API's with everything

If you work in and around any sort of company that is undergoing a digital transformation, you will almost certainly hear the term "API".

Short for Application Programming Interface, put simply it provides a way for one system to be used by another in an agreed way. In other words, you can run some specific functionality or process elsewhere (e.g. within you organisation or across the Internet) via a set of published instructions.

APIs aren't a particularly new idea (I've been working with them since the 1990s), but they have grown in prominence and usage as other technologies and approaches such as Digital and SaaS (software as a service) have become more popular. It is therefore very likely that at some point or another most large organisations will have built APIs for their customers, or for their internal use.

Some  might therefore possibly state that we have currently "reached peak API use"... were it not for the likelihood that API development and adoption is set to increase further as more companies look to standardise and expand their digital integration capabilities.

It is also one of the reason's I called our company "Ideal Interface".

The rise of Personal Finance Management services

Last year I was lucky enough have a senior role as the Head of Digital for a financial organisation. This got me back into the Financial Services arena, where I could leverage the experience I’d gained from several years of agency-side delivery in this sector.

Diving into this industry again after several years out of it, I was struck by the changes that had taken place. For example: The reputation of banks was lower than it had been nearly 10 years ago (primarily due to the financial crash, but also because of the rise of customer complains brought on by better communication methods such as the Internet and Social Media) and people were eventually breaking away from the traditional and clumsy segmentation models of life stage and age.

However one thing in particular grabbed my attention more than most, the potential for banks not to own the financial interface with the customer anymore and that a service layer could be placed between the user and financial services provider. In other words, the market was far more likely to use personal finance management tools now than ever before.

But why are online personal finance management services now being considered? Especially when banks have spent so much money and time creating their own direct banking channels?

1. Users want independence
Having a product agnostic platform puts the user back in control. Look at the gradual dominance of the aggregator in financial comparison; from credit cards through to car insurance, online now provides a way of comparing and contrasting multiple products in a single place. This independence from a specific financial services provider gives the user a place they can trust and not have cross-sell and up-sell offers from the same company tirelessly pushed to them at every opportunity.

2. Users need better interfaces
All online banking and services sites are playing catch-up with each other, but all so very slowly. Thanks to lengthy development timescales, the need to comply with in-house governance and the very nature of financial brands to be less agile and more risk averse... you then get products that work, but are rarely shining examples of fantastic functionality, user experience and design.

3. Users have more choice
The financial services landscape has changed. These days users not only have the ability to switch providers for their insurance and banking needs, this switching is becoming a legal requirement that all FS providers must support. Add to this the fact that so many financial companies have now all diversified into as many different markets as possible (usually by white-labelling everyone else’s services) and the choice amongst products is bewildering and still growing...

When you then compare these facts with the ability of smaller, digital-first and more innovative personal finance manager sites, you can start to see why some banks and building societies are getting worried. The rest, well they’ll have a nasty shock when they eventually wake up.

Organisational eBusiness Maturity

Thankfully, a growing number of organisations are looking to improve their digital channels. Consequently they are looking around for others who have already made a step forward and to learn from their innovations (without hopefully copying their mistakes).  Consequently I have seen certain trends appear over the years that may act as a model of not only where companies have come from, but also where they can grow and develop in the future.

Note: Like most of my work on this blog, this model is a ‘work in progress’ where I post my thoughts before they are completely refined and documented. It is therefore submitted with the aim that it will not only be refined by my own further understanding and application, but by wider feedback (either via comments on this blog or by other means).

 

Here’s how I see the organisational maturity of a company progressing (typically in the retail, financial services and travel markets, but potentially in others where this model can be applied):

Individual
Online initiatives originally sprung up thanks to the innovation and inspiration of specific people. Historically this may well have been a young-ish or passionate person who saw the opportunity to utilise some form of digital technology to improve something or interest to them.  Based in the IT, Marketing or other part of the company, they would initially have had very little influence, but potentially the opportunity to create and learn by themselves.

Department
As the individual has grown in their knowledge, they may well have caught the eye of senior individuals. Aligned with a growing understanding of the possible benefits of digital channels for communication, acquisition, commerce and engagement…  this one-man initiative may have grown into a team of people who have specialist knowledge of digital (marketing, eCommerce, User Experience, Analytics, etc.). From experience this has usually been the ‘land grab’ stage, with different high-powered players staking their claim to know all about modern technologies and taking this department under their wing.

Enterprise
Eventually the rest of the company wakes up and realises it is not just the digital team that either needs to understand and use digital tech, but that the whole organisation has become an e-ebusiness, with a digital eco-system around it… enabling everything from new customer influence and marketing through to existing customer self-service and HR connectivity (e.g. automatic postings to job sites, etc.)

Extended
For a company to truly ‘live’ digital however, it needs to move beyond the connected state (e.g. creating a bunch of fixed  digital connections with its customers and suppliers) it needs to extend some of its functions outside the organisation and embrace co-creation as a way to generate a flow of sustainable new ideas and talent.  API’s and XML interfaces enable these companies to allow 3^rd parties (individual developers, agencies and sometimes even entire industries) to build upon their data and functionality, to reach a new audience or to connect to other web services in ‘mash-ups’. Don’t get me wrong, this isn’t easy stuff and very few companies have the will, ability and braveness to venture into this territory. But for those who do (e.g. Amazon, Google, etc.) the rewards are obvious.

Companies and the services layers

I recently received a report from McKinsey [link] that covered the topic of the 'corporate software layer'. This wasn't just another publication talking about application development standards, it referred to a metaphorical layer of services that surrounds the core 'hardware' processes and functions of an organisation. This software layer is an all-encompassing wrapper that the author described as including APIs, digital customer touchpoints and even Social Media.

Coincidentally I was chatting with someone in the Digital industry only a few days ago (thanks Wyndham) about how the use of web-based services can allow a company to incrementally develop its inner and external functions to remain agile & responsive to changes. I explained that via a Service Orientated Approach (SOA), a company could continually evolve its client-facing functionality (internal and external clients), wrap legacy functions and get the most from its digital agencies... by getting them to utilise any existing services.
Note:
We also questioned why digital agencies never seemed to develop work for clients using their own suite of web services to quickly deliver more intelligent work for their clients, but that's another topic for this blog sometime).

Anyhow.... Having thought about this some more, I do think there's the opportunity to not only merge the two topics mentioned above, but to then represent this in a similar (but perhaps more complex) way than McKinsey have done.

Here's what I mean:

1. McKinsey (perhaps in an effort to de-techie their report) haven't mentioned SOA and it's obvious benefit.

2. The 'software layer' is a little too catch-all for me.

3. Their diagram doesn't explain the big difference between the more technical machine-to-machine interfaces and the softer services that involve human interaction.

I guess what I'm saying here is that there might not be just one layer around the business, but possibly several service layers..... And the diagram needs to reflect this.