Background: Modern banking platforms increasingly adopt microservice architectures and RESTful APIs to achieve scalability, agility, and independent deployability, yet they confront fundamental challenges in preserving transactional integrity across polyglot services and distributed data stores. Two prominent approaches—coordinated, blocking protocols typified by Two-Phase Commit (2PC), and decentralized, compensation-based workflows typified by the Saga pattern—offer divergent trade-offs in consistency, availability, latency, and operational complexity. This paper synthesizes the theoretical foundations and practical implications of these strategies specifically for banking API ecosystems, integrating perspectives from transaction theory, distributed systems design, and contemporary microservice engineering.

Methods: Relying exclusively on the provided literature, this research conducts a rigorous conceptual synthesis and comparative analysis. We reconstruct the problem space by aligning classical transaction theory with microservice characteristics, elucidate the mechanics and failure modes of 2PC and Saga workflows, and propose a decision framework and hybrid design patterns for banking scenarios. Our methodological approach foregrounds architectural constraints found in RESTful API design, event-driven orchestration, and multi-database deployment common in banking domains.

Results: The analysis reveals that while 2PC provides strong atomicity guarantees suitable for tightly coupled systems and guaranteed commit semantics, it imposes coordination latency, resource locking, and limited fault-tolerance at scale (Haerder & Reuter, 1983; Fan et al., 2020). Conversely, Saga affords greater availability and resilience in loosely coupled microservices and supports eventual business consistency through compensating transactions, yet it demands rigorous compensation design, complex recovery logic, and can produce transient anomalies that must be addressed at the domain level (Christudas & Christudas, 2019; Kleppmann, 2017). Hybrid approaches—combining local 2PC within bounded contexts, Saga orchestration across services, and compensation-aware idempotency controls—emerge as pragmatic for banking APIs that require both strict monetary correctness and scalable operations (Hebbar, 2025; Zhang et al., 2019).

Discussion: We provide an extended theoretical elaboration on failure semantics, concurrency control, idempotence, and observability necessary for operationalizing either pattern, explore counter-arguments regarding correctness vs. performance trade-offs, and discuss limitations of each approach. We synthesize a prescriptive, textual methodology for architects: classifying transactions by criticality, mapping failure and latency budgets, and selecting patterns or hybrids accordingly. Proposed future research directions include formal verification of compensation logic, adaptive middleware for mixed-mode transactions, and empirical validation in production banking environments.

Conclusion: No single pattern universally dominates; the optimal choice for banking APIs depends on explicit domain requirements, tolerance for eventual consistency, and operational maturity. Banks benefit from adopting an evidence-based hybrid strategy: local strong coordination where monetary correctness cannot be compromised, distributed Saga orchestration for cross-cutting business flows, and enhanced tooling for monitoring and recovery. This synthesis offers architects an in-depth conceptual toolkit and stepwise design guidelines informed by foundational and contemporary research.