BBVA API Market
If you work in a company linked to software development, you’re certain to be more than familiar with the term API (application program interface). If not, this article may be useful for helping you understand a little more about the true dimension of the tools that have become key in creating business in many fields of digital project development. We could even confidently say that nowadays almost everything is an API.
There are several very important reasons today why APIs developed by other companies may be a mechanism for relaunching one or several departments in your company, and multiplying your income and profits:
1. Creating business from scratch, or broadening your horizons.
The APIs of companies like Google, Facebook, Twitter, Amazon and banks like BBVA can serve to develop products or services that generate new revenues, and even to create new and profitable companies. One example of this power is Twitter, the social network based on messages containing 140 characters. Numerous companies are generating income through the API of this San Francisco-based company. Hootsuite (a well-known social networks manager) and Audience (previously SocialBro, a social marketing and analytics company) are two good examples of this.
Some banking institutions such as JP Morgan are currently promoting a new core business development as a Platform as a Service (PaaS), from which other companies are able to create applications and services with the content they offer them. These are what are known as mash-up applications.
2. The API is a product that generates income.
The development of an API in itself involves creating a marketable product. Access to its benefits is not free, at least if third-party developers are looking to make full use of its data. This type of APIs as a product can generate income in such diverse fields as content, advertising or banking services. They provide support for third companies who make use of the tool and are charged for it.
On this point, in October 2015 a major shift took place in the EU and opened up an array of new opportunities for banks, account information services (AIS) and payment initiation services (PIS). The update of the Payment Services Directive (PSD2) finally normalizes the new scenario for business transactions between financial institutions, service providers and customers, and gives banks a real opportunity to do business as an open service platform thanks to the use of APIs.
The development of open APIs may be the only possible way to associate with startups in the fintech market and work with them and charge for services that they might otherwise lose. This shift towards become an open service platform, gaining in digital versatility and improving the user experience encapsulates the whole of BBVA’s acquisitions strategy: Holvi in 2016 (a Finnish startup providing banking services for companies), Atom (mobile banking in the United Kingdom) and Spring Studio (an American design company) in 2015, Madiva (big data and cloud computing), Simple (money management) and Propel (a venture capital firm) in 2014.
3. The API as a developer of innovative products.
APIs are not only a tool for creating companies, expanding businesses and boosting revenues –they are also a new way of working with a company’s teams. It’s not just the big banks who need to work more on workflows and product development like in the fintech sector –companies in other sectors must also follow suit and design teams that have the training and conditions that enable them to innovate.
APIs are a great gateway to the outside. A simple way to learn from people who want to do business, learn from their products, improve their ideas, make the most of the talent in their teams, improve the teamwork itself… APIs can produce sweeping cultural changes in an organization.
4. Talent recruitment
Companies should always look for balance. Companies that have a significant turnover, vast structures and great expertise sometimes lack the agility and capacity to assume risks and innovate and to occupy markets and unconquered spaces. In the banking sector, this is also conditioned by the management of sensitive material: customer information is anti-risk, as security is now non-negotiable.
APIs help find the companies, products and professionals who can enrich the structures and working methods of the big companies. Talent recruitment is indispensable for competing in today’s market –both in banking and all other areas. These interfaces can help companies put together internal teams for entrepreneurial innovation in the style of lean startups. A second application involves using APIs to create new products or new APIs that generate new spaces for business development.
If you are interested in the world of APIs, find out more about BBVA’s APIs here.
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Various case studies are used to show how open finance enables the financial inclusion of SMEs and the economic growth of developing regions.