The Rise of the API Economy

The invention of the wheel, railway networks, internal combustion and the discovery of flight have all been major contributors to economic creation and expansion. However, in the digital age, new tools to develop the economy are not restricted by the confines of physical innovation, instead, only by the limitations of imagination, knowledge capital or financial resources. The current era in human history marks one of the greatest opportunities to drive change- defining what we consume, how to invest, who we trade, and how we manage our lives. The vast collection of data in isolation is growing at an expanding rate and coupled with the opportunity afforded by global communication and sophisticated connectivity, it is not inconceivable to think that the API economy will drive how consumers and markets behave moving into the future.

At this point, many readers might find themselves unsure about what an API is, what it does, how it drives the economy and how it might affect them personally or in business. In short, the first published  Application Programming Application (API) specification was published by David Wheeler, David Wilks an Stanley Gill in the 1951 book   The Preparation of Programs for an Electronic Digital Computer. This set out the early building blocks for how systems can interact with one another in early computing ecosystems. However, according to’s History of APIs, the first web API was introduced by on February 7th 2000. Subsequently, the evolution and use of APIs in commerce has exploded.

For the average consumer or business unit, the mechanics of APIs may not bare much immediate concern- how digital platforms communicate and interact with one another may be surplus to the day-to-day requirements and outside technical understanding or interest. To put things into context, not many people know KFC’s secret recipe made from 11 herbs and spices, but the end consumer knows what they want and how to get it without having to spend time and effort cooking the meal themselves.

This is a simplistic way of viewing API connectivity, however as elementary as the basic concept may appear, evidence would suggest there are a growing number of businesses that have noted the power of utilising APIs within their businesses. Subsequently, early adopters have enjoyed the rewards of first-mover advantage and have managed to revitalise their respective industries ahead of their competition. As an example, Netflix shifted from a DVD postal service to becoming the global flagship digital streaming platform. Most of the consumers are not aware that they are interacting with Netflix’s platform via an API. For the end user, simplicity is key. Open app, select what to watch and how to watch it. To give an idea of how impactful the change can be, in 2000, Netflix made $5m revenue, Blockbuster made $4.5b and had 6,500 stores in 26 countries. In 2007 Netflix launched their on-demand streaming service and by 2010, blockbuster filed for bankruptcy. A powerful example of APIs contributing to radical change and competitive advantage.    

APIs are driving new forms of economic growth by refining the creation of user-focused applications to support line-of-business outcomes. Diving deeper into this statement, what this means is that in utilising API’s, microservices and third-party data sources, businesses can build scalable platforms to interact with multiple data sets thereby allowing for a truly personalised customer experience. In a practical sense, what this means is that by offering platforms which connect to third party sources via API’s, organisations can empower customers to choose their own journey, to select how and when they interact with products and services.

At Credisense we have embraced the API economy, with a huge native integration map covering thousands of data points.  Additionally, a Rest API and webhook functionality, provides interoperability for the creation of beautiful, integrated customer experiences, connected to their chosen systems, using the data they need.

The question must be asked, was Blockbuster was happy with its choice not to embrace connected technologies to better serve their customer base? If the same question is then applied to other businesses facing similar challenges, will they be able to participate and thrive in the new digital economy?

About the Author

Matt is a senior credit consultant with Credisense and has worked within the credit industry for almost a decade, consulting on multiple facets of credit from data to decisioning and origination platforms.

Matt Shand
Credit Consultant