We Were Promised Flying Cars

In 2014, Gartner predicted over 75% of the Fortune 1000 would have public APIs by 2017. This number is way higher in 2024! The initial motivation for enterprise APIs was mostly internal benefit:

• Hardened ‘services’, loosely coupled to each other to enable rapid new development – just like Jeff Bezos mandated at Amazon in 2003
• Use of microservices to adopt new infrastructure like NoSQL and the cloud (sunsetting legacy technology)

Remember Marc Andreesen saying Software Is Eating The World in 2011? If software is eating, APIs are the silverware. Beyond accelerating developers and cloud adoption, the ‘API Economy’ where business models and commerce went digital was also supposed to transform the relationship between companies, customers and supply chain partners. APIs would enable enterprise products and data byproducts to look and feel like software to the outside world. ‘Software’ that could be sold.

While the ‘API Economy’ vision manifested in businesses like AWS, Twilio, and Stripe, its promise has yet to fully trickle down to the legacy enterprise. We got the enterprise APIs…where is the enterprise API economy?

Taking It To The Bank

McKinsey has conducted years of round tables and surveys around Banking API strategy. Some key findings:

• 75% of bank APIs are internal (motivated by the above)
• Only 25% are external, driven by mandates like PDS2 in the EU and ‘FOMO’ from fintech disaggregation and neobanks
• Now banks want are prioritizing monetization, but business strategy and sponsorship around APIs continues to lag, leading to stagnant adoption

Where is the most obvious opportunity to break the adoption logjam and find new API revenue?

It’s The Customers!

Banks have historically tried to monetize APIs two ways:

1. Court fintechs to become the ‘embedded rails’ in their apps
2. Promote APIs directly to clients in hopes of them self-serving native integrations

This is a fundamental disconnect. 89% of US businesses have fewer than 20 employees  – they don’t have developers sitting around waiting to write code to their bank’s APIs!

Banks spent the 2000’s launching mobile apps to remove friction for consumers, win and protect retail market share. Where is that same urgency to remove friction in commercial banking?

Banks need to bridge the gap from public APIs to the client’s needs for a seamless, integrated banking experience. Offering these businesses API documentation is like throwing a drowning person an instruction manual for a life preserver.

These commercial banking clients interact with the bank constantly through their systems:

• Payroll, AP and AR happen in accounting and ERP systems
• Working capital is handled in the TMS
• Reporting lives in FP&A and BI tools

Banking should live in a company’s daily processes as a self-service experience right in the bank’s portal, with no code. The APIs to make this possible already exist!

Commercial Banking Automation is the monetization opportunity banks have been waiting for – and Workato has the platform and playbook to do this as a fully hosted solution.