The Magical Mystery API Is Waiting to Take You Away…Waiting to Take You Away
There’s nothing like a good mashup of a Beatles song and technology, right? We all know the Beatles, but do we all know APIs? To butcher another Beatles song, ‘All you need are APIs, APIs are all you need.’ At least that’s what it seems like, especially in today’s vast finance industry. Before we quote any more songs, we should first define what an API is. According to our friends at Webopedia, Application Program Interface (API) is a set of routines, protocols, and tools for building software applications. An API specifies how software components should interact and APIs are used when programming graphical user interface (GUI) components.
Now that’s what I call a scintillating definition!! And speaking of scintillating, ladies and gentleman, the Beatles (uttered in my best Ed Sullivan voice)…I mean, ladies and gentlemen, the Ranta!
So Mark, are APIs the biggest thing since the Beatles and sliced bread combined?
First off, you can’t really compare anything to sliced bread, as the sandwich is beyond comparison, especially if the sandwich features Pastrami (see the above photo)...”now going for the trifecta!” But I digress.
In our industry, the “next big thing” has been blockchain and the distributed ledger. APIs give us the ability to have something tangible near-term, whereas blockchain and distributed ledger technology are still a decade-plus away from having meaningful impact (across our industry). With blockchain, we’re creating an entirely new ecosystem, hence the lengthy timeframe for when it might come to fruition. APIs give us the ability to enhance the banking and payments ecosystem today; like right now, banks can begin to extend their current offerings, and take advantage of emerging opportunities. I guess to that extent, it’s like our industry’s British invasion. Pop wasn’t new when the Beatles came around, and APIs aren’t new either. The Beatles and APIs just reinvented the way we viewed these respective areas and created massive amounts of excitement in the process.
Other than being the Beatles of financial technology, why else are APIs intriguing?
What’s exciting about APIs is that it’s not pitting banks against fintechs—APIs allow us both to leverage each other, leading to a win/win/win/win—the banks, the fintechs, the merchants, the customers.
It’s like the Red Sox and Yankees or the Patriots and (all other NFL teams) getting along, working together?
It doesn’t seem normal for the Sox and Yankees to hoist the World Series trophy together, but that’s what we’re talking about… and the fans singing ‘Dirty Water’ and ‘New York, New York’ with “hands…touching hands…”
Hmmm…Neil Diamond, the Beatles, Sinatra and The Standells… great range in that playlist of yours! So some last thoughts before we leave dancing to a standard…what’s the difference between Open APIs and APIs? Are they interchangeable?
All squares are rectangles, but not all rectangles are Open APIs.
You lost me.
When we talk about sensitive financial or personal data, protection is absolutely critical. When we talk about ‘open’ with regard to APIs, it’s not straight-up open source; rather, it’s limiting data access to only verified third parties. Moreover, some banks create Open APIs for internal purposes only.
Is there a risk for banks to do this?
There’s a level of risk with ANYTHING and EVERYTHING, but banks have to evolve and APIs are a perfect example of a toolset for banks to evolve. We’re seeing more and more financial technology firms come onto the scene everyday, creating new innovative solutions that are slowly eating into the market share of banks, not rapidly by any means but certainly beginning to erode at the edges. I think that’s why you’re beginning to see more collaboration with FinTechs and Banks. But as with any collaboration, there is a level of understanding that is needed in terms of the partner, and that the partner meets the security requirements that are inherent when dealing with data that is as confidential as one’s finances and personal information. At the end of the day, though, the risk is acceptable if the client demand is there…and at the end of the day, this is moving to a truly customer-centric industry, which means that convenience will trump certain security risks.
So it sounds like you’re bullish on open APIs. What’s on the near-term (and long-term) open API horizon?
Now that PSD2 has moved front and center, a lot of the industry is already exploring and utilizing open APIs to meet the regulatory requirements, which is why it will be THE hot topic at this year’s conferences—from SIBOS to Money2020 and everything in between. Open APIs, Open Banking and PSD2 will be the leading buzzwords on your conference Buzzword BINGO, you can count on that.
I have BIN… See you at Sibos! (and check ACI out at booth F59)
Related Blog Posts
How to be a Payments Trailblazer – The Seven Habits of Highly Innovative Organizations
The new Culture of Innovation Index from Ovum and ACI identified segments—from banks to intermediaries to merchants to corporates—at the cutting edge (of innovation) across the payments ecosystem. But what is most notable about those segments that have reached ‘trailblazing’ status is the apparent lack of commonality between them. No one segment, nor one region fosters better innovation. In fact, what’s driving these segments/organizations to be best of breed is their own culture of excellence. The only thing they have in common is their attitude.
Get Customers to Race Through Your Payments Funnel
No matter how good the products, how nice the website and how slick the flow, there are so many reasons why an eager prospective customer does not convert into a paying customer even after they have filled their basket. The buying decision has been made, but so often customers don’t complete the transaction.
Women in Payments: Don't Be Afraid to Ask Questions
Today, we have the pleasure of speaking with Google's head of Retail and Payments Activation for Southeast Asia, Anna Maria Maurieta. Anna works closely with retailers and e-wallet partners across the region's complex and sometimes highly-regulated market—including countries such as Indonesia, Thailand, Malaysia and Vietnam—making it easier for Google Play users to make payments on Play.
New Survey Results How Lenders Can Capture More of the Billion Dollar Pie
It should come as no surprise that the disruption found throughout the world of payments would impact the world of consumer finance. Fact is, the eCommerce experience enjoyed by shoppers has created an undeniable ripple effect for everyone from bankers to lenders. And with billions of dollars at stake, it’s important to understand the impact of this paradigm shift, especially as it applies to the growing demographic known as Gen Z.
How UPI is Driving India's Shift from Cash to Digital Payments
The Indian economy has traditionally been heavily dominated by cash, while experiencing low adoption of various online payment systems including National Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGS) and inter-bank mobile payments. The dominance of cash is evidenced by the ratio of cash withdrawals at ATMs vs debit card usage at Point of Sale (POS)—ATM transaction volume is more than 2x greater than POS.
Success Speaks: Surprising New Ways Students Want to Pay
Colleges and universities are facing the dual tasks of accommodating not only new payment methods, but also a new generation of students, Gen Z, whose expectations differ greatly from even millennials. How can higher education institutions meet these demands?
In our latest Success Speaks webinar, experts from Temple University, FutureCast, ACI and MTFX Group of Companies explored today’s payments landscape for colleges and universities, payment desires of Gen Z, innovations the higher education sector is already implementing and how schools can better assist with international payments.
Women Must Choose to Rise Up Despite Past, Current and Future Circumstances
Money20/20, Europe’s biggest payments and fintech event, was recently held in Amsterdam and featured Rise Up Money20/20, a global program designed to address the gender imbalance in leadership positions within the financial services and fintech industries. A cohort of 30 female professionals was selected to take part in an exclusive curated agenda, complete with a series of bespoke content sessions, one-to-one mentoring and unique networking opportunities.
How Italian Banks and Processors Can Capitalize on Digital Transformation
The European payments landscape is in an era of significant change thanks to PSD2 and other macro factors, but there is more than one way to deliver real-time and open payments to meet PSD2 requirements and its technical standards. Banks and processors must manage this alongside their own set of domestic challenges and opportunities.
Overcoming Cyber Threats to Payments Security
Recently, Gene Scriven, chief information security officer at ACI, spoke at NACHA Payments 2019 on the ever-changing landscape of cybersecurity. Here are a few highlights from his session, including the impacts of cybersecurity breaches, today’s emerging threats and the new strategies to keep your organization safe.
Removing Gender Bias and Enabling Women to Succeed in Leadership Roles
The recent UK Women in Payments (WIP) Symposium 2019 took place in London, recognizing unique leaders who help uplift women in the payments industry. Among those recognized was ACI’s Melissa McKendry, vice president, Retail Banking Implementation Services, who was honored by WIP as the 2019 Advocate for Women.