How Canara Bank slashed its infra costs by 50% and doubled transaction volume with DAC

Canara Bank is one of India’s oldest and largest public sector banks and plays a critical role in the country’s financial ecosystem, serving millions of customers across urban and rural regions. It is known for its deep-rooted legacy and national footprint, and the bank has been steadily advancing its digital capabilities to keep pace with evolving regulatory demands and customer expectations. However, legacy infrastructure, slow innovation cycles, and mounting compliance requirements were becoming bottlenecks. That’s when Canara Bank partnered with DigitalAPICraft to modernise its API banking stack, unlocking a future-ready, compliant, and highly scalable digital ecosystem.

The Challenge

Despite being a leading public sector bank, Canara Bank faced mounting pressure to modernise its digital banking capabilities, particularly its API infrastructure. The most critical challenge was its inability to meet evolving RBI compliance requirements, especially around security protocols like VAPT, OAuth, and session-level controls. This regulatory gap not only posed operational risk but also limited the bank’s ability to innovate.

At a technical level, the bank’s existing 2-tier infrastructure (DMZ and MZ) was insufficient to meet enterprise-scale demands, and it lacked the standardised API interfaces required to adopt modern gateway systems like Apigee. This mismatch made onboarding new services cumbersome and highly manual, resulting in long delivery timelines and limited customisation flexibility for internal teams and partners alike.

Additionally, high operational expenditures on legacy API infrastructure were becoming unsustainable. Fragmented tooling, redundant manual processes, and a lack of automation were inflating costs and stretching delivery teams thin, ultimately hindering the bank’s ability to compete with private and digital-first players in the market.

DAC’s Solution

To overcome years of stalled innovation and compliance hurdles, Canara Bank partnered with DigitalAPICraft to reimagine its API ecosystem from the ground up. The goal was not just modernization, but accelerating fast API delivery, more securely, and at scale. It was then followed by implementing DAC’s solution to turn Canara Bank’s fragmented infrastructure into a unified, future-ready platform.

1. Rebuilt API infrastructure with 3-tier architecture

DAC re-engineered Canara Bank’s API layer to support a robust 3-tier architecture (Web, App, DB), enabling it to meet enterprise-grade scalability and security needs. This overhaul addressed architectural limitations of the previous 2-tier setup and laid the foundation for compliant, resilient operations.

2. Ensured RBI compliance with advanced security controls

To meet RBI’s stringent security mandates, DAC implemented critical enhancements like VAPT, OAuth, session restrictions, CAPTCHA, and OTP-based logins. These upgrades ensured end-to-end protection and audit readiness, unlocking faster approvals and smoother regulator engagement.

3. Accelerated API rollouts at scale

What used to take years was now accomplished in months! DAC migrated 300 APIs in just 9 months using standardised specifications and streamlined workflows. The rollout became significantly faster, reducing delivery timelines and enabling rapid digital service expansion.

4. Enabled the external ecosystem with a secure partner framework

DAC helped Canara Bank extend its API capabilities beyond internal teams. With a partner API framework featuring multi-factor authentication, the bank could now support secure third-party integrations and fintech collaborations with ease.

5. Deployed a developer portal for self-service and visibility

To enhance API discoverability and reduce reliance on IT, DAC implemented a self-service developer portal. Features like role-based access, OAuth token generation, and a Maker-Checker model empowered both internal and external teams to work autonomously, boosting adoption and governance.

Business Outcome

With DAC’s support, Canara Bank transformed its fragmented API operations into a high-performing, secure, and compliant digital banking ecosystem. The new platform enabled faster rollouts, reduced costs, and opened the door to API commercialisation—all while meeting RBI standards. Here’s how it delivered measurable impact:

• Migrated 300 APIs in just 9 months, cutting down delivery timelines from years to quarters.
• Reduced infrastructure and operational costs by over 50% compared to the legacy system.
• More than doubled transaction volumes, driving stronger customer acquisition and retention.
• Enabled API monetisation and third-party onboarding through a secure partner API framework.
• Deployed a self-service developer portal with 106 active production users and 210+ UAT users.
• Established a secure, compliant foundation with OAuth, multi-factor auth, and session control.

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