This is forcing FSIs to think very differently about their business, because their competitors can come from anywhere. They may not come from another traditional FSI. We see that a lot of examples of that in other industries — like how Airbnb is a competitor to hotel chains, Uber is a competitor to taxi companies, and Alibaba as a competitor to typical retail companies.
Similarly, the finance industry is seeing the rise of non-bank lenders and payment systems that come from other places. The mantra is this: As a company you have to disrupt your own business model, because if you don't do it, someone else will and they're going to do it by using mobile, social and cloud technologies, as well as APIs.
How does an API-led connectivity approach help FSIs generate valuable intelligence to enhance operations and deliver productivity?
From a productivity perspective, using APIs as an approach and a pattern promote developer productivity and reuse, as well as the development of micro services within an IT organisation. This helps with agility as it allows you to loosely couple your systems, as well as free up IT to focus on the high-speed areas such as building better user-facing apps.
Loosely coupling your applications and breaking your change management down with micro services also help develop a much better cadence around change and a much more predictable cycle. In doing so, you can get into things like continuous development, immigration and deployment.
At the heart of it all, if you take a holistic approach to API and building connectivity, you're really moving towards real-time integration, and that in turn allows businesses to not only gather, but also use data intelligence in a whole different way.
By taking a holistic approach, you effectively have a single payment glass on the business. You're thus getting deeper operational visibility — from when a customer takes an action on your website to a mobile app through to the back-end system that is being invoked at the end of the day to provide that service — which helps you better understand the business.
From the intelligence perspective, people are currently talking about big data, data analytics and the creation of data lakes. The fundamental aim here is to get all that data onto a single platform that allows you to govern your data, as well as mine that data for key insights that could perhaps enable you to provide your customers with a more compelling offer or service. For instance, if you knew that your customer recently bought a car insurance and plans to travel, you can make an offer for travel insurance.
So, APIs enable a single view of the customer, vetted digital experience, and better upsell and cross-sell opportunities to increase revenue. For FSIs, it enables fraud management and fraud detection as only by having data properly connected will one be able to prevent fraudulent transactions going through his/her platform in real time.
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