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Plugging Into the Power of APIs

Application program interfaces (APIs) are helping businesses open new pathways for innovation and growth. Learn how you can harness their capability to integrate with third-party services and deliver products to market faster while improving the customer journey.

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Tech Trends Episode 6 Transcript

Anish: Stephen, thanks so much for joining us today.

Stephen: Thanks for having me.

Anish: So, we hear a lot about APIs, right. Very much in the conversation across technology and also in the business, right. So, what is an API?

Stephen: Well, the term stands for application programming interface, which is a mouthful.

Anish: Rolls off the tongue.

Stephen: But it's basically just a service, or set of services that helps computers talk to each other. If you read the news, if you use a ride sharing app, if you've bought goods and services online, you're already enjoying the benefits of APIs.

Anish: Yeah, they're pretty much everywhere, right. But how do they work?

Stephen: Well, as an example. So, we mentioned that they're a service that helps two different computers talk to each other. Those services need standards and a common language to talk to each other. So, if you publish an API, you're gonna publish, you know, what different commands, what different functions that API performs. And you're gonna publish how to send a request to that API and you're gonna publish how to receive a response from that API. So it's kind of just defining a language to make a request and receive a response.

Anish: So, it could be like, you send me an address, I'll send you back the GPS coordinates for that address, or things that like, right?

Stephen: That's right. I could send you a payment instruction and the API could go execute that payment for you.

Anish: So, how are companies using APIs to better serve their customers?

Stephen: Well, we'll give a few examples. So we talked about the news example. News aggregates content from thousands of different content providers. They're doing that through APIs. You may experience an ad when you read the news. That ad is being published through an API, typically. If you use a ride sharing app, that ride sharing app is finding drivers through an API, typically with Google Maps or Waze or one of those types of platforms. And then the driver is actually finding you through Google Maps as well. Those are APIs also. If you listen to Spotify, the first time you start up your Spotify account, it's gonna ask you, would you like to log in with your Facebook account if you have one. And when it does integrate with Facebook that's through an API as well. So, they're everywhere.

Anish: Now, what are some of the benefits of using APIs?

Stephen: Well, a few of them are that they're just faster and more nimble. So, if you think about pre-modern APIs, if you wanted two systems to talk to each other, you'd have technology departments on the phone sometimes for 30, 60, 90 days. And they'd have to make lots of decisions together. They'd have to decide how are the two computers gonna talk to each other, what different goods and services are we gonna consume, what are the kind of protocols and formats to send data and receive data? And there's a lot of negotiation that goes on. And importantly, those interactions are one to one. So, all that work that you've just done is to connect with one computer system. APIs are different. So, APIs, you can build one, publish it, and then let the world consume it using the standards that you've published. And so you don't need to hop into those conference room pilots.

Anish: Right.

Stephen: And negotiate each little interface independently.

Anish: Right, right. And it's also faster because you get to leverage other people's work effectively, right? You get to build on work they've already done. So, as you mentioned before, the maps example, right. You're not gonna build your own map service. You can leverage a maps service somebody else has built and you can focus on adding your own business functionality to your environment, right?

Stephen: Precisely. You know, if you look back, it took decades for new businesses to establish. Today, you have new businesses that are starting and ramping to 20 million in top line revenue in a matter of months.

Anish: Yeah.

Stephen: And they're able to do that because they really focus on their core differentiator, their core product. And then they're contracting out, leasing the best of the best through all these APIs. If you need, like you mentioned before, if you need an address perfected, you send it to a service, it returns the address. If you need a payment initiated, you send it to the payment initiation API, versus building all that infrastructure yourself.

Anish: So, how are we using APIs at JPMorgan Chase?

Stephen: Many different ways. One example is we've recently built a developer ecosystem. So, we have a J.P.Morgan developer and Chase developer. It's really a common platform to store APIs, to define how they're used and how customers can benefit from them. And to explain to the developer community how to test the API. And for them to test what types of results they're gonna receive. So, this is in the public domain. You know, we kind of authorize the developer community to use these services. And you know a great example would be, if you go to the Chase Developer Portal, you will see Chase Pay API. That API, if you integrate it into your e-commerce site as a checkout option, your consumers will be able to see that Chase octagon, click on it, type in their username and password, and then pay with their Chase credit card or their Ultimate Rewards card. And the interesting part about that is, you know, for your client to use that service, they grab a snippet of code and tuck it into their ecosystem. It's very quick and easy.

Anish: Right, they don't have to do any development on their side or what used to take weeks or months, now they can do in a matter of minutes, right?

Stephen: That's right. You know, they don't have to coordinate testing with three different parties and confirm that they're seeing one thing on the other side. They can test through the developer ecosystem and launch the code very quickly.

Anish: Yeah, I think one of the other points that people should be aware of is, one of the big benefits of APIs is that it enables you to serve customers the way they wanna be served, on the channel that they want to use, rather than the way that you want to serve them. So, as an example, rather than coming on to a website to conduct a transaction or to, you know, leverage a capability you can embed it in your own code locally, right? So, example, making a payment. You don't have to go onto the website, you can do it from within your accounting software or doing the checkout, you can do from within your e-commerce site, and that gets sent over to another payment site or things like that, right?

Stephen: That's a great example. You know, APIs are really just another digital channel. So, we talk about portal desktop experiences, mobile experiences, exchanging files, and API is another way to do that. If you think about a property and casualty insurance provider, they may have a large captive audience of consumers that they want to drive to their site to checkout and make premium payments. So, they may wish to connect with the J.P.Morgan API to facilitate the payment end of that transaction versus using a J.P.Morgan branded portal experience for their consumers.

Anish: Yeah, and that's great. I think one of the other things that the benefits of this is that, it sort of abstracts away a lot of the complexity of maybe a lot of the backend systems. So, testing becomes that much easier, right? You're basically breaking your applications down to components and then you're testing that component, make sure that component works well, and then how it communicates with other services, rather than having to test this big giant piece of code, it can often take, you know, weeks or months to get perfected, right?

Stephen: That's right. And one of the interesting benefits you and I've talked about is, as your internal technology group starts to compartmentalize and build microservices so that you can be more nimble and drive change more quickly, APIs are kind of the glue that helped them connect together. And when you build those APIs, you can often make them not only internal to help your systems talk, but you can expose them to clients. So you build them once and use them for internal purposes and then leverage them with your clients and suppliers as well.

Anish: Finally, how should companies think about getting started with APIs?

Stephen: Well, I think most importantly, you have to start with your business strategy. You know, building APIs for the sake of APIs doesn't make sense. So, go back to think about who are the clients that you're serving, what are their needs. Think about your supply chain, who are your suppliers, what are their needs for a digital workflow or for APIs? You have internal stakeholders that could be line of business owners, it could be technology department leads. Think about the needs of all those stakeholders, the platforms that you need to deliver products and solutions to those different stakeholders and then the role that APIs can play and the role that they can play is often delivering goods and services in a very rich efficient manner.

Anish: Right. And smaller companies can take advantage of this as well, right? You don't have to be a big,in fact, that's one of the advantages is smaller companies can get started quicker, can maybe leap frog a lot of the things that would've taken other people to do before, right?

Stephen: That's right, because you're, rather than going through a large complex technology integration, you know, you have a small technology staff that takes snippets of code and they can test things kind of swiftly and efficiently. And you can leverage the best of the best.

Anish: Great. Stephen, thanks very much for joining us today.

Stephen: Thanks for having me.

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