Transforming the traditional: making industries programmable through APIs

Many businesses could be transformed by the strategic adoption of APIs, cloud services, artificial intelligence and big data

APIs are drivers of innovation, enabling developers to access the information and functionality they need to invent new products and experiences without having to start from scratch.

Today, entire businesses are being built on top of APIs - businesses that would be impossible to establish otherwise. Uber is the obvious example, an app built on top of navigation, data sharing and payments APIs that has changed the way people travel around the world. In financial services, neobanks like Monzo are transforming the way people manage money, using APIs to quickly and securely check account balances in real time and authenticate transfers.

Many of these API-based companies were built from the ground up, new market entrants when they first launched, unencumbered by legacy technology. Unsurprisingly, these are often the reasons cited by well-established companies when it comes to challenges around digital transformation.

Transforming the traditional

Traditional industries like insurance are ripe for innovation, but many of them have not yet embedded modern data science and technology into their underwriting operations. Many of the issues insurers face, such as poor submission data or having to spend more than 50 per cent of time on low-value tasks like data acquisition and form filling, could be much better supported by the adoption of a number of linked technologies: APIs, cloud services, artificial intelligence and big data.

Related industries, including payments and banking, are in the midst of their own technological revolution. In particular, banking, investment and loan underwriting companies are embracing technologies including APIs and AI to reduce the cost of delivering their services and leverage a competitive data advantage

In fact, recent research from Accenture found that many banks have already begun using APIs in response to competition and regulation. However, that same research found that only a few have realised their full potential. In order for the dial to move further, these institutions require a holistic view, seeing APIs as much more than just a technology solution.

Innovation in insurance

An API platform for insurance underwriting provides a single access point for commercial underwriting data and analytics products, as well as programmatically consumable APIs that create a foundation for automation throughout an organisation. The individual APIs enable business teams to independently automate low-level tasks. By assembling these API building blocks, insurers can drive increasing efficiency of complex underwriting journeys.

Insurers are now beginning to transition towards platform-based orchestration of services for underwriting. Thanks to forward looking executives and a new breed of digital managing general agents (MGAs), some players are already well placed to navigate this transition.

Through adopting a platform approach, insurers can benefit from streamlined IT systems, automation of low-level tasks, decreased time to quote, and improved portfolio analytics to guide strategic decision making.

When it comes to adopting an API platform, the goal is to move insurers to transform an existing business into one where digital platform and ecosystem are the dominant mindsets leading to participation in the API economy. And once strategy and business outcomes are in place, adopting an API platform is deliberately straightforward.

Unlike major software purchases, a team can select and begin working with an API platform in a matter of weeks. Importantly, the benefits will ultimately be realised across an organisation, but different business units can begin to adopt the technology at different times, so you don't have to bet the ranch on one big transformation.

The future of APIs

Accenture's research found that API-driven organisations are future-ready, with the report explaining that thriving in an API economy is key to unlocking new sources of value for financial services institutions across the globe.

This is true across many industries, particularly given that access to high-quality data has grown exponentially in recent years. With the right data infrastructure in place, even the most traditional financial services firms - whether in insurance, mortgages or payments - can digitally transform.

This will ultimately lead to industries becoming programmable. Insurers can underwrite programmatically, using machines do repetitive jobs such as gathering data, verifying documents and filling forms. This frees up underwriters to spend more time on risk assessment, product development and customer relationships, also reducing cost and tearing down barriers to entry.

The future of these industries, driven by APIs, will see complexities vastly reduced to enable organisations to focus on what's important - customer success, product relationships and building a successful business.

Richard Hartley is CEO of Cytora