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The API movement in robo-advisory space

Xignite

Open APIs

Source

There are 1700 APIs (rounded) shared on the Financial Category of the Programmable Web directory, plus 1200 in payments. Government has 1150, e-commerce 2500, and mobile 2450. Xignite launched last September the #FintechRevolution API ecosystem, which is a consortium of 21 companies supporting and connecting developers with best-of-breed financial APIs. The focus is on non-traditional workflow, data and analytics providers (e.g. TradierEstimizeAutochartist).

Financial businesses, startups or those innovating, may or may not have an API strategy. The main choices I see are:

  • A white label offering
  • A private API
  • An open API

white label offering, is a package without a label that a business can buy from a provider. This package can be integrated with existing processes and can be offered to your clients with your own logo. Customization is only feasible on the window dressing level.

An API (Application Programming Interface) is a software program that enables other software programs to interact. It can enable access to backend data and functions of an organization.

It is easy to grasp the concept in FX trading: an API is the software that enables a trading platform to connect with the market where execution occurs. Investopedia says:

Proprietary APIs are offered by almost every major online forex brokerage.

Which brings us to the distinction between private and Open APIs; the latter not being yet well defined. Private APIs or Proprietary APIs, are those accessible only to customers and in-house developers. As such, the security problems are controlled and whether modifications are truly valuable, is also monitored.

On the other hand, linking to Open APIs, a developer or business, doesn’t need to login into the provider site or be a customer. Open APIs, sit on the programmableWeb. They are similar to the Internet or open-source Linux operating system. Security problems and software development is not controlled centrally.

More detailed considerations between the two architectures and business strategies can be found on the API Academy Private APIs vs. Open APIs. Clearly, the market is versioning their business strategies and testing waters, from private APIs, to open APIs, and some refer to hybrid APIs.

Zooming into Digital Wealth management, which we defined as broad and intrusive in our early April post “How we define and categorize Fintech” wont help us take a look at the API movement, its versions and its business strategy alternatives. We choose to start by the, by now, boring robo-advisory space. There are two broad types of such businesses:

  • Standalone robo-advisor startups
  • Broader businesses with a robo-advisory offering

We stressed their dynamics in a 90sec videographic in early March, as we were seeing serious signs of leapfrogging of the “incumbents”. From the entire universe of robo-advisors, we distinguish two meaningful clusters involved in robo-advisory:

  • Robo-advisory business with brokerage and or custody services
  • Robo-advisory business without brokerage and or custody services

Most of those in the first category, have been adopting the API movement around their robo-advisory business along with a white label offering. A few examples are:

White label & API offering

Multi asset

TD America

Interactive Brokers

Saxo Bank

Apex Clearing

Only API offering

Equities

Robinhood (free commission brokerage)

Tradier (brokerage as a service)

Bitcoin

Coinbase

From the second batch, those without brokerage and custody, we see more of a white label rather than an API approach. Betterment for example has taken the white label approach for their institutional offering. And so has Sig Fig and NextCapital in the US (just to name of few in the US). In Italy, AdviseOnly has a white label offering; Money on Toast in the UK. Who am I missing in Europe?

This leads to the distinction of the “Coming Soon” API of Hedgeable which will be included on the programmable web. Announced about 2 weeks ago on “Daily API RoundUp: NASA, MapFruition, Hedgeable, ProPublica Campaign Finance”. Hedgeable, the first robo-advisor (albeit not robo 1.0) that offered retail clients the opportunity to invest in bitcoin. Now they are taking a lead in joining the OPEN API movement.

Wealthfront, who is focusing on direct consumers (not advsiors) seems to have chosen an API approach (no white label offering) that is closer to the Robinhood style:

“Wealthfront 3.0 will feature direct integrations with platforms like Venmo, Redfin, Lending Club and Coinbase as well as bank accounts and external brokerage accounts.”

Redfin is an on-line real estate firm. Venmo is a digital wallet that allows sharing payments with friends (like splitting cab fare). Coinbase is a bitcoin wallet. Apex Clearing is the clearing partner for Wealthfront. All these are integrations are possible via “private API” access of these parties.

Glancing at the 1700 financial APIs on the programmable web, it is evident that they are mostly data related or crypto-currency related. As there is no easy way to granulate the categorization, we can only conclude that most open financial APIs are related to brokerage (e.g. Tradable), banking of course (e.g. Capital One), payments and PFM.

As the broader trend of Convergence and integration is underway in a couple of verticals of financial services (digital wealth management and lending, for example); we will be watching the attractors in action.

Where will the puck head to in the robo-advisory space?

  • White Label
  • API
  • Open API

Which European robo-advisors (with no brokerage and custody business) have a white label offering or some version of an API strategy?

Anybody in Asia? Smartly, 8Now!, are just launching locally and aren’t fired up via a white-label from the West.

Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Efi Pylarinou is a Digital Wealth Management thought leader.

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