In May I wrote about The API movement in the robo-advisory space, and found that those with API offerings were companies in the brokerage business (which is severely disrupted as we speak) and not that much in businesses with robo-advisory offerings (without brokerage and custody).
At the time (6months ago), I checked the APIs listed on the Programmable Web directory in the Financial category, Payments, e-commerce (see May figures here). Today, the Financial category and e-commerce show a 10% increase each; the Payments category on the other hand, a 30% increase (Government 2% increase).
The Financial category isn’t easily dissected; therefore, one can view it mostly around consumer banking type of functions. Large incumbent institutions are starting to have some type of API offering (starting form ATM locations, credit cards, payments etc). You can sample them in the live conversation on the Fintech Genome Let’s build a List of Banking APIs (created by Konstantin Rabin, Kontomatik) and Open Bank Project & JB Financial Group Launch Global FinTech Hackathon in South Korea (created by Ismail Chaib, TESOBE / Open Bank Project). Those include BBVA, OCBC, BNP Paribas, JB Financial Group. If there are more that are joining the party, add them to the conversation.
Open APIs in WealthTech
The ones already mentioned on the Fintech Genome are:
Saxo Bank – The FX broker transformed into a Fintech scale-up in the multi-asset investment space – Saxo Capital Markets – with an Open API offering along side its white label multi-asset trading offering. (Disclosure: Saxo Capital Markets is a client of Daily Fintech Advisers).
Xignite has a data focus; Hedgeable is a next generation investment platform (including Bitcoin and private equity) that could be integrated (to create more products or to distribute products in a cheaper, faster way); Saxo Markets offers the full stack of the investment process and could be used to create and distribute more products (leveraging the Saxo Markets access to global markets).
Addepar, the other Fintech scale-up that just surpassed $500billion in AUM, has been focused mainly on RIAs in the US but is targeting asset managers and family offices. They provide an integrated solution for transactions, holdings, securities, tax lots and related metadata. They just announced the new Addepar Open API that invites innovation on their platform.
IBM Watson is entering the WealthTech API segment also targeting Financial advisors, fact that nobody can afford to ignore. The IBM Wealth management offering – Client Insight for Wealth Management powered by IBM Watson – was presented, much like a startup, at FinovateSpring 2016 and is the first API –based the IBM cognitive predictive analytics offering. IBM is leading the Cognitive era movement which has multiple possible use cases.
Symphony, B2B Wall Street-backed sweetheart and Bloomberg competitor, has also opened up its API. The announcement is just two weeks old: Symphony Software Foundation (the Foundation), is a nonprofit organization fostering open innovation around the Symphony secure messaging platform with a corporative approach. The Open Developer Platform will be launched before Christmas and will provide access to the Symphony platform.
And last but not least, the #FintechRevolution API ecosystem that was created by Xignite a year ago. It is a membership organization open to fin vendors, data providers, accelerators etc. Its mission is to create a select API offering that is simple and usable, so that more API are created. The members range from Nasdaq, StockTwits, Quantconnect, Estimize etc.
Open API colors and forms in WealthTech
Open API offerings come in various forms of “openness”; private access or public access on the Github.
More importantly, they can play different roles on the financial value chain. We mentioned above businesses with an Open API offering that enables communication or access to Financial Data or information, to Asset management services with alternatives, to the Full stack investment cycle, to Cognitive Predictive analytics.
We also highlighted two industry wide foundation initiatives (by Xignite and Symphony).
The value that will be created through these Open API initiatives (to be determined in 2017) may focus on three main areas:
- Creating new products
- Integration of the new financial services
- Distribution of third party products
Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech & operates the Fintech Genome P2P Knowledge Network. Efi Pylarinou is a Digital Wealth Management thought leader.