In the financial sector, digital transformation is an urgent concern. For banks, a best-in-class app can mean the difference between retaining a customer and losing them to a competitor. Many banks understand the key role APIs will play in any digital strategy but much of the industry is still lacking in maturity when it comes to their API programs. To flourish in the digital age, a bank must offer open APIs, accessible to partners and third-party developers. These APIs will form the foundation of a new IT platform that will make it possible to quickly seize emerging opportunities. Here are five reasons why building a banking platform with open APIs will prove essential to banks focused on competing in the app economy. API-Driven Innovation in Banking and Finance: How Finance Institutions are Transforming the Customer Experience To take a deep dive into the specifics of how a digital strategy based on open APIs and platform thinking will empower the most innovative banks to win in the application economy, download this new eBook from CA Technologies. Get the ebook here: http://cainc.to/9IHDw5

1. Five Reasons
Every Bank Needs
an Open API Platform

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The application economy is creating the need for digital transformation
throughout the public and private sectors and across all vertical industries.
Nowhere is this need more urgent than in banking, where a best-in-class
app can mean the difference between retaining a customer and losing them
to a competitor.
Digital Transformation in Banking
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Most banks understand the importance of digital and many realize the key
role of application programming interfaces (APIs) in making services available
on mobile devices and the Web.
But much of the industry is still lacking in maturity when it comes to their API
programs—stuck on creating ad-hoc APIs that digitize simple functions.
Any bank that wants to truly succeed in the application economy will need
to build a new technology platform based on a firm foundation of open APIs.
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Many APIs are simple backend integration tools. Even those APIs that
are used to build customer-facing apps are often not made directly
available to anyone outside the organization.
But to flourish in the digital age, banks must offer open APIs that can
be accessed and leveraged by partner organizations and even third-party
app developers.
Opening Up With APIs
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Rather than being created ad-hoc in order to meet immediate needs,
these APIs will form the foundation of a new IT platform that will make
it possible to quickly seize emerging opportunities.
Here are five reasons why creating a banking platform built with open
APIs will prove essential to banks focused on achieving true digital
transformation and competing in the app economy.
Building the Banking Platform
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It’s the Law
Increasingly, regulatory requirements like PSD2 are compelling banks to give
authorized third-party providers access to customer information, which
means creating and securing open APIs.
1
Banks should not see this is as a chore—instead, they should embrace
it as a chance to open up their services to the many opportunities waiting
in the digital future.
The revised EU Payments Services Directive (PSD2) requires financial institutions
to open their customer information to third-party providers.
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Your Choice: Disrupt or Be Disrupted2
Even if regulations were not forcing banks to open up, digital would still be
changing the way people managed their money, as well as creating
competition from unexpected places.
To stay competitive, banks must partner with providers of new products and
connect their services with the network of interactions that increasingly
comprises life in the digital age.
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Customer Expectations are Changing3
Banks need to address these realities simply because their customers expect
and want them to. Consumers have come to expect the level of convenience
offered by the Web and mobile apps.
Therefore, banks cannot afford to cut their services off from the ever bigger
and more complex ecosystem of connected devices, apps and services
that enable this level of convenience.
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You Have to Be Ready for Anything4
Creating open APIs as and when regulations or customers demand is not
sustainable. With digital technology evolving at a extraordinary rate, banks
must be fundamentally more agile.
This can only be efficiently achieved by building an API-enabled platform,
upon which lightweight microservices can be quickly and easily developed,
integrated and repurposed.
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Staying Ahead Requires Momentum5
Traditionally, IT in banking is monolithic. But as the API-enabled platform
makes it possible to break more common functions into lightweight
modules, the more innovation accelerates.
Platform-based banks can achieve greater economies of scale and gain an
exponentially bigger head start on their less agile competitors as the speed of
innovation accelerates.
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11. API-Driven Innovation in Banking and Finance
How Finance Institutions are Transforming the Customer Experience
To take a deep dive into the specifics of how a digital strategy based
on open APIs and platform thinking will empower the most innovative
banks to win in the application economy, download this new eBook
from CA Technologies.
Read eBook
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