Bitpace: Powering the Future of Finance Through APIs

The financial services landscape is rapidly evolving, with APIs becoming the backbone of modern banking infrastructure.

As embedded finance continues to gain momentum, traditional institutions are being challenged to adapt their technological frameworks while maintaining customer-centric services.

Fintech Magazine speaks exclusively to Can Taner, Chief Product Officer (CPO) at Bitpace about navigating this transformation and the crucial role APIs play in connecting traditional banking with emerging crypto innovations.

As embedded finance grows, will banks become primarily API providers, or maintain their high-street presence whilst expanding API services?

“The rise of embedded finance has driven the growth of API services in the market, such as API protocols like REST, WebSockets and GraphQL, as well as emerging technologies like gRPC.

“As these are designed to help data flow between online banking services, with the secure exchange of information for bank transfers, balance checks and transaction history, banks lean heavily on API provision to make these digital services available 24/7.

“Building on this transition towards online payment services, the normalisation of new forms of finance is pushing services such as crypto payments up the agenda, and a growing number of API services focus on integrating crypto for borderless, frictionless commerce.

“Despite these shifts towards online services for certain customer segments, the provision of digital banking doesn’t mean high street presence should be neglected.

“Financial services need to be inclusive for all, and accessing physical branches is key for certain demographics, such as the elderly or tech-challenged.

“The future of financial services is hybrid – with some services supported by API provision, and others delivered by retaining traditional brick-and-mortar stores.”

How will APIs evolve to handle both real-time payments and their associated fraud prevention, particularly given the push for instant settlement?

“APIs can operate fraud prevention strategies such as transaction scoring, machine learning models, or risk-based authentication through data analysis. APIs can authenticate user identities using protocols like OAuth 2.0 and OpenID Connect, alongside verifying emails, phone numbers, and other personal data.

“They can identify fake accounts, track login attempts using device fingerprinting and behavioural biometrics, and utilise device intelligence to prevent account takeovers and fraudulent signups.

“By analysing these data points, APIs can create patterns of user behaviour, using machine learning to detect anomalies and flag potential fraud.

“Despite checks and balances across banking processes, there are still vulnerabilities in this system, owing to threats from hacking attempts, fraudulent chargebacks, and pitfalls around single-point failures.

“As a counterpoint to this, crypto payments can offer an extra layer of security. With blockchain transparency, decentralised infrastructure, and advanced encryption, a crypto payment gateway can ensure your transactions remain protected, efficient and immune to traditional financial risks.

“Blockchain is key for security here, like a ledger that everyone can see and write in, but no one can erase or change what’s already written. This is why its integration ensures tamper-proof transactions, protecting both merchants and customers from fraud and data breaches.”

What’s the most effective way to integrate modern APIs with legacy banking systems that are decades old?

“Traditional banks have been investing heavily in upgrading legacy systems over the last decade, driven in part by open banking. A more open financial system, led by data, has transformed the way banks operate, and APIs will continue to play a huge part here.

“For example, middleware and API management platforms can bridge applications, data, users, and operating systems, offering services such as APIs and single sign-on.

“Employing an approach using middleware prevents direct modifications to the core banking system while enabling API-based integrations.

“Moving past challenges from legacy systems, there are new providers in the market building sleek payment services from the ground up. A lot of new digital services are gaining traction through crypto.

“This is part of ongoing crypto standardisation for online payments and money transfers. Many people worldwide lack access to essential financial services such as investing, saving, and seamless cross-border transactions.

“Crypto helps bridge this gap by providing financial tools to anyone with an internet connection. This impact is particularly evident in emerging economies, where unstable currencies and fragile banking infrastructures make international transactions difficult for businesses.

“Digital assets, especially stablecoins, offer a more reliable store of value and open doors to new financial opportunities.”

How might APIs bridge traditional finance with DeFi and CBDCs? What challenges do you foresee?

“It can often feel like there is a huge gap between the operations of TradFi and DeFi. Players in the market are often pitted against each other, but APIs can serve as the connective tissue between the two, linking these together with CBDCs.

“Because API integration can enable seamless data exchange, transaction processing, and interoperability across different financial ecosystems, traditional services can be updated to match current customer expectations.

“This can all be managed in a controlled way, as API standardisation can help integrate regulated services at speed. For example, APIs allow TradFi to adopt regulated stablecoins, such as USDC and EURC, as a bridge between fiat and digital assets.

“On top of this, APIs can help DeFi platforms access real-world financial data like FX rates, stock prices, and interest rates, all under KYC/AML compliance. These processes help legitimise banking services and add benchmarks for global transactions.

“Exciting prospects are happening with the way services become linked to accessible crypto, where APIs allow banks to integrate with crypto exchanges and DeFi platforms for easy fiat-to-crypto conversions.”