Are Industry-Specific APIs the New Norm?

For years, developers have used a variety of common APIs. Perhaps the biggest recent shift is the focus on industry-specific APIs.

The role of application programming interfaces (APIs) has taken on elevated importance in recent years as a fundamental underlying technology enabling digital transformation. They also play an essential role in helping companies speed the development and rollout of applications and services to keep up with the rapid-paced cadence of modern business.

These developments are causing a shift in the API landscape. In the past, proprietary and one-off APIs may have been common when companies were connecting internal resources. Now, APIs must be easily shared and consumed by third parties to build modern composite applications. That requires standards-based APIs to allow easy integration of the elements and services that make up any application.

For years, developers have used RESTful APIs and open standards such as SOAP, Swagger, OpenAPI, JSON Schema, AsyncAPI, and GraphQL. Many of these have active open standard communities that are enhancing core services and adding new capabilities. But perhaps the biggest shift is the focus on industry-specific APIs. 

See also: Join the Open Banking and Open Finance Revolution

Open banking APIs as a model

One example that illustrates the need for APIs, in general, and standards-based APIs, in particular, is in banking. Integration is a relatively new phenomenon in the banking industry. Most banks have traditionally built apps that only worked within their own ecosystems. Finance tools that could pull a consumer’s data from multiple institutions were rare, and their methods for collecting data were usually technically complicated.

The open banking model originated in Europe with the goal of opening a financial system that would easily share information about typical banking products with customers. Specifically, one factor that has helped propel the concept and its use was the European Union’s implementation of the Revised Payment Services Directive (PSD2), which mandated that banks make consumer data available to third parties at the customer’s request, typically via APIs.

Banks that share customer data can gain new markets by consuming customer data from other banks. Fintechs and neobanks also benefit from this model by enabling the offer of niche solutions with customized products that are perfectly suited to adapt to changing customer demands. The wide-scale use of APIs driven by open banking initiatives also opens new markets for many other industries, including retail and insurance. Some estimates show that up to 87% of countries now offer open banking in some form or other.

Other industries take note

Healthcare is another industry that requires simplified integration and easy (and secure) access to data maintained by many disparate organizations. Those requirements have led to the development and implementation of FHIR (Fast Healthcare Interoperability Resources). 

FHIR is an HL7 specification for Healthcare Interoperability. In particular, it is a next-generation standards framework created by HL7. FHIR solutions are built from a set of modular components called “Resources.” These resources can easily be assembled into working systems that solve real-world clinical and administrative problems at a fraction of the price of existing alternatives. FHIR is suitable for use in a wide variety of contexts – mobile phone apps, cloud communications, EHR-based data sharing, server communication in large institutional healthcare providers, and much more. FHIR has a strong foundation in Web standards, including XML, JSON, HTTP, OAuth, and others. And it offers support for RESTful architectures, seamless exchange of information using messages or documents, and service-based architectures.

APIs in manufacturing, logistics, supply chains, and more

Many other industries have the same integration and data access demands and, as such, are turning to APIs. For example, Manufacturing is an extremely interesting market. Data is produced from sensors on shop floor equipment and industrial process controllers. Raw materials are tracked and managed in ERP systems. Logistics systems monitor ordered and incoming supplies and outgoing products.

API-based integration helps manufacturers build applications to view and aggregate data, analyze trends and get insights, and build applications to make the information and derived insights available on a user’s device of choice. Because so many systems and elements are involved, it is not surprising that there are many manufacturing-specific APIs. In fact, ProgrammableWeb lists 30 manufacturing APIs.

Enhancing API integration benefits with automation

The use of APIs can improve the speed and ease of software development and speed integration by reducing the amount of new code that needs to be written to access and connect different applications, services, and data. Additionally, APIs help eliminate application development problems with data silos and disparate systems.

The benefits of using APIs can be enhanced when companies use other technologies such as no-code/low-code application development platforms. Such platforms let citizen developers and lines of business create applications by assembling components in a drop-and-drag visual environment. The assembled elements make their data or services available via APIs. These platforms also let experience developers work faster.

Increasingly, companies are turning to additional technologies based on artificial intelligence to automate API-based integration. For example, AI in the form of natural language processing (NLP) might be used at the start of a project that requires integration. The business team could then simply describe the integration it needs. An AI-powered automation solution could then use those words to recommend various integration templates the team might use in its project. And finally, an AI-powered automation solution would create the integration workflows once the business team selects a template. Such an approach will greatly speed integration efforts.