Accelerating APIs in banking to help grow the African economy

Kamanie Naicker unpacks Absa’s approach to building a powerful digital ecosystem.

Kamanie Naicker, head of platforms CIB digital at Absa Group, says clients are looking for simplified payment solutions that are seamlessly integrated with both technology and finance solutions. In that pursuit, Absa has invested in leading edge technology to create an API platform for their clients. API is the acronym for Application Programming Interface, where programmes and applications talk to each other.

Absa Access is the channel through which the omni-channel offering is provided. The platform delivers a seamless omni-channel experience through the bank’s host, mobile, online and API channels. Absa’s API solutions include payments, domestic as well as cross-border payments, mobile wallets and the ability to do account verification on the platform. These have been a huge step in making real-time transactions possible, which creates a better client experience and saves businesses time while helping with cash flow management and managing risk.

A driver of growth in Africa
Kamanie says on the heels of the Covid-19 crisis in almost every conversation, clients are automating their internal processes, saying, “Our clients have purposeful and ambitious agendas. They are working across industries to create value. For instance, FMCG clients are focused on automating supply chains.”

The change in the API landscape is being driven by multiple factors: one is the need for real-time payments. She says consumer clients are increasingly looking at e-commerce and the demand for “Buy Now, Pay Later” solutions is growing, so rapid payments are crucial to enabling these transactions to happen seamlessly and with as many partners as possible.

The trend towards open finance is a whole new way of building, transparent, and versatile relationships. Open finance enables clients to choose who they can share their financial data with, thereby enabling safe and easy sharing through standardising technology. In this shifting paradigm, APIs are key to allowing banks to securely share data with approved third parties with consent.

Another driver is that customers are yearning for a single, robust digital identity that enables for secure and seamless onboarding, which further accelerates access to financial services. One of the biggest upsides of a digital identity by means of APIs is that it can be reused across various products within the bank without repeating the onboarding journey. A single identity can also cater to cross-sector and cross-border requirements, while offering customers the flexibility to create and share their identity attributes.

On a macro level, the Africa Continental Free Trade Area is set to lead to an exponential increase in intra-African trade. However, in order to realise these potential gains transparent, efficient, real-time payments and enhanced digital capabilities are needed to underpin and facilitate trade efficiencies.

Seizing emerging opportunities
Kamanie explains that picking and bundling APIs across companies and segments to create new value is how ecosystems will start to evolve. Collaboration, partnering and data regulation are likely to play a big role in this phase.

She says, “We see our API platform having a significant role to play in how we support innovation and experimentation, and it will mature over time. There is a need for our API platform to mature around digital identity, consent, security, predictive and personalised services.”

She explains that Absa’s initial focus has been on liberating core services for consumption, availing services like payment initiation, account information and forex rates as well as working with clients’ ERP (Enterprise Resource Planning)/transportation management systems vendors and fintechs. This will be followed with focus placed on shifting how the bank starts to incorporate its APIs with client APIs to create more meaningful experiences or value-added products for clients.

Kamanie says, “As the bank started to create the building blocks for our API platform, our mantra has been to firstly create an exceptional experience for developers and start-up communities. Then secondly to service the need for speed and ease of integration and lastly to secure by default because the trust agenda is important for us.”

The desire to solve real problems
Value creation lies at the heart of successful innovation and Kamanie shares that client conversations are revealing that where they are seeing the benefits of Absa’s API platform is in terms of automation and efficiency with the move to real-time payments, tracking, visibility, and cash flow forecasting. Additionally, there is now opportunity for faster innovation for ecosystems with no need to manually recapture payment instructions.

“Clients will gravitate to where they can partner, move fast and feel secure,” she says. “Risk is a huge element and banks have a role to play with regards to security and trust. Clients will want to feel like they are ‘approving and authenticating’ against best in class security that the bank can provide.”

While other financial institutions are also deploying their own solutions, Absa brings a unique set of attributes which differentiate it from other banks. Kamanie explains that from a platform perspective, stability, scalability, reliability, low latency, consistency, and digital servicing experience are crucial.

She says, “An agile mindset, human-centred design, platforms and data are core to how we work with our clients to intimately understand their challenges and execute on them. Technology and experience won’t be the only differentiator: how we work with clients and how we work internally to execute will continue to play a role.”

These strengths have not gone unnoticed and Absa Corporate and Investment Banking has scooped some major awards, such as Best Trade Finance Services and Best Online Portal in Africa 2020 at the Global Finance, Best Digital Bank Award 2020. Additionally, Absa Access was recognised for Outstanding Innovations in Cash Management, Global Finance at the Innovators Awards 2021.

Creating new value chains
Kamanie emphasises that impact is key, and that, for example, by integrating APIs, fintech and insurance companies have been able to provide a client with a quote, loan approval, and payment, and within minutes the buyer can complete the transaction and is insured before leaving the dealership. “These are the kinds of changes that are shifting gears on experience. This allows our clients to deliver a new service that is fully integrated within their own brand and provide an enhanced customer journey.”

Another example she offers is on the work they are doing with fintech, focused on digitising end-to-end supply chains for SMEs in the agricultural sector which have been under-served in terms of digital innovation.

She says, “We’ve been impressed by seeing our clients build with focus for their clients and are excited to create an ecosystem of partners that will unlock new revenue opportunities across Africa.”