Rory Blundell, CEO at Gravitee
‘API First’ is an approach that can help enterprises and organisations, including those in the finance sector, future-proof their development and API strategies in order to adapt to the new rules of the digital market. But what exactly does the term mean, and how is the approach implemented in order to take advantage of the many benefits APIs have to offer?
Defining ‘API First’
API First is an organisation-wide approach that treats APIs as ‘first-class citizens.’ This means that development and business strategies are mapped out with APIs in mind, and, specifically, with API-consumption top-of-mind.
While APIs can be leveraged for many different benefits, here are some major ways that APIs function across leading financial organisations:
- By creating a contract that defines who should be able to access what (and how much) of the data and services being made available
- Being an efficiency multiplier that reduces the risk of IT components, digital services and datasets needing to be created within each interface or system (for example, by reducing redundancy or by creating duplicate databases in each business unit when designing data flows across multiple departments)
- Providing an ecosystem builder that allows key partners, third parties, and consumers themselves to co-create new products and services built off core business systems
- Behaving as a digital enabler that speeds up the delivery of new features, products, services and workflows
- Working as a data infrastructure element that allows for better collection of timely data on usage, performance, and demand, to provide business insights. (APIs as data infrastructure also allow finance businesses to plug into artificial intelligence tools and privacy-enhancing technologies to support an organisation’s maturity as it moves beyond being a digital organisation, to being a data-enabled organisation.)
Understanding the real value of APIs
When talking about technical topics such as APIs, API Management, API Security, Event-driven architecture (EDA) and APIs, it can be easy to talk about value only as it pertains to technical value. However, APIs are able to deliver serious business value as well, and finance organisations that have taken an API-first approach have realised this.
Technical teams have long understood the value of APIs. These teams typically know that APIs can be used to:
- Expose financial services as productized APIs
- Enable partner and customer onboarding
- Avoid duplication in each system interface
- Prevent database duplication
- Strengthen security and reduce vulnerability
- Automate workflows
However, decisions to support these technical teams into building and making APIs available for these purposes are also business and strategy decisions. And, as a result, proper API-first implementation will require finance business users and stakeholders to more fully understand APIs and their value and understand how API usage can be driven from the ‘business side.’
The following list reveals how business decisions can work alongside the already-established technical value and functions of APIs in financial organisations:
- Expose financial services as productized APIs: This requires a business-led strategy around which services can be turned into new revenue streams and how those services can be exposed for maximum revenue generation
- Enable partner and customer onboarding – This requires a business strategy that implements a platform business model and fosters an ecosystem approach.
- Avoid duplication and recreation in each system interface – This requires a business strategy that calculates costs and prioritises creating more efficiencies.
- Prevent database duplication – This requires work across multiple (often siloed) business units or departments and the creation of cross-organizational assets such as a data registry that makes a dataset available to each department (which departments may fight against as they fear it means their budget will be reduced if they access a shared resource).
- Strengthen security and reduce vulnerability – This requires a business strategy that sets user access permission controls for each role within the organisation and for each role in the ecosystem.
- Automate workflows – This often requires multiple business units working together to share resources and create common systems and approaches.
Leveraging resources
Leveraging the full potential of APIs requires a new business mindset – an API-First approach – that actively seeks ways to build digital business models, foster an ecosystem, empower IT architecture, and support cross-team productivity with APIs as first-class citizens.
In digital business, banks and financial services players could actually have a head start in adapting to this way of working. Once they have leveraged the wealth of data, information, customer experience and knowledge, they need to adopt an omnichannel strategy to keep up with digital transformation in the wider external ecosystem. This approach will create an environment and culture that delivers both innovation and digital leadership while allowing banks to evolve in line with future demands.