Technology and the ever-changing landscape
Technology is ever evolving, continuously enabling businesses to not just sustain but also flourish. In the last decade, enterprises have adopted new technologies to assist them in keeping up with the pace to meet the growing demands and challenges. Be it Automation, Cloud adoption or the move from Monoliths to Microservices and API driven architectures, technology has injected the necessary agility enabling businesses to move faster, to focus on the real customer, to come up with new ideas, to test those ideas and to take them to market.
Application Programming Interfaces (APIs)
APIs are one such technology which has been at the epicentre of transformation in various industries. We live in a Digital world that is always on and interconnected. How we operate in the current world is dependent on the countless APIs that underpin web, mobile and Internet of Things (IOT) applications. APIs have not only fuelled a new Digital Economy, but also have created an arms race of innovation that is forcing many organizations to rethink how they build and deliver new applications.
Benefits of an API ecosystem
APIs are no longer an IT conversation. In fact, they never were. APIs are first and foremost a business construct. As Jason Bates from Monzo puts it best; “APIs enable end-to-end customer journeys through the integration of data and digital services from different partners.” APIs serve as an entry point to the business capabilities of the organisation and of a service. They provide a means of communication with a service. APIs form a contract that the service provider commits to maintain for its consumers and provide an abstraction point which hide service implementation details; this allows for loose coupling between services and consumers. Businesses are fast realizing the need to align their Business Strategy with their API strategy. With an API-led, customer-centric business strategy, businesses are set to achieve increased customer centricity, faster innovation, faster delivery of digital capabilities and reuse of capabilities across varied channels. Top that with the revenue generated with the use of APIs by external and/or partner entities and you have another means of generating revenue. APIs not just help in accelerating innovation, but also drive competition among businesses, of course all of which calls for the APIs to be designed as Products keeping the customer’s perspective left, right and centre.
Ever increasing demand for Data
The ever-increasing demand and reliance on data has also driven the usage of APIs. Businesses are longing for data insights to make informed decisions promptly. Fintechs and Banks are looking for customers’ spending behaviours, Retail businesses are interested to know what customers are purchasing to suggest accompanying products, Transport agencies want to monitor customer travelling patterns to suggest routes and interruptions and so on and so forth. With all the underlying data distributed, APIs serve as the necessary tools that allow for consumption of data effectively, securely and easily.
With the exchange of data and with the immense number of benefits APIs offer, comes along the opportunity for monetizing APIs. The concept of APIs as Products to generate revenue is not a novice one and has been around for some time now. Many organizations now provide their APIs as Product offerings for third parties to innovate and come up with new products, in turn generating revenue. Google offers hundreds of APIs on its Developer Portal for consumption by external entities and Partners. Not to mention the very popular Google Maps APIs being used by ‘n’ number of businesses – small and large across various sectors such as ridesharing, gaming, asset and delivery tracking etc. Similarly, Apple and Amazon also have a number of API as Product offerings such as the very popular voice assistant APIs. Facebook, Instagram, Uber, Ola cabs, Paypal, Realestate, Domain, Woolworths or any other Digital business you can think of has APIs as Product offerings where these organizations offer underlying data under certain pricing model. The pricing model may vary from a transactional charge to a subscription model depending upon the number of API consumers etc. Long story short, businesses have started to characterize APIs as strategic assets for creating Business Value and not merely Products for software development.
Open Banking, Partnerships and the Fintech lens in Australia
The Banking and Financial Services industry is at the cusp of Digital Technology innovation and with Open Banking knocking on Australia’s doors opportunities are immense. With the advent of Open Banking, Banks and Financial Institutions have already started looking at how best to share customers’ financial data with each other and with partners to improve products and services for the customers, stimulate competition and innovation in the sector. Some examples exist already. Ubank recently partnered with Basiq, a Financial Data Aggregation provider, to deliver an Account Aggregator feature for its customers. Similarly, Qantas launched a Personal Financial Management app in Qantas Money, partnering with Yodlee, with features such as spending categorization and account aggregation from different financial institutions. Another example is the Neo bank 86 400 offering similar capability to its customers in a recently launched app. Some of the new fintech banks such as Athena, Tictoc, Prospa etc are using banking data to make credit decisions. ‘Look who’s charging’, Proviso, Basiq, Yodlee, Voltbank, Plaid, Moven, Revolut, Xinja are only some of the fintechs which are leading the way in Innovation and Financial Disruption, challenging the Big 4 (NAB, CBA, ANZ & Westpac) to up their game and delivering exceptional customer experiences. The big four banks have also acknowledged and recognised that open data is coming and have already started taking futuristic steps – an example is NAB Labs who have started making some Product information available via Open APIs in hackathons, and Westpac with their launch of Data Bank. While many of fintech players are using screen scraping as the technology behind data sharing, one can see opportunities only growing further once Open Banking comes in. Again, APIs being the backbone to all the innovation.
To summarize, APIs in the Digital world present so many colourful opportunities all one needs is an eye to visualize the beautiful kaleidoscope!!
References and Other interesting reads:
- The API Product Mindset: https://cloud.google.com/files/apigee/apigee-api-product-mindset-ebook.pdf
- Fintech Australia – Review into open banking in Australia