In the last 10 years, the landscape of the financial industry in the UK has drastically changed. Such fintech startups as Transferwise, Revolut and Monzo attract millions of users, and - if a few years back, traditional financial institutions were not considering them a threat - today they are forced to rethink their digital strategy and business models.
"We are at an important crossroads with the institutions both protecting their huge investment in IT legacy and trying to innovate services, while challengers, who are looking to leverage innovation and differentiate through speed and agility, entice customers from their traditional thinking," says Mike Randall, CEO at Ricston - an IT consulting company in the UK.
Traditional institutions tend to opt for one of the two strategies - competing with startups directly by launching new brands of services, apps and products, or linking with emerging technologies to become an integral part of the new ecosystem. Although the strategies are very different in their business execution, both require a very similar set of technology tooling to be successful.
While AI, Cloud, Mobile and SaaS might be the first ones to come to mind, there is an 'invisible' layer that connects all of them and enables communication between all internal, as well as third party, systems.
"SaaS has led us away from the thought of power being held 'at the core', showing us that innovation 'at the edge' provides better consumer adoption rates. Now, organisations that can leverage this thinking further and provide connectivity around their platforms and services will be able to best leverage the opportunities for the future. This is what drives the need for API-led connectivity," Mike suggests.
An API-led connectivity approach allows enterprises to incrementally transition from monolith to a composable integration architecture, with underlying connectivity and orchestration services based on discoverable and reusable APIs. "[These] APIs become the foundational building blocks for new services, enabling enterprise agility and seamless customer experience across devices," comments Kevin Jervis, CTO at Ricston. "An experience API layer further enables a company’s customers and partners to have governed access to their data assets, which fosters new acquisition and monetisation channels," he argues.
"Our clients have successfully utilised MuleSoft Anypoint Platform to achieve this; in essence, it is a hybrid connectivity technology with API management capabilities that allows companies to leverage an API-led approach to integration," Kevin explains.
HSBC, Barclays, JP Morgan and others are benefiting from MuleSoft’s Anypoint Platform and the API-led connectivity with tangible results. HSBC has recently rolled out an online banking service, where users can see all their HSBC accounts in one place, even if these accounts were being opened in another country. The bank also launched a Digital Partner Platform to allow third parties to collaborate with HSBC and access their APIs. Furthermore, a UK online lending startup, iwoca, already connects to both HSBC and Barclays via APIs, and, thanks to the API driven middleware, one of the market main challengers - Atom bank - has streamlined the mortgage process, arguably one of the most complicated tasks in retail banking.
“Both innovators and institutions are looking at a future where they need to collaborate and consume each others’ services in order to adapt to the market and bring value to their customers through interoperability; and APIs hold a significant piece of the puzzle to allow ultimate success“, Mike Randall concludes.
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