Finance Monthly April 2019 Edition

39 www.finance-monthly.com advertising, economics and so on. They also provide a signpost to how the future is shaping up, especially in finance. For example, the emergence of Open Banking – built on open APIs – is driving a lot of new thinking at every level of financial services across the board. 3. Opening up new business models Once a company has built internal APIs that make data accessible to new ideas and services, it’s a small step to making some of that data available to external interests. Any company that is successful in a market has a high degree of current knowledge of that sector, often locked up in data sets across many sources. Other businesses could become new markets for that knowledge, using it either for their own internal purposes or as part of a partnership or joint enterprise. APIs offer a simple, standard, secure and highly usable route to explore these ideas and find new ways to sell what a company does. As Bottomline Technologies stated last year, this is very prevalent across financial services: “Innovations underway include apps to help consumers find the best investment or borrowing offers in the market and tools for businesses to manage their cash more efficiently or forecast working capital requirements more effectively. And this is just the start.” and companies that don’t embrace that trend will fall behind. Challenges and answers in digital finance Today’s customers know what they want, and are no longer resistant to changing their financial services providers. BAI reports that from millennials to baby boomers, customers expect a highly consistent omnichannel experience above all. They’re also looking for an emphasis on mobile, highly usable tools for customisation, and a way to bring together the information and services they want. Meanwhile, financial service providers are keen to analyse customer data so they can come up with new ideas and customise offers and services for more personalised customer experiences. What resources do organisations have to help make this happen? As the old maxim says, you fight with the army you have, not the army you want. Think about any financial business: their existing technical estate likely includes many different data stores from CRM to email, and the company’s development process may be anywhere along the pathway from waterfall to DevOps. They also have to consider performance, compliance and security. But the customer doesn’t care about any of this. The customer just wants their financial services provider to be seamless, efficient and easy to use. Management of these elements is done by APIs effectively breaking them down into optimal logical components that can be reconnected in the simplest possible way. Say you have a new product and want to target a specific demographic of people. If you have built APIs across your data sources that work in a consistent way, then your new product developers need to only learn that once. Using a new data source takes seconds. Such capabilities are useful for organisations of any size. But they can be especially valuable for small and medium-sized businesses looking to remain competitive against larger companies with far greater available resources. APIs enable more than just speed and efficiency When financial organisations adopt an API-first mindset, they also gain other benefits as well: 1. Democratising innovation Because APIs hide complexity, they create simple, abstract concepts that anyone can grasp and use in what-if thinking, even if they’re not programmers. Using tools as simple as pencil and paper, or codeless graphical design software, anyone with sector expertise in a company can sketch out how to build a system around data that can address a need or offer a brand-new idea. This can be invaluable across financial services, where customers’ needs are ever-changing. Far too often in all business, a lot of valuable information and experience is never used because IT is seen as a disabler rather than an enabler. APIs don’t cure this entirely but they do offer a path through it. 2. Opening up new data sources There are well over 20,000 open sources of data available online through APIs, according to the ProgrammableWeb API Directory. And that number has been growing by around 15 new APIs per day. These APIs provide data from every category of source: geographic, social media, weather, Where next? Quickly connecting multiple applications and data sources is a significant operational benefit for financial services companies, but building innovative digital platforms is truly transformational. By connecting your own legacy systems with third-party data and cloud applications, you may aggregate information flows and create new services, like market updates, from your own digital platforms. This could deliver value to customers with the potential to generate new revenue opportunities. APIs are now at the centre of innovation creation and also help to enforce the ontology and data standards throughout an organisation. This, in turn, demonstrates the importance of financial services embracing APIs to help solve their key integration challenges, as well as automating and streamlining data operations. ASK THE EXPERT - APIs