McKinsey - Reimagining transaction banking with B2B APIs

https://www.mckinsey.com/industries/financial-services/our-insights/banking-matters/reimagining-transaction-banking-with-b2b-apis

APIs can help global transaction banks move closer in the value chain to their clients amid rising competition.

B2B integration: The state of play

We see six major challenges around file-based integration:

• limited exception handling on format mismatches
• manual failure recovery following network or system outages
• weak controls for file tampering and man-in-the-middle breaches
• long customer onboarding times—as much as four to six months
• bulky file formats for enterprise resource planning (ERP) integration, requiring customization for each corporate
• higher operating cost to run and maintain the specialized software needed

Building a B2B API platform: Five success factors

1. Embrace a product development mindset
2. Design for process control and orchestration
3. Weigh tradeoffs between a channel and product approach
4. Set up a modern API lifecycle management platform
5. API gateway
6. API publisher
7. API store and development portal
8. API analytics
9. Extend risk management and optional controls to API-based offerings
10. Align security and regulatory controls
11. Amend client undertakings and legal contracts
12. Leverage partnerships and self-service solution for customer acquisition
13. Form partnership with software-as-a-service finance companies
14. Simplify customer onboarding
15. Define an API taxonomy to accurately access system readiness, avoid proliferation of incompatible APIs, and prioritize for business value
16. Experience APIs
17. Process APIs
18. System APIs
19. Experience APIs should be owned by channel teams and process APIs by business owners. System APIs should be controlled by application owners.