Streamlined API Lifecycle in Banking

Over the last few years, we’ve seen customer expectations change and increase in all the industries — banking is no different. They demand personalized services, not just wanting to know their balance but the implications of their spending patterns. They expect banks to be proactive in addressing fraud and enforcing security. And they expect to be able to compare and change loan, mortgage, and insurance providers with a click of a button. Your customers anticipate an exceptional, seamless experience whether in-branch, online, in-app or using a third party that you happen to integrate with.

Add to this, the global pandemic accelerated digital transformations, which, combined with Open Banking innovation and FinTech and neobank disruptors, banking as we know it has been reformed. Banks have been pushed to innovate faster, while still meeting rigid governance and compliance restraints. There’s no turning back. The future of banking is now. So, what differentiates the winners from the losers? A solid backbone of a high-impact API program. APIs provide alternate channels through which customers can have the experience they want, when they want it, at their fingertips. This enhanced user experience extends beyond customers to employees, investors and strategic partners, who can all benefit from real-time data and decision-making. A high-impact API program, grounded in open banking collaboration, enables you to streamline your API lifecycle and deliver a better customer experience.

Overcoming the complexity in order to scale your API strategy

The now industry standards of API-first and Open Banking have not only enabled big banks to stay competitive, it’s leveled the international finance playing field, allowing for new entrants like neobanks and fintechs to become competitive, too. In fact, Platformable witnessed a 381% annual growth in Open Banking API platforms and API products in 2020. That curve will only continue to trend up, included in API-powered embedded finance estimated to exceed $138 billion in the next four years.The true differentiator comes with focusing on a top-down API strategy. With that, an Open Banking and Open API strategy is possible, which allows developers to build and embed your services into their own applications, increasing customer experience and reducing churn. This means treating your APIs with the planning and strategy that goes into a product.

Top-down innovation is the industry standard, but that doesn’t make it simple. 90% of new digital services are expected to be built as what the IDC calls composite applications — a mix of public and internally built API-delivered services. API sprawl becomes a real challenge as most enterprises are interacting with thousands of APIs.

Organizations are now facing an overwhelming tool stack with a huge investment of time maintaining and fixing, while there’s a push to deploy faster in response to customer needs. And that’s a risk because 70% of IT outages are due to unexpected changes.

And, of course, banks are also facing a huge talent gap, and don’t have enough time to upskill current staff, who are just trying to keep afloat. You can no longer afford to maintain custom-built tools and handcrafted scripts, run by specialized individuals. You need guardrails and safety nets to gain visibility into your cross-organizational API management, while still giving your developers the autonomy to build and release quickly.

Most importantly, as Conway’s law is always causing your technology to reflect your disjointed organization, you must look to build a solid API team that communicates over a single, shared view.

Moving from a product-first to platform-based approach

An API platform-based approach becomes the obvious solution, enabling:

• Productivity
• Reliability
• Governance
• Consistency

An API platform enables you to:

• Democratize and upskill organizations: Move away from specialized skillsets in order to leverage low-code and no-code platforms to abstract out complexity so both tech and business can do what they do best in the shortest amount of time.
• Centralize best practices and governance: At each step, automate best practices, governance and notifications with self-service to deliver a better customer experience by defining consistent processes and streamlining cross-functional teams.
• Decoupled control plane: Leverage a control plane that’s decoupled from vendor lock-in or runtime platform, so it’s not dependent on an API gateway or Service Mesh provider. This has a strong impact on cutting costs, complexity and delays that come from using disparate technologies.

Of course, a successful API program is truly data driven, allowing for experimentation and autonomy, but, again, with those quality, compliance and governance guardrails, and the ability to roll back when things go awry.

Plan, build, test and publish your API strategy

Organizations want to move fast and not break things, which often butts developer autonomy against continuous integration. And they want to move to become a cloud-native organization but are struggling with conflicting goals across the organization. And it’s all just costing too much.

This is because until now most API strategies — if you even want to call them that — have been ad-hoc. Now you must plan and collaborate across the organization so that your API strategy aligns with the organizational vision and objectives.

Three essential first steps to a solid API strategy

• API design-first approach: Define business goals that manifest into APIs, accepting that they will evolve. Simplify API design to maintain consistency and expedite API adoption through collaboration versioning and documentation.
• Track and notify API changes: Automatically notify developers when API changes occur, including breaking changes and new endpoints.
• Maintain an API Catalog: Accelerate API discovery with required documentation, schema definitions and code samples, to promote reusability and reduce friction.

Build and manage your APIs

• Build API programs free from vendor lock-in: Surface APIs from multiple API Runtime Gateways to provide a more consistent developer experience.
• Simulate and iterate API behaviors: Reduce development and testing cycle dependencies, get early feedback and go to market faster by standing up realistic, dynamic mocks in seconds.
• Reduce outages with config management: Avoid disruption caused by manual errors and changes to configuration by centralizing ownership via version-controlled config management.

Test and deploy with governance

• Contract testing for API governance: Design and build reliable APIs using automated tests and robust test coverage based on API contracts that have already been designed and approved.
• Predictable release model: Deploy to your pipelines on demand using a flexible, gated release model with security and compliance reviews. Easily standardize, scale, and run audit checks across your organization.
• Continuous delivery: Embrace predictability, Use a familiar visual GUI to auto-generate data models and workflows to avoid hand-rolled automation, scripts and custom development.

Increase developer experience as you publish and monitor

• Simplify API adoption: Enhance developer experience by providing API resources to internal, partner and third-party developers for faster collaboration and API consumption.
• Increase developer productivity: Auto-generated, interactive API documentation and SDKs allow teams to continuously learn while they make calls and view sample responses from each API endpoint.
• Real-time API monitoring: Monitor API KPIs like latency, uptime and downtime, enabling failure prediction and rapid response before an API goes down.

In the end, an API platform-first approach is about communication. Yes, it’s about creating a way for disparate interfaces to integrate in order for information to flow quickly yet securely, but, more than anything, it’s about creating a single cross-organizational view that allows both technical and business sides to align around an API strategy. And it’s absolutely essential for a bank of any size to continue to compete and even stand out and attract and retain customers.

This post was our reflection from our APIdays London talk. It was originally published on APIscene.