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The Now, The Cloud and the Crowd: What is Shaking Wall Street to Its Core? Part 2

Xignite

Bobs Guide Cloud Wall StreetFinance is often the last sector of the economy to embrace new technologies, preferring to shield it from tech booms that may lead to ruin. This caution hasn’t served Wall Street well in the past decade, however, because the industry has lost touch with the changing demands of the next generation of consumers, savers and borrowers. Much of that disconnect can be attributed to the increasing emphasis on regulation, but regardless of the cause, Wall Street fell asleep at the wheel while young entrepreneurs figured out how to reinvent finance for the era of the Now, the Cloud and the Crowd.

The Now

Most of Wall Street services and processes were engineered back when people had time and patience. That is so 1999. The Millennials are a generation defined by instant gratification. (We can thank Steve Jobs and weak parenting for that). Click. Done. Wall Street as an industry is still emerging from the seventies. Understand for instance it still takes three full days for a trade to settle in the US. There is so much legacy infrastructure and processes, layers upon layers of interconnected systems technology and software, much more manual intervention that you would dare to imagine, encumbered by massive regulatory constraints. Wall Street cannot do anything quickly and this has created a huge impedance mismatch with a millennial generation that does not give a damn about mahogany-lined conference rooms and certainly doesn’t want to talk to anyone about their investments. If Millennials want to open an account, they want to do it now! If they want to trade, they want to trade now. Don’t ask them to sign and fax a piece of paper to open their account because you lost them at paper.

The need for the Now is hitting all facets of the industry: money transfers, banking, lending. But nowhere is it more disruptive than in the area of wealth management. Financial advice used to be about personal relationships. Many believed this would never change. But today Robo-Advisors are threatening the industry. Now that software has been eating the world for a few years, you can delegate advice to a machine. Companies like Wealthfront, FutureAdvisor, Betterment and SigFig have all built-in - to a degree or another - instant gratification around their services. And customers are gobbling it up. Personal Capital just released its app on the Apple Watch this week. Wealth Management is now unified with the one device that is the embodiment of the Now.

Sure, the fact that Millennials have yet to experience a market downturn suggests that they will come crying to their human advisors at the next correction. But I doubt it. I predict that the so-called “robo-advisor” platforms will manage 15% to 25% of retail investable assets within 5 years.

The Cloud

We have been beating the Cloud drum for years now. Amazon Web Services is now a $5B business growing 50% a year. But why is this more relevant than ever to Wall Street?

The industry should have figured out how to take advantage of the public Cloud to eliminate the billions and billions of dollars it needs to shave from its cost structure. Instead, everyone builds the same technology infrastructure, deploys the same software, operates the same data centers, and builds up the same layers upon layers of brick-and-mortar technology to operate an industry that is essentially virtual. Spare a few ATMs here and there and you realise that from banking, to lending, to wealth management, to capital markets, the financial services industry is essentially perfectly suited for the ether, ideally positioned for taking advantage of the mutualised technology infrastructure offered by the public cloud. But it has wanted none of it. Why? The usual demons of security and regulation.

But startups don’t have that problem, unburdened by regulation, fueled by organic kale, yoga lessons while-you-work, and free lunches, they have embraced the cloud. I deal with fintech startups every day and we have hundreds of them as clients. They all pretty much run on Amazon Web Services. The public cloud and Amazon Web Services in particular, is the operating system of the future. A global processing infrastructure on a stick. Wall Street is fooling itself if it thinks it can beat Amazon at this game. The dice have been thrown.

The next generation of financial service companies—those who will be giving Jamie Dimon a run for his money - are being built on APIs and the cloud (itself a big API). And they will benefit from a massively smaller cost structure than their legacy competitors - which in the end will seal their success. It’s not only financial services firms that are being re-invented on the cloud, it is all their network of retail and institutional service providers. When your arm dealers are switching to the next generation technology, it’s time to renew your arsenal.

Nowhere is this problem more visible that in the sector served by my company, Xignite. The market data industry is a $26B market where most of the money is spent on proprietary technology inherited from the 80’s and 90’s and where redundant infrastructure spending is pervasive. Every single financial institution spends billions of dollars on the same technology as its competitors but draws very little competitive or service advantage. The public cloud and its lower cost structure is a lifeline that Wall Street must grab now.

The Crowd

Finally the biggest premise underneath Wall Street is also being challenged; that is has to be run be a set of gigantic highly leveraged, highly centralised, too-big-to-fail, century-old institutions to even work. New technologies have simply shattered that assumption with the unbundling of the bank as obviously the first step. Who needs a large bank providing a set of mildly integrated, average-quality services across the board when a crowd of new technology companies are able to provide a set of best of breed services all running in concert on the same device? Or when companies like Yodlee are able to provide those startups with an integrated view of the customer’s asset via easy APIs no matter where those assets are held. There is not a single sliver of service or technology infrastructure provided or used by large financial institutions today that is not under attack by dozens of startups worldwide. Take for instance Tradier who can provide you with a complete set of brokerage APIs to build your business upon. Ten years ago, doing this would have taken month and cost millions whereas now, a brokerage business can be built overnight. Sure not all startups survive but many will and have already changed the industry forever.  

And this not only applies to consumer-facing services like money transfers or savings accounts, it also applies to some core internal supply chains of the capital industry where the power of the Crowd is successfully applied to create alternative sources to Wall Street traditional fare. Estimize for instance, is applying the wisdom of the crowd to the earnings estimates and being very successful doing so - challenging big vendors like Thomson Reuters on a turf that is literally the beating drum of the markets. Vetr is also drawing upon the Crowd to rank stocks in a fashion similar to the way Morningstar built its famous star rating for mutual funds. Example abound in more obvious categories such as crowdfunding with companies like Kickstarter, Crowdnetic, Funding Circle, LendingClub and dozens of others worldwide.

There used to be a distinction between Wall Street and Main Street and at times their interest have not aligned. One of the biggest strength of Capitalism is its ability to self-improve. Today, Main Street and Wall Street are merging and they are leveraging new technologies to give the next generation what they really want: everything, right now, and for less.

Source: Bob's Guide

RECENT NEWS

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 Neeva, the world’s first ad-free, private subscription search engine. Neeva has built features to deliver information in a more user-friendly manner to a general audience. One new feature is a stock tracker, enabling users to look at stock prices based on different time intervals and other key data points. The stock tracker is powered by Xignite financial data. Click HERE to download the case study containing the full results.

Neeva’s stock tracker requires significant quantities of high-quality market data to function. The company initially enlisted a legacy data provider but quickly ran into issues with data and API quality. Neeva needed to integrate quickly and required fast and reliable financial data. After a trial and receiving a recommendation from another client, Neeva identified Xignite as a provider capable of delivering large quantities of market data in a comprehensive and developer-friendly manner. 

“We were impressed by Xignite and committed to them following a successful trial,” said Stephanie Chang, Head of Marketing at Neeva. “The main factors that drew us to Xignite were the consistency of their stock ticker coverage and the granularity of their time-series ticker data, as well as the speed and reliability as well as the speed and reliability of their API,” added Chang.

Integration of the Xignite financial data APIs into Neeva’s stock widget took less than two weeks, and Neeva noticed immediate results in terms of breadth, detail, and API quality. Powered by Xignite’s global quotes and global historical APIs. Neeva presents its users with rich and desirable views of key data points for a huge variety of stocks. Users can use a time-based filtration mechanism to drill into metrics like open price, daily highs, and lows, 52-week highs and lows, volume, and market cap. 

“Xignite’s vision is to Make Market Data Easy. With our industry leading technology combined with Neeva’s user friendly search engine we have done just that,” said Stephane Dubois, CEO and Founder of Xignite. “We look forward to continuing our work with Neeva as they disrupt the search engine marketplace.” 

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

About Neeva

Neeva is the world’s first ad-free, private subscription search engine. Neeva focuses entirely on the consumer, delivering only real, high-quality, trustworthy results. Neeva blocks third-party website trackers and will never sell or share customer data with any third party, especially advertisers. Neeva also makes it easy to search within personal email accounts, calendars, and cloud storage platforms surfacing the most important information from the same familiar search box. Neeva was founded by former executives from Google and YouTube. Learn more and sign up at Neeva.com.

07/15/2021

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