In this webinar session, SmartBear and SWIFT discuss the importance of API standardisation and the role it plays in the new platform economy in the financial services industry.
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Standardising APIs: Powering the Platform Economy in Financial Services
1. Standardising APIs:
Powering the Platform Economy
in Financial Services
Richard Tomusk API Lifecycle Product Manager at SWIFT
Neil Munro API Lifecycle Product Manager at SWIFT
Joe Joyce API Solutions Engineer at SmartBear
5. FIs have traditionally
operated like castles
protecting their territory, with
moats to dissuade outsiders
As such, an open platform
economy has not flourished
in financial services
Financial Services: A Traditionally Closed Environment
Standardising APIs Powering the Platform Economy in Financial Services
6. Standardising APIs Powering the Platform Economy in Financial Services
Opening Banking Up
Regulators have seen
the power of APIs to open
up retail banking markets
and spur competition
Closed banking: Bank owns the customer relationship
Open Banking: Bank or third-party owns the customer
relationship
7. Standardising APIs Powering the Platform Economy in Financial Services
SWIFT Standardized API Approach
No
standard
data
model
Varying
identity &
security
schemes
Different
API
channels
per bank
FRAGMENTATION
Inconsistent
business
models
Fragmented
API specs
Varying API
capabilities
across firms
Data model
Open API specifications
Identification,
authentication, authorization
Consumption models
STANDARDIZED
API APPROACH
STANDARD
THE API MARKET IN THE FINANCIAL INDUSTRY REMAINS FRAGMENTED…
9. Standardising APIs Powering the Platform Economy in Financial Services
What Do We Mean By Standardisation?
Data model
Business model / flows
Identity
Security
Connectivity
Delivery process
Lifecycle management
11. Standardising APIs Powering the Platform Economy in Financial Services
Standardisation is a Fundamental Requirement for a Prosperous API Economy in
Financial Services to Take Root
Reduce cost
to providers
and consumers
Increase reach
by building
on existing
technology and
relationships
Focus on
strengths
and spend
less on basic
infrastructure
Be innovative
using building
blocks that
others provide
SWIFT is collaborating with its users to standardise APIs. We aim to:
14. SWIFT is the leader
in secure, compliant
and standardised
global financial
communications
We are uniquely
positioned to help the
community overcome
challenges
and seize this
opportunity
Our Unique Expertise
Unparalleled reach
Extensive
compliance expertise
Exceptional security
& reliability
Unique expertise
in data standards
Standardising APIs Powering the Platform Economy in Financial Services
15. Standardising APIs Powering the Platform Economy in Financial Services
Delivering the Building Blocks of the Platform Economy
Identity
framework
Data
controls
Security &
cyber defense
Network
connectivity
Strong
governance
Reliability Scale
Regulatory
compliance
Standardisation
16. 16
The SWIFT Ecosystem
Service Providers
3rd Party
APIs
3rd Party
APIs
3rd Party
APIs
SWIFT
APIs
Global Banks
Global Custodians
Consumer Merchants
Third-party API aggregators
Trade Platforms
DLT platforms
Securities Platforms
Third-Party Service Providers Partners
API
Gateway
Service Consumers
Corporates
Asset Managers
FinTechs
Financial Institutions
Banks
APIs
APIs
APIs
APIs
Standardising APIs Powering the Platform Economy in Financial Services
17. Standardising APIs Powering the Platform Economy in Financial Services
Creating Standardised APIs
Management
Delivery process, lifecycle, analytics, versioning
Modelling APIs
SWIFT collaborative
modeling tools and
methodologies, powered
by SwaggerHub
Consuming API
SWIFT’s API Gateway
with consumption options
Publishing APIs
SWIFT Developer Portal
with sandboxes and the API
catalogue
18. Using SwaggerHub to Accelerate
API Standardisation
Standardising APIs Powering the Platform Economy in Financial Services
19. 19
Importance of API Standardisation
Standardisation is the top
API technology challenge
teams want to see solved
in the coming years
https://smartbear.com/resources/ebooks/the-state-of-api-2019-report/State of API Survey Report 2019
20. 2020
Improve Developer
Experience
Enable Intelligent
Standards
Seamless
Integrations
Provide workspaces for collaboration
and feedback within a single
platform
Enable and enforce design-first
principles to improve API quality
Enable integration into a wide range of
API platforms and services
What is SwaggerHub?
Standardising APIs Powering the Platform Economy in Financial Services
21. Enforce design rules from the top down
• Define design rules to be used across an organization
• Resolve quality issues before reaching development
• Give real-time feedback as definitions are written
Create a library of reusable assets
• Store pre-approved definitions
• Teams create references
• Updates are pushed down to other services
Built on the industry standard for API definitions
• OpenAPI Initiative is a collaboration of leaders in the industry
• Industry wide support for OAS
• Evolving standard is growing and adapting to the needs of API
providers and consumers
Asset Library
API_1 API_3API_2
Design Guidelines
!
✔ ✔
SwaggerHub and API Standardisation
Standardising APIs Powering the Platform Economy in Financial Services
23. { }…
Why SwaggerHub?
A Single Source of Truth for API Development
Swagger is the OpenAPI Specification
Standardising APIs Powering the Platform Economy in Financial Services
24. Standardising APIs Powering the Platform Economy in Financial Services
What are the Risks of Not Standardising?
How is the SWIFT Community Helping?
25. Standardising APIs Powering the Platform Economy in Financial Services
Risks of Not Standardising API Data and Business Models
Increased client
implementation cost
Slower
onboarding
Decreased
reach
Losing out on
existing business
Decreased
value proposition
for APIs
More complex
architectures for
interoperability
Risk of
misunderstanding
26. Standardising APIs Powering the Platform Economy in Financial Services
How is Our Community Helping to Solve This?
Using the ISO20022 financial
messaging standard –
defining both data models
and business meaning
Collaborating
on OAS in
SwaggerHub
Extending open
banking with valuable
use cases
Global securities
use cases –
settlement status, NAV
Bank to corporate cash
management use cases –
payment initiation, balances,
request to pay
API design
guidelines and
best practices
27. Corporate-to-Bank 3rd Party API Use Case Payments: Account Balance
Corporates
API business solution benefits
Community participants
Standardised solution, scales globally with minimal friction
Improved cash-flow forecasting and treasury management
Reduced operational costs
Flexible API, covers several use cases
Standardising APIs Powering the Platform Economy in Financial Services
Banks
The issue:
Corporate cash management is limited by low
intraday account balance visibility
The solution:
Real-time balance inquiry
Global, standardised API for easy adoption
28. Standardising APIs Powering the Platform Economy in Financial Services
Modelling APIs
Business process definition Conversion to API contract
ISO 20022
Repository
Standards
Editor
Business
Process Editor
JSON
Schemas
Open API
Specification
29. Standardising APIs Powering the Platform Economy in Financial Services
Risks Of Not Standardizing Identity / Security / Connectivity
Increased client / provider
implementation cost –
many-to-many does
not scale
More onboardings
required for
providers / clients
Decreased
reach
Decreased value
proposition
for APIs
More complex
architectures for
interoperability
Possibly weaker
security
30. Standardising APIs Powering the Platform Economy in Financial Services
How is Our Community Helping to Solve This?
Leveraging the
super-secure SWIFT
network – now for APIs
Shared gateways
on SWIFTNet and
public cloud
10,000 on-boarded
and KYC’ed institutions
– identity and ARM
Securing APIs
with a Public Key
Infrastructure (PKI)
Software Development
Kits and server stubs
C:>
31. Standardising APIs Powering the Platform Economy in Financial Services
Risks of Not Standardizing API Management
Increased cost
of API
Increased cost and risk
to clients due to different
delivery cycles
Decreased
assurance
to clients
Possibly API
mismanagement due
to inexperience
Longer onboarding /
decreased reach
32. Standardising APIs Powering the Platform Economy in Financial Services
How is Our Community Helping to Solve This?
A new way for working
groups – productise in
3 months – align delivery
cycles, version control
Service provider
technical assurance
Vendor / partner
management
and assurance
Business assurance,
SLAs, benchmarking
Shared developer
portal and resources
Analytics
and insights
34. Future
Standardised APIs >
lower cost >
more partners >
more value exchanged
Current
Bilateral APIs >
higher cost >
fewer partners >
less value exchanged
Standardising APIs Powering the Platform Economy in Financial Services
Current State and Future for Organisations –
The Value Of Standardisation
Me
Partner
API 1 API 2
Partner
API 3
Partner
API 1
Partner
Partner
Partner
Partner Partner
Partner
Me
API 1
Partner
SmartBear tools are synonymous with quality across the entire SDLC, from planning and design to testing and monitoring. We were founded in 2009 in Boston, Mass and have grown to over 11 global offices, encompassing North America, Europe, Asia, and Australia.
Over 6 million developers, testers, and operations professionals from 20,000 plus companies, like Google, RBC, and Vineyard Vines, use our tools ever day to deliver bug free software.
Our company of over 500 employees also provides 5 free tools for the community, including 2 wildly popular open source tools Swagger and SoapUI.
A fragmented environment: The agility and simplicity afforded by APIs means that anyone can develop and publish their own API specifications and update them whenever they wish – under such a model, fragmentation is inevitable.
Inconsistent business specs: Differences between open banking regulatory specifications in different markets, leading to banks implementing their own interpretation of the local regulation, leading to a large number of APIs covering similar business functions.
Varying identity and security frameworks: Many different identity solutions are applied inconsistently across different APIs, and often focus on domestic or regional solutions. This limits opportunities for common API frameworks across regions and requires international users to maintain addressing and identity solutions for each market.
Lack of standardised data model: In any given marketplace or ecosystem, multiple organisations will expose external APIs that work with the same kinds of data, even though they offer different functionalities. Without a consistent end-to-end data model, the business value of data may be diminished through misinterpretation or truncation.
Varying API capabilities between firms: Whilst some institutions have been first out of the blocks in leveraging the technology – trying to seize the initiative to be the first to offer new services to their customers – others have been slow to develop their API capabilities. For a API economy to flourish in financial services, all firms must have the ability to access, consumer and develop API-based services.
SWIFT is a global member-owned cooperative and the world’s leading provider of secure financial messaging services.
We provide our community with a platform for messaging, standards for communicating and we offer products and services to facilitate access and integration; identification, analysis and regulatory compliance.
SWIFT is a global member owned cooperative and the world’s leading provider of secure financial messaging services.
We provide our community with a platform for messaging and standards for communicating, and we offer products and services to facilitate access and integration, identification, analysis and regulatory compliance.
Our messaging platform, products and services connect more than 11,000 banking and securities organisations, market infrastructures and corporate customers in more than 200 countries and territories. While SWIFT does not hold funds or manage accounts on behalf of customers, we enable our global community of users to communicate securely, exchanging standardised financial messages in a reliable way, thereby supporting global and local financial flows, as well as trade and commerce all around the world.
As their trusted provider, we relentlessly pursue operational excellence; we support our community in addressing cyber threats; and we continually seek ways to lower costs, reduce risks and eliminate operational inefficiencies. Our products and services support our community’s access and integration, business intelligence, reference data and financial crime compliance needs.
SWIFT also brings the financial community together – at global, regional and local levels – to shape market practice, define standards and debate issues of mutual interest or concern.
This is an excellent slide-- Enabling the calling of Community APIs over the SWIFT API gateway
Introducing the P-a-a-S Platform-as-a-Service concept: 99.999 reliability with global connectivity/reach + all community network value + community network effect value propositions
How do you bring collaborative products from ideation to publication and go-live? How do you manage them after, including analytics? How do you provide assurance in an ecosystem? (standardisation will not bring benefits if actual implementations don’t follow the standardised specs)