ING participates in first trade finance API

ING is one of the first two banks to test an API (application programming interface) that allows clients to see the status of their bank guarantees in real time on their own banking platform.

This is fundamental to the digitisation of trade finance and will make the process of issuing guarantees more efficient and more transparent for both clients and banks, according to Sylvia Brandsma, global head of Financial Institutions Transaction Services at ING. Once the guarantee has been issued, it can instantly be downloaded as a PDF copy.

The API, developed by HSBC, is being tested by ING and Standard Bank.

“Trade is an important domain for ING to innovate and create new enhanced experiences for our corporate clients,” says Mark Buitenhek, global head of Transactions Services at ING. “This pioneering connection with HSBC fits perfectly in our ambitious open banking strategy.”


What are APIs?

When you use an app on your phone, it connects to the internet and sends data to a server. The server retrieves the data, interprets it and sends it back to your phone, which converts the information into a readable format. All of this happens via an API. In the banking system, APIs act as bridges between banks and the (third-party) applications or programs that their clients use.

As such, APIs are crucial in transforming financial institutions from closed systems to open platforms. They enable access to specific data that allow banks to leverage functionalities created by third parties or set up new, open business models that improve the customer experience.

ING is working with HSBC and Standard Bank to integrate the bank guarantee API into its banking platforms. The current prototype of the API covers the guarantee issuance process between two banks at the request of their client. It can be improved with features that enable real-time documentation negotiations or pricing agreements.


What is a bank guarantee?

A bank guarantee is when a lending institution promises to cover a loss if a borrower defaults on a loan. The guarantee lets a company buy what it otherwise could not, helping business growth and promoting entrepreneurial activity.