APIs are stitching together newer business models and helping customers bring them to market faster
Monday May 13, 2019, by Santosh Padmanabhan
Application programming interfaces, or APIs, are not new, but they are still, if not more, important today, as APIs are how software talks to each other. They are about connecting “things” and enabling enterprises to interact and share information with other enterprises at an unprecedented scale, taking advantage of the far-reaching progress in digitization and the rising influence of software in our day-to-day lives.
But APIs go even further than connecting different systems. For instance, did you know that one of the chief advantages of APIs is that they allow the abstraction of functionality between one system and another? They also help to create entirely new commercial ecosystems, and as a result, they are now integral to how leading enterprises operate and conduct business.
In fact, without APIs, life as we know it would not exist, as they play an integral role in the digital transformation of how we live, work and play by making possible social networking, e-commerce, mobile and cloud computing. So, when it comes to digital transformation, APIs are the digital glue. Why? Because APIs are what enable global enterprises to do business with their customers, 24/7, no matter where they are, while also providing better customer experiences and delivering new revenue opportunities.
For instance, Salesforce released APIs to enable partners to extend the capabilities of their platform and now generates half of their annual revenue through those APIs. Let’s also look at Expedia…they opened up their travel booking services to partners through an API to launch the Expedia Affiliate Network, building a new revenue stream that now contributes $2 billion in annual revenue!
APIs are also transforming how financial services operate by opening access to backend systems through APIs to support third party FinTech partners and omni-channel engagement points. APIs are able to do this by focusing more on the system or application’s behavior and less on the underlying system work. That means different systems and data can be brought together to provide a seamless customer experience.
For example, one of our customers is a large commercial bank. They are changing how they operate by having new customers onboard via online, and that means multiple vendors are required to validate background checks and documentation such as passports. APIs are essential to the validation process. We at Brillio are building the middle layer using APIs from the multiple vendors to create a customized solution so that the bank can seamlessly onboard via online their new customers. For our customer, this new capability of onboarding customers also presents a new business model and revenue stream that can be leveraged to vendors and clients.
As we are seeing with increasing frequency, APIs are critical to financial services, as they connect all different types of data from multiple suppliers and platforms while connecting disparate systems. All this then enables those in the financial services industry to create a seamless cross-channel banking experience.
And this is critical, as in our always on, always connected world, consumers are using more devices, and for leading enterprises – particularly those in the financial services industry – the customer experience on those devices has to be flawless. For example, mobile banking is now one of the most critical factors that consumers consider when selecting a bank. In fact, according to Business Insiders’ 2018 Mobile Banking Competitive Edge study, 61% of respondents would change banks due to a poor mobile banking experience. So, as enterprises digitally transform themselves, APIs are making all this – mobile apps, digital payments and more – a reality.
To accelerate growth, the need for data driven, real-time, responsive customer communication to support these changes in the financial industry is even more important than ever. And as APIs become mainstream – not only in financial services but industries across all sectors such as retail, manufacturing, and healthcare – they are offering an unprecedented opportunity to drive new business opportunities through ecosystems and new ways of rebooting enterprise architectures through microservices. Without question, APIs are powering significant changes that will continue to change how we live, work and play.