Nowadays people have higher expectations. They expect more and more every day. They want to have immediate access to everything. Just like everything else in their lives, they want access to their bank anytime, anywhere. They want to go on their phone whenever they want to use their bank App to check their account balance and transfer money. This is part of everyday life, and the need to do some banking can arise any time.

Think about 10 to 15 years ago, depositing a check by taking a picture of it on your smartphone wasn’t possible. Today, it’s almost an expectation. And this is just one of the many services that have been a standard in our society today. Customers demand the same ability to self-serve and the same level of customer service that they enjoy in other areas of their lives.

The internet and our smart devices have made it easy for Banks to offer their services and grant us access to them 24/7. Customers know it, which is why they expect so much from every business they choose to patronize. That’s why they grow impatient and then get angry when something they expect isn’t offered or can’t be offered to them. All financial institutions need to move from physical branches to omni channel digital platforms such as web and mobile applications. Nowadays customers are always on the go, so they prefer online and mobile applications. Their bank selection is influenced by the availability of these services.

The end goal of any financial institution is to improve their efficiency ratio which boils down to the cost of generating $1 of revenue. It’s important because it’s a quick and easy measure of a bank’s ability to turn resources into revenue.

There are three important business outcomes that contribute to this goal. They are the main drivers of digital transformation projects in all major financial institutions

  1. Increase operational efficiency. This is done by improving the expense to revenue ratio through streamlining processes. The technology exists to automate a lot of the manual processes in commercial banking and back-office operations.
  2. Enrich the client experience. This goal ties back to what I mentioned about rising customer’s expectations. Financial institutions need to attract and most importantly retain customers through digital offerings and services that make their lives easier.
  3. Launch new products and services fast. Banks know that in order to stay in the forefront of their industries, their digital transformation efforts need to focus on driving innovation but also rapidly respond to value chain disruption.

By adopting an API strategy following the principles of API-led connectivity, Banks can improve their efficiency ratio by increasing their project delivery speed. Most financial institutions have monolithic services comprised of thousands of operational processes. The idea is to discard the redundant services and transform the important ones into APIs and microservices, that serve as reusable assets, into three different layers. The first layer are APIs that have access core systems (System API layer), the second layer is called the Process layer. They are APIs that deal with the orchestration and common business logic unique to the organization. The third layer are APIs that facilitate the organization’s ability to connect with the outside world such as web and mobile applications. Adopting API-led connectivity is all about re-structuring their software architecture into building blocks that can be easily reused. This is how major banks are creating new streams of revenue and reducing their operational processing costs to improve their expense to revenue ratio. A good example is a bank’s ability to introduce new products and eliminate old ones with great frequency to match the needs of the market. The customer has more options and loans can get approved much faster.

Example of API-led connectivity approach in action in the Financial Sector:

System Layer APIs:

These APIs can talk to core systems such as call centers, Temenos data bases for checking and savings account information, and other mainframe systems that contain customer risk worthiness, FICO scores, underwriting documents and data, and also product information. Once this layer is built, it’s much easier to talk to these core systems instead of point to point integration. This layer allows assets to be unlocked and decentralize access to data.

Process Layer APIs:

This layer is a little bit more complex as it is comprised of APIs that contain the logic and processes specific to the business. For financial institutions these can be the account balance process or request new credit or debit card.  These are business processes that share common logic and should be distilled into service APIs and microservices that can be reused to create new products and services.

Experience Layer APIs:

These are the APIs that talk to our mobile and web application we as consumers are most familiar with. This is where the data is consumed across a broad set of channels, each of which want access to the same data in a variety of different forms. For example, a bank branch teller, online banking site, and mobile application all want access to the same customer information fields, but each require that information in very different formats. Experience APIs are really the means by which data can be reconfigured so that is most easily consumed by its intended audience, all from a common data source.

Here are the best practices for API-led connectivity and Open Banking based on the experiences of top nine global banks:

Start-up mode:

The API-led connectivity customer journey must start with a specific use case or for a specific line of business. By defining and bounding the problem, the probability of success is increased.

Scale the platform:

These use cases will become the lightning rods within the organization. Also, the service oriented approach results in the creation of reusable assets which increases speed, agility and reduces the IT delivery gap

Shift to a Center for Enablement (C4E):

Once the scale has been established, it’s important to establish best practices so that the platform facilitates discovery and dissemination throughout the organization.

The top financial institutions that implemented this strategy saw a 2x to 5x faster time to launch new products and services and satisfy the open banking trends to compete with new entrants like Fintechs. This pace of change and agility is fundamental in Open banking.

Here at NEWTOMS we understand the new trends disrupting the financial sector and we can help organizations embrace Open Banking and digital transformation in general. We help our clients bring together business and IT as strategic partners to achieve outcomes.

We are more than happy to discuss any use cases with your organization. Feel free to contact us at We respond to any request 24/7 because our staff is strategically located around the globe. We speak English, Spanish, and Filipino.

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Uncover the possibilities and create opportunities for your business by having these solutions powered by MuleSoft and implemented by NEWTOMS.

Winston J. Rivero Jr.

Winston J. Rivero Jr.

Winston J Rivero Jr. graduated in two careers: Finance & Marketing from Georgia State University in 2012 – He's currently the Director of Business Development in North America and leads the Content Marketing Strategy for NEWTOMS