How Can Banks Refine Their Branding for Digital Ecosystems and the Age of Assistance?
By Paul Rohan
Consumers today have a multitude of connected devices and channels that they can use to answer a question, explore how to do something, research a location or service, and otherwise discover something new. As the internet becomes embedded in more and more devices and experiences, banks — and indeed, all brands — need to think more about assisting people through this maze of connected experiences rather than attempting to force customers into specific channels or leverage channels merely to push marketing messages.
In generic terms, assistance means helping people to get things done. In marketing terms, it often means driving growth by anticipating and satisfying intent throughout the customer journey. The customer journey can no longer be defined as a journey that starts at a brand’s own user interface. The customer is now on a journey through a digital ecosystem, expecting the best brands to work together as partners to provide connected experiences that improve on what any one brand used to be able to accomplish alone.
Customers are turning toward the brands they find most helpful, evidenced in everything from internet mattress companies eating into department store sales to technology companies winning territory from traditional banking and financial services firms. Within these traditional banks, leaders looking for ways to compete should think of this new landscape as the “Age of Assistance.”
In the “Age of Assistance,” a bank’s ability to work with partner brands to provide connected customer journeys becomes critical — increasingly, customers are settling for nothing less. In this context, it is useful to review why banks’ traditional approaches to business partnerships no longer keep pace with customer needs and expectations — and to explore why application programming interfaces, or APIs, may be the key to changing how a bank positions and expresses its brand.
The Historical Approach: Too Slow and Inflexible
Historically, banks have pursued many partnerships through incorporated joint ventures in which they and a partner form a new company. These ventures are generally a major commitment, as the upfront investment is often bespoke and not reusable. Given the formality and legality of the partnership, joint ventures typically have very long lead times to market. The extensive pre-planning can bring certainty about initial commercial goals, but in the medium term, it may restrict an organization’s flexibility to adjust to changes in consumer preferences.
In the fast-moving and dynamic world of digital ecosystems, customer experiences are often the sum of multiples brands’ data and functionality, and those experiences may evolve and mutate, adding new partners and features, on a daily basis. The traditional style of incorporated partnering to which most banks are accustomed is largely unworkable in this environment. If customers want to interact with a bank not via its first-party apps but via a social network, via a voice assistant, or within the context of some other brand’s application, banks don’t have months or years to slowly and methodically ramp up to meet the demand — by then, someone faster and nimbler will have already lured away many customers.
Banks seeking partner enterprises have also frequently aimed to collaborate via project-enabled strategic alliances in which participants agree to share intellectual property to pursue a common goal. Again, as in the case of a joint venture, the upfront investment is not reusable. Even without the tighter legal structure of a joint venture, strategic alliances typically involve long lead times to market and restricted flexibility. Competition between the alliance and in-house projects can become a concern for each participant. A project within one complex enterprise is a significant coordination challenge, but coordinating a project across two or more complex enterprises with different project management protocols and practices can be a labyrinth. Before, during, and after the project launches, partners’ share of benefits, risks, and operational controls may be ambiguous. As was the case with the joint venture, traditional strategic alliances are increasingly inadequate for adapting to the fast-moving and dynamic world of digital ecosystems.
APIs: Fast and Agile Partnerships
The characteristics of partnerships enabled by APIs are very different from the aforementioned legacy methods and can provide a significant opportunity for banks to participate in the “Age of Assistance.”
APIs make a business’s data and functionality accessible to developers who build new digital experiences. Because APIs can abstract underlying technical complexity into a reliable interface, well-designed APIs from one enterprise can be easily combined with well-designed APIs from one another enterprise, enabling the organizations to combine their business capabilities and provide a richer experience for end users. Moreover, because APIs are, like all software, infinitely replicable, there is virtually no marginal cost when an enterprise extends its APIs to new partners. Consequently, API-based partnering can move significantly faster and more flexibly than traditional partnerships.
Without settling on a specific or single partner, a bank can get started by identifying data and services that may be attractive to other businesses in a digital ecosystem. These financial services should be valuable, rare, and difficult for non-bank rivals to imitate or substitute. Next, a bank can expose these digital assets as APIs that treat developers as users and are managed as products. Many banks are experienced at building APIs as bespoke, one-off integration projects with no permanent owner and no anticipation of future users — and this approach is not sufficient in the “Age of Assistance.” The better supported an API is via efforts such as documentation, sample code, customer service, and improvement via iteration, the more likely developers are to adopt the API.
As more developers adopt an API, the API becomes more likely to be leveraged in new ways that expose the API provider’s business to new customers and contexts across connected ecosystems. API management platforms can automate rapid partner onboarding and provide the control and visibility enterprises need to protect the corporate assets that the APIs expose.
In contrast to joint ventures and strategic alliances, which focus on pre-planned goals, API-enabled partnering can reveal unanticipated opportunities. There are often short lead times to market and high mutual visibility in the search for valuable partners. Potential partners gain confidence from the automated processes behind each API, and the reusability of well-designed APIs gives companies high optionality to test, add, and exit partnerships. Detailed exploration of shared opportunities can take place in a sandbox environment without a formal long-term commitment.
In scale and speed, API-based partnerships are fundamentally different from the more methodical approaches to which many traditional banks are accustomed and fundamentally more appropriate for responding to today’s customers.
How APIs Change Bank Branding and Marketing
The move to API-enabled partnerships inevitably impacts the full marketing mix that many companies, including banks, have used to define and market their brands.
The original marketing mix is often known as the 4 Ps, consisting of Product, Place, Pricing, and Promotion. With API-enabled partnering, Product is impacted because APIs need API product managers. Crucially, the Place of service is evolving, as rather than insisting customers visit a specific website or application, service providers will need to leverage APIs to push their services to the customer’s preferred digital interfaces as the customer travels through digital ecosystems. Pricing is evolving to support ecosystem value, rather than to focus merely on a cost-plus price. Promotion efforts need to adapt to reach new audiences as enterprises cultivate potential partners by promoting their APIs to third parties.
Today’s extended marketing mix for services adds additional Ps to the discussion. API-driven partnerships mean People employed in enterprises may need new skills and new empowerment to orchestrate the behavior of partners in the ecosystem, and the Process of service delivery using partners will change, as enterprises become capable of communicating with partners through the quality of API documentation. Lastly, concepts of Physical Evidence supporting service delivery should change to reflect that reliable and fast APIs (and the metrics derived from engagement with them) are evidence of the enterprise’s ability to collaborate in ecosystems.
How will bank marketing teams implement this refined marketing mix on a day-to-day basis? By treating APIs as software products that require full lifecycle management.
Full lifecycle API management helps banks to build a bridge between legacy systems and modern applications, enabling them to launch more products by leveraging legacy systems alongside newer sources of data and functionality. It helps development teams quickly deliver mobile apps and other digital experiences to customers’ preferred online destinations. Marketing teams can deliver partner and third-party offerings to existing customers and recruit new customers through APIs. Additionally, full lifecycle API management can provide the enterprise with a wealth of actionable intelligence, enabling API data to flow into advanced analytics engines to produce insights that inform product innovation and partnering decisions.
As the above attests, a dedication to API products and adoption of full lifecycle API management can fundamentally change not only the mindset and attitudes of IT leaders but also how the bank defines and presents its brand writ large. Such dedication can move the organizational dynamics in banks away from slow and cumbersome innovation and partner management processes that only produce single business outcomes for one partner and one cohort of customers. Instead, it can help banks and their marketing teams to refine their strategies for the “Age of Assistance.”
[Looking to learn more about driving business value with APIs? Check out our ebook series “Inside the API Product Mindset.”]