In a galaxy not so far away…progressive banking and insurance firms are using APIs to integrate a veritable solar system of functionality into their offerings.
Meanwhile, back here on Earth, things are happening a bit more slowly. Yes, industry giants are growing their understanding of APIs and most realise that legacy infrastructure and mainframe-based IT stacks are not compatible with a digital/mobile-first world.
But we also know, from painful experience, that moving from legacy tech to a modern stack in one fell swoop is a recipe for write-offs and can stunt the careers of the individuals involved in these failed projects. Case in point – April 2018 saw TSB experience widely-publicised problems with its digital transformation, forcing them to start from scratch, all under the critical gaze of national press.
So, yes, there are certainly dangers in digital transformation. But there is also a danger in not investigating the idea of using APIs, when you consider the benefits your contemporaries are deriving from them.
Here’s a hypothetical use case – as an insurer, if your products and services can be accessed via an API, you remove the limits of your own distribution. The reach of your product suite will widen and the multiple ways in which third-parties could present them to your customers will only open up more income streams and effectively grow your army of sales people instantly.
If I may be so bold, companies that don’t have an API strategy are basically telling the world that the only way their products can be sold is either through advisers (again, likely in an offline or digitalised fashion), or through their captive distribution channels, or through a single online proposition.
The fear that drives this insular approach can be dissolved by asking the right questions – ‘Is there no one that might come up with a way to sell my products that is better than the way in which we currently sell them?’.
The ultimate question is, ‘Does it make sense to put in a fresh tech stack, API-enable it and see what business opportunities that might create?’. If the answer is ‘Yes’, then perhaps, in a galaxy not so far away, that fresh stack could replace your current core offerings. That’s the bet that NatWest seems to be making when they launched Bó and Mettle.
APIs are increasingly becoming the light saber of choice for banks as they battle for intergalactic dominance. And, over time, more and more insurers will no doubt come to see them as a powerful weapon too.
Request a demo of the Envizage API by contacting the Envizage team.