All bank staff will have to understand APIs as the industry transforms

As a non tech expert writing about Enterprise IT, with a focus on financial services, I always try to break things down into easy to understand concepts, otherwise I can’t write about them.

A good guide for journalists when  writing something is that they should do so as if you were telling your mate in the pub. I find this works really well, but in the tech sector you rarely things described in a simple way. This is often because either the tech experts behind the technology struggle to explain stuff to the layman, or the marketing department filter adds a bit more confusion because they don’t really understand it.

But if you work in a bank and don’t for example understand what the acronym API stands for you need to start asking questions.

I was at SIBOS this week and among the usual platitudes about how digital is transforming banking were some that I had never thought of before. One of these points was that all bank staff in the future will need to understand what Application Programming Interfaces (APIs) are.

I must admit it took me a while to get my head around it because initially the explanations were far too technical. The word programming is usually enough to confuse me. I also heard at SIBOS that when some fintechs have contacted banks about APIs, the people in the call centres didn’t know what they were talking about.

But as banks transform digitally they will increasingly have to enable financial services apps from third party suppliers to interact with their systems. To do this APIs are needed, otherwise it takes ages and costs a lot to plug systems together. In the past when the banking industry changed slowly it didn’t matter that it took a while to connect systems, but in today’s environment change is happening quickly and banks don’t have the time or resources to keep up using techniques of the past.

I asked a few experts at SIBOS to describe APIs in a couple of sentences. Here are a couple of examples:

Hans Tesselaar, executive director banking industry architecture network at banking industry technology group BIAN.

“An API is a standardised way to interact with either the inside or outside world.”

But here is one for the layman from a tech executive at a major software supplier. “Lego has an API at the top that connects it to other lego. My lego from 30 years ago fits into the lego my kids use today.”

I like the lego one. Do you have any good descriptions of APIs? If so please put them in the comments box.

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