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If you're one of the market leaders which already has a suite of open banking APIs, you have a valuable possession. There are thousands of other firms out there all trying to solve the same problems, many of which will gladly license your APIs if it saves them the time and effort of developing their own. That's a potentially significant new revenue stream.
The primary monetization method will center around the transactional use of the API i.e. where it is interacting with your systems, depending on the service this may be based on calls, payload, time connected, a simply a monthly license to use, etc.
Along with charging for the transactional use of the API itself, banks and financial providers can also sell a range of add-on services, such as integration support, or consultancy, around the API which not only increase profits but also turn departments which were cost centers into revenue generators.
Even if you choose to license your API under a relatively simple payment model ' pay per call, for instance, or a per-user license ' there will inevitably be integration and support questions from the companies which license from you.
These can and, in many cases should be billable. You can offer customer support under various different contract models. Some of the most common are:
All three models are an intuitive upsell for any customer already licensing an API. After all, if they don't have the time or resources to develop their own API, there is a good chance they will also find themselves stretched by the task of integrating and operating that API, giving them a reason to welcome the export support your teams can provide.
But there's more. Not only are these contracts, and others like them, an ideal upsell, they also create further upsell and cross-sell opportunities. For instance, if a customer needs a lot support, it makes sense to suggest and upgrade from a pay-per-incident to a service-based contract.
These new revenue streams take departments that previously only had internal customers and exposes them to the outside world. As well as generating money, this allows these departments to grow, to become more visible and to more easily attract the kind of talent they need.
Another way in which you can expand the scope of your API monetization activities, is to sell access to the business skills and knowledge which are a necessary complement to the API you are licensing.
For instance, if you're licensing an API that facilitates access to cross-border payment methods, will your customer benefit from access to your experts on cross-border banking or e-commerce? Do your teams have specific expertise in areas such secure customer authentication (SCA), account aggregation, push payments or some other areas which are currently hot in fintech?
If they do, particularly in today's tight talent market, that knowledge and expertise - gained so painstakingly in developing your own APIs and the business models they support, is valuable and saleable. And when a customer is already in negotiation to license an API, your sales and account team have an open invitation to start a conversation about the ways in which the same client can also benefit from accessing your knowledge and expertise.
Virtusa specializes in helping banks and financial institutions develop, implement and maximize their returns from open banking APIs. Our consultants can work with you, to help you build business models that maximize the return on investment you get from every API you develop.
Download our new white paper, Open Banking Beyond Compliance
to learn about why monetizing open banking APIs is vital for long-term success.
In this white paper, Virtusa surveys the current open banking landscape and puts forward recommendations for effective API monetization, including API pricing models, risk and quality control mechanisms, potential new business models, and strategies for open banking. Download here.
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