Every month ABNAmro organizes “Startup Friday” meetings. I have been attending several of these meet-ups lately. Two months ago it was about “Behavioral Biometrics” which led me to write a whole string of posts on the subject .
Yesterday the subject was “The API economy”. (See for explanation of API: From EDI to API) Compliments again for the ABNAmro Innovation Center team for a very interesting line up of start-ups. This time Uber’s comrade #5 named Conrad was around as well, he proclaimed:
“Uber wants to be THE internet transportation layer.”
And Uber uses an elaborated API strategy to do so. Becoming part of other parties front ends and services via APIs is increasing the use of the primary – in this case Uber – platform beyond the footprint that can be established by their own apps alone. At the same time it can surf the creativity and business drive of the others big time, virtually at no cost.
Apart form the hyperbole the statement made by comrade #5 in a way is exemplary for the way many look at the developing landscape of the interconnected world based on API connected value chains.
As if in the end there will only be room for 1 dominant player only. Hence the rest will fail (NB Think of the social and economic consequences when this thesis would turn out to be true!). I think this is a far to short sighted and simplistic view on how our societies and economies will be (re)arranged. But lets digress on that an other time in an other blog.
Talking to some of the attendees after the formal presentations my impression was again confirmed that banks see them selves having to rush to a central spot in a (financial services) value chain, just like Uber: central and dominant.
There is no doubt API’s will revolutionize the financial industry, if they are not already. APIs allow for new types of collaboration between parties who are organizing services in a different manner and creating new types of value chains at even lower friction costs as compared to much of what we have seen before.
There is much to say about the transformation of financial services. Technological change, like the APIs, is underlying much of the changes in markets, distribution channels, products and collaboration witnessed today. What functionality is to be performed does hardly change over time, how they are performed and hence by whom is heavily impacted by technological change.
But what banks do not realize is that in the Uber kind of model the bank will not be in an Uber kind of position. They are in the position of the drivers of Ubercars in the Uber ecosystem analogy. If banks (by means of EBA) in EU do not create a unified/standardized API fast especially for XS2A others will fill in the void by linking to individual banks with their proprietary API’s. (NB see some of my thoughts on XS2A here and on the way banks generally see themselves in value chains)
And if that is the case the question will be only if banks will be offering their services under the UberPop, UberBlack or UberLux conditions to the platform.
Update 18 March 2015
This was what comrade #5 was touting about… During the meetup an other party showed there approach to bring 3D printers and people looking for a place to print together. Somebody in the public suggested to hook up Uber to this app. Now it is feasible:
Today the company updated its API, introducing a feature called “Request endpoints.” Ignoring the technical jargon detailed here, the feature enables third-party apps to “incorporate the entire Uber experience” inside their apps.