January 11, 2013

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Banking on APIs for Innovation

The banking industry, like any other consumer-centric industry, is faced with innovation challenges like never before. While the core banking applications are adept in enabling banks to carry out their operations and deliver services effectively, taking that to customers through varied channels proactively calls for innovation. These innovative customer-focused applications are popularly addressed as “apps.” Apps extend the applications to end users in an easily consumable manner.

These apps are fast becoming hygiene factors, and banks today realize the potential to build these apps lies not just within their marketing and R&D teams, but outside of their organization. The smarter customers, the partner banking institutions and third party developers complete this broader innovation ecosystem.

The presence of an ecosystem is one thing, but there is a need to enable it with ammunition to build innovative apps. APIs are the ammunition we are talking about, and these are the key ingredients of these apps. Simply put, APIs are interfaces opened by applications to enable other applications to communicate with them. 

Innovation, therefore, is not a one-step routine, but a process. Here is a simplified representation of the innovation cycle and the steps involved.

We are already seeing examples of banks embracing this proactive innovation approach, and it’s only going to gain momentum as we move forward in time, primarily for two reasons:

  1. Customer satisfaction is directly proportional to the ability to deliver proactive innovative services through smart channels (mobile, social, etc.) 

  2. Banks are sitting on a goldmine in the form of customer information, which, if not monetized by them, will be monetized by someone else.

HCL’s Innovation Platform Enablement (IPE) offering simplifies the adoption of this innovation cycle for banks and puts them on an accelerated journey of growth.

HCL’s IPs, Partnerships and Engineering Services frameworks that comprise IPE address each stage in the cycle and hasten the speed with which banks can transform themselves from being reactive institutions of ability to proactive institutions of delivery.