How APIs Are Reshaping The Future Financial Services
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The document discusses how APIs are fueling a financial technology (fintech) revolution. It outlines key economic, social, and technological factors driving this revolution, including the maturation of app development, adoption of cloud infrastructure, and availability of APIs. APIs are lowering costs and allowing newcomers to challenge traditional financial services incumbents. The future fintech ecosystem will be made up of API leaders in different categories that work together, lowering costs and improving customer experience. This interlocking API ecosystem will increasingly power new financial applications.
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How APIs Are Reshaping The Future Financial Services
- 1. #FINTECHREVOLUTION xignite How APIs Are Reshaping The Future Financial Services MoneyConf Belfast June 2015 Stephane Dubois - CEO & Founder - Xignite
- 2. xignite AGENDA XIGNITE BACKGROUND WHAT IS FUELING THE #FINTECHREVOLUTION? WHY APIS MATTER TO FINTECH AND FINSERV? WHAT WILL THE FINTECH API ECOSYSTEM LOOK LIKE?
- 4. AWS Since 2008 2006 Funded $16M Raised 40 Employees 1000+ Clients 1000+ APIs 30B Requests/Month 150+ Sources Cloud-Based Market Data APIs WHAT WE DO
- 5. MARKET DATA IS PAINFUL
- 6. WE MAKE MARKET DATA EASY Easiest To Use APIs Fastest Time To Market Equities Funds Bonds Indices Futures Options Forex Metals Derivatives More. Quotes Valuation Fundamentals Master Ticks & Bars Analytics Markets Real-Time Delayed End of Day Historical AWSNative Cloud 45 Services 1000+ APIs 99.99% Availability 200TB of Data 3Million Instruments 25Billion Requests/Mo 20ms Response* 100K Messages/sec North America Europe Middle East Asia Pacific Latin America Africa Cloud APIs HTTP/S - REST/SOAP - XML/JSON/CSV Cloud Files FTP/S – CSV/XML Cloud Widgets HTML - Hosted Cloud Streaming HTTP/S - WebSockets
- 7. WE INSPIRE THE BEST FINANCIAL TECHNOLOGY HORIZONTAL TECHNOLOGY FINANCIAL SERVICES DATA VENDORS OTHERS
- 8. xignite WHAT IS FUELING THE #FINTECHREVOLUTION?
- 9. xignite WHAT IS FUELING THE REVOLUTION? ECONOMICAL SOCIAL TECHNOLOGICAL
- 10. xignite ECONOMICAL FACTORS STOCKS ARE AT AN ALL-TIME HIGH NASDAQ BEAT 2000 RECORD IN APRIL 2015 500 1000 1500 2000 2500 4000 6000 8000 10000 12000 14000 16000 18000 20000 DOW JONES INDUSTRIAL AND S&P500 2000-2015
- 11. xignitexignite SOCIAL FACTORS EVERYTHING MOBILE AND AUTOMATED INSTANT GRATIFICATION MILLENIALS
- 12. xignite $5,000,000 $500,000 $50,000 $5,000 2000 2005 2009 2011 TECHNOLOGICAL FACTORS Maturing of App Development Scaling of the Public Cloud Coming of Age of Social Networking Dawn of APIs COST TO LAUNCH A STARTUP Source: Upfront Ventures
- 13. ANDY RACHLEFF CHAIRMAN & FOUNDER “WE WERE ENABLED BY 3 TECHNOLOGIES: ETFs, TRADING APIs, AND MARKET DATA APIs.” THE DAWN OF APIS
- 14. xignite TECHNOLOGICAL FACTORS APP DEVELOPMENT INFRASTRUCTURE CUSTOMER ACQUISITION CORE SERVICES Faster Cheaper
- 15. WHY APIS MATTER TO FINTECH AND FINSERV?
- 16. xignitexignite ASSUMPTIONS CHALLENGED MONEY = BANK? BANK = TRUST? ADVICE = PEOPLE? INTEGRATION = VALUE? APIs = TOYS?
- 17. xignitexignite APIS = TOYS? MARKET DATA COSTS FOR ROBO- ADVISOR: $50K MARKET DATA COSTS FOR LARGE BANK: $250M When the more powerful competitors you have had in 25 years come and challenge your core business by leveraging APIs, you must pause and try to understand what is wrong with the way you operate.
- 18. xignite FINSERV IS RIPE FOR API DISRUPTION Cost Structures are too high Adoption of Cloud is still restrained Capacity of innovation is too limited Regulation is too large a burden Meanwhile, newcomers are re-inventing the game by leveraging APIs
- 19. WHAT WILL THE FINTECH API ECOSYSTEM LOOK LIKE?
- 20. xignite THE FINTECH API ECOSYSTEM The new ecosystem is developing. Made of leaders in their respective categories. Interlocking ecosystem of interdependent APIs. Available to end-users or to providers themselves. Growth driven by lower costs, increased business agility and greater user/investor experience/service. This ecosystem will grow and increasingly power the next generation of financial applications.
- 21. THE NEXT-GENERATION APPLICATIONS THE INFRASTRUCTURE APIs THE DATA APIs THE ANALYTICS APIs THE WORKFLOW APIs FINTECH FINSERV AWS XIGNITE YODLEE ESTIMIZE SR LABS CHARTIQ TRADIER QUANTCONNECT PLANWISE QUANTOPIAN PSYCHSIGNAL TIPRANKS STOCKTWITS AUTOCHARTLIST VETR INSIGHT 360 GF PRODUCTS THE FINTECH API ECOSYSTEM NASDAQQUANDL MARKET PROPHIT
Editor's Notes
- Hello Everyone My name is Stephane Dubois. I am the CEO and founder of Xignite and I am going to spend the next 15 minutes to tell you why APIs are becoming the single most important factor that will revolution the financial services industry in the 10 years to come.
- First I will give you a bit of background on Xignite so that you know where we are coming from. They I will dig into the sources and drivers of the #fintechrevolution Then I will discuss how critical APIs are going to be the for financial services industry And finally I will try to pain how the world of the future may look like.
- So a bit of background on Xignite.
- We are the leader in Cloud-Based Market Data APIs. We have the largest and most popular platform distributing financial market data via APIs from the cloud to applications. Our platform has been running natively on AWS since 2008. We were initially funded in 2006 and we have raised $16M and are just in the process of closing our C round. We have 40 employees in San Mateo and Shanghai. We have more than 1000 clients in 55 countries using more 1000 APIs which they call 30 billions time a month to pull data from more than 150 sources.
- The problem we solve is simple: Financial market data is a very complex world littered with legacy technologies that make integrating data with applications expensive, slow and painful.
- We solve this problem by making market data easier than it has ever been. Our collection of APIs is the most comprehensive of its kind. We support multiple delivery methods making data easy to use and integrate including REST APIs, files, widgets and streaming. We support every asset class, every data type, and every market. Our Amazon based platform is the fastest and most reliable of its kind. Our main differentiation is the ease of use of our APIs. Our main value proposition is that we help our clients go to market quickly.
- But don’t take my word for it, and just look at our client list. The most innovative fintech companies like Wealthfront and Betterment. The best software companies like Netsuite and Tibco. The largest financial services companies like Wells Fargo and Schwab all use us to power their apps.
- Let’s now look at what is fueling the fintech revolution. Now we have in the front row of the phenomenon for a few years. We have been an arms dealer in the process. Selling Molotov coktails. We have had the privilege of powering some of the most innovative fintech companies from the early days. And so we have a bit of a unique perspective on what caused it.
- The causes are a combination of economical factors, social factors, and technological factors.
- The first factor is economical. The stock markets are an all time high. This is the Dow and S&P as of Friday’s close. This is not the cause. This is the catalyst of the revolution. Things did not start exploding until the market reached significant levels.
- The second factor is social Social in the sense of demographics. Society looks different now. We have raised a generation of kids who only have patience for the instant. If you cannot give them what they want right this minute, they will abandon you and your free trial. And they are lazy. If it’s not on their phone and not automated. Your are cooked. This is the voice of revolt of the revolution. Back in 1999 it did not happen because there was no revolt.
- The third set of factors is technological. The last 15 years have seen of set of major shift that have transformed the landscape of finance and technology. The first was the maturing of app development around open sources and the available of new development tools which dramatically cut costs of development down. Then the scaling of the public cloud with Amazon first (which has 10 times the active processing power of all other clouds combined) with cut deployment and operation costs dramatically. Then the coming of age of social networking which became a powerful customer acquisition tool which dramatically cut business ramp up and customer acquisitions costs. And finally, the Dawn of APIS, which enables the firm to focus on its core business by offloading all non-critical activities to the API ecosystem.
- Let’s focus on the last piece: The dawn of APIs. Andy Rachleff, the Chaiman and Founder of Fintech Poster Child Wealthfront says it best. Two of the most enabling part of his business were APIS: Market data APIs and Trading APIs. APIs enabled the #fintechrevolution and will continue to do so more and more violently as they get used more broadly.
- The impact is that by combining the benefits of those technologies, new companies—or large ones who step up to them—can achieve 100 times the velocity in 100 times less cost. The combination of all those factors caused the #fintechrevolution.
- So why are APIs so critical to finserv and fintech?
- The factors we discussed have caused many revolutions within the industry. We no longer think that banks are the only places you hold money? We no longer rust banks more than we trust apple or google. We are ready to get advice form machines, instead of people. We no longer think that horizontal integration add values. And we no longer thing that APIs are just toys used to build web sites and mobile app.
- As to APIs, it used to be the case that market data APIs for instance were considered Toys by large firms, unable to power their very special business. But they have enabled formidable competition who as instilled fear in the industry. So they should take notice.
- Financial Services are ripe for API disruption. Their cost structures—based on a huge proprietary stack—are to high. They have been too slow adopting the Cloud probably more interested in self preservation than true progress. As a result they can’t innovate. They can’t keep up with regulation. And meanwhile. Silicon Valley is eating their lunch.
- The next step with APIs is the API Ecosystem. What does that look like?
- First it is still a work in progress. Not fully formed. It is made of thought