Three questions and answers about APIs in banking apps

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Why should my bank participate in the API economy?

Customer expectations are evolving rapidly, and they expect their financial needs to be met as other innovative companies in other industries like retail are meeting them.  As a bank focuses on the essential services at which it excels, it can foster an environment of innovation in a community of its internal developers, other companies and app developers to better serve their customers now.

APIs provide the ability for app developers to integrate services and capabilities from many different providers into cutting-edge and innovative consumer applications… that could not be created by a single bank based solely on their services in a closed and inaccessible system.  Your bank would not be able to create this ecosystem alone, but can participate in already existing ecosystems.  APIs allow you to offer many different solutions that can address the needs of different consumer groups and audiences, each of which have different requirements for privacy, security, trust and convenience.

The API economy will allow your bank to begin removing the constraints and barriers created by your legacy applications.  These constraints limit your ability to fast forward your business models and create innovative new products and services.  You can extend your core capabilities and mobile services to a much broader consumer base and reach niches that would have been previously unreachable.

Apps and APIs force your bank to think differently.  You can reimagine customer experiences that take advantage of trends in mobile, social, cloud, Internet of Things (IoT), wearables and analytics.  It is all built on your core capabilities as a bank.

Who will consume my APIs?

To successfully cultivate an API ecosystem, you should make it easy for developers to consume your APIs, allow them to customize and specialize to meet their needs and allow them to integrate your services into their workflows.  Third party developers and partners can compose new innovative applications using the services you offer, combined with services from other APIs.  This network effect benefits your bank as your digital footprint is increased.

APIs also benefit your internal developers, even if you do not expose your APIs to an ecosystem of external developers.  Large organizations tend to work in silos and the benefits of an API economy can apply to your internal organization as well.

Your bank probably already offers some APIs – ATM locators, foreign currency exchange rates, deposit and lending rates, bill pay services and access to account data and payments for aggregators like mint.com.

How do I get started?

Start by experimenting with a couple of API services.  Create services that would be most useful in the development of a consumer mobile application, and limit the requirements for deep integration into your core systems.  This will lower the requirements for investment and allow you to enable something in the short term.

Hackathons and innovation challenges are common strategies to excite developers and create interest in your APIs.  Developers can use your APIs and those from other companies to create real-world innovations.

Sign up for IBM Bluemix and access data and service APIs that you can use to build compelling apps.

APIs are all about ensuring ease of business with your company, while extending your capabilities to the widest number of customers available.  Customers want quick and convenient access to products and services.  They demand personalization and relevance to meet their needs.  Join the API economy now to embark on this exciting journey of transformation.

For more information you can also visit our API economy site.

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