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API Economy Unlocks Business Opportunities! Creating A Win-Win with Open APIs


Consumer behavior has been changing with the advent of the Internet age, and APIs serve as the key to delivering services and products through software. The essence of APIs is to connect two sides and provide ubiquitous services, with user experience as the core. By exposing internal APIs to external developers to allow for applications in different products and services, consumers are able to enjoy more diversified and convenient services. Some common application examples include online shopping, travel price comparison websites, mobile money transfers, etc, which aim to attract new customers and increase customer adhesion. Riding the wave of API economy, consumers can benefit from more accessible services, while businesses can utilize APIs to drive innovative application scenarios and communicate with third-party platforms, creating a win-win situation with a competitive edge and new business opportunities!

What is an API?

API stands for Application Programming Interface, which is a bridge connecting two applications to interact and exchange data back and forth from one system to another, effectively reducing the burden on developers and creating new implementation channels. Think of an API like a waiter in a restaurant; the customer (client end) orders food from the waiter, and the waiter sends the order information to the kitchen (application), and finally delivers the meal from the kitchen to the customer. An API acts as a waiter who delivers messages.

The biggest advantage of API is that developers do not need to understand all the technology and logic, and API has the characteristics of standardization and scalability. When a company has new functions to launch, it can just purchase software with open data for interfacing through the powerful data integration of APIs, and further provides products fitting consumer needs and economic benefits.

The Key to Building the API Economy is _____?

An API is not an emerging technology, as global tech giants have leveraged APIs to process a large amount of transactions and data for more than 10 years. The use of APIs has gained importance worldwide in recent years thanks to the thriving trends of IoT, cloud and mobile devices. This new wave has facilitated the rise of the API economy. The first step to the API economy is to “open up”. To respond to the rapidly changing market while reducing the development burden and generating economic benefits, enterprises, banks and governments integrate the resources by opening up key data. For example, banks share financial information with third-party service providers such as instant messaging (IM) providers through “Open API”, which allows consumers to simply transfer money in the messaging software without logging in to online banking apps, making financial services more accessible for people. Hospital websites connected to HIS for appointment scheduling, flight comparison sites, weather forecast platforms, and real-time update apps on masks and rapid antigen tests availability nearby, to name a few, are all practical applications of open APIs.

Business models of the API economy are diversified, one of which is to build an API ecosystem. Open API providers such as banks and insurers integrate internal resources, ensure standardized and secure data transmission, and offer paid connection services of various applications to third-party developers through the open platform, expanding the market reach to different businesses to increase revenue. For API developers, they can focus more on their core business, save development time and cost, create more innovative services through APIs, grow potential customer base, and bring a new look to the brand. For consumers, open APIs enable an omni-channel shopping experience and innovative services.

The Future and the Challenges of API Economy

In conclusion, the impact of the API economy should not be underestimated. As software-centric and service-oriented will be the future trend, providing a good user experience is the key to succeeding in the API economy. Consequently, enterprise transformation is imperative. Many businesses embrace the trend of Open API; however, when it comes to huge volumes of data and traffic, they need to take API management, monitoring and optimization into consideration. Besides, how to track the usage of internal and external APIs, build data security practices, ensure privacy and access control in data transmission and regulatory compliance are all the challenges to be addressed.

TPIsoftware’s API management platform digiRunner is 100% compliant with the open API specification with active anomaly detection for vulnerability management. Featuring alert mechanism, WAF protection, IP blacklisting, system encryption to prevent repeated transactions and more, digiRunner safeguards your API management and deployment. To learn more about our API management solutions, please reach out to us.

Read More: How to grow the value of your Open Banking services with advanced API Management

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