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This blog accompanies our series of webinars on the ROI of API Management. This fifth edition discusses how to increase revenue with open APIs.
The use of open APIs in banking, healthcare, insurance, and other industries has not only increased interoperability between parties, but has also led to revenue growth with increased customer retention, new products, and new partnerships.
An open API is a public API whereby the term "open" refers to "open standards." These are industry-agreed standards for their particular vertical. In the banking, healthcare, and telecommunications industries, for example, there are standards that foster interoperability, innovation, and reuse.
As they are publicly available, they can be accessed by all developers to enhance their own applications. With this availability to a community of developers, open APIs can be leveraged by organizations to create innovative uses of their applications, adding value to their core business.
An application program interface (API) provides access to external parties to your data and business processes.
The diagram below illustrates the typical flow from a core system to the public. Most backend systems were never built to expose information or access directly; this is where microservices and APIs come into play.
A microservice is built to do one thing, and do that one thing well. Often, a set of microservices need to be strung together to form a transaction, and that's where APIs fit into the architecture. APIs and API management platforms have the capability to expose a single interface which aggregates multiple microservices.
Through the use of microservices and an API interface, data and access is provided to external consumers or channels.
If more organizations follow the standards in their verticals, there will be many benefits. Open APIs, in general, provide:
Open APIs have been around in a number of industries for some time now, with some more mature than others.
Open banking is the poster child of open APIs, having been around for a few years, and centers around the practice of sharing financial data electronically and securely. This was driven by regulatory changes in the EU and UK with initiatives like PSD2 and GDPR. Banks were initially not very happy as these changes were forced on them, but the value has begun to emerge in recent months.
In healthcare, FHIR (pronounced "fire") is a data exchange standard developed to provide a unified, standardized interface between healthcare providers. Learn more about FHIR APIs.
Open insurance lags behind banking but has seen a lot of activity recently. By providing customer data, insurers can make use of developers to bring new services, create a seamless customer experience, increase efficiency in claims processing, and grow customer acquisition channels.
Related >> Are you an insurance carrier? See how the implementation of the Akana API management platform can benefit your organization >> Start Your Analysis Here
We will take a look at two industries in particular, banking and healthcare, to illustrate how open APIs can increase revenue.
Open banking APIs are the secure way to give providers access to your financial information. APIs are the "secret sauce" in the open banking revolution, helping to extend customer reach, stimulate innovation, and increase revenue. Financial service providers have realized they must embrace modern technologies and leverage the data held in their systems to secure their long-term futures.
How APIs increase revenue in banking:
FHIR provides a standard data exchange format between patient and provider. The vision is a world in which everyone can securely access and use the right health data when and where they need it.
APIs increase revenue in the healthcare industry with:
For greater detail on all the above points, we encourage you to view the full webinar below, our read more in our complete guide to API ROI:
To discover how your API strategy measures up against our benchmarking repository, begin your analysis with our KPI Test Drive.