Posted In: gbst digital, Wealth Management Administration
As the Open Banking framework draws attention to the power of APIs, Gary Cox, Product Manager – Super and Pensions, looks at how APIs fit in to the future of financial services.
APIs are fast becoming a key driver of digital transformation as businesses look for an edge in competitive marketplaces.
In the world of financial services, APIs are looked to as a solution to streamline operations and improve customer experience. As mentioned in our article on Human Centred Design, poor user experiences stemming from outdated interfaces and limited functionality are no longer acceptable.
APIs can help solve these issues in two key ways: allowing systems to communicate so data can flow across the organisation, and by enabling external parties to access consumer data and develop digital solutions.
APIs are a big part of the Open Banking revolution which kicked off in the United Kingdom earlier this year and will be switched on in Australia next year.
Open Banking gives consumers – and technology providers they nominate – access to their data. From 2019, the Consumer Data Right (CDR) will be implemented in the Australian financial services sector under the Open Banking framework.
Australian consumers will have the right to share their transactional and usage data with third-party service providers including service competitors and comparison services. The original service provider must provide the data, even to competitors. The banks will start with APIs providing access (with consumer consent) across card and account transactions, with mortgage data likely to have its own set of APIs by 2020.
With valuable consumer data now accessible, developers can build apps and tools to add to the bank’s ecosystem and provide new services for consumers. These companies may not have their sights set on replacing traditional banking – but rather to use the data these banks collect to create new services and platforms.
With the Open Banking revolution well underway, the financial services sector is opening up to the benefits of an API-driven approach. It is expected that other aspects of the industry – including wealth management and insurance – will quickly follow the banking model.
It’s not just front-end customer interactions where APIs can add value, but in the middle and back office too. APIs allow vendors, software providers and developers to integrate into existing institutional software systems, sparking innovation and delivering customisation with endless possibilities. APIs take organisational data from the confines of internal IT departments and shifts it to a tool for software development and a driver of business growth through reusing, sharing and monetising that data.
We are already seeing many financial organisations investing in projects to explore API capability and expand their footprint in the financial ecosystem.
The efficiency and integration offered by APIs are driving tech providers like GBST to put them front and centre to drive new systems and adapt existing ones.
GBST’s award-winning Composer software platform is undergoing a comprehensive update via our Evolve project. APIs are driving client benefits including business process integration and automation for improved productivity, customer experience initiatives providing up to the minute access to data and self-service business transactions, and a modular approach to building bespoke solutions (tying in with an agile methodology to build, test and iterate).
Get in touch if you’d like to discuss API development to grow your business, or find out more about how APIs are part of the GBST technology roadmap.