Plataforma de banca moderna FIS
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Amit Aggarawal | SVP, Product Management, FIS
July 06, 2020
In the digital age people need banking but not necessarily banks. With 70% of bank interactions taking place online or on mobile, bank customers increasingly want banking services delivered in context as part of an engaging experience. Application programming interfaces (APIs) make this possible. Here we consider how APIs boost integration in an ever-changing world.
API technology has been in the spotlight as the prime enabler of the new sharing economy. Many successful modern businesses owe their existence to this new technology, including Uber, Salesforce and Airbnb. Many others, including giants like eBay and PayPal have harnessed APIs to accelerate progress rather than write code from scratch.
Although APIs are mainly about integration, in practice they facilitate much more. Systems can be decomposed into constituent components, which can be fully integrated with other applications within the same organization or with third parties. For example, Uber – and other ridesharing apps - calls upon Google Maps to manage geolocations and provide directions. Uber also integrates other third-party services, for example to manage cashless payments as part of an integrated customer experience.
In addition to dividing systems into components, an API architecture facilitates a microservices approach to systems management. Individual components can be managed, updated and deployed independently, which accelerates progress and enables systems to be updated continuously with no interruption to service. For example, Amazon engineers deploy code every 11.7 seconds on average. By adopting a dynamic approach to software deployment, Amazon – and similar companies – can compete on the basis of a continually updated customer experience.
Banking has fallen behind some other sectors in adopting API technology for a number of reasons, including:
In many global locations, open banking is forcing change. Although legislation varies in scope across jurisdictions, all open banking initiatives seek to give consumers control of their data and to make it available (through APIs) to third parties. But apart from giving customers and members what they need, open banking is driving innovation and API use throughout financial services. APIs have reached a level of maturity to be trusted by the financial community and to attract substantial investment. Financial institutions are waking up to transformational potential of APIs and the need for integration.
A modern banking platform cannot exist in isolation but is part of a constantly evolving ecosystem, with a growing number of players. As well as requiring a new approach to technology, this also challenges traditional operating, business and competition models. Financial institutions that may be competitors in some markets may collaborate in others, to develop integrated banking and payment services that add consumer value.
In this new age of integration, the financial ecosystem is increasingly hosted on the cloud. After some initial reticence, financial institutions and regulators are yielding to the gravitational pull of cloud as the technology of the future. A modern banking platform must be cloud enabled and strategic platforms are increasingly cloud native. Most financial institutions recognize the need to move to cloud sooner or later but few wish the risk and expense of wholesale core system replacement.
The good news is that it’s possible to run a new, digital architecture alongside a legacy processing core. Mediated APIs are at the heart of this solution, acting as a bridge between the old and new applications. With many financial institutions facing similar challenges, this approach is gaining popularity and is commonly known as a “two-speed IT architecture.” So, how does it work?
A two-speed IT architecture that uses APIs can help financial institutions develop their consumer-facing capabilities quickly while decoupling legacy systems for which software release cycles continue at a slower pace. APIs introduce three crucial components to a two-speed IT architecture:
Pace of change: APIs allow for focused, multi-speed change delivery. This recognizes the need to consume IT at different speeds throughout the business, and to balance pace with large-scale traditional delivery.
Architectural clarity: APIs allow for the decoupling of systems of engagement (channels) from systems of record (customer and member records) through rethinking and separating underlying technology architectures. This allows change to be delivered into the business in a coordinated but non-synchronous way.
Dynamic support: APIs offer flexibility in both the operating model and infrastructure, which can include cloud technologies. This enables more dynamic, automated support for change delivery and release.
In practice, a two-speed approach can leverage the strengths of each solution. There are sound reasons to decouple consumer-facing solutions from the core processing engine within any financial institution. Purposeful design and intentional integration patterns, such as digitally enabling the core and APIs, allow the digitally advanced front-end to forge ahead, while better utilizing the legacy back-end system’s strongest assets – data and stability. APIs have become a critical success factor in any financial institution’s integration and digital strategy. In the chapters that follow we will consider how APIs can deliver quantifiable business benefits.
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