In a world where people are ubiquitously connected and there is a proliferation of apps to help them match, model, learn, and connect, shouldn’t the connections between systems, so integral to successful financial relationships do the same?

API’s are enabling system architects to develop platforms using best of breed components. The opportunity to modernise legacy systems through this approach is immense, and enables financial institutions, who have previously struggled with this, to add capabilities like machine learning and smart data analytics to their existing platforms, as they start to transition to the new world.

APIs facilitate connections that in the past may not have been possible for different systems – old with new, fast with slow, English with German – but for the effectiveness of the API to improve, it needs to learn from the data it receives, and effectively give “dumb systems a brain”. The modern API needs to do more than just connect at speed, it needs to add intelligence to that connection, and in so doing optimise the intelligence of systems on both sides of the connection.

The fact that API’s allow computers to talk to each other does not guarantee the sustainability of the relationship between systems, in much the same way that a simple dating profile that provides basic information without enrichment and matching, is not that useful. The basic data provided in any human (or financial) interaction needs to be enhanced and optimised to ensure the progression of that relationship.

The API needs to be more than simply a communications channel, it needs to do more than allow different devices to talk to each other. The real question should be, “How smart is it?”  Does it add and improve on the intelligence between the parties engaging in the relationship?

Sustainable relationships in a system environment are not that different from those between people – they need to develop from conversations to something more. Firms offering API solutions need to understand this. The sooner we engage the brain in the API and learn from the past, the greater the bond and value add, and we quickly move from just communicating to creating valuable and long-standing relationships.

Jonathan Shapiro – Contribution to Fintech Circles Thought Leadership