“Digital transformation” is a term that every C-suite executive or IT professional has heard a thousand times.
And for good reason: Omnichannel digital engagement with consumers has become the norm, sophisticated data collection and analysis tools are increasingly accessible, and the proliferation of networked devices has forever changed the way consumers research and purchase products.
But even when enterprises such as financial institutions increase their digital presence and take steps to develop more data-driven products, services and customer experiences, there’s one element of the digital transformation they often overlook: Integration.
It doesn’t matter how advanced your digital services and data platforms are — if you haven’t forged strong connections between systems, departments, partners and value chains, your institution isn’t operating nearly as efficiently as it could be. This is what APIs (application program interfaces) are for — they enable real-time access to critical information and processes across the enterprise, which facilitates collaboration, increases transparency, reduces pointless repetition and makes applications more scalable, reliable and customizable.
These are all reasons why it’s crucial to develop an API strategy that will help your credit union navigate the digital transformation as effectively as possible.
Make data accessible to all key stakeholders
The ability to share and analyze data across an enterprise ensures that important information isn’t siloed and the relevant employees always have immediate access to it. APIs are a vital part of this process – as a recent Deloitte report explains: “In the world of information technology, APIs are one of the key building blocks supporting interoperability and design modularity.”
The same consumer data that helps designers and engineers develop better products can help your member service team understand customer pain points and how to address them. Meanwhile, this data is essential for managers to hold employees accountable with objective indicators of success and failure, such as customer satisfaction, net promoter scores and feedback about individual user experiences. And APIs don’t just help you share data – they can also synthesize data from diverse sources, such as different products that comprise a single data management platform.
With so many overlapping uses of data, it should be shared freely between departments and teams, and widely available at any time. As seen in an argument in an article from Harvard Business Review, you should invest in data management “with the goal of integration in mind. Each progressive step should build also toward an integrated platform for your enterprise data.” By providing a link between applications and opening up the flow of information within your institution, APIs are a core component of any integrated data platform.
Make internal processes flexible and reusable
According to a 2016 survey conducted by CrowdFlower, 60% of data scientists say they spend more time cleaning and organizing data than doing anything else. As CrowdFlower notes: “Everything from list verification to removing commas to debugging databases – that time adds up and it adds up immensely.” It’s no surprise that almost 60% of data scientists also say they spend too much time on data preparation.
Imagine how much time is squandered every year on repetitive tasks like these. This is another reason why APIs are so crucial — they can save thousands of hours and free your employees up to work on projects that make full use of their creativity. And the usefulness of APIs isn’t limited to data management — they can also streamline a vast range of processes across the enterprise.
APIs also allow organizations to take advantage of the right kind of repetition. API-led connectivity is consistent with a service-oriented approach whereby logic is distilled to its constituent parts and reused across different applications. This prevents duplication of effort and allows developers to build on each other’s efforts. APIs simultaneously make internal processes less wasteful, more agile and useful across a wider range of applications. And, application networks – connecting applications, data and devices – are enabled through APIs.
Develop API-driven microservices
While APIs link different parts of your institution together by making assets discoverable and usable across departments and teams, they also allow you to build specialized, connected services that don’t rely on a single codebase. This means you can improve individual services more efficiently than ever before, as developers don’t have to make sweeping changes when they just want to modify a single service.
A single API can be made up of multiple other services and “microservices” in a combination that can be used across a vast range of digital platforms and devices. Microservices combine the benefits of independent and distributed coding language with API-driven communication.
What does all of this mean in practice? More scalable, agile, reliable and cost-effective applications. Microservices allow you to scale applications independently, which means you can build out some products and services while others remain unchanged. This allows you to experiment more freely and allocate resources to specific projects without creating costly redundancies.
When something is wrong with the code that underpins a microservice, you can address the problem directly and precisely instead of reworking your entire platform. All of this saves money by allowing you to deploy human capital and other resources in the areas where they’ll do the most good.
Is it any surprise that companies such as Amazon, Netflix, Twitter and PayPal are using microservices? According to a survey of more than 1,800 IT professionals conducted by NGINX, “nearly 70% of organizations are either using or investigating microservices, with nearly one-third currently using them in production.”
You may have noticed what appears to be a dichotomy — although APIs allow organizations to develop more cohesive processes, services and data management platforms, they also enable them to narrow the focus of their applications and work on each one separately.
But this is no contradiction: By linking these applications together in an API-connected network, credit unions can ensure that their digital transformation is as comprehensive, productive and cost-effective as it can be.