B
y Vasyl Soloshchuk, CEO and Co-Owner at INSART
Today, in a world that is changing more rapidly than ever, knowledge becomes the most valuable of all assets. For example, if an investor or financial advisor is able to find out useful information in good time, they can make worthwhile investments. With leaders of WealthTech companies, we discussed the API landscape and the APIs provided by their companies. Below, are some of their ideas and insights.
Aaron Schumm, CEO at Vestwell, said:
“In today’s technology landscape it’s crucial to be able to establish connectivity across any industry player that either brings value to you as your core business or to your clients and their core business.”
Open APIs provide a range of market data and information. Harry Temkin, Chief Information Officer at DriveWealth, spoke about the advantages that API users can access:
“In the API today, we provide basic history performance. We can tell you how the equity of the account has changed, deposits, withdrawals, cash balances. You can pretty much build historic performance from inception of the portfolio while breaking out any cash infusions or withdrawals, aside from straight equity performance.”
Using open APIs in wealth-management platforms provides access to financial data and facilitates communication with banks. All sides of the process can benefit from it:
Banks can increase their assets under management by providing financial infrastructure to new industry players, and improve own offering due to integration with new financial services.
Wealth-management technology firms can create new products thanks to the increased availability and access to financial data.
Investors can enjoy a better customer experience and access to all personal financial data in one app.
Lex Sokolin, Global Director Fintech Strategy at Autonomous Research, said,
“Since the financial advisory industry is very entrepreneurial and decentralized, advisors can choose any technology they want. And that in turn drives the diversity of FinTech solutions that are able to build software. As apps compete for similar functionality (i.e., rebalancing, CRM, planning), they are evaluated not just on features, but ease of use within the rest of the ecosystem. And similarly, platforms are evaluated both on native functionality, as well as third-party integrations.”
To be useful, open APIs should be valuable—i.e., backed by data or services that are in demand. According to Lex Sokolin, open APIs should be “a byproduct of modern software design methods, not a separate initiative that is scotch-taped to large humming engines from the 1980s.” Lex emphasized that CRM, client portals, planning apps, and data aggregation should have an easily accessible and permissioned infrastructure.
Folio Institutional
Greg Vigrass, President of Folio Institutional, believes that “a good API is one that should be clear and easy to work with, and should be very straightforward for a third party to make work with their systems.”