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Banking APIs: shapes, colors, and focus

Xignite

Article by Efi Pylarinou

daily fintechIs an Open API much like an 24/7 Open house? Maybe it is in some ways but it can also be gated. I actually like to think of Open APIs, as Private, Open for Distribution, Open for Business.

Pardon my thinking in progress as I watch and monitor the versioning, pivoting, and roles of APIs. It is actually in many ways, similar to the versioning we have been witnessing with Blockchains (private or not, immutable or not, etc).

Private APIs

Private APIs are by invitation only. Think of linking to a Bank’s functionalities such as basic account data, or payment initiation. Private APIs are being used by banks in B2B experiments, and less for running their businesses. Hackathons, accelerators, and bank sponsored developer portals, are such examples. A very recent example of such private API, is the dbAPI, Deutsche bank’s API which “opened” up on Nov.1. The first hackathon (open house but gated party) in Berlin was three-day competition with 750 applicants and 70 participants from 22 countries. More details on the winners which show the kind of Fintech ideas incubated, in Deutsche Bank opens its data store to external software developers. Another example also launched this month is the “opening up” of APIs from the Mastercard Labs, that will allow experiments with the private Mastercard blockchain. More details about that private party in Mastercard Wants Developers To Experiment With Blockchain.

I have to also refer to Capital One’s US Open banking platform, because it is on the programmable web and offers 3 open APIs, but is actually for developer experimentation (see DevExchange: An Open Banking Developer Platform).

From Asia I mention the recent Open Bank Project & JB Financial Group Launch Global FinTech Hackathon in South Korea, another hackathon via APIs from the Korean market. I will stop with these three examples and suggest checking out the Let’s build a list of Banking APIsconversation on the Fintech Genome, for more.

An example of a private API actually used in business is by BNY Mellon, the custodian of $30 trillion of assets! Private APIs are used in the daily reconciliation service they offer to their pension fund clients who invest in 200 different asset managers. This daily function has been transformed from one in which files were exchanged to one that is delivered through APIs.

For distribution

Open APIs for access to a bank’s distribution channels, is the second category. Banks have been distributing third party products in old-fashioned ways, through their own distribution channels for a long time. Traditional examples, range from offering funds of other institutions as investment options to clients, to payment services of cards or telco providers.

Xignite’s U.S. Mutual Funds and ETF Fundamental Data API is an example of such API, acting as a connector.

However, banks have been owning the customer and running their businesses like a fortress. They have been witnessing the growth of businesses like Paypal and Klarna (the alternative payment providers, the free-floating credit card alternatives) who are acting as distributors in the payment industry.

Within PSD2, the European regulatory enabler, banks can become third party providers themselves. They can tap into other banks and offer them initiation of payments or account aggregation. Such services would be especially valuable for mobile citizens and cross-border transactions. Open APIs for distribution of 3rd party products or for playing the role of a 3rd party provider, is an area of growth in which banks haven’t been proactive.

In Singapore, MAS is inviting banks to list their APIs on a regular basis and is also is developing itself APIs that will be used for regulatory reporting purposes to simplify the process.

For now, it is mostly Fintechs that are using the API technology and getting ready for the PSD2 or any other type of standard that gains market-wide traction (for America and Asia). OpenF2 is an initiative that aims to standardize the framework necessary for creating value via the API technology.

An example is the Australian Fintech, Simply Wall St. (visuals and infographics for fundamental stock analysis) who has built its API in a compliant way with Open F2.

For Business

Imagine a platform that facilitates others to engage in business. This a platform (as a business model) that allows peer-to-peer business transactions. This would be a true Banking Platform. An entity that does have a banking license but doesn’t have to create the financial products and doesn’t have to own the customer (i.e. access to the distribution channel) This true Banking platform facilitates third parties and their customers to do business (without using the bank’s balance sheet).

This is the kind of business that Fidor Bank or Solaris Bank, are building. This is the kind of business that Ipagoo is creating by offering a special international current account. This allows clients (individuals or businesses) to obtain a credit card from any European country of choice, a loan from any bank etc. See details of the comparison of Ipagoo vs. traditional banks.

Open APIs are the connectors of all these modular businesses. Kontomatik is a 3rd party provider in this space, that could enable for example, banks to improve credit scoring of prospect borrowers by accessing customer related data via other bank APIs. Kontomatik is part of the Kreditech group that is focused on serving the underbanked, by leveraging alternative data with machine learning (more in Kreditech and the next generation of Consumer Banking).

For now, banks are either not opening up such APIs (not being proactive ahead of PSD2) or offering low quality APIs (i.e. connectors that have bugs and are not well maintained). The adaptation of these connectors, APIs, especially in the “For business” role is nascent.

Source: Daily Fintech

RECENT NEWS

Xignite, Inc., a provider of market data distribution and management solutions for financial services and technology companies, announced today it has enhanced the data coverage for its’ interbanks and interest rates APIs in preparation for the required transition from the London Interbank Offered Rate (LIBOR) benchmark interest rate at the end of 2021.

Used in financial products such as adjustable-rate mortgages, consumer loans, credit cards and derivatives, LIBOR has been the world's most widely used benchmark for short-term rates. But after the 2008 financial crisis the U.S. Federal Reserve recommended a new benchmark interest rate to replace the outdated and problematic LIBOR. In the U.S market the new benchmark is Secured Overnight Funding Rate (SOFR), which is based on transactions in the U.S. Treasury repurchase, or repo, market, where banks and investors borrow or lend Treasuries overnight. Other countries are introducing their own local-currency-denominated alternative reference rates for short-term lending.

Xignite banking, and Fintech customers that build apps for capital markets, investment management, financing, and foreign currency exchange purposes, require interbank and interest rates data to manage exchange and interest rate risk. Xignite enhanced its Interbanks and Rates APIs with SOFR earlier this year and has now added four of the alternative overnight risk-free rates (RFRs) recommended to replace LIBOR for currencies in respective markets. The new rates include Euro Short-Term Rate (ESTR), Swiss Reference Rates (SARON), Sterling Overnight Index Average (SONIA), and Tokyo Overnight Average Rate (TONAR). These additional rates are available now at no additional cost to customers.

“Our rates and InterBanks APIs were the first REST APIs ever released to serve the needs of the lending and banking industries. They uniquely aggregate rates that are used by dozens of firms globally in critical business processes,” said Vijay Choudhary, Vice President of Product Management for Xignite “Given the major shift the industry is experiencing regarding reference rates, it was critical for us to support those new rates to give our clients the data they need to run their businesses,” added Choudhary.

Xignite’s Interbanks API offers real-time and historical interbank and deposit rates for currencies in 40 countries. Xignite’s Interest Rates API provides interest rate data for over 600 global treasury, money market and private capital market instruments and benchmarks. The new alternative T+1 (24hr+ delayed) rates include:

  •         Europe: Euro Short-Term Rate (ESTR) is an interest rate benchmark that reflects the overnight borrowing costs of banks within the eurozone. The rate is calculated and published by the European Central Bank.
  •         Switzerland: Swiss Reference Rates (SARON) represents the overnight interest rate of the secured money market for Swiss francs (CHF). The rate is calculated and published by SIX.
  •         United Kingdom: Sterling Overnight Index Average (SONIA) is the effective overnight interest rate paid by banks for unsecured transactions in the British sterling.
  •         Japan: Tokyo Overnight Average Rate (TONAR) is an unsecured interbank overnight interest rate and reference rate for the Japanese yen. The rate is calculated and published by the Bank of Japan.

About Xignite

Xignite has been disrupting the financial and market data industry from its Silicon Valley headquarters since 2006, when it introduced the first commercial REST API. Since then, Xignite has been continually refining its technology to help fintech and financial institutions get the most value from their data. Today, more than 700 clients access over 500 cloud-native APIs and leverage a suite of specialized microservices to build efficient and cost-effective enterprise data management solutions. Visit http://www.xignite.com or follow on Twitter @xignite.

06/09/2021

Xignite, Inc., a provider of cloud-based market data distribution and management solutions for financial services and technology companies, today introduced XigniteGlobalCorporateActions, a new advanced API providing detailed corporate actions data for events such as stock splits, dividends, mergers, and spinoffs. The COVID-19 pandemic has led to a dramatic increase in corporate actions, annual meetings canceled, dividend payouts suspensions, and an accelerated company mergers and acquisitions rate. Knowing when a company plans to offer a split or undertake an acquisition is critical for buy-side and sell-side firms.

Corporate action processing is one of the “last frontiers of pain” for investment management, and one of the most manual and complex parts of back-office operations. The lack of uniformity and standards makes it difficult to identify and interpret information correctly. Obtaining accurate and timely information is challenging, and errors can result in painful financial losses. The XigniteGlobalCorporateActions is the first cloud-based REST API to eliminate the pains and complexity caused by legacy data feed and files. The API provides a single-source data stream with consistent information gathered from more than 190 exchanges and over 30,000 U.S. mutual funds.

The recent split of TSLA and AAPL stock on the same day illustrates the complex and far-reaching impact of corporate actions. If a firm does not do this correctly, it will show on historical charts, and their customers will notice. Xignite’s Data Quality team cross-validates our corporate actions data across sources and proactively detects and fixes any missing information. This prevents missing issues such as the TSLA and AAPL splits.

“The industry is facing a ‘perfect storm’”, says Vijay Choudhary, Vice President of Product Management for Xignite. “On one hand you have a massive wave of corporate actions fueled by the pandemic and the rising markets, and on the other you have millions of new retail investors eyeballing their investment applications all day long. One bad corporate action can send your customer service department into a tailspin,” added Choudhary. Additional detail on the Corporate Actions API endpoints:

GetDistributions - Returns cash and stock dividends as declared by the company for a requested security and date range.

GetDistributionsByExchange - Returns cash and stock dividends as declared by the company for a requested exchange and date.

GetEventSummaries - Provides a high-level overview of events for a requested security and date range.

GetMergers - Returns merger events for a given identifier and date range.

GetSpinoffs - Returns spinoff events for a given identifier and date range.

GetSplits - Returns the stock split history for a security for a specified date range.

GetTakeovers - Returns takeover events for a given identifier and date range.

Xignite

Xignite has been disrupting the financial and market data industry from its Silicon Valley headquarters since 2006 when it introduced the first commercial REST API. Since then, Xignite has been continually refining its technology to help fintech and financial institutions get the most value from their data. Today, more than 700 clients access over 500 cloud-native APIs and leverage specialized microservices-delivered modules to build efficient and cost-effective enterprise data management solutions. Visit http://www.xignite.com or follow on Twitter @xignite

05/18/2021

In the foreign metal market and the world of international rates, currencies play the crucial role of acting as the medium of exchange in the transactions that take place.

Currencies like the United States dollar, the Euro, or the British Pound are commonly used around the world in order to get a metal rate. Some companies that offer precious metal live and historical rates have exposed their APIs (Application Programming Interfaces) to allow developers to integrate current and historical metal rates, currency conversion, or other capabilities into their applications.

In order to know about precious metals live and historical rates, there’s a lot of APIs available online, and if you want to try one, Barchart is going to be one of your first options. But if you take a look at what else is in the market, you’ll find alternatives so many great alternatives:

Xignite Market Data Cloud Platform

Xignite Market Data as a Service was one of the first market data services built to run in AWS and they are one of the few vendors that is an AWS Advanced Technology Partner with a Financial Services Competency.

With more than a decade of cloud expertise in building, scaling and operating cloud-based market data technology, it is no surprise that leading financial services and capital markets firms rely on this company to empower their journey to the cloud. Their Metals API Service offers real-time prices and quotes for metals including Gold, Silver, Palladium, Platinum and other base metals. In addition to real-time precious metals prices, the service provides daily London Fixing prices as well as historical precious metal prices and metal news. 

Xignite Cloud APIs are sourced from leading providers such as FactSet and Morningstar as well as Xignite’s own curated, high-quality data.

Read the article Top 3 Alternatives for Barchart Precious Metals Rates

02/25/2021