Based in Mountain View, California, Khan Academy is a not-for-profit that produces and posts a vast collection of free educational online videos about math and science topics ranging from algebra and trigonometry to biology and economics.

Millions of students, educators, and self-learners around the world watch the videos, both on the Khan Academy’s YouTube channel and on its hugely popular website (www.khanacademy.org), where students answer some 1.5 million practice questions per school day. The Khan Academy development team continually tweaks the site based on how visitors choose to learn.

Challenge

Khan Academy’s beginnings date back to 2004, when Sal Khan’s cousin asked him to remotely tutor her daughter in math. Khan was happy to help and more than qualified, given his three MIT degrees and his Harvard MBA.

As more relatives and friends asked Khan for tutoring assistance, he began videotaping short lessons and posting them to YouTube. His knack for distilling complex concepts into easy-to-follow tutorials helped the videos go viral.

Sal knew he needed to offload the technical and maintenance concerns so he could work on what was important. To grow, it was important for him to be able to stop worrying about things like deployment issues and running his own server.

Ben Kamens, lead developer for Khan Academy

Khan maintained a website for his growing video library for several years, but the platform experienced limitations as traffic increased.

At the same time, media attention was growing, and technology industry leaders, including Microsoft founder Bill Gates and Silicon Valley venture capitalist John Doerr, began lending their support and evangelizing Khan’s mission and work. It was at this point that Khan quit his job as a hedge fund analyst to devote his full-time attention to the site’s growing potential.

“With Google App Engine, we don’t need a system administrator or anyone dedicated to deploying our app, so 99 percent of our time is spent working on our application,” says Ben Kamens, lead developer, Khan Academy.

“Sal knew he needed to offload the technical and maintenance concerns so he could work on what was important, which was to make more videos for the Khan Academy library,” explains Ben Kamens, lead developer for Khan Academy. “To grow, it was important for him to be able to stop worrying about things like deployment issues and running his own server.”

Solution

Khan Academy chose App Engine as its hosting and application development platform because App Engine could easily house its growing collection of 2,000-plus videos, resolving the organization’s overall server and maintenance issues with a single solution.

Using App Engine freed the team to focus on the user experience and the array of content that makes the academy such a powerhouse.

“A lot of what the Khan Academy is about is collecting data on student behavior so we can teach them better,” Kamens says. “Did they use a hint? Have they watched the video before? That data is being stored on Google App Engine so we can figure out what the most effective videos are, or where students struggle the most.”

Khan Academy provides individual profiles to students so they can analyze their learning progress, which means the organization needs systems running in the background to collect and track of all this data. Because App Engine takes care of server support, Khan Academy’s five developers can spend almost all of their time improving site functionality.

“If we didn’t have Google App Engine, we’d be spending a lot more time figuring out server setup and working on routers,” Kamens says. “Our ability to focus on the actual product is the benefit of Google App Engine.”

With the App Engine dashboard, which provides information like response time, uptime, and error rates, the development team also has an easy way to watch over site performance. “It lets us see what the average response time is, so we can keep it really low,” Kamens explains.

Results

During the US school year, Khan Academy receives more than 3.8 million unique visits a month — all served through App Engine. To support this much traffic, a typical company would need an internal system administration staff.

“With Google App Engine, we don’t need a system administrator or anyone dedicated to deploying our app, so 99 percent of our time is spent working on our application,” explains Kamens. “Our application lives on Google App Engine, and we bank all of our scalability and traffic concerns on Google App Engine. Even huge traffic spikes from Sal’s media appearances don’t worry us since we know that Google App Engine will handle the spike.”

Kamens also likes the fact that he and his team can turn to the Google App Engine support team for assistance when they need it. He also finds helpful tips on the Google App Engine blog.

The Khan Academy staff has come to completely rely on App Engine. “We are constantly using more of Google App Engine’s capabilities and have been happy with the performance,” Kamens says. “It’s nice to have an easy deployment process since we deploy the site on average at least once a day, [and] sometimes up to nine or 10 times [a day].”

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.}

Editor’s note: Today’s post comes from Naohiko Takemura, Head of Engineering, and Kosukex Oya, Engineer, both from Japanese customer experience platform PLAID. The company runs its platform in a multicloud environment through Anthos clusters on AWS and shares more on its experiences and best practices. 

At PLAID, our mission is to maximize the value of people through data, and we are developing a range of products that focus on improving customer experience. Our core product is a customer experience platform, KARTE, that can analyze the behavior and emotions of website visitors and application users, enabling businesses to deliver relevant communications in real time. We make KARTE available as a service to functions such as human resources and industries such as real estate and finance, and run the platform in a multicloud environment to achieve high-speed response and meet availability requirements. This is where Anthos comes in.

We introduced KARTE in 2015 and updated the system configuration in line with the addition of new functions and the need to increase scale. Our multicloud configuration is optimized through Anthos clusters on AWS, which give us access to the capabilities of Google Kubernetes Engine (GKE). 

KARTE runs in two groups of server instances in each cloud; one group runs the management screens used by clients, and the other provides content for visitors to our website. In Google Cloud, the management system runs in GKE and content is delivered through Compute Engine.

We initially developed and operated the core of our services on another provider and from 2016 began to transition to Google Cloud due to its strong data processing capabilities. The products that handled big data, such as Cloud Bigtable and BigQuery, were attractive because they could handle data in real time and were compatible with KARTE. Now most functions, including peripheral aspects, run in Google Cloud, because we thought if we built a system centered on these products, it would become efficient to build other parts on Google Cloud.

While we considered migrating everything to Google Cloud, we decided to leverage its strengths alongside those of our existing provider, AWS. We felt a multicloud approach could create more opportunities and deliver higher growth than a mono-cloud environment.  

We completed our move to a multicloud environment in 2017 and found that by building systems with almost the same content on two cloud services to leverage the strengths of each, we could reduce costs and improve performance and availability.

However, as KARTE grew, and the content of the service increased in complexity, we began to experience new problems. The increased load on the system due to an influx of in-house engineers from 2018 onwards impacted the scalability and development speeds of our  conventional monolithic architecture running in virtual machines. We opted for an approach based on microservices and containerization, excluding the components that enabled real-time analysis as these had been modernized since initially being deployed in 2016, and the management screens, as the infrastructure running these did not require crisp tuning. Our key priority was to improve the ability of our engineers to deliver quickly.

From 2019, we turned to promoting microservices that make full use of container technology. When deciding to move from a target built on virtual machines to containerization, we evaluated the ease of use of GKE and decided to build in Google Cloud. At the same time, the number of systems with strict service level obligations was increasing, so to ensure higher availability, we considered running these in a multi cloud environment. The announcement of Anthos clusters on AWS at Google Cloud Next ‘19 in San Francisco provided an answer.

We had been wondering how to achieve the equivalent smooth operation of GKE in our AWS environment, and welcomed the Anthos clusters on AWS announcement. We consulted with a Google Cloud customer engineer through an early access program and quickly gained an opportunity to work with this version of Anthos. This allowed us to provide feedback and requests for improvement, and this paved the way for us to implement the product to take advantage of its functionality and future enhancements. With Google Cloud, we have been able to continue to interact closely with the development team to understand and provide input into the product roadmap.

We are now realizing the benefits of multicloud, including faster development speeds and higher availability. For businesses in general, we recommend they take a thoughtful approach to multicloud—while for us, multicloud is a useful mechanism that enables us to provide large-scale data analysis in real time, other businesses should consider whether multicloud is right for them and if so, the role of a technology like Anthos. They should also start small before ramping up.  Moving forward, we are keen to see what other products Google Cloud is creating that can help drive our business to a higher level.