Banking chiefs should stop trying to assess the commercial value of individual APIs (application programming interfaces) and instead focus on the potential returns from investing in the emerging digital economy, according to a senior leader at NatWest Group.
Speaking at the European Open Banking Expo in September, Dan Globerson, head of bank of APIs at NatWest Group, said he is frequently asked by senior directors about the “shareholder value-add” of individual APIs.
“I say, that is kind of the wrong question. The APIs are part of a digital economy. The question should be what is the value of integrating into an emerging digital economy and what products and services can you monetise there?”
He explained that despite trying to focus on the bigger picture of what innovation in the API landscape could deliver commercially, he is still often asked to distil the benefit to shareholders of individual APIs.
“Do we want to participate in an emerging digital economy?” he asked. “Do we want to embed our products and services?”
Globerson explained that investment will be needed in the coming years based on a vision that commercial returns in the future will come from putting tools in many pools.
“We need to grow an ecosystem. I want to see other companies doing well, because we want to create a market. That’s a big thing and it requires education.”
The former RBS risk boss said forward-thinking bank leaders do recognise the potential and many would like to share services which were previously used exclusively in-house with the wider market, but elevating these services about the “wall” takes time.
“We want to bring what sits behind our services over the wall and expose that to the economy without questioning which of those will be ‘monetisable’, or which of those will be successful,” he said.
“If we expose those services, we can reorchestrate, and, wonder by wonder, you can acquire the technology and immediately integrate it.”
However, Globerson warned that there was a need for strategic corporate planning to be far more agile if this new approach is to be successful.
“Years ago, in business school, we would say let’s make a strategy and stick with that strategy,” he said. “Now, we are talking about a one-year strategy and pivoting that on a daily basis.”