The API economy: helping financial services companies to build better products

Published on
26 Jun 2015
Final Author
Richard Peers

Markets and industries are changing faster than ever. Disruption takes many forms and businesses must grapple with the ‘innovator’s dilemma’: how to set the pace of change without stumbling. They need to embrace new technologies wisely to innovate fast at low cost and low risk. Application Program Interfaces (APIs) offer a powerful way to do this.

The business value of APIs

Pioneers such as Amazon and eBay are using APIs externally, to change how they interact with customers and with their supply chain and internally, to change how the IT department works with the rest of the business.

The key point is that an API platform can change the way IT deliver and the businesses innovate. But it doesn’t require wholesale changes or five-year transformation programmes. Instead, take the first few easy steps on the journey using the API approach and continue in an agile, iterative way.

The application programming interface (API) economy is based around four building blocks: social, mobile, analytics and cloud. Apps and services can be linked rapidly and cost-effectively to create an extended value proposition. For example, buyers and sellers could be connected via an exchange, where all parts of the value chain come from separate parties and are linked via APIs to facilitate an end-to-end transaction.

In the past, if companies spotted a niche or an inefficiency in the market they would need to build all of the technology to create a new product offering. However, using APIs enables them to take their pre-existing intellectual property and link it to new services, saving time, money and allowing business to create new or extend existing value propositions. Although APIs have been available for many years, it is only the modern APIs that have been designed for today’s ‘plug and play’ world.

Additional areas to explore

The rest of the article would expand on the opportunity to consider areas such as

Understanding API’s
The business value of API
Drivers of API economy