For the uninitiated, APIs allow two or more platforms, systems or apps to talk to one another and trigger processes. They are the workhorses responsible for making things happen online, for example. Any time an app shares an article via Twitter or payment via PayPal, APIs allow the exchange of data.
APIs have been around since the dawn of computing. But they have become hot property because of their innate ability to enable partners, developers and customers to collaborate and innovate to create new business models. Uber, for example, has built a business around interfacing to Google Maps through an API to match driver locations with passengers.
APIs allow companies to grow rapidly by letting them share assets with external organizations, monetize existing services and create new revenue streams. Programmable Web is one of the largest directories of APIs on the web with over 18,600 APIs in its database – and it's still growing.
Organizations from banks to retailers are keen to get involved. Singapore-based DBS Bank, South Asia’s largest bank, for example, is the latest in a series of API launches by large financial institutions. Its bank API platform is one of the largest available, consisting of over 150 APIs ranging from accounts to payments and loans. It is making it available to other corporates, fintechs and software developers in a bid to create innovative customer-centric experiences and boost its digital ambition.
Companies have been quick to take advantage of DBS Bank’s API platform. Fast food chain McDonalds has used the DBS banking API under the PayLah! Payments category to introduce PayLah! to its 24-hour McDelivery service, providing customers with a cashless option.
APIs in networking
Standards are also important for APIs. As part of an initiative between AT&T, Orange and Colt, AT&T has been collaborating with Orange Business on standardized APIs that will allow SDN architectures from different network service providers to interoperate with each other. This will speed up the adoption of SDN across the industry.
Keys to innovative technologies are being opened up. Mastercard, for example, has given partner banks and merchants access to its blockchain API to accelerate development in the business-to-business space.
Blockchain is an area where Gartner believes APIs will be critical to next-generation developments. They will help connect third-party data sources and drive increased interoperability with other blockchain platforms.
Where are APIs heading?
As the Internet of Things gets smarter, things using an API to “communicate, transact and even negotiate will become the norm,” according to Gartner.
“The API economy is an enabler for turning a business or an organization into a platform,” explains Kristin R. Moyer, vice president and distinguished analyst at Gartner. “Platforms multiply value creation because they enable business ecosystems inside and outside of the enterprise to consummate matches among users and facilitate the creation and/or exchange of goods, services and social currency so that all participants are able to capture value.”
With the rise of machine learning, we will see an increase in APIs adding vision, speech, language and knowledge capabilities, providing predictive and intelligent information. Things will understand exactly how we like our coffee and to where we’d like to go on vacation.
Let’s talk security
APIs promise much, but security is still a number one challenge. Why? Because the whole point of APIs is they create assets that can be re-used and shared. This fuels innovation and new service development. The downside, however, is that it may expose sensitive information such as IP details.
This is why it is paramount that APIs are developed with security in mind. Carelessly coded or implemented APIs can open the doors to cybercriminals and put a whole business at risk. There is much that enterprises and their development teams can do to protect themselves.
APIs enable speed of development, but it is crucial that enterprises allow enough time to get API code and documentation tested before it is released. Organizations that are looking to use APIs from third parties must ensure their IT teams know exactly how to utilize them securely and validate responses they generate.
The untapped power of APIs
APIs have shown that they have the power to disrupt industries and connect our world. No longer just the domain of the IT world, they are a strategic business driver in digital transformation and have found their place on boardroom agendas across the globe.
Find out more about effective digital transformation with Orange Business here.