India's Financial Sector Bets on APIs

The public infrastructure enabling this shift is collectively known as the India Stack, a set of open APIs that includes the Account Aggregator (AA) and the Open Credit Enablement Network (OCEN) frameworks. The AA framework acts as a "data blind" intermediary, allowing users to securely share their financial data with their explicit consent from Financial Information Providers (FIPs) to Financial Information Users (FIUs). This consent-based architecture is designed to give individuals control over their data, replacing cumbersome processes like sharing physical documents or login credentials. However, the on-ground implementation of the Account Aggregator framework has presented challenges for developers. Some of the hurdles include performance issues with bank APIs, especially from public sector banks, which struggle to handle data requests at scale. Developers also face data quality problems such as incorrect transaction timestamps and incomplete data, with some banks only sharing information during specific windows, like overnight. Furthermore, crucial data sets like joint accounts, fixed deposits, loans, and credit card information are not yet fully available through the AA framework, forcing developers to rely on alternative methods like reading emails and SMS to get a complete financial picture. The Open Credit Enablement Network (OCEN) aims to do for lending what UPI did for payments by creating a common language for lenders and marketplaces. It provides a standardized set of APIs for every step of the loan cycle, from application and consent to loan offers and repayment. This is intended to democratize credit by allowing any platform, from e-commerce sites to gig economy apps, to embed loan products, moving from traditional asset-backed lending to cash-flow-based underwriting. For developers, OCEN's goal is to remove the friction of custom integrations for each lender, creating a more interoperable ecosystem. This API-first wave has been spearheaded by technical founders who experienced the pain of financial integrations firsthand. Rohit Taneja, co-founder of Decentro, was inspired to build a full-stack API banking platform after the long and intricate process of working with banks at his previous startup. Similarly, Postman, one of India's most valuable SaaS companies, was born from co-founder Abhinav Asthana's side project to solve the frustrations he faced with API testing and debugging while working as an intern at Yahoo. The journey of these API-centric startups highlights a key decision for founders: bootstrapping versus venture capital. While VC funding can fuel rapid scaling, the Indian startup ecosystem has strong examples of bootstrapped success. Companies like Zoho and Zerodha have demonstrated that focusing on profitability and sustainable growth from the start can build resilient businesses. This approach fosters a culture of fiscal discipline and creativity born from constraints, allowing founders to retain full control over their product and vision. For developers building on these new financial rails, the opportunity lies in creating the "API glue" and improving the developer experience. The existing public infrastructure, while powerful, has its complexities and gaps. Startups that can simplify these integrations, enhance data quality, and provide robust tools for developers will be well-positioned to capitalize on this shift. The success of companies like Postman underscores the massive potential for developer-focused tools built out of India.