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Low-code development and BaaS APIs: is this embedded finance’s hockey stick moment?

By Vikram Srivats, Vice President, WaveMaker

Enough has been said and written about the effect of the pandemic in hyper-accelerating the shift to digital – for enterprises and consumers alike. This is one widely accepted fact we can note and move on from.

The combination of low-code development and BaaS APIs are enabling more companies than ever to add banking services to existing apps and products

However, another rising wave has been afoot for a few years now – something that Bain Capital Ventures (BCV) thinks is far greater than the Internet, Cloud, and Mobile combined (yes, you read that right) – with a projected market value of $3.6 trillion by 2030. BCV heralds this wave as the Fourth Platform: financial services in an embedded (or integrated) form within technology-driven businesses.

Andreesen-Horowitz (a16z) and CB Insights talk about this being the banking industry’s “AWS moment”, with new Banking-as-a-Service (BaaS) players offering all (or parts of) the banking stack as-a-service for a new crop of fintech and tech-driven brands. a16z further predicts that every company will become a fintech company – embedding finance across digital and traditional brands – by leveraging offerings from BaaS providers.

Embedded finance and BaaS are two sides of the same coin. Brands and fintech offer embedded financial services to consumers and businesses while BaaS providers are the suppliers and enablers for those brands and fintech.

Two trends collide to form one massive opportunity

With the pandemic driving a tectonic shift to online, virtual, and instant gratification, embedded finance allows brands and disruptive new financial products to gain and delight customers, increase share-of-wallet and create stickiness. From a customer standpoint, the financial experience is in the moment, contextual and seamless within the brand experience – to the extent that the finance is almost invisible.

For example, think of Apple – which now offers a credit card backed by Goldman Sachs – or Shopify – going above and beyond by offering embedded payments, balance accounts, and loans to aspiring e-commerce businesses. With the likes of Amazon, Google, Doordash, Chime and Affirm, the list of embedded finance and BaaS-powered use cases and players is growing rapidly.

This growth is primarily fueled by a whole slew of capable BaaS players – Synapse, Treasury Prime, Stripe, Marqeta, Bond, Finastra, Railsbank, Solarisbank, Unit, Galileo, BBVA Open Platform, GPS, and many more – offering differentiated and compelling technical and financial propositions. These BaaS players in turn have partnerships with one or more banks and offer APIs (sometimes a single API) for a brand or fintech customer to call and access the offered financial service via the API.

In a way, things have come full circle – from the software powering financial services (core and engagement platforms) at FIs, we now have banking subsumed into software and offered via APIs.

BaaS APIs are becoming the new currency in the world of financial services

With this BaaS revolution going on in the background, the low-code market has grown exponentially, with more than 100 platform providers – with different specializations – competing for market share. 

Microsoft, Mendix, OutSystems, and ServiceNow are some of the leading players while there are specialist challenger firms more focused on specific personas (professional developers, citizen developers, and business process users) and target areas (apps, workflow, automation, analytics, and so on).

To say that low-code adoption was propelled further by the pandemic is an understatement. Whether for businesses urgently wanting to digitally transform or for more advanced corporations, low-code has comfortably hit its stride as a new paradigm in software development.

Now, with over 2,000 fintech launched in 2019, the rise and maturity of BaaS offerings and differentiated embedded finance use cases/opportunities, and a world where APIs rule, developers are now the first customers of the banking and financial services capability stack.

Brands and fintech, banks and third-party software developers, independent software vendors, and system integrators need to find, attract, hire, train, mentor, motivate, manage and drive world-class development teams to deliver business outcomes.

They must do all this in the face of non-trivial challenges:

  • Talent wars in a field of wider opportunities as business lines blur and career options abound for software developers.
  • Walking the fine line between investing to build a truly high-quality product that customers will love, yet balancing cash burn and ROI.
  • Navigate a web of technology choices for every aspect of the tech stack, including most importantly, the BaaS vendor stack itself.
  • Be prepared to execute quickly – and pivot on a dime – to get ahead of the market in an extremely competitive, dynamic, and fast-paced environment.

A breed of developer-friendly, open, API-driven, modern, enterprise-grade low-code platforms could be the answer. Here is how:

  • Serious B2C and B2B2C digital experiences at the speed of change – delivered using visual full-stack development with pre-existing widgets, themes, styles, and layouts – while still playing well with existing assets, best practices, and architectural choices.
  • Significantly cut development (specifically UI) cost by reuse – Lego-like composable experience development by dragging and dropping custom-built, rich multi-API widgets – “prefabs” – that combine powerful functionality, pixel-perfect UI, and data.
  • Democratized and collaborative development – Citizen developers build out experiences based on user journeys and hand them to pros to make apps “enterprise-compliant”; or in a B2B2C context, expert developers build out the core app which is then extended and customized by less-skilled professional services teams.
  • Deliver on tough innovation problems – convert teams to full-stack development, become agnostic to tech stack changes, handle custom UI demands through app lifecycle, move B2B customers to a self-serve model, and more.
  • Peace of mind guaranteed – apps built are performant and secure, the tech stack is modern and future-proof, deploy anywhere without lock-in, generated code is “real” code that can be exported and extended (as an insurance policy), easily available, low-cost skills for writing custom extensions, no price tag for scaling up apps/app objects/app end users and such like.

In 2020, Microsoft cited research predicting that more than 500 million new apps will be built in the next five years, which is more than the total number of apps built in the last 40 years, even as companies struggle to find software developers. According to KPMG, despite the overall market softness in H1 2020, H2 rebounded and saw almost $72 billion in fintech investment (across PE, VC, and M&A deals). Klarna, Revolut, and Chime raised mega rounds north of $500 million each. KPMG goes on to predict that embedded finance will emerge as the *new North Star* in fintech.

Low-code development layered on BaaS APIs may be embedded finance’s hockey stick moment

Embedded fintech and low-code development are massive scale markets in their own right. The next 1,000 or 10,000 fintech, FIs, and brands that deliver embedded financial services will need to be laser-focused on their customers and business to compete and win. Agility, automation, and reuse will underpin composable enterprises and personalized experiences, and modern, powerful low-code platforms already are delivering complex, compelling and contextual experiences for discerning development and business teams globally.

To further explore banking solutions by WaveMaker, please view our exclusive BFSI offerings here.

Or, start a conversation with our expert consultants for solutions to your unique requirements.

Originally published in Fintech Futures

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Blog

WaveMaker v10.8.0 is out!

Team access to artifact repository, improved workflows for artifact publishing, prefabs versioning, and more

WaveMaker 10.8 brings capabilities and features that harness the power of artifacts and prefabs on the WaveMaker low-code platform–especially for teams. Prefabs are custom widgets that can be reused across projects within a team. With this release, the platform consolidates its strength on prebuilt software components by making collaboration across teams faster and easier to manage.

WaveMaker continues to enable enterprise IT teams, ISVs, and all stakeholders to co-create value faster and better with low-code.

Teams - Together and Transparent

Artifacts in Teams

Artifacts are reusable components that can be developed and maintained independently. Various components such as prefabs, project shells, template bundles, and themes come under the umbrella of artifacts on the WaveMaker low-code platform. V10.8 allows the sharing of a central repository of artifacts in teams promoting collaboration between team members.

Team members can view a list of all available artifacts providing clear visibility. Developers have complete access to the repository of available components and are free to choose the artifact version that suits their requirements best. This in turn makes activities such as documentation, maintaining change logs, and version control of artifacts a seamless process.

A new and improved flow

Artifact approval

With 10.8, developers creating and using artifacts across teams and projects can manage their workflows seamlessly. Consider a scenario where a developer publishes an artifact and waits for approval from the team admin. The admin can then review the artifact on the team portal and approve the same, making it accessible for all developers to use or reject it and send it back with changes.

Not just that, the same prefab or artifact can be versioned multiple times with each version visible to all team members. Developers can search and view available prefabs under projects, teams, or system prefabs and import specific versions into the projects.

One component, different forms

Support for specific prefab versions

Different projects can use different versions of the same prefab with a scope for upgrading. Developers can choose versions that suit their requirements with the help of changelogs and get real-time notifications of newer versions. Minor patch updates on prefabs can be published independently using branch support. Development teams can update patches and upgrades seamlessly without disrupting the existing environment and projects.

For ISVs, having access to the latest versions of artifacts is of great value. This allows for both forward and backward compatibility with respect to prefabs with minimum disruption. With every new update, WaveMaker continues to bring developers together, fostering collaboration, and helping them build powerful applications.

To know more about WaveMaker 10.8.0, please read the release notes here.

Categories
Blog

Leveraging low-code for API-driven development

Create, publish and consume APIs effortlessly with WaveMaker low-code platform

Digital transformation is no longer a buzzword. It has become a way of life for enterprises that want to stay in business. In the current post-pandemic era, business maturity is being evaluated in terms of digital maturity. The road to digital adoption has many emerging technologies in force but working silently behind the scenes and aiding this rapid acceleration, is the unseen ‘super glue’ of all business services – Application Programming Interfaces (API). Technically, APIs have been around for two decades at different levels of operability but it is only in recent years that there has been an explosion of sorts in the usage of APIs.

The demand for multichannel experiences and the everything-on-cloud approach has accelerated the use of APIs. Whether it be composable architecture or microservices, APIs enable the kind of business collaborations that were unheard of before. The partnering of transportation services with a bank, retail shops with payment apps, and banks offering investment opportunities, loans, currency transactions, and payment services on an e-commerce platform have all been made possible by the growth of APIs. Similarly, offloading certain business tasks to ecosystem partners and liberating internal services from silos has been fueled by the synergy between APIs.

API-driven development

API-driven development is the practice of designing and building the API contract first and then developing the application around the contract. Also, known as the API-first approach, this paradigm involves the front-end developers building mocks around APIs and creating refined end-user experiences. In parallel, the back-end developers implement the underlying logic of the APIs.

Dedicated test suites are created around these APIs and, in a way, they foster the idea of test-driven development. In an API lifecycle, the API Publisher designs and deploys the API whereas the API Consumer discovers and integrates the APIs. Each of these roles has multiple functions associated with them and those functions define the characteristics of the API.

API Management with WaveMaker low-code platform

WaveMaker is an open standards-based, developer-centric low-code platform built for modern development practices. The platform enables app developers to play the role of an API Publisher and API consumer. The platform has a natively integrated component called the API Designer which is used to ease the process of designing, creating, and consuming APIs.

  • API- first approach: With WaveMaker, a REST API is generated automatically for every service that is imported. These APIs are available for consumption as well as modification through the API designer that can be used for:
  1. Exploring the various APIs generated by the platform
  2. Testing the APIs 
  3. Customizing APIs generated by Java services
  • API GeneratorWaveMaker generates standards-based REST annotations for the above services which can be consumed by API tools for generating documentation using the API generator. The design of these auto-generated REST APIs can be updated further by configuring their description, visibility, method types, and parameter types.
  • Open APIs: The platform generates core REST APIs endpoints using Swagger/Open API compliant contracts for database services, Java services, web services, custom code business logic, or even third-party imports. It also to generates UI functionality for Create, Read, Update, Delete (CRUD) operations for REST APIs which conform to Open API specifications. Integrating an existing REST endpoint with any of the 100+ UI widgets offered by WaveMaker is also straightforward without writing a single line of code. Open API helps WaveMaker apps consume other WaveMaker APIs enabling applications within an enterprise to talk to each other.
  • API Security & TestingSecurity is auto-enabled for an application that can be viewed in the API designer. API security is ensured by securing it with role-based access within the enterprise. API endpoints are also OAuth protected. Once the REST APIs are defined successfully, they can be tested with the “Test” tab. On successful testing, APIs are published along with the applications.
  • Legacy APIs: APIs are invariably REST-based but there remain big remnants of legacy SOAP-based APIs. WaveMaker automatically creates a REST API endpoint for the SOAP services that are imported into an application thus enabling the reuse and modernization of legacy technologies.

WaveMaker offers an API-driven development platform with:

developer-friendly low-code platform abstracts the complexities of API management and provides UI-based connectors to work on the endpoints without having to hand-code. WaveMaker scores high on effortless API creation and management with an API-driven approach and an in-built API designer. The platform’s inbuilt adherence to the rules of the API game and its innate ability to convert any service as an API makes the job of all stakeholders so much easier.

APIs have become an inherent part of software building. Programmableweb (API directory) had a listing of mere 54 APIs in 2005. Today there are close to 24000 APIs listed there, and this is excluding the internal enterprise-level APIs and the ones that haven’t been made discoverable yet. Fuelling this expansion are tools and platforms that help us design, manage, test, produce, and consume APIs. Rapidly, easily and securely.