APIs are changing the way we invest

In the future, AI will give investment advice - OP Developer

17.1.2018

In the future, AI will give investment advice

It will not be long until our houses and cars will communicate with each other and artificial intelligence will help us save money more intelligently. Open APIs expedite the creation of new products and services.

Application programming interfaces (API) have become a significant part of our everyday lives, even if we may not be aware of it yet. A well-known example of an application that uses APIs is Google Maps, used by many people for route planning on a daily basis.

But what do open APIs mean? They are interfaces between information systems that can also be used by external systems.

According to Anders Stenbäck, head of OP’s digital business, open APIs are a reflection of the current culture of sharing and openness. They also influence business models. Companies mostly use closed APIs, however.

An open API is available to anyone, free of charge. A closed API, on the other hand, is available for a specific corporate customer or startup on the basis of an agreement. Closed APIs reinforce the corporate ecosystem, or cooperation between companies. They give companies access to data offered by their partners. Such companies can then refine the data further, expand the distribution of their digital products to other channels or create entirely new products and services. For example, the banking sector is already making commercial agreements with companies and opening their APIs to them. Various parties, such as the national railway company VR, make use of the payment services of operators such as OP through these agreements, which specifically operate through APIs.

According to Stenbäck, APIs are interesting because they create innovation and new business potential. For example, HSL has opened its traffic data, which has given birth to new types of public transport applications.

To the customer, cooperation between companies can mean a smoother user experience, as it eliminates the need to jump between different services. For example, you can get financing for your car simultaneously as you buy it from an online dealer.

AI will not replace people completely

Like APIs, artificial intelligence is also changing the world at a rapid pace. Banks are already using it or, to be more specific, financial intelligence.

Artificial intelligence is part of our everyday lives. In day-to-day banking, it gives sales advice to customer service personnel and evaluates the best offering for each customer on the basis of available data. AI is capable of processing huge amounts of data, from which it learns and is able to offer advice. In the future, services such as investment advice could increasingly be provided by AI. It is capable of identifying typical customer behaviours and offering solutions based on them.

According to Stenbäck, it will never fully replace human employees, however.

People will continue to work with people. AI is just one more tool to improve customer service.

He considers the development to be logical, since consumers are already accustomed to companies knowing their needs and being able to offer tailored services. Stenbäck says that artificial intelligence is actually about creating added value by making our day-to-day lives and work more personalised.

Houses and cars will soon talk

Stenbäck considers API development to be in its infancy in Finland. Abroad, the first users of open APIs were giants such as Amazon, IBM and Microsoft in the first half of the 2000s.

In Finland, the use of open APIs has thus far been limited to banks, startups and pioneers of digital development. In Stenbäck’s estimate, this is now changing.

Manufacturing companies with extensive subcontracting networks will probably be the next group to embrace open APIs. As a concrete example, a delivery company could provide the precise location of shipments, and customers could change the delivery address or time in real time.

Open APIs will enable AI-based automation to consolidate its role in our everyday lives

The solutions revolve around making everyday life easier. You car talks with your house, and your phone knows where you are. This creates new kinds of user experiences. For example, the heating and lights will be on at your house when you get home.

Changes are also coming to banking

The biggest change brought by the PSD2 payment service directive that will enter into force at the beginning of 2018 is that the consumer’s liability for misuses will decrease from 150 to 50 euros. The next change in the foreseeable future will arrive in the autumn of 2019, when banking operators will be required to open account information and payment APIs to third parties free of charge.

In practice, this means free open APIs. Stenbäck estimates that the change will generate new services specialising in, for example, paying bills or shopping around for the best loan offers.

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