APIdays Open Banking & Fintech: Workshop - Financial Services Use Cases for APIs
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This was a fairly high level presentation I did at the APIdays Open Banking and Fintech event in London where I started to explore the main drivers for APIs, the mega trends in consumer banking and the various use cases for APIs within Financial Services.
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APIdays Open Banking & Fintech: Workshop - Financial Services Use Cases for APIs
- 1. ©2015 Apigee Corp. All Rights Reserved. Workshop: Financial Services Use Cases for APIs Jeremy Brown, Apigee @tenfourty
- 2. ©2015 Apigee Corp. All Rights Reserved. Were you expecting API Best Practices from Apigee? • As this is a Financial Services event I decided to walk through a few use cases for APIs in Financial Services instead! • Have no fear, there are have – APIs for Dummies – basic intro to APIs – The Definitive Guide to API Management – THE definitive guide! – And many more eBooks! - http://apigee.com/about/resources/ebooks 2
- 3. ©2015 Apigee Corp. All Rights Reserved. But first a quick retrospective: WHY APIs? 3
- 4. 4 Digital is transforming every business Nature of Market Retail Music Cars CPG Books Food Cleaning Services Consulting Mining Weightless Intermediate Nature of Product 2000s 2030s Heavy B2CB2B2CB2B 2020s Source: Gartner - CEOs and CIOs Must Assume That Every Industry Will Be Digitally Remastered, 2014, Raskino
- 5. ©2015 Apigee Corp. All Rights Reserved. 5 Those who fail to adapt to change Those who adopt the technology Those who (re)build their business around the change Technologies have This hashappened before changed the market context
- 6. ©2015 Apigee Corp. All Rights Reserved. 6 liberated data + agile platform technology + vibrant developer ecosystem = platform business How does a 100+ year old company become a platform business? data What does a 100+ year old company have?
- 7. Speed up while preserving existing investments 7 Backend Intelligent Digital Business Platform layer SOA / Middleware layer System of Record YearsMonths IT Applications Partner Apps Mobile Clients "Internet of Things" Days Database API EXPOSURE API CONSUMPTION
- 8. ©2015 Apigee Corp. All Rights Reserved. Mega trends in consumer banking 8 Agility in application development and digital • 2 Speed IT – increased agility to deliver functionality without compromising availability • Scaling and securing infrastructure and applications • Consolidating applications Threat of substitution – fintech disruption stretching well beyond payments • Digital Banks, Marketplace Lenders, Crypto-currencies, Roboadvisors • Payment landscape continues to evolve The ever changing technology landscape • Chairman of large European bank believes bank’s future lies in as a software company competing with Amazon Apple and Google • Ubiquitous connectivity, open architecture and user-centered design is transformational • Big Data, Cloud computing, Mobility, Social Media and APIs are changing the landscape of what is possible with technology Changing consumer behavior, expectation around customer centricity • Expectation from digital is more than before • Digital is key for service and sales • Omni-channel and hyper personalized experience Privacy and security will draw increased scrutiny from consumers and regulators • Digital authentication measures are evolving – Biometrics • More security features will be needed to reassure customers
- 9. ©2015 Apigee Corp. All Rights Reserved. Key technology strategies to respond to these imperatives 9 Improve infrastructure and security • Optimize infrastructure with public / private cloud and virtualization • Consolidate applications and infrastructure • Enhance end-to-end security Data & analytics foundation and wins • Infrastructure and COE • Operationalize insights Agile delivery model: Two-speed IT • Boost innovation + efficiency • Agility, speed, scalability Enhance digital foundation and key capabilities • Drive seamless and sticky customer experiences • Architect for building a digital ecosystem around your services • Mobile payments innovation Financial services firms are evolving to an API based architecture to address some of these objectives
- 10. ©2015 Apigee Corp. All Rights Reserved. The value proposition for APIs and an API based architecture 10 Foundation for accelerating Digital development – 2 Speed IT API Banking as a Channel to scale innovation API based Financial Services solutions • Increase agility of digital and IT teams by decoupling systems of records and systems of engagement. • Increases time to market of of digital offerings • Increase customer experience measures • Scales innovation through ecosystem of fintechs, developer communities • Scalable, secure infrastructure • We have helped our customers across industries innovate using this model, build new service offerings and increase revenue. • Quicker time to market with API based Emerging Payment solutions, Digital Banks and emerging models in Credit and Wealth management • We are investing in inter-operable APIs, implementing standards to decrease the on-boarding time of emerging payment solutions for our customers.
- 11. ©2015 Apigee Corp. All Rights Reserved. a holistic approach from identifying value to defining the new digital operating model 11 APIsUsers Apps Developers API Team Back-end Intelligent API Platform Digital strategy planning and change management Rapid prototyping Building scalable infrastructure on private and public clouds Expert services & hackathons Customer facing apps Internal users
- 12. ©2015 Apigee Corp. All Rights Reserved. Financial Services are building a platform to create connected experiences for their customers faster and at scale … Digital Banks and Monetization of data PFM, card linked offers Develop alternate models in Lending P2p lending, alternate decisioning, using IoT in equipment finance Access control, and risk management Reduce risk through access control, metering of enterprise assets Outside-in Transaction Banking Business to Bank integration from ERP, Treasury workstations and 3rd party apps Alternative models in Wealth management Roboadvisors for affluent segments Deposits LoansInvestments Payments Third-party services e.g. Health, Smart Govt etc Other Banks 12
- 13. ©2015 Apigee Corp. All Rights Reserved. … Some are opening up an API platform to expose APIs and build ecosystems – API Banking as a new channel to scale innovation efforts 13 APIs have helped industries innovate, create new service offerings and increase revenue with this model Can scale innovation efforts and unlock hidden potential in a firm Deposit, credit, investment and payments Fintech ecosystem External developer communities Other FIs Secure, controlled APIs The API Banking Ecosystem
- 14. ©2015 Apigee Corp. All Rights Reserved. Leading payment companies are using APIs to create emerging payment solutions for 14 • Apple pay & other mobile wallet* integration • In-app purchase • Card not present transactions • Check out with online credentials • Loyalty and offers • Pay with points • API end-points / enabling contextual commerce • Analytics • Fraud prevention • Social media integration • 3rd party • Developer /fintech ecosystems * Inflight projects Partners / Developers / FintechsMerchantsConsumers
- 15. ©2015 Apigee Corp. All Rights Reserved. Internal API economy 15 apps developers and partners platform technology (APIs, apps, cloud, devices…) data
- 16. ©2015 Apigee Corp. All Rights Reserved. API all the things - Infrastructure • Expose all of your services as self-service APIs • Abstract away –private and public cloud – mediation –IaaS and PaaS –SDN –all parts of the Software Defined Data Center You can’t just expose the raw APIs without adding in your own “stuff”* - build a smart façade on top. *Authentication, Authorization, RBAC, Audit Logging etc. 16
- 17. ©2015 Apigee Corp. All Rights Reserved. Monetise your Data • Open up your data – both internally and externally • What systems do you use internally? – Would people pay for this? – Can you build an API in front of it and make it a product? Revenue-sharing models (API provider pays developer) Fee-based models (API provider charges developer) Freemium models Fixed Flexible Hybrid (flat fee plus fixed or flexible) Transaction One-time Subscription Duration Quantity Hybrid Transaction Volume Custom Attribute Advance / Arrears Pro-rated / Full amount Revenue / Volume Bands
- 18. ©2015 Apigee Corp. All Rights Reserved. Key Characteristics We have learn with our customers in the field that these characteristics should be applied to all API initiatives: • Self Service & Ease of Use • Multi-Tenant Architecture • State at Scale • Security • Cloud First – Public and Private • Configuration and Code – agility wins! 18
- 19. ©2015 Apigee Corp. All Rights Reserved. Stepping up to a Platform Business 19 Project Program Platform
- 20. ©2015 Apigee Corp. All Rights Reserved. 20 liberated data + agile platform technology + vibrant developer ecosystem = platform business
- 21. Thank you
Editor's Notes
- CEOs and CIOs Must Assume That Every Industry Will Be Digitally Remastered Published: 20 August 2014 Analyst(s): Mark Raskino if you're a music company today, no aspect of your business is not digital...
- Internal slide purpose/ zoom in on the highest level of problem that faces every digital business which Apigee can help with There may be many reasons for why seamless experiences are hard. For example: imagining the experience is hard, getting funding or figuring out ROI may be hard. However, by far the hardest part is connecting these experiences across different apps, data and devices. The connections need to happen both for new systems you are building as well as the back end of systems you already have. In fact, your most precious assets like customer data, inventory, payments etc. are already in your systems of record. You have to stitch every little fabric of digital experience such that the seams and stitching don't show. That’s hard. Operationally, there is only one modern way to do this…APIs
- At Apigee we believe that the right tool for the consumption or outside in layer should have the following characteristics: Self Service & Ease of Use - Providing self-service capabilities in all aspects of the platform for developers, administrators and other API team members to improve speed and agility. Agility is a key aspect of being successful in the digital economy. To improve agility, one needs to reduce friction in getting things done when using the platform. Self-service capabilities reduce this friction to help you get things done faster and helps with faster adoption. Multi-Tenant Architecture - Multi-tenancy means easily having a logical separation for business units or teams without changing the underlying platform. This allows a central IT team that has to be responsible for the platform to have centralised control but still allow decentralised development and a lifecycle of APIs by the various API teams. A great balance between centralised operational control with decentralised development with innovation and pace. State at Scale - Systems that are stateless are easier to scale. API Management requires one to scale while maintaining state such as authentication, authorization, quotas, IP validation, caching for performance and “recording” for analytical purposes. Scaling like this is hard as you need to do it whilst being performant with no impact on latency. When your business needs scale and hence API traffic increases, the API performance needs to match the need so the API consumer or the app user experience is not tarnished. Security - In Financial Services, as in many other verticals like Retail and Health, protecting data and being compliant with regulations is mandatory, out of the box features such as Role Based Access Control, Audit Logging, secure multi-tenancy and data isolation are critical out of the box features to avoid heavy customisation to become compliant. Public Cloud and Private Cloud are equal citizens - When you are operating at the scale of a financial services company you have to operate every platform like an internally hosted SaaS product. If you have the same on premise product for your private cloud as the vendor’s public cloud offering you can be sure that you have the performance, scale, and operational rigor the vendor puts the product through prior to you having to host it on your private cloud. Configuration and Code - Following the Pareto principle we believe that 80% of the things you would need to do in an API Platform should be done fast via drag and drop of pre-built policies that just require simple configuration. However for the remaining 20% it is a losing proposition to try to provide configuration for possible use case. Therefore we strongly believe that you need both configuration and code in your platform.