IDC PeerScape: Best Early Steps in Deploying Open Banking Application Programming Interface in Asia/Pacific
In the context of how API readiness will most likely be a years-long program of work, we write this second report in our series on open banking API to present a list of best practices that banks can follow. These best practices are gleaned from Asia/Pacific banks and financial institutions that are leading adopters of open APIs even as most of these institutions are still in the early stages of their overarching open banking API strategy. "The momentum for the deployment of open banking APIs is growing. We expect a majority of the top 250 Asia/Pacific banks to deploy open APIs in the next two years as they take advantage of the capabilities of third-party partners in improving the organization's insight into customers, and dealing with them to the point of serving a customer segment of one. The next two years will be a period of determining who to partner with, how to manage these partnerships, and most importantly, why such partnerships are crucial to the bank's overall business strategy," remarks Michael Araneta, associate vice president, IDC Financial Insights Asia/Pacific. "Introducing open APIs into the banking industry demands a holistic new approach — starting from looking at it more as a business opportunity that requires different stakeholders to work together toward achieving a common business goal. This is better than considering open APIs as mere technological challenges to be driven primarily by the technical team. Open APIs demand a 'new product' approach, in which scope, policies, product life cycle, roles, and responsibilities need to be considered alongside technology considerations. This is how banks can stay ahead of competition and sustain their leadership in what we expect to be a constantly challenging world of banking APIs," says Anuj Agrawal, senior research manager, IDC Financial Insights Asia/Pacific.