1 banks, with other credit unions following based on asset size. Klingensmith urged attendees not to wait, advising them to begin “to build your API capabilities, start building those partnerships with the fintechs that have the services that you want to be offering to your customers and reimagine how you can build these new experiences and keep the digital trust with your members.”

Global Perspectives and the US Opportunity

The session also drew parallels to international models. Europe, for instance, has seen a surge in financial innovation due to open banking, with regulations like the Digital Operations Resilience Act (DORA) focusing on system resilience against cyberattacks. “This is about proving that their systems and their third-party partners and their APIs can all withstand a cyber-attack,” Klingensmith noted. Brazil and Australia have advanced further, embracing “open finance,” which includes insights from telecom, utilities, and insurance data, offering a holistic view of a member’s financial life.

While open banking has been in use in the US, Dodd-Frank Section 1033 provides much-needed structure, with the Financial Data Exchange (FDX) now serving as the official standards body for APIs. This presents a unique opportunity for credit unions to influence the development of fintech solutions to meet their specific member needs. As Klingensmith pointed out, “The sooner you step up and start having those conversations with your fintech partners, the more you’re going to be able to influence what their solution looks like to best meet your members’ needs.”

APIs as Digital Plumbing: High-Impact Use Cases

APIs, described by Klingensmith as “digital plumbing,” can securely and efficiently move data, not just connecting credit unions to fintech partners but also breaking down internal silos. Klingensmith outlined four high-impact use cases:

• Smarter, Personalized Lending: APIs can provide real-time insights into income, expenses, and cash flow, enabling faster, more informed lending decisions, reduced application friction, and better terms for members. “What if your system already understands what their income looks like, what their expenses are, what their cash flow is? Wow, wouldn’t that be amazing?” Klingensmith asked.

• Real-time Fraud Detection: Moving away from delayed transaction data, APIs allow for real-time verification of account activity across channels, devices, and products, helping detect fraudulent patterns and significantly cut fraud losses. “One credit I work with cut their fraud losses in half just by switching to real-time API checks,” Klingensmith stated.

• Embedded Financial Health Tools: APIs enable credit unions to easily integrate fintech capabilities like budgeting tools, credit builders, or automatic savings tools under their own brand, without extensive development.

• Better Forecasting and Member Insights: Dodd-Frank unlocks up to 24 months of transaction history, providing data for smarter liquidity forecasting, improved credit risk modeling, and early detection of members struggling financially. This data can also be accessed across institutions, offering a comprehensive financial picture.

A Real-World Success Story: Croí Laighean Credit Union 

Bernard Hunter

During the conference, Bernard Hunter, risk management officer at Croí Laighean Credit Union in Ireland, shared a compelling real-world example of their journey to a fully cloud-based core system and API-driven services. Hunter explained that their move to Temenos banking on the cloud, a first for Ireland, provides a “shopping list of APIs” through Temenos Marketplace Exchange, allowing for seamless plug-and-play integration without rebuilding interfaces. “It just makes real sense for us that that’s the avenue we would go down, that we would seek a provider that can give us those options,” he stated.

A significant game-changer for Croí Laighean has been digital onboarding for members. By using an AI-powered tool with biometrics and real-time database checks, they reduced their member onboarding time by 90%. “As a first step, I would suggest that’s the step to take,” Hunter advised. He also anticipates similar efficiencies in lending with open banking tools like Crif, a company that specializes in credit reporting and business information. This approach would allow moving from days to hours or even minutes for loan approvals by accessing real-time, authorized account information.

Hunter emphasized that embracing legislation like DORA, even if not immediately mandated, is a smart investment in resilience and fraud mitigation. “I think the message is, don’t be afraid to embrace some of the legislation that’s coming down and the changes in the regulation because it can actually be really positive for you,” he said.

Hunter’s key advice for credit unions starting this journey is not to be afraid to engage with fintech providers, even if their offerings seem too extensive. He encouraged credit unions to communicate their specific needs and ask for tailored solutions, rather than feeling obligated to take everything a provider offers. He shared an example of how his open communication with a provider led to the development of a specific API that is now available to all Temenos customers.

“I think that’s a real indication of taking the journey with the provider rather than actually just trying to get what you can from them and fight having a little bit of backwards and forwards, just work with them,” he noted.

The session concluded with a powerful call to action from Klingensmith: “Credit unions can choose to move from reactive compliance to proactive, member-centric innovation. By delivering personalized, secure experiences and partnering with the right fintechs, credit unions can not only survive but lead in this new era of open banking.”