While some financial institutions may not be known for being on the cutting edge of innovation, several powerful forces have been driving the need for digital transformation, the development of new products and services, and more compelling customer experiences in the financial services industry.
Market conditions like an uncertain economy and increasing regulations, combined with increased customer expectations and agile new entrants to the market, have led financial institutions to move forward with digital initiatives to help be on the leading edge of technology.
However, this has not come without its pains. Business leaders are under pressure to deliver digital transformations faster, along with reduced costs. IT leaders must deliver increased volumes of projects, remove IT as the bottleneck to innovation, and move the focus of the department from keeping the business running to growing the business. Application architects face pressure to incorporate new digital technologies into legacy stacks (including the trusty mainframes) in an agile, flexible way to avoid creating brittle integrations that require constant maintenance. The IT department is being called upon to drive change.
At first glance, traditional, point-to-point integrations may seem like the most logical choice to link together disparate systems and provide access for customers and partners. However, these types of integrations are time-consuming, very system-dependent, and costly to maintain. Each additional system requires new coding and connections, and when the system needs an upgrade, developers and architects are left scrambling to ensure the code is compatible with the upgrade.
Is there a better way than this duct-tape approach? Leading financial services institutions have already discovered it: APIs. With an API-led integration approach, these institutions are improving their expense to revenue ratios, attracting and retaining customers, and responding rapidly to industry threats. Furthermore, their API Management solutions provide important connectivity, security, and change management capabilities to meet the needs of line of business users, customers, and partners.
In this post, we’ll explore three real-life examples of financial services companies leveraging APIs and the advantages they have achieved.