APIs, it is claimed, will ensure the user is not plagued with the inefficiency of retrieving or calculating information not easily accessible and will banish the curse of repeatedly rekeying the same data.
This vision isn’t new though, in fact, the process of having different systems communicating together was solved decades ago.
Having systems directly talking to each other or through the more common “API layer” is not a modern phenomenon.
But if you’re involved in the intermediary sector, you might be wondering about two things: if this API thing was solved decades ago, why aren’t your systems communicating together now? And where does all this wizardry sit?
The first question is relatively easy to answer. Many organisations recognise that exposing their functionality and services through APIs allows partners to include and enhance their products: think sourcing, verification systems and research tools.
On the other side, there are the organisations that need nudging or legislation to open-up their systems, examples being direct lender submission and the opportunity presented by Open Banking and PSD2.
The second question is more about common sense – where each interaction fits into the overall advised process and where those efficiency gains can be made.
Direct lender submission naturally fits within the fulfilment process or back office system, whereas access to an individual’s current account data, to verify affordability, salary or automatically complete a budget planner should be requested and delivered directly through the client.
I suspect any process that requires the client to provide current account access to the intermediary directly is going to raise eyebrows for both parties.
Broker of the future
It’s here where we see how the intermediary of the future will work.
Data will naturally flow from the initial opportunity into the fact find with integrations collecting qualified hard facts from an individual’s current account and other due diligence sources. That same data flows into mortgage, protection and general insurance sourcing systems with no rekeying of data and into a back-office system where complex documents, such as the suitability report can be automated.
This isn’t a heady ideal, but more about joining up those dots and recognising where the unnecessary can be trimmed or even eliminated.
Using client engagement tools such as a client-facing fact find and portal involves the client into the process and increases buy-in.
This foundation of client tools also provides a logical mechanism to permissively request current account data in a safe and secure environment that ensures the client is in full control of their data.
So should you care about APIs?
I suggest that it is only through APIs that intermediaries will begin to see those dramatic changes that will change the way their business works in a remarkably positive way.
Through APIs, we connect systems together and eliminate the unnecessary or streamline the necessary.
You might not necessarily want to cuddle an API, even if this was physically possible, but APIs are the foundations that will define the industry going forward.