The financial services and insurance industries are being reshaped by changing customer and market demands for speed and agility. For that reason, most financial services and insurance firms are investing in APIs to compete in the digital economy. APIs are fast becoming an indispensable architectural commodity for financial services and insurance firms looking to develop new applications for dealing with the ever-increasing integration requirements. As the number of partners engaged in business ecosystems and the complexity of their interactions within the ecosystem increases, the need for APIs and creating a winning API strategy for insurance and financial services firms will intensify.
Although many organizations have already started implementing their API strategy, some are still figuring out where to start. Since all enterprises have existing APIs, an additional dilemma for many is to determine whether to reuse existing ones or create new APIs from scratch. Using the existing ones would mean modernizing the APIs, which requires a different kind of effort, but may still bring much-needed value to the enterprise. For this reason, it may be useful for organizations to have a short-term and long-term strategy when it comes to APIs.
If you are a CIO or CTO of a financial services or insurance firm looking to accelerate your API adoption efforts, here are six questions and answers to help launch your API journey.
Top 6 Q&A to Jumpstart your API Strategy
Q1: What are other financial services and insurance firms doing with regards to API integration?
Financial services and insurance firms are investing in APIs to improve customer experience, drive the underwriting process, and improve claims and customer service. They are doing this by evaluating their API maturity; adopting an API platform to help modernize their existing platforms; identifying quick and easy integration with partners to provide more services to customers; integrating applications and services from multiple environments and platforms; and leveraging APIs to build self-service capabilities for many financial services and insurance use cases like Payment Processing, Currency Exchange, Lending, Chats, ID generation, Quoting, FNOL, Claims, and more.
Q2: What should my API enablement strategy look like?
There are 6 foundational blocks to consider for enabling an API strategy. These 6 foundational blocks and their role in delivering the value of APIs, are outlined below.
- Platform: Managing the full lifecycle of APIs to deliver innovative applications and experiences.
- Security: Safeguarding API platform and securing your API with impenetrable security mechanisms.
- Governance: Applying common rules relating to API standards and security policies to your APIs.
- Discoverability: Increasing the online discoverability of APIs with content and social bookmarking to promote reuse.
- Design: Providing an effective and easily maintained interface that helps consumers understand, use, and integrate
- Lifecycle Management: Overseeing all aspects from API development to deployment and beyond, to provide the ability to build, scale, analyze, and monetize.
Q3: How do I implement my API strategy?
Most organizations adhere to the following 7 steps to implement their API strategy successfully:
- 1. Establish goals and benchmarks
- 2. Develop a thorough understanding of the current IT environment
- 3. Determine what needs to be connected through APIs and how
- 4. Communicate the importance and benefits of API integration to everyone in the organization
- 5. Conduct a trial run of the new strategy
- 6. Determine how new APIs are going to be introduced
- 7. Start building a Digital Ecosystem
Q4: How should I develop my APIs?
How you go about developing your APIs depends on your team and the culture of your organization. Some things to consider are – the platform you want to build on; the development language; preference for low code; how you want to scale. These considerations should be grounded in the current company culture as well as the resources you have available in your organization.
- If you want to be platform-independent and your organization prefers Java, you can build your APIs in Java and deploy them as services/containers; this way you can easily port your APIs across vendor product or cloud.
- If you prioritize scalability, you can build in Java and deploy via containers; this makes it easier on the infrastructure side and gives you dynamic scale. Or, you can leverage cloud-native services to build your APIs.
- If you’d like to build on a vendor platform, you can leverage a tool like MuleSoft, Apigee (Google), IBM, Microsoft, AWS, etc., to quickly build and scale your APIs. These platforms are drag and drop connectors and model-driven mappers and leverage scripts to do your transformation rather than writing code.
Q5: What does my organization need to support API adoption?
Enterprises that adopt APIs successfully go through the following five steps:
- 1. Creating an API strategy and roadmap
- 2. Selecting API Management Platform
- 3. Setting up API Infrastructure & Practices
- 4. Creating API adoption guidelines and generating community buzz
- 5. Establishing processes to learn, innovate, and mature API usage
Throughout the entire process, financial services firms and insurers should implement best practices to ensure that they are maximizing the full value of their API investments.
Q6: How do I select the right tools given my needs/cost?
There are several factors to consider in your API lifecycle tool selection. General considerations include the technology stack of your enterprise applications as well as the platforms and environment hosting those applications. API-specific considerations include:
- API design and lifecycle tools that work with your chosen platform, and support both test-driven development and a contract-first approach
- API specification format
- API testing process
- API performance and monitoring process
- An API gateway
- API management providers that help you to securely publish and manage your APIs in production.
Keeping all these factors at the forefront of your selection process will help you choose the tools that best fit your needs as well as allow you to effectively drive API adoption in your organization.
These questions and corresponding answers should give you the information you need to jumpstart your API journey. A well-thought-out API strategy for insurance and financial services, covering all these elements discussed in the Q&As above, plays a critical role in driving API adoption to success.
To learn more about how we can help you set up your integration architecture, accelerate your development of APIs, and modernize your services to scale for tomorrow, visit our Integration Services page.