We live in a world of constant transformation and every day we are bombarded by the news. So there's no doubt that we live in a new digital age, and being connected to this world is essential to the advancement of businesses that need to ensure agility, efficiency, scalability and practicality to those who rely on their services.
1. Open Banking
As we look to the future, we cannot fail to talk about banks, one of the sectors that have been promoting increasingly concrete changes when it comes to digital transformation. In 2018, Open Banking was one of the issues that gained the most momentum and throughout 2019, it's no different.
The concept of Open Banking, as its name implies, aims to open banking services to a new level without restrictions. In social terms, it aims to increase market competitiveness and generate new financial services and business for society. For financial institutions, it aims to expand services and businesses from new direct or indirect channels through third parties.
We can say that the last three years have been the years of consolidation of Open Banking initiatives in European Community countries following the guidelines of PSD2 and CMA in the United Kingdom. These initiatives have influenced large institutions to open their financial services to greater competitiveness and, as a result, better services for the citizens of these countries.
The issue should be even more evident in Brazil because it is this year that the Central Bank of Brazil should enforce the new rules for the modality. In Brazil, the central bank should also be wider in its decisions, establishing that banks make available not only services but also customer information to better competitiveness of services to society. The goal is to be an open development space governed by Central Bank rules that enables companies, developers and banks to share data with the focus on enhancing market competition and leveraging digital financial services.
Until today, companies create products and services that involve exposure and business logic, based upon an architecture referred to as SOA (Service Oriented Architecture). But, the creation and evolution of technologies and the use of the cloud, which has been adopted widely, facilitate the rise of technologies for creating small services. That is, instead of creating monolithic solutions that are more complex to update or innovate, and less agile, it is now possible to adopt services with minimalist functions that are easier to update, innovate and scale.
One example is a weather information service, where we can create two small news-focused services, and another that is focused on getting current or historical weather information. If one of the services fails, it will still be possible to have part of the information, or if any of them suffers greater demand or update can be updated independently. In the case of a single service, a single fault they let out. An upgrade would require upgrading everything, and if it was necessary to scale the news service, it would have to be done for everything, increasing costs.
Companies are beginning to embrace this kind of technology because - by analogy - it's easier to focus on winning every battle than on winning the whole war at once. Many innovation initiatives start small, with small investments, so they need to start small and have the ability to scale quickly if the service goes well and has a meteoric expansion of business and customers.
We already know that behind the programs and systems we use in our daily lives, there is a set of patterns that allow us to connect to other systems without user interference and this happens through the API.
Because of this, APIs become directly valuable products to customers, and these products can be directly charged for their use, or rather monetized, directly generating revenue from their use. A company Telecom, for example, can provide directly an API streaming data to enable the user to consume videos directly or embarking on their products to other customers, paying in this way by consumption. Or in a very common scenario, Google charges for the use of the API that interacts and displays Google Maps as part of other products and applications.
One of the most common and commonly used ways to monetize an API is direct revenue, widely used by companies with services via SaaS (Software as a Service). Another model is using packages or plans, or as an affiliate program and marketplace.
Regardless of the form of billing or non-billing, the intention is always to find the model that enables and generates revenue to maintain the business using APIs as a means of interacting with the customer. It is important to note that the API is above all a product, and only viable, quality products, and thus desired by customers, that will actually have the potential to generate revenue and thus be monetized.
Author: Julio Fernandes