API Driven Mobile Communication Tools for Financial Institutions

Dennis Adonis

With FinTechs poised to erode as much as 23% of existing market share by 2020, financial institutions are struggling to find the balance between the digital expectations of staff and customers, and the realities of maintaining their core infrastructure.

For some, this means a radical approach to divesting legacy assets, such as 150-year-old Swiss Re. To remain a leader in the digital age, Swiss Re is focused on pushing their entire IT environment, including employee interactions, business processes, insurance clients and end-user service to the cloud, expecting 95% of infrastructure to be off-premises by 2020.


Focus on Asia

Asian banks are also, of course, navigating the digital transformation landscape, with Singapore based DBS Bank leading the charge, having recently received Euromoney’s inaugural award for world’s best digital bank.

The bank is committed to not only transforming internal systems, but also to supporting a network of open development, working with FinTechs, funding incubators and accelerators and even incorporating hackathons into its leadership training to foster a culture of innovation.

Within Singapore, these transformational efforts mean that more than half the nation’s population transact digitally with DBS now, rather than through traditional manual methods.

Singapore Bank Customers

Outside of Singapore, this digital foundation is facilitating the bank’s move into larger markets, like India, where DBS is launching the country’s first mobile only bank.

Leveraging other advancements in financial tech, like India’s Aadhaar biometric card, and AI powered virtual assistant technology, allows DBS to offer an almost entirely automated, ultra low cost banking presence.

One of the key elements of DBS’ successful strategy is the extended partnership model the bank has embraced, capitalising on the strengths of the nimble partner ecosystem, rather than trying to create everything internally.


Legacy system challenges

This partnership approach is vital for most incumbent banks, as the inflexibility of legacy IT assets means successfully meeting customer expectations mandates leveraging the strengths of multiple, nimble delivery partners.

as ever more systems are digitised, core bank systems are creaking at the seams and, in some cases, falling apart

Chris Skinner – chairman, Financial Services Club.

Many traditional banks are persevering with legacy technology systems, such as mainframes for core banking processes, as they still deliver the fundamental value they were designed for, and replacing these assets is complex and costly.

There are also high dependencies on many of these systems, with market and regulatory pressures leaving no room for even minor downtime.

As nimbler competitors continue to erode the market share of traditional banks and insurers, incumbents are actively searching for the best ways to combine their legacy systems with newer technologies to level the playing field.

Supporting this need, the Association of Banks in Singapore launched the “Finance-as-a-Service: API Playbook”. The playbook lays the foundation for financial institutions, FinTechs and other related parties to develop and adopt open Application Programming Interface (API) based system architecture.


Engaging the API economy

APIs are software interfaces which provide the integrating layer between data and business logic from multiple enterprises, connected through apps on any device via the cloud. 

APIs allow core information assets to be packaged, shared or sold between enterprises to build awareness, increase customer satisfaction, shape services more tightly to customer requirements, and expand partner networks.

Communications Automation 2 1

With more than 18,000 APIs now developed, the focus has moved beyond understanding the technical base, to fully exploiting the business case opportunities.

Financial services firms are increasingly exposing their legacy systems to APIs to couple their processing power and data to flexible front-end applications. Partnerships with nimbler, tech enabled providers are creating an ecosystem of value well beyond any one bank’s ability to create alone.

A mobile first approach to operational excellence

FSI customers increasingly expect the same standards of engagement, customisation and great experience as they receive in other areas of digital commerce. Staff are also expecting greater flexibility in how, where and when they work, and need robust, advanced tools to achieve this.

With more people accessing the internet via mobile than pc now, these devices are increasingly the focus of engagement and productivity efforts, a conduit for improving customer experience, and ensuring staff have the tools to work effectively when away from their desks.

Well-designed mobile apps can programmatically connect, via API, to enterprise systems of record - the applications and databases which manage activities like finance, sales, marketing and human resources - ERP, CRM, accounting software, etc.

APIs allow data to be exchanged seamlessly, making the app essentially a front endpoint for the core application, allowing actions to be taken directly from the mobile device, a means of controlling these programs that sits in the pocket of the user.

HTML5 micro apps on demand

The costs of enterprise app development, limited user engagement, and high rates of app abandonment are all challenges app developers need to confront.

A new breed of communications platforms has grown, in response, that can deliver a complete mobile app on demand to any internet connected smart device, without the end user having the app pre-installed. This can be done in the form of an initial text message or email, which opens the micro app on the remote hosted communication platform.

The benefit is the end user doesn’t need to have the app installed to be able to access the functionality. This allows the organisation to create any conceivable user experience to automate and streamline that process - staff and operations, customer relationship management, IT service management etc.

Micro Apps In Financial Services

Some common applications already in use include:

  • Improving the customer experience:
  • Enhancing staff communications:
  • Secure sales agent communications
  • Crisis communications
  • Streamlined IT service management

In future editions of our FSI series, we’ll share specific examples of how these API driven micro applications are currently being used, and the possibilities for extending these into your own organisation.