Forrester predicts that significant digital shifts are coming to financial services in 2016, one of which is the increased focus on APIs. With the spread of apps and handheld devices, consumers increasingly expect to have services at their fingertips, in real time.

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We work with business and
technology leaders to develop
customer-obsessed strategies
that drive growth.

3. Banking On APIs
How Financial Providers Are Approaching APIs To
Enable Digital Business Transformation
Peter Wannemacher, Sr. Analyst
February 10, 2016

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Agenda
› Five questions financial services
executives ask about APIs
› Six predictions about digital financial
services in 2016
› Seven takeaways & recommendations
for FIs, disruptors, and their partners

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Agenda
› Five questions financial services
executives ask about APIs
› Six predictions about digital financial
services in 2016
› Seven takeaways & recommendations
for FIs, disruptors, and their partners

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Five most common questions about APIs
1. What are other firms using APIs for?
2. How are APIs better than alternatives?
3. What should my API strategy be?
4. Why can’t we just build everything in house?
5. How long should we spend evaluating various
vendors and APIs before committing to one?

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Four types of APIs

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PayPal is uses internal APIs
Source: Craft Conference 2015: Evolution of the PayPal API: Platform & Culture

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Xignite sells APIs to FIs and other firms
Source: Xignite

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BBVA and Mondo both use open APIs
Sources: Forrester Case Study: BBVA; Mondo

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E*TRADE is looking to productize APIs
Source: E*TRADE

12. APIs enable better (and faster) flexibility.

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New realities transform operating models
Customer-aware Customer-led
Data-rich
Perfect
Siloed
Insights-driven
Fast
Connected

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APIs are a means to an end…
Source: Forrester Research

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…yet they will be mission critical for FIs
Source: Forrester Research

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APIs enable a faster, more agile approach

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Agenda
› Five questions financial services
executives ask about APIs
› Six predictions about digital financial
services in 2016
› Seven takeaways & recommendations
for FIs, disruptors, and their partners

18. Prediction one: APIs will take center stage.

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Four types of APIs

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Ecosystems require dynamic collaboration

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BBVA is doubling down on APIs
Sources: BBVA and Dwolla

22. Prediction two: The mobile mind shift will
continue to reshape customers’ behaviors
and expectations.

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How we define the mobile mind shift
The expectation that I can get what I
want in my immediate context and
moments of need.

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Context will drive success in 2016
Context is everything you know about a customer or
prospect at the point of engagement.

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Deconstructing the mobile mind shift
Source: Forrester’s “The Mobile Mind Shift,” Groundswell Press, 2014
Companies
Platforms
People
Processes
Mind Devices Applications

26. A mobile moment is a point in time and
space when someone pulls out a mobile
device to get what he or she wants
immediately, in context.

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Discover focused on a key mobile moment
Source: Discover iPhone app

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Yet customers remain wary of mobile
Source: Discover iPhone app

29. Prediction three: Cross-channel banking
experiences (and expectations) will surge.

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How we define cross-channel
Any instance in which a customer or
prospect moves from one touchpoint to
another when completing an objective.

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Cross-channel will have a major impact
Among US online adults: Among Canadian online adults:
*Cross-channel shopping is defined as researching a financial product via one touchpoint (e.g., phone, mobile app, branch, website) and
applying for that financial product via any other touchpoint
Source: Forrester’s North American Consumer Technographics Online Benchmark Survey (Part 2), 2015

32. Prediction four: Banks and disruptors will
push into the shared finances market.

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How we define shared finances
Any situation in which a person acts as
an observer of, partner in, or proxy for
another person’s finances.

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Technology is not the main driver
Demographic shifts
Economic forces
Complex financial
relationships, such as:
• Elderly parents
• Blended families
• Dependent children
• Multi-generation
households
• Pooled financial goals
• Other situations

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Expectations will rise in the near future

36. Prediction five: Executives will move
resources to back-end initiatives.

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Financial firms will re-engineer in 2016
Source: Forrester’s Mobile Banking Strategy playbook

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This will be especially evident in mobile

39. Prediction six: Real-time will go prime time

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The move from batch to real-time begins
Source: American Banker online poll

41. “Our first implementation of PFM was
working on a batch process... If you want
to provide effective and accurate hints to
customers, you need real-time data.”
-Head of eBusiness, large U.S. Bank

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BBVA partnered with Dwolla using an API
Source: Forbes

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Agenda
› Five questions financial services
executives ask about APIs
› Six predictions about digital financial
services in 2016
› Seven takeaways & recommendations
for FIs, disruptors, and their partners

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Takeaways & high-level recommendations
1. FI execs are increasing their use of APIs…
2. …but they’ll move slower than other industries
3. APIs are not a strategy unto themselves…
4. …but they are a crucial tool to enable digital
transformation and ecosystem design in FS
5. Financial brands will feel immense pressure in
mobile, cross-channel, and real-time data…
6. …but they cannot go it alone!
7. Success will require everyday collaboration

45. forrester.com
Thank you
Peter Wannemacher
@p_wannemacher
pwannemacher@forrester.com