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Workshop: Financial Services Use Cases for APIsJeremy Brown, Apigee@tenfourty

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Were you expecting API Best Practices from Apigee?• As this is a Financial Services event I decided to walk through a few use

cases for APIs in Financial Services instead!• Have no fear, there are have

– APIs for Dummies – basic intro to APIs– The Definitive Guide to API Management – THE definitive guide!– And many more eBooks! - http://apigee.com/about/resources/ebooks

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But first a quick retrospective: WHY APIs?

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Digital is transforming every business

Nature of Market

Retail

Music

Cars

CPG

Books

Food

CleaningServices

Consulting

Mining

Weightless

Intermediate

Nature of Product

2000s

2030s

Heavy

B2CB2B2CB2B2020s

Source: Gartner - CEOs and CIOs Must Assume That Every Industry Will Be Digitally Remastered, 2014, Raskino

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Those who fail to adapt to change

Those who adoptthe technology

Those who (re)build their

business around the change

Technologies haveThis hashappened before

changed the market context

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liberated data +

agile platform technology

+ vibrant developer

ecosystem

= platform business

How does a 100+ year old company become a platform business?

data

What does a 100+ year old company have?

Speed up while preserving existing investments

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Backend

Intelligent Digital Business Platform layer

SOA / Middleware layer

System of RecordYe

ars

Mon

ths

IT Applications Partner Apps Mobile Clients "Internet of Things"

Days

Database

API EXPOSURE

API CONSUMPTION

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Mega trends in consumer banking

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Agility in application development and digital

• 2 Speed IT – increased agility to deliver functionality without compromising availability

• Scaling and securing infrastructure and applications

• Consolidating applications

Threat of substitution – fintech disruption stretching well beyond payments

• Digital Banks, Marketplace Lenders, Crypto-currencies, Roboadvisors

• Payment landscape continues to evolve

The ever changing technology landscape

• Chairman of large European bank believes bank’s future lies in as a software company competing with Amazon Apple and Google

• Ubiquitous connectivity, open architecture and user-centered design is transformational

• Big Data, Cloud computing, Mobility, Social Media and APIs are changing the landscape of what is possible with technology

Changing consumer behavior, expectation around customer centricity

• Expectation from digital is more than before

• Digital is key for service and sales

• Omni-channel and hyper personalized experience

Privacy and security will draw increased scrutiny from consumers and regulators

• Digital authentication measures are evolving – Biometrics

• More security features will be needed to reassure customers

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Key technology strategies to respond to these imperatives

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Improve infrastructure and security

• Optimize infrastructure with public / private cloud and virtualization• Consolidate applications and infrastructure• Enhance end-to-end security

Data & analytics foundation and wins

• Infrastructure and COE• Operationalize insights

Agile delivery model:Two-speed IT

• Boost innovation + efficiency• Agility, speed, scalability

Enhance digital foundation

and key capabilities

• Drive seamless and sticky customer experiences• Architect for building a digital ecosystem around your services• Mobile payments innovation

Financial services firms are evolving to an API based architecture to address some of these objectives

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The value proposition for APIs and an API based architecture

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Foundation for accelerating Digital

development – 2 Speed IT

API Banking as a Channel to scale

innovationAPI based Financial Services solutions

• Increase agility of digital and IT teams by decoupling systems of records and systems of engagement.

• Increases time to market of of digital offerings

• Increase customer experience measures

• Scales innovation through ecosystem of fintechs, developer communities

• Scalable, secure infrastructure• We have helped our customers

across industries innovate using this model, build new service offerings and increase revenue.

• Quicker time to market with API based Emerging Payment solutions, Digital Banks and emerging models in Credit and Wealth management

• We are investing in inter-operable APIs, implementing standards to decrease the on-boarding time of emerging payment solutions for our customers.

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a holistic approach from identifying value to defining the new digital operating model

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APIsUsers Apps Developers API Team Back-end

Intelligent API PlatformDigital strategy planning and change management

Rapid prototypingBuilding scalable infrastructure on private and public clouds

Expert services & hackathons

Customer facingapps

Internal users

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Financial Services are building a platform to create connected experiences for their customers faster and at scale …

Digital Banks and Monetization of data

PFM, card linked offers

Develop alternate models in Lending

P2p lending, alternate decisioning, using IoT in

equipment finance

Access control, and risk management

Reduce risk through access control, metering of enterprise

assets

Outside-in Transaction BankingBusiness to Bank integration from ERP, Treasury workstations and 3rd party apps

Alternative models in Wealth managementRoboadvisors for affluent segments

Deposits LoansInvestments PaymentsThird-party servicese.g. Health, Smart

Govt etcOther Banks 12

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… Some are opening up an API platform to expose APIs and build ecosystems – API Banking as a new channel to scale innovation efforts

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APIs have helped industries innovate, create new service offerings and increase revenue with this model

Can scale innovation efforts and

unlock hidden

potential in a firm

Deposit, credit, investment and payments

Fintechecosystem

External developer communities

OtherFIs

Secure,controlled

APIs

The API Banking Ecosystem

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Leading payment companies are using APIs to create emerging payment solutions for

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• Apple pay & other mobile wallet* integration

• In-app purchase • Card not present transactions• Check out with online

credentials

• Loyalty and offers• Pay with points• API end-points /

enabling contextual commerce

• Analytics• Fraud prevention

• Social media integration• 3rd party• Developer /fintech

ecosystems

* Inflight projects

Partners / Developers / Fintechs

MerchantsConsumers

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Internal API economy

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apps

developersand partners

platform technology

(APIs, apps, cloud, devices…)

data

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API all the things - Infrastructure• Expose all of your services as self-service APIs• Abstract away

–private and public cloud – mediation– IaaS and PaaS–SDN–all parts of the Software Defined Data Center

You can’t just expose the raw APIs without adding in your own “stuff”* - build a smart façade on top.

*Authentication, Authorization, RBAC, Audit Logging etc.

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Monetise your Data

• Open up your data – both internally and externally

• What systems do you use internally?– Would people pay for this?– Can you build an API in front of it and

make it a product?

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Revenue-sharing models

(API provider pays developer)Fee-based models

(API provider charges developer) Freemium models

Fixed

FlexibleHybrid

(flat fee plus fixed or flexible)

Transaction

One-time

Subscription

Duration

Quantity

HybridTransaction

Volume

Custom Attribute

Advance / Arrears

Pro-rated / Full amount

Revenue / Volume Bands

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Key CharacteristicsWe have learn with our customers in the field that these characteristics should be applied to all API initiatives:• Self Service & Ease of Use• Multi-Tenant Architecture • State at Scale • Security• Cloud First – Public and Private• Configuration and Code – agility wins!

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Stepping up to a Platform Business

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Project

Program

Platform

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liberated data +

agile platform technology +

vibrant developer ecosystem

= platform business

Thank you