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We all know about Open API’s, Open Banking but what about Digital Overlays?

Open API’s and Open Banking has been a hot topic for quite some time now, but very little has been said about Digital Overlays.  What if I told you that Digital Overlays is the key to unlock the full potential of Open API’s and Open Banking.


There are many banking initiatives underway that are driven by various factors, such as regulatory, innovation, societal, competition, and others.  C-Level executives find themselves with the challenge of trying to implement and manage all these initiatives.  Ordinarily, this would not be an issue, however, these initiatives often require you to address these challenges simultaneously and promptly.


One of the keys to taking on many organization initiatives is to have an agile infrastructure in place that allows for managing multiple initiatives at one time. I am sure it is not the first time you hear the term “agile infrastructure,” so, no big news there.  In fact, many organizations have made great strides in creating an agile infrastructure, and not just through streamlining organizational structure, but investing in technologies that allows them to develop and implement new solutions to adapt to new market trends and regulations.  Some of these investments have been in cloud technology and micro-services architecture, with an open API approach.  Additionally, organizations have streamlined their software development process by adopting Agile Methodology.  


All these initiatives lay a great foundation for Digital Overlays.  You may ask “What is a digital overlay?”  So, I will simply define it as software that you either develop or purchase that is designed from its inception to be consumed via an API or an SDK.  Your next question may be “When will I need a digital overlay?”  To that I say, any time you want to add new functionality or capability to an existing application or business process.  Digital overlay service provides out of the box solutions that are designed to natively integrate to your current infrastructure; thereby, allowing you to extend your current capabilities with very little development efforts and minimal integration.


Interestingly, the intent of Open API and Open Banking was to facilitate the integration of various systems in order to share information and business processes across systems.  However, by providing this level of access to the system, we have an opportunity to go beyond its initial concept.  This is similar to today’s smartphone, by making phones digital, we opened the platform to a host of new capabilities.  Our phones can now be used for navigation, taking pictures, recording movies, watching TV, playing video games, listening to music, and banking, probably not its original intent.  Similarly, we can leverage Open API and Microservices architecture, currently implemented in banking applications to extend their capabilities, very much like the smartphone example.


So, what are some good candidates for Digital Overlays?  Let’s review some of the key business drivers that are affecting the payments industry, and the various available overlays in the market today that can address these initiatives. 


I) Business Driver : Social | Market Segment : Merchants

Digital Overlay : QR Payments | Existing Application : Mobile Application


II) Business Driver : Influx of Fintechs | Market Segment : Consumers

Digital Overlay : P2PPayments, Digital Wallets | Existing Application : Mobile Application


III) Business Driver : Innovation | Market Segment : Corporates

Digital Overlay : Request to Pay| Existing Application : Tresury Systems


Obviously, this is a very small sample size, but I think you get the idea.


There will always be a need to replace legacy systems.  However, organizations do not want solutions that require a “rip and replace” approach to address new market needs, as this becomes costly and very time consuming.  Organizations of the future will not only need to implement new changes regularly, but they must do so cost effectively and fast.  I believe that we will see a major shift in adopting digital overlays in the near future, as most organizations are already in position to take advantage of Digital Overlay services.





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