The first in a report series, IDC Perspective: Moving Toward Open Banking APIs: Opportunities and Threats in Asia/Pacific Banking aims to work as reference kit on open banking APIs for banks/ financial institutions, as IDC Financial Insights strongly believes that making the API an integral part of a business strategy is going to be a must for any banking entity to stay relevant and ahead of competition in future irrespective of size and vintage.
According to IDC Financial Insights, traditional financial services companies have to prepare for more customer-focused ways of providing customer experiences. APIs are one of them. The report highlights the possibilities that APIs bring for banks in the long term, and how the strategy to open their APIs will decide whether they are disintermediated by fintech companies and lose revenue to competition or whether they collaborate with third party providers and create more avenues of value and revenue creation.
"APIs represent fundamental shifts in IT — in how data is provided and used, how functionalities are developed and deployed, and what level of control customers have. This presents a massive shift in how the existing IT architecture can be made ready and customisable to accommodate the changing requirement without losing control over data,” says Michael Araneta, AVP, IDC Financial Insights Asia/ Pacific.
Araneta adds, “Banks' API strategies require an assessment of internal technical expertise, and identification of the right set of people who understand the impact of this change on future business opportunities and associated threats, including primarily IT security threats. New roles and capabilities need to be carved out within the bank to be future-ready for such a different future.”
"Open banking APIs will be inevitable as the approach offers so much to the customer, and banks will be compelled to offer these benefits. For the consumer, open banking APIs would mean visibility of bank-related information at one place, accessibility to personalised financial products and services without compromising security, and competitive and lower charges such as reduced charges on card payments and better rates on loan/credit products," said Anuj Agrawal, Senior Research Manager, IDC Financial Insights Asia/Pacific.
According to IDC Financial Insights, traditional financial services companies have to prepare for more customer-focused ways of providing customer experiences. APIs are one of them. The report highlights the possibilities that APIs bring for banks in the long term, and how the strategy to open their APIs will decide whether they are disintermediated by fintech companies and lose revenue to competition or whether they collaborate with third party providers and create more avenues of value and revenue creation.
"APIs represent fundamental shifts in IT — in how data is provided and used, how functionalities are developed and deployed, and what level of control customers have. This presents a massive shift in how the existing IT architecture can be made ready and customisable to accommodate the changing requirement without losing control over data,” says Michael Araneta, AVP, IDC Financial Insights Asia/ Pacific.
Araneta adds, “Banks' API strategies require an assessment of internal technical expertise, and identification of the right set of people who understand the impact of this change on future business opportunities and associated threats, including primarily IT security threats. New roles and capabilities need to be carved out within the bank to be future-ready for such a different future.”
"Open banking APIs will be inevitable as the approach offers so much to the customer, and banks will be compelled to offer these benefits. For the consumer, open banking APIs would mean visibility of bank-related information at one place, accessibility to personalised financial products and services without compromising security, and competitive and lower charges such as reduced charges on card payments and better rates on loan/credit products," said Anuj Agrawal, Senior Research Manager, IDC Financial Insights Asia/Pacific.
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