The API-fication program as enabler of the open API ecosystem Business Model

Companies are becoming increasingly data-driven, with information as their main asset. However, it is important that they ensure access to their data, as well as the secure transformation and integration into internal and external ecosystems.

“Open” has become a buzzword in the financial services industry (open data, open banking, open APIs etc.) and refers to a company’s ability to expose its services to the outside world so that partners, even competitors in certain cases, can use these services to bring added value to their end customers thanks to the technological evolution of open APIs (Application Programming Interfaces), which in simple terms are the digital gates that make this type of communication possible

We are now beginning to see the impacts of this new paradigm on the banking sector: for example, some banks are gradually specializing in the provision of financial services, while others are focusing on product distribution and the relationship with end customers. Whatever the approach favored by each operator, we are gradually seeing the abandonment of the traditional model, with the building of entirely in-house end-to-end financial solutions, in favor of the assembly of financial services that guarantee innovation and are tailored to customer needs: available on the market, the best in terms of quality, price, and ease of integration. In view of this, traditional product-centric distribution is being transformed into services that provide financial customer insights (generated by applying Advanced Analytics techniques to in-house information assets) and which can be integrated with services offered by operators from other industries. This model is only possible by establishing a so-called open API ecosystem, bringing real value to all the players involved.

In this context, we need to understand APIs not as a technical concept, but as a true commercial product: the face that a company shows to the outside world; the factor that enables an ecosystem based on collaboration and cooperation among partners. And that’s what leads us to the subject of next-generation APIs exposed on “open” platforms: they need to be designed not so much in terms of how they solve potential business issues, but rather in terms of their ability to foresee and enable future growth in value.

These platforms, based on microservice architecture, favor the interoperability and modularity of the services they expose. However, we need to abandon the traditional approach to API design, which aims to find a solution to specific project requirements, according to a vision of application integration between vertical worlds. Over time this has created complex interdependencies between systems, duplicated information, and made the evolutionary maintenance of services complicated and expensive. The new APIs of the platform economy are the bridge that makes it possible to connect products and services, both in-house and third-party, to create greater value for end customers. However, they must be designed to expose business data, functionalities, and services to the outside world in a controlled way.

The adoption of the new API paradigm is primarily a strategic choice, not just a technological one. A culture based on the creation of reusable assets that facilitate alliances and partnerships within an ecosystem context must be promoted within the company at all levels. Following this logic, legacy/traditional services can also be revitalized if redesigned based on next-generation APIs, breaking the silos, simplifying the use of basic information, and making traditional information assets available to a new community of users.

The “new” APIs must be easily accessible by as broad a user audience as possible; they must be well documented; they must ensure compliance with corporate security standards; and they must be quick and easy to update.

One of the key elements in attracting ecosystem participants and leveraging the so-called “network effect” (the value that each ecosystem participant sees is proportional to the number of participants) is the Developer Portal. This is a true corporate website, through which a company communicates with the market, and it is the public point of entry that describes the company in the context of the open API ecosystem.

In addition to the technical documentation that can be used by app and service developers to build their own software modules necessary to consume the APIs of services exposed on the company platform, it must allow easy and fast onboarding, ideally through self-registration. It must also have tools that simplify development of applications (multi-platform SDKs, source code samples, etc.); provide API sandbox test environments; and provide forums for the developer community to post opinions and comments.

In order to be successful, the “API-fication” process in a company must be accompanied by the adoption of the target operating model that best suits the characteristics of the company itself and its business objectives. There is no single operating model that works well for everyone. In general, however, there are some important guiding principles that should be taken into account: first of all, a shared and consistent common vision must be achieved, communicated to everyone; the “API-fication” process is a journey, not a project with a beginning and an end; and a dedicated team must be responsible for governance of the program, to ensure compliance with corporate standards, guideline definition, and policy monitoring.

CRIF has recently presented its positioning strategy in the world of Open Banking by launching as its main pillar CRIF Digital Next - the innovative platform that enables financial players, insurance companies, and businesses to accelerate their digital transformation - with the aim of integrating and hosting CRIF Value Added Services (VAS) together with the VAS of third parties which are partners inthe CRIF ecosystem. The CRIF Digital Next offering is built on and delivered through CRIF’s open platform, a multiservice infrastructure layer, specifically designed to enable the quick and easy creation and integration of internal and external services, through the exposure of next-generation APIs. The platform is designed to be open and take full advantage of the ecosystem business model, to enable the implementation of valuable use cases, and to improve the end-customer user experience by generating fast, continuous, and sustainable innovation processes.

Specifically, the strategy of exposing products and services through APIs will allow new opportunities to be explored and will be a further driver to the continuing evolution toward an increasingly agile, customer-centric organization. The success of this business model and the platform that makes it possible will be measured by the creation of new revenue streams, service improvement and the resulting customer satisfaction, as well as the ability to collect even more data.

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