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Guest Article: Silicon Alley and Silicon Valley Jostle for the Fintech Crown [News]

Xignite

Xignite CEO Stephane Dubois compares and contrasts the fintech communties from the coasts

PEHUB PE HUB 10 Coolest Brands in Banking 2015Last year fintech rose from the ashes of the mortgage crisis to the pinnacle of startup hype, with companies such as  WealthfrontPersonal Capital,  Betterment,  Robinhood  and Motif Investing raising troves of capital. We expect this trend to continue in 2015 and beyond.

The bulk of the fintech activity has so far taken place in the US, and primarily in the hubs of New York City and San Francisco. Startups are popping up like mushrooms in London,   Frankfurt, Singapore, Cyprus and Beijing, but according to data by VentureScanner, New York, with 97 fintech companies, and the Bay Area, with 176 companies, dominate the scene. Up and coming areas such as London, with 81 companies, and Boston, with 18, still don’t measure up.

While fintech brings together Wall Street and Silicon Valley and creates a new space influenced by the forces of financial services and disruptive technology, there are clear differences between these two main centers of activity. Compared with its counterpart in the West, New York’s Silicon Alley traditionally takes a backseat in what the industry   considers to be “pure technology.” But when it comes to fintech, it has an undeniable advantage as the finance capital of the world.

In our position as a provider of financial market data APIs, we interact a lot with fintech companies on both coasts. As we become more familiar with how they operate, we have begun to notice patterns and contrasts. As the number of fintech startups grows, trends emerge in these companies’ operational strategies, and today we see three main traits that differentiate the valley from the alley:

  • Technologists vs. Financiers
  • Disruption vs. Revolution
  • Venture vs. Organic

Technologists vs. Financiers
The first difference lies in the origins of the fintech founders. In Fintech Valley, founders are more likely to have technology backgrounds, and, as a result, pull their inspiration from their past experience within the space. Bill Harris, CEO of Personal Capital, started at PayPal, while Hardeep Walia, co-founder and CEO of Motif Investing, used to work for Microsoft. Backed by a tech-heavy experience, these founders bring a unique perspective on how to apply technology to financial services. By contrast, New York-based founders are more likely to enter fintech after breaking away from large financial institutions, where they experienced unmet needs first hand. For instance, Basil Qinibi, founder of the hedge fund platform Novus Partners, used to work at Merrill Lynch, and Mazy Dar, CEO of OpenFin, came from UBS. Because of their experience in the world of finance, these individuals – like many of their East Coast colleagues – are equipped with valuable insight and perspective on financial services.

Disruption vs. Revolution
The second difference between the two coasts is in their approach to the markets. Silicon mavens are more likely to want to disrupt financial services altogether, given their perception of finance and fintech at large as mountains of inefficiency fueled by immense fees that are ripe to have the rug pulled from under their feet. These industry players want to become the new finance. Palo Alto’s Wealthfront and Redwood City’s Personal Capital exemplify this trend. By contrast, New Yorkers will take a more subtle angle, as they are more likely to be peddling new technologies and platforms that aim to help large financial institutions capitalize on emerging trends and regulatory mandates. These companies, which include EidoSearchEstimize and Standard Treasury, tend to view traditional finance as their client, not their enemy.

Venture vs. Organic
It is no surprise that the attitude of the two communities differ when it comes to fundraising. Silicon Valley fintech entrepreneurs will naturally turn to Sand Hill Road and its hordes of venture capitalists for funding. Pitching to angel groups or institutional investors is a tried-and-true, well-oiled process rehearsed heavily from Palo Alto to SOMA and fueled by the abundance of capital. By contrast, New Yorkers will favor organic development, and, if they do take money, they are more likely to seek strategic investments from the large financial institutions and executives that they plan to serve. Maybe it’s because New York entrepreneurs are experienced as financiers. Or maybe it’s that their existing connections allow them to quickly sell to a few clients and achieve organic profitability much quicker than their leveraged Californian counterparts. Either way, this trend will continue all the way to the exit, where western VC-funded companies will seek IPOs more often than their New York peers. The recent Yodlee and LendingClub IPOs speak for themselves.

Despite these patterns, and there are exceptions, one thing remains certain: cultural differences aside, the fintech landscape from east to west has never been as energetic and strong as it is today in both Fintech Valley and Fintech Alley.

Stephane Dubois is CEO and founder of Xignite and a sought-after observer and contributor to the fintech community.

 

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StockCharts requires vast quantities of financial data to power its visualization, charting and tracking tools, which investors use to analyze the markets to help with investment decisions. The company was frustrated by the limits of its on-premise market data center, which was forcing the team to make architectural decisions based on what its data center could handle in terms of speed and storage, not on their technology. Its previous market data provider was just starting to build out some cloud offerings, but they were far away from what the business required. StockCharts decided to migrate its infrastructure to the AWS cloud and partner with Xignite to gain access to endlessly scalable market and financial data delivered through innovative cloud APIs.

The collaboration made an immediate impact as StockCharts was able to expand its offerings and customer base by pursuing growth strategies enabled by Xignite’s cloud-based approach, which provides easy access to data and eliminates architectural limits on storage and speed.

The pandemic provided further validation. Seattle-based StockCharts was in one of the first areas hit by COVID-19 and was forced to quickly shut down its office. Pandemic-driven market volatility followed and StockCharts customers wanted to visualize what was happening. The company’s ability to scale quickly and accommodate a high volume of new requests would not have been possible without Xignite.

“The move to the AWS cloud and Xignite has unlocked tremendous new potential for us in a lot of architectural ways, and has given us a lot of data options that we could not even consider before,” said Grayson Roze, Vice President of Operations at StockCharts. “It relieved us of the burden of figuring out how to source things. Instead, we know exactly where we need to go to get the data and can access it instantly. That is a huge, huge benefit for our business.”

“We are proud to have played a role in transforming how StockCharts approaches data,” said Stephane Dubois, CEO and Founder of Xignite. “The events of this year unleashed a massive spike in retail trading and a host of other unexpected forces that reinforced the need for financial services firms to leverage the cloud. Despite the disruption of this year, StockCharts was positioned for success, and we look forward to continuing to deliver our financial and market data solutions to the industry at large.”

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-delivered modules to build efficient and cost-effective enterprise data management solutions. Visit http://www.xignite.com or follow on Twitter @xignite

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Xignite, Inc., a provider of cloud-based market data distribution and management solutions for financial services and technology companies, today announced that its Market Data Management-as-a-Service solution has been named “Best New Technology Introduced over the last 12 months – Infrastructure” at the 2020 WatersTechnology American Financial Technology Awards (AFTAs). Selected by the editors of WatersTechnology, the AFTAs recognize excellence in the deployment and management of financial technology within the asset management and investment banking communities.

Xignite’s Market Data Management-as-a-Service (MDMaaS) solution enables buy- and sell-side firms to centralize the management of vendor data feeds into their own cloud environment. The solution is built around the cloud microservice-based architecture and technology stack Xignite has been refining and scaling for more than 10 years. Xignite’s technology platform has been the backbone of the company’s Data-as-a-Service business, daily supporting 12 billion API requests of financial data for their 700 fintech and financial services clients. Now Xignite is leveraging this battle-tested cloud-native data management architecture to offer buy- and sell-side firms a market data vendor agnostic offering, with connectors available for firms to load data they license from Bloomberg, Refinitiv, ICE and numerous other providers.

The MDMaaS solution includes a suite of loosely-coupled modules that enable market data user firms to control their data usage, automate entitlements, optimize their data spend and minimize liabilities by simplifying data governance and ensuring regulatory compliance.

The functionality is delivered via microservices, an architectural approach in which core functionality is handled by loosely coupled, independently deployable modules that can work together or separately. Microservices architecture stands in stark contrast with monolithic platforms that require expensive on-premise technology – that is especially hard to maintain in the context of a pandemic.

The MDMaaS microservice-delivered modules introduced in 2020 include:

Xignite Entitlements and Usage - Manage the entitlement of vendor data to users and applications to ensure compliance and eliminate excess spend.

Xignite Optimization - Streamline data consumption to avoid duplicated vendor requests, leverage cached bulk data and get recommendations to reduce data costs.

Xignite Data Lake - Centralize, catalog and connect data shapes to enable frictionless integration by consumers via unified cloud APIs.

Xignite Reference - Aggregate, normalize, store and index vendor reference data to centralize enterprise-wide access.

Xignite Historical - Provide centralized access to normalized, stitched and adjusted historical data via cloud APIs.

Xignite Real-Time - Distribute real-time vendor data via cloud APIs, eliminating on-premise infrastructure.

Xignite Fundamentals - Make simple and complex time-series data structures available via cloud APIs.

“Xignite has pioneered market data in the cloud for more than 10 years now, so we are very excited to announce – and be recognized for – our Market Data Management-as-a-Service solution,” said Stephane Dubois, CEO, and founder of Xignite. “The pandemic has reinforced the need for financial services firms to migrate to the cloud as a means of navigating disruption and enabling scalability, among other benefits. We are proud to spearhead that effort and help the industry modernize its approach to financial and market data.”

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 via its Data-as-a-Service and Market Data Management-as-a-Service solutions. 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

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