As treasury professionals, we have seen dozens of RFPs. The term API is often thrown around, but it is important to understand that not all APIs are created equal. In order to make full use of this innovative technology, it’s critical to have a thorough understanding of what you intend to do so you can make a clear request of your connectivity provider. Doing this ensures that you are getting the solution that you need and avoid falling victim to the catch-all phrase used by many bank connectivity providers: “We have APIs too.”
Where to Begin
Start by drawing out a detailed list of treasury and finance data that you need between you and your bank to determine how you will create that connection from all available bank channels. Start simple:
- Determine how many banks and bank accounts you need to integrate
- What does the reconciliation process look like?
- What does the payment process look like?
It will be an opportunity to not just re-create or automate the manual processes of today, but to improve them, and make them faster.
One of the biggest mistakes we see in treasury software RFPs asks “Do you have APIs?” The problem with this yes/no question is that there are many different types of APIs. A provider may answer ‘yes’ to this question because they have a single API connection, but they do not provide the multi-bank connectivity an organization needs to enable true real-time treasury.
In recent years, this question has progressed to “Do you have APIs to <specific bank>?” But that question is still not good enough.
It lacks the specificity needed to know if the bank APIs will provide all the rich data you need. For example, they might connect to a single API for Acme Bank that only provides balance information, but not have a connection to Acme’s payments or transactions APIs.
The Right Question to Ask
So, what’s the right API question to ask on your RFP and avoid surprises on this front?
“Do you have a bank API with <insert specific banks here>, so we can do <task(s)>in real-time?”
A full review of your bank connectivity provider’s API Catalog will allow you to see the different types of bank APIs they currently connect to, which ones are on the roadmap, and those actively in use.