How the world keeps
running on APIs

Programmatic access to ChatGPT's large language model via APIs has just started, and the creativity of developers still has a long way to go. Naturally, companies want to leverage AI technologies to make their applications more innovative, user-friendly, and simpler to use, banking on the competitive advantage that these AI-enhanced applications promise to deliver. 

Most providers of AI technologies are well aware that offering APIs is a fundamental channel to distribute their product, allowing clients to deliver powerful extensions to applications, ranging from everyday AI to game-changing AI.

According to an old saying, a platform is a product you build products on.So, is a bunch of APIs a platform? Well, at a minimum, it’s the start of one. In the heyday of the API economy (2017, according to Forbes, it certainly was. Back then, companies used to publish APIs and hope somebody out there who needed them would discover and start using them.

For most APIs, that assumption didn’t work, for several reasons, including poor marketing, complicated/proprietary data models, or unsuitable monetization policies. However, the main reason it didn’t work is exactly why platform engineering is different: the focus of the API providers is not to sell what they have; it is to provide API consumers with what they need, in a ‘user-friendly, self-service’ way.

Banking clients (both end consumers and corporate clients) need open banking regulations because they use different financial institutions to do different things.

Open Banking is finally ramping up the slope of enlightenment in Gartner Hype Cycles and is becoming a reality in more and more geographies, including the huge US financial market. 2024 is going to be a year in which financial institutions in advanced Open Banking countries (like Brazil or Scandinavia) will demonstrate more and more that opening up is not only a thing they have to do for their users or to check a box of compliance: opening up is a good business decision for their financial institutions too, it brings in fresh revenue and new opportunities.

API gateways are everywhere. An average company, even if small, is likely to have more than one, from more than one technology provider, especially in API-friendly geographies.

Some visionary API management providers, including Sensedia, have started a multigateway / multi-API management administration journey. They offer an initial set of features to monitor API traffic on several gateways and to see which APIs sit in several developers portals. These features are a good starting point. However, in 2024, the need to push/monitor/manage the exceptions of central policies to multiple gateways from a single point will become a major point of differentiation, far more than it is today.

From the beginning of the API Economy, the focus was on software developers. Lately, trends like platform engineering, which explicitly addresses ‘user-friendly, self-service capabilities,’ shifted the focus decisively towards the consumer developer.

Gartner has been saying for years that consuming APIs is becoming more frequent than designing APIs and backs that up with surveys to prove it. But there’s more. Generative AI is already helping developers design, document, and test the APIs they produce: some visionary application infrastructure players, including Sensedia, are piloting additional functionalities to this effect.

Adaptive end-to-end governance emerges from API governance

So, was 2023 a year in which we governed API programs decisively better? It’s hard to answer with a resounding yes. Did we try to govern our API programs more effectively? Yes, we certainly tried. Did API management platforms offer more features to govern API programs better? Yes, that improved too. Did adaptive governance really take off in 2023? Not that clearly.

The most difficult decision in governance is where to stop. A specific project can be killed by a lack of governance or even too much governance. So, how do we reach just enough governance? Apart from an empirical rule of governing more and more, until you start getting unwanted constraints, the answer to this question is largely unknown.

What you need
to know

• If you don’t already believe the world runs on APIs, 2024 will certainly convince you. The explosion in consumption of Generative AI services is going to convince a lot of people of this fact. 

• Companies are realizing the true value of platforms for internal and external interactions.

No matter where you live, banks eventually will have to give secure, governed, private, safe access to banking data and operations to third parties.

• API Management Platforms are everywhere. Medium to large companies running multiple gateways from multiple providers are going to be increasingly common.

• APIs, especially high-level experience APIs, are ideal building blocks, not just for programmers but also for business technologists building innovative interactions.

• Governing API programs will remain a huge challenge for any API provider. In 2024, most companies will become API providers, when considering APIs developed within the organization for private internal consumption.