When CGAP asked digital finance executives about the number one piece of advice they would give to another provider getting started with open APIs, Hover CEO Ben Lyon emphasized that APIs are not just a product, they’re a “standalone business.” Open APIs can benefit providers in many ways, as documented in CGAP’s case studies, but successfully implementing a API initiative requires a business strategy, new company processes, and investments in technology and customer engagement. CGAP created the resources below to help providers in emerging markets better understand and navigate key considerations when implementing an open API initiative.
While it is important to take a strategic approach to open APIs, you do not need a full-fledged strategy in place to get started. It is better to start small, offering a limited number of APIs to existing partners, learning about developers’ needs, and testing business models, before evolving toward a full open strategy.
Pricing is a key component of any open API strategy. A pricing strategy should do at least three things: (1) help the financial services provider achieve specific business objectives, (2) generate business value for each target API consumer segment, and (3) align with market expectations and norms for pricing.
One of the most important factors in implementing an open API strategy is selecting the right technology solutions. A common mistake among business leaders is to focus on the business strategy without engaging on key technology decisions. This can lead to technically unreliable solutions, the need for ongoing technical support to third-party API consumers, or a need to manage financial risk when things go wrong.
When launching open APIs, do not assume that developers will automatically start using them. To ensure developers are aware of your APIs and drive usage, providers need a go-to-market strategy. It is also important to create resources that make it easy for developers to see the potential applications of the APIs and to start using them. Such resources include an online developer portal and supporting documentation.