Technology
The Right Choice

• Mike de Waal
• August 2019
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The digital revolution aims to transform customer service and make back-office processes radically more efficient. But to accomplish those goals, the right technology is needed for the job.

Application programming interfaces (APIs), web services and microservices can all play key roles.

API is the core of online connectivity. As the medium through which multiple applications, devices and data interact, API defines a set of rules and protocols that allow two or more systems to communicate with each other. Every API needs to have documentation specifying the information that gets transferred between systems.

Suppose you are building software that integrates with Facebook to help identify if your customers are breaching a policy term. A Facebook API can access data such as users, comments and posts.

Today's APIs are more flexible and powerful than ever, making them an essential building block.

Web services, too, play a vital role in the digital revolution and act as the software that implements an API.

The software can respond to requests coming from the web and automatically provide responses or services.

Web services can use text formats such as extensible markup language or JavaScript Object Notation, an open standard data exchange format based on a JavaScript syntax subset. They can also use transport channels such as hypertext transfer protocol with proper encryption for data exchange.

Microservices are responsible for breaking down software into smaller components, rather than having one large software application. Such modularity can make even sophisticated software easy to understand and/or develop. The success of a microservice implementation depends on how loosely coupled the components are. Ideally, each component should be deployed and scaled independently.

Microservices can aid employee benefits providers in automating the process of examining which policyholders paid their premiums and remind those who have failed to complete that task.

Insurers also offering voluntary benefits can use microservices to break down software into two loosely coupled components (one for group insurance and employee benefits and another for worksite and individual voluntary products) so that adding the new functionality will not affect the existing one.

Determining which of the three technologies is best for your project largely depends on your requirements.

Companies that want to delegate some of their software functionality to another party could have their application act as a web service consumer.

An online payment system is a complex system, subject to numerous regulations and security constraints. While an insurer may not be willing to expend the required effort to implement on the process, that functionality could be embedded in the insurer's software to connect and communicate with a third-party online payment system through web services that use a public API.

As software becomes more complex, insurers should consider breaking it down into smaller, simpler components that they can gradually develop or deploy. Microservices are an ideal solution for that undertaking. Software can use both web services and microservices simultaneously.

APIs, web services and microservices all have a vital role to play and can be used as part of the framework for digital transformation.