When a software change is deployed — after being designed, coded, tested, packaged, and tested some more — a journey comes to an end. At the same time, a new journey begins: your customer’s relationship with your service. It’s here, in the domain of operations, that abstract risks like launch schedule slippage give way to tangible risks like lost revenue, degraded trust, and tarnished reputation. Only when it’s available to users can software contribute to (or threaten!) the success of your organization. And so, throughout the past several years, the DevOps Research and Assessment (DORA) project has incrementally deepened our research into the reliability of services, through and beyond deployment, into ongoing operation.

Reliability is a broadly defined term, which refers to a team’s ability to meet their users’ expectations — for software services, it may encompass aspects of availability, latency, correctness, or other characteristics that influence the consistency and quality of user experience. Google’s practice of Site Reliability Engineering (SRE), which has been embraced and extended by a global community of reliability engineering practitioners, is an approach to operations that prioritizes user-oriented measurement, shared responsibility, and collaborative, blameless learning. Starting with the 2021 Accelerate State of DevOps Report, we began asking survey respondents detailed questions about reliability engineering in their organizations. We continued and expanded our investigation in 2022, and found further evidence that modern reliability engineering is widespread: a majority of respondents report that they employ SRE-style practices. With this extensive body of data to draw from, this year we pushed further into analyses of the impact of reliability and its interaction with other dynamics present in our model of technology’s influence on organizational success.

Reliability matters

When reliability is poor, improvements to software delivery have no effect — or even a negative effect — on organizational outcomes

Reliability is more than beneficial: it’s essential. As in prior studies, we find that software delivery performance (as measured by the “four key metrics” of change lead time, deploy frequency, change failure rate, and failure recovery time) is predictive of organizational performance. However, this year’s analysis revealed a previously unseen nuance: the influence of software delivery on organizational performance is predicated on reliability. When reliability is high, high-performance software delivery predicts better outcomes for the organization. But when reliability is poor, improvements to software delivery have no effect — or even a negative effect — on organizational outcomes. This affirms a long-held belief among reliability engineers: “reliability is the most important feature of any system.” If a service or product doesn’t meet its users’ reliability expectations, it’s counter-productive to rapidly ship flashy new features, because users can’t properly experience them. Software delivery relies on a foundation of reliability to create value.

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Reliability is a journey

Any experienced leader will tell you that progress is rarely linear: even with a discipline like SRE, widely practiced and with demonstrable benefits, the path to success is unlikely to follow a straight line. DORA describes the “J-Curve” of organizational transformation, a phenomenon in which durable success comes only after setbacks and lessons learned. This year, we compared the depth of teams’ reliability engineering practices to their impact on the services they provide: will an investment in SRE produce greater reliability? The answer is yes, but with a significant caveat: not at first. Comparing reliability outcomes across a range of levels of SRE adoption, the J-Curve is plainly visible. A team which practices SRE only lightly — at the beginning of their SRE journey, perhaps — is likely not only to not benefit, but to regress in terms of the reliability experienced by their users. However, after these practices have more deeply permeated, an inflection point is reached and we see strong reliability benefits from continuing to grow the reliability engineering capability.

Knowing that it will likely take time to realize the benefits of adopting SRE, it may be tempting to start the process as soon, and as broadly, as possible. But we offer a note of caution here: organization-wide cultural transformation initiatives typically fail from overreach. We studied this and reported findings in a previous report. And even if you manage to beat the odds and fully adopt SRE across multiple teams simultaneously, the cost may be unacceptable: the setbacks in reliability that you are likely to experience early on, amplified across an entire organization all at once, could have catastrophic consequences. Therefore the SRE principle of gradual change should also be applied to the adoption of SRE itself.

Reliability is about people

Reflecting back on over a decade of SRE practice and theory, the Enterprise Roadmap to SRE underlines the importance of culture, suggesting that Site Reliability Engineering is in fact emergent from culture. Tools and frameworks are important; language is essential. But only a trustful, psychologically safe culture can support the environment of continuous learning which enables SRE to manage today’s complex, dynamic technology environments. DORA’s research in 2022 demonstrates the interplay between culture and reliability: we found that “generative” culture, as defined by the Westrum model, is predictive of higher reliability outcomes. And reliability has benefits not only for a system’s users, but for its makers as well: teams whose services are highly reliable are 1.6 times less likely to suffer from burnout.

Got a story to share about your DevOps journey? Submit it to Google Cloud’s 2022 DevOps Awards by January 31, 2023!

Faced with changing customer behaviors and demands, tightening margins, and increasing threat from digital competitors, financial services institutions (FSIs) will need to meet customers where they are, open up their services, and establish new ways to monetize their products. Doing so will also enable them to build a better profile of their customers, and deliver more personalized user experiences and fast, convenient banking and payment services. Cloud technology plays a big role in this shift toward digital FSIs. 

In Asia, bank branches now account for just 12% to 21% of monthly transactions in the region, with customers turning to digital channels for routine transactions such as peer-to-peer transfers and bill payments, according to McKinsey&Company. Overall customer engagement has climbed from an average 12.7 to 14.9 transactions a month in Asia’s developed markets, and from 6 to 8.1 in emerging markets.¹

Fueled by growing smartphone adoption, the evolving customer behavior and momentum toward digital platforms have enabled digital-first players to snag a growing piece of the banking pie. 

McKinsey estimates that digital banking penetration has grown an average of 97% in Asia’s developed markets, and 52% in emerging markets, with between 30% and 50% of those that have yet to use digital banking likely to do so.

Consumers now are more than ready to make the switch to neobanks, or digital banks. In Singapore, 63% are open to banking with digital-only players, according to a Visa study. On what will entice them to do so, 63% point to bill payments while 56% will use neobank services to make payments at retail outlets. Furthermore, 54% prefer digital banks for the convenience they offer while 52% like the faster service.

Among those who are open to digital banks, 60% will move some services from their current bank to these new players even if the latter have no prior banking experience. One in five of respondents say they are willing to switch all services to a neobank.

The same is true for small and midsize businesses (SMBs) in Singapore. According to a separate survey by Visa, 88% of these companies will consider moving some services to digital banks.

Driven to do so by their frustration over a lack of quality corporate products and control of their banking experience, 55% of SMBs believe neobanks will help bring down overall banking costs. Another 54% say digital banks offer greater convenience, while 53% point to greater ease in paying bills online.

These stats should worry even established FSIs, especially those that have not done quite enough to open up their service ecosystems and drive innovation through APIs.

An API toward new revenue

While most banks have active APIs, the services that some of them currently provide are just functional; they’re the means to an end for partners to obtain their targeted products and services. Without knowing, consumers use these types of APIs indirectly by using their favorite applications every day—a payment processing API will enable them to purchase their lunch, while a loan application API will get them that dream home.

But while banks do not always own the customer journey, they still can find opportunities to sell their products via partners. Many leading banks are leveraging key technologies, such as API management, artificial intelligence (AI), and data analytics to embed digital banking into consumers’ everyday lives, including groceries, travel, entertainment, healthcare, and food delivery. 

When traditional banks open up their APIs to third parties offering broader services that pull in unique services into their own apps, they then become plugged into the broader customer journey. This helps boost usage of their services and embeds them in the overall customer experience. It also provides aggregated data that will help banks build richer consumer profiles, and deliver more personalized products and services.

APIs also create equal opportunities for smaller participants to be involved in the financial services ecosystem, potentially creating micro-segments that previously may not have existed. With insufficient demand within a closed system, to justify the provision of such services, some customers in these micro-segments have previously been left unserved. The APIs, which facilitate collaboration between the different micro-segments so they can be commercially viable, help assuage this problem. 

Some banks are also opening up APIs to allow access to datasets that enable businesses to trigger automated workflows and enhance their operational efficiencies. Others, such as Bank Rakyat Indonesia (Bank BRI) have generated new revenue by leveraging Google Cloud’s Apigee to manage their API lifecycle and identify new revenue opportunities.

Apigee’s monetization feature has helped Bank BRI realize $50 million in revenue and enabled the bank to define its pricing based on API calls and automatically bill based on usage.

In addition, the Indonesian bank uses the data analysis alongside Google Maps Platform to score its customer base of 75.5 million, and identify those who can be recruited as BRILink agents for underbanked areas. These agents are customers who maintain a minimum balance of $800 USD and score high on reliability.

The appointment of branchless agents via the Agent BRILink app has pushed the loan volume from the bank’s branchless business to $26 billion in 2018, up from $15 billion the year before.

How banks can get started with APIs

Clearly, there are new revenue opportunities for banks to leverage the data they already have. Here are some tips to help FSIs kickstart their API journey:

• Align with internal leadership growth initiatives. Leverage executive key performance indicators around growth and cost savings to foster a culture that offers APIs to micro-segmented markets with an eye on cultivating a healthy financial services ecosystem.
• Productize APIs with a strong value proposition. Starting with an API-first approach, stock the shelves of your API shop with new services and a strong inventory of APIs that will entice third parties (i.e., retailers, telcos, etc.) to start using them. This customer-first, outside-in approach will serve as a strong base to build on and enable the addition of more APIs as adoption grows.
• Actively nurture a developer community. A properly trained API manager will ensure constant contact with the developer community, and that partners are provided with case studies to help them identify viable use cases for your APIs.
• Leverage security as a strategic enabler. Security is a key enabler of the API economy, and most API security postures are defensive. By leveraging deep security tooling together with strong identification of developers, banks can better track information and data usage offensively. 

FSIs also need to avoid some common pitfalls, such as overlooking the need to continuously improve their APIs. If no one is using it, the API clearly is failing to provide any real value to third-party developers.

In addition, efforts should be made to market the APIs and let developers know what is available. A common mistake FSIs make is assuming their work is done once their APIs are released and neglecting the need to carry out community outreach and marketing to generate awareness about the APIs.

If you are interested in learning more about this topic, don’t miss our session at the Google Cloud Financial Services Summit on Embedded Finance: The Future of Banking.

^{1. McKinsey & Company. “Asia’s digital banking race: Giving customers what they want.” Global Banking Practice. April 2018.}

Apigee is committed to continually innovating new capabilities and solutions for our customers, and 2021 saw new product launches, partnerships, and best practices for managing your expanding range of business-critical use cases. Here are some of our favorite stories from 2021. 

Spotting the trends in APIs

Our State of API Economy 2021 Report surveyed over 700 IT leaders globally and identified five key API trends that emerged post-COVID. SaaS and hybrid cloud-based API deployments are increasing with half of all respondents reporting increases in these areas, and AI- and ML-powered API management is also gaining traction, with usage growing 230% year-over-year among Apigee customers. Business metrics like Net Promoter Score (NPS) and speed-to-market are API users’ preferred way to measure success, and API ecosystems are increasingly innovation drivers, with high-maturity organizations much more likely to focus on building a developer ecosystem or B2B partner ecosystem around their API. Finally, API security and governance is more important than ever, as research showed that increased investment in security and governance was a high priority. Check out the blog to explore these five trends in more detail.

Launching new capabilities with Apigee X

We announced Apigee X, our next-generation platform that brings the powerful scale of Google technologies to Apigee API Management and allows enterprises to power API programs for enhanced scale, security, and automation. Apigee X customers can harness the capabilities of Cloud CDN to maximize the availability and performance of APIs across the globe, deploying across more than two dozen Google Cloud regions and enhancing caching at over 100 locations. Apigee X customers can apply solutions like Cloud Armor web application firewall for enhanced API security and Cloud Identity and Access Management (IAM) for authenticating and authorizing access to the Apigee platform. Apigee X also enhances automation by applying Google Cloud’s AI and ML capabilities to historical API metadata to detect anomalies, predict traffic, and ensure compliance. To read more about these features, check out our blogs on Apigee X and Cloud Armor, Apigee X and Cloud CDN, and Apigee X and AI. 

Making new connections with Apigee Integration

Apigee brought our successful API-first approach to integration this year with the release of Apigee Integration. This silo-busting solution lets customers connect existing data and applications, and surface them as easily accessible APIs. Apigee Integration brings together the best of API management and integration into one unified platform so IT teams can scale their operations, improve developer productivity, and increase the speed to market. The platform comes with built-in connectors to Salesforce, Cloud SQL (MySQL, PostgreSQL), Cloud Pub/Sub and BigQuery, with connectors for additional third-party applications and databases on their way. Advanced integration patterns also serve our customers with even more use cases. Check out our launch blog and our Next session video for more details. 

Managing GraphQL APIs with Apigee

The exponential rise in digital services adoption among enterprises now generates petabytes of data every minute. You can harness the power of this data with query languages like GraphQL, accessing the data your app needs with one single request. The growing popularity of GraphQL APIs and their business-critical use cases mean it’s important to manage them with full life cycle capabilities, much like you manage your REST APIs. Last year we compared REST and GraphQL and introduced best practices for managing GraphQL APIs. You can also read our blog announcing Apigee’s support for the management of GraphQL APIs, and our partnership with StepZen to deliver these capabilities. To dive deeper into building GraphQL APIs, check out our Next session video. 

Looking back at the year’s top stories

2021 was the year of the customer, and we published the following stories to show how API management helps enterprises modernize their applications, build digital ecosystems, and generate value for their customers and their own organizations:

• Telco:
  • Leveraging APIs to create value for telco ecosystems 
  • How the MTN Group is expanding its business with APIs
• Retail:
  • Conversational AI with Apigee API Management for enhancing customer experiences
  • Seven-Eleven Japan uses Google Cloud to serve up real-time data for fast business decisions
• Financial services:
  • Arab Bank: Accelerating application innovation with Anthos and Apigee
  • Military Bank: Turns to Apigee to manage its API strategy and deliver digital transformation
• Energy: 
  • How Veolia’s API-first approach is powering sustainable resource management
  • GRTgaz: Calling on Apigee to help internal and external partners access intelligence securely

That’s a wrap for 2021! We hope you have a safe and happy holiday season, and we can’t wait to see what the new year brings for us. Stay tuned in 2022 for product launch announcements, partnerships, tips, and stories of how organizations like yours are innovating with Apigee.