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APIs and app stores and the future of banking

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APIs will certainly revolutionise the services the banks provide, but they will also revolutionise the way banks work.

The lovely people at Finextra kindly invited me along to their FutureMoney event at Level39 in Canary Wharf this year and asked me to moderate the panel about banking app stores, which I loosely interpreted to mean about financial services app stores and APIs. Luckily for me, I had a great panel to work with:

Edward Budd from Deutsche Bank, Udayan Goyal from Anthemis Group, David Pope from Jumio, Simon Redfern from Open Bank and Jose Antonio Gallego Vázquez from BBVA.

[From Finextra: Live: Finextra Future Money, day two]

After some initial confusion about the relationship between the colours of the chairs and the colours of the pictures behind them (!) I made a few introductory comments about APIs in this sector and why I felt this was a strategically important discussion.

#FutureMoney

Picture: Roberta Profeta

Following that, we began to examine some of the questions that I had prepared to challenge the panel and brought in questions and observations from the floor to follow. Though I say so myself, it was a terrific session and I would like to broadcast my sincere thanks to the other people who said so too, including Richard Brown from IBM.

It was a one hour session and we were still going strong with questions and debate at the end, which I think is the only effective barometer of both the moderator and the panel. Modesty forbids me from quoting Zilvinas Bareisis of Celent on the session but… oh, wait, no it doesn’t…

Given that here both his topic (banking apps and APIs) and panelists were genuinely interesting, it is no surprise that it was perhaps the best session over the two days.

[From Celent Banking Blog » A “Shout Out” to Finextra Future Money]

Richard and Zilvinas are very kind. The reason that the session was such a joy, and was much appreciated by the audience, was that the panelists had exactly right mix of expertise and experience to tackle such a hot topic. I had a bit of an inside track as well, since Consult Hyperion carried out an extensive study of the financial services API world for one of our US customers last year, so I had a pretty good overview of the space in my head to help to shape the discussion. You can read the liveblog for yourself at Finextra, but I want to highlight a couple of what I thought were key points here.

First of all, the importance of the app store and APIs was reinforced. As I said in the introduction, this isn’t some obscure technical discussion about parameters and tokens. I think Craig Burton and Steven Willmott capture this nicely with their “Five Axioms of the API Economy”. These are:

  1. Everything and everyone will be API enabled.
  2. APIs are core to every cloud, social and mobile computing strategy.
  3. APIs are an economic imperative.
  4. Organizations must provide their core competence through APIs.
  5. Organizations must consume core competences of others through APIs.

Secondly, APIs are not all about organisations connecting with other organisations. They are also a way of restructuring the way that bank systems connect internally. This was referred to as “Amazonisation”, the idea that every single corporate function should expose its APIs, because other functions within an organisation might be able to do something useful with them. Uday used the excellent example of Fidor Bank as an organisation that has taken those axioms to heart internally.

We decided from the beginning to build our own middleware, because there was no suitable offer in the market. This is what we now call “Fidor operating system”… fOS is an “open” System. Via standard interfaces we integrate 3rd party offerings into our account.

[From FIDOR Bank |]

In our Consult Hyperion “hot five” for 2014, we highlighted the importance of APIs as part of an electronic transaction strategy and this panel confirmed, to me at least, just how central that API strategy should be to organisational strategies. And they also underlined one of my key messages to our clients: this is business strategy, not technology strategy.

APIs are, at their core, not a technical device. Instead, they are a means of delivering or providing access to a service or a product.

[From The Five Axioms of the API Economy, Axiom #3 – APIs are an Economic Imperative | Craig Burton]

So thanks again to Liz and the rest of the Finextra crowd for giving me the opportunity to learn so much from a terrific panel.

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One thought on “APIs and app stores and the future of banking”

  1. Sytaylor0@gmail.com' Simon says:

    Axiomatic subject matter executed with absolute clarity. Kudos.

    Points 4 and 5 are critical. APIs aren’t a channel or a product. They’re a strategy that starts with wrapping your internal systems in cotton APIs and ends with being the Salesforce of banking.

    When a corporate can install a bank’s FX “app” in Salesforce…

    When a Retailer can install a bank / PSPs merchant acquiring app through Magento…

    When a consumer can view all of their bank data in their favourite money dashboard or Mint.com equivalent without hostile integration…

    When developers can compliment the core value of banks…

    Then we’ve overcome the fear and embraced the freedom of APIs

    (This rant is brought to you by Paulo Nutini – Iron Sky, quite possibly the best song to be written in decades)

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