News

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

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

Each year, Bobsguide asks the market to vote for fintech companies they believe stand out from the competition – those who have gone the extra mile in terms of development and servicing their clients. Xignite is proud to be listed as the "Best API Management" vendor on the Bobsguide 2020 Rankings.


Read article on Bobsguide

01/26/2021

Web services data provider Xignite captured the AFTAs judges’ attention on the infrastructure front with its release of Xignite Enterprise Microservices in July 2020, a suite of cloud-based microservices for data management, storage and distribution in the cloud, designed to help financial firms migrate from monolithic legacy data architectures to more agile and less expensive cloud services and data sources.

Requires subscription to read the article on WatersTechnology

01/25/2021

Xignite, Inc., a provider of market data distribution and management solutions for financial services and technology companies, today revealed the results of its collaboration with StockCharts, a leading technical analysis and financial charting platform for online retail investors. The collaboration involved a move from an on-premise market data provider to Xignite’s cloud-native technology hosted in Amazon Web Services (AWS). Download the case study containing the full results.

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

01/12/2021