May 31st, 2013

Banking on APIs

Banking APIsSomething has changed in the world of banking technology. Over the last few months, the architects who shape IT strategy for banks have started talking about API programs with an enthusiasm and energy that was barely at surface level in 2012. I can’t put my finger on exactly what has changed but IT leaders in the financial services world are moving towards implementing API strategies as a legitimate method for supporting a wide array of business drivers.

We know that connectivity and message-based integration are not new concepts for the financial industry. Enterprise architects in the banking world are masters in the art of connecting old systems with new facades and exposing backend resources through multiple channels. But up until now, a conversation with these professionals would be dominated by concerns rooted in the Services Oriented Architecture world: “How do we prevent service proliferation?”, “How do we secure SOAP conversations?”  In fact, it wasn’t too long ago that the mere mention of an API as a strategic initiative would leave these enterprise architects scratching their heads.

Fast forward to today and many banking technologists are explicitly asking for API Management solutions.  They know the terminology of the space, they know what they want to achieve and they know the pitfalls they wish to avoid. In addition, I’ve been amazed at the depth of knowledge that has emerged among these teams, as enterprise developers have invested their own time to learn from relevant tutorials , articles and – of course – blogs posts. The caricature of the enterprise developer as a SOA dinosaur struggling to understand the “new stuff” is fast becoming a myth.

To be fair, there is still great hesitation within the industry when it comes to opening up data and losing control of the user experience but that isn’t stopping banks from applying good API design practice internally. As we’ve said before, APIs are not simply about reaching  anonymous third-party developers. Indeed, organizations can gain great benefits by applying API Management to the interactions that take place in private for their own apps and partners.  But I’ve been astounded by the handful of architects in the banking world I’ve met who are actively experimenting with public API releases.  It seems that the fear of losing control over data, services and products is beginning to lose out to the perceived value of growing the business through a new channel.

Banks provide a great indicator for the direction of enterprise technology and it certainly seems that the “API thing” has legs within this space. If you are in the enterprise world, make sure you have considered how launching an API program might help your business – because it’s increasingly likely your competitors are already doing so.

1 Comment »

  1. After introduction of core banking and internet banking facility , banks now require more user friendly APIs for their regular customers.Banking course running by various institute should keep this terminology and it’s function to teach it’s banking students.

    Comment by Abhi Roy — November 11, 2013 @ 2:04 am

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