The flexibility of application programming interfaces should be used to credit unions’ advantage, not feared.
It’s true that everything is connected to everything, reflects Amit Aggarwal, SVP/product management, open application programming interfaces, for CUES Supplier member FIS, Jacksonville, Florida.
“In the IT world, APIs let various systems talk more easily to one another,” he says. “I liken it to providing a monolithic banking solution, but with smaller pieces. Think Legos. Benefits range from boosting efficiency to real-time processing and launching new business models. Ultimately, an API should provide members with a unique, more personal banking experience.”
Each API will also have its own function in creating this experience.
“Applications can be assembled in different ways, much like a Lego masterpiece,” he adds. “This flexibility is an API’s greatest strength. And, used as a tool, it should unleash the law of creativity for a credit union and how members choose to bank with you. Consider the different compositions and pieces (again, like Legos), and the innovation provided to solve an array of business problems.”
Problems solved could range from providing a modern experience on a legacy system to integrating new payment technology through third-party partners. For instance, an API may take the reporting of data from several locations and morph them into one reporting source for greater efficacy. Another might be integration with a third-party app and service providers to reach new markets.
Ironically, this flexibility can lead to increased complexity for the institution and be a perceived weakness.
“By their highly technical and versatile nature, APIs can intimidate some,” Aggarwal submits. “However, as APIs become democratized and accessible to all, business problems become more readily solved. Solutions go to market faster. Services are more consumable. And it’s easier to unleash the power and potential of a new credit union experience.”
Conversations about APIs should also be organic, centering on improving the way an organization conducts business. For example, can APIs be a tool to expand your current market? Can they help you to shift from a top-to-bottom focus to a bottom-up focus? Can they help you get products to members faster?
This transformation to more organic conversations can make a massive difference in a credit union’s outlook, especially when the senior team spends more time listening to where the organization wants to go. Additionally, these conversations encourage new perspectives on the integration of enhanced technology.
APIs can be customer-centric, used directly by the customer, or implemented invisibly by the financial provider for a better end-user experience. Whatever the case, the API should make the experience better for the consumer.
APIs are exciting. They’re problem-solvers. And Aggarwal says they’re evolving to become more than a piece of technology but an organic business tool. “Viewpoints are changing—evolving from a once-competitive to a now collaborative mindset. These partnerships can and should become part of an integrated environment to meet changing demographics and create a more fully integrated banking experience.”
As credit unions become more familiar with and adept at integrating APIs, these tools will naturally feel less intimidating and help level the playing field with their larger counterparts.
“It’s time to start the conversation,” Aggarwal says. “And ultimately, a more customized and personal user experience is the benefit. It’s about integrating APIs and other fintech solutions for enhanced business models, which embrace an organization’s core values. Without the power of APIs, there will be missed opportunities.” cues icon
Stephanie Schwenn Sebring established and managed the marketing departments for three CUs and served in mentorship roles before launching her business. As owner of Fab Prose & Professional Writing, she assists credit unions, industry suppliers and any company wanting great content and a clear brand voice. Follow her on Twitter @fabprose.