No, this blog is not about my personal retirement plans. However, I have had several meetings recently with Financial Services companies and thought I would make this the next industry to discuss regarding API use cases.
What do Financial Services and APIs have in common? They are used to make money. While not all use cases for APIs directly charge for API usage, the intent of many of the API scenarios is to bring in additional revenue through either better serving existing customers or expanding the potential customer base.
So, letâ€™s explore how APIs are used in the Financial Services industry. Once again Iâ€™ll use the structure I previously introduced (here).
- Basic APIs â€“ account types, investment products and detail, pricing, tools, research, life planning (retirement/college), education, FAQs, find a branch, online forms, market/investment news
- Custom APIs: account list, balances, trading, transfer funds, statements, profile management, advice, send questions, message access, comparison reports, holding analysis, alerts, watch lists
- Mobile advantages include voice recognition, deposit check, GPS directions to branch location
What APIs are available today in Financial Services? Here are just a few samples of public APIs:
- Fundpeak – is an investment database provider focusing on managed futures and forex and impact investing. Users can customize and personalize the data they want and run performance reports on investments and funds.
- StrategYard – is an investment strategy trial service that allows individuals to test and evaluate potential investment strategies in a simulated environment. The site allows users to work create, test, and delete multiple strategies, see performance metrics and charts, and automate trading strategies.
- S&P Capital IQ â€“ allows users to integrate information – including investment research, companies’ financials, credit ratings, global market data, alpha and risk models, and key developments – into business applications.
- StatPro – is a portfolio reporting and analytics service for companies and organizations. StatPro allows users to access and analyze various data, such as investments, portfolios, and stock market.
Besides creating Mobile Apps for their own customerâ€™s accounts, there are many other areas where APIs can provide value for financial companies.
Partnering â€“ Some Financial Services companies provide offerings that are sold by other companies. The ability to expose APIs to your partners that list your offerings, details, and prices allow partners to integrate your offerings into a consistent user interface to their / your clients. Providing APIs for this purpose allow you to make the offerings available through more channels.
Education, news feeds and company information that are included in your mobile offerings may be obtained via APIs from partners who provide this information. Companies round out their offerings providing more value to their customers with capabilities supplied by others â€“ life insurance, financial advisors, etc. that can be accessed via APIs. APIs to on-board these partners can allow for easier market expansion.
Small business on boarding via APIs provides investment and retirement solutions for employees. Providing easy on boarding is attractive to small businesses with limited IT staff. By providing the ability to set up investment and retirement accounts during the hiring process these companies can reduce manual efforts and provide better benefits to their employees at lower cost.
Public APIs â€“ API access to the list of offerings and prices could be made available to a comparison app. Also tools for financial or retirement planning purposes could be made available via public APIs either for a fee or free. Branch locators are also common.
Social â€“ Along with movie stars, politics, and cats, financial topics are near the top of social media interaction. Taking advantage of these interactions as places to add value, react to news, and market offerings can all be opportunities to engage with potential clients.
Devices â€“ As with other industries the situation for devices and APIs comes back to the evolving user interface. We know that the current interfaces – mobile and tablets were not the interfaces that were prevalent 10 years ago. And, we know that this will continue to change as we move to wearables and beyond. Having APIs allows the interface to change with much less disruption to the business systems.
Data â€“ Financial companies collect data on customers, market movements, companies, etc. Providing access to this data for the investing tools created inside the enterprise or making the data available externally for a fee are best enabled through the use of APIs.
In all cases when you provide APIs as I’ve described you should always put controls around them so that you know who uses them and how much. With that visibility, you can manage change, introduce new versions, and protect your back-end infrastructure with enforced rate limits.