What's an API?

The ‘application programming interface’ – or ‘API – serves in many ways as the backbone of our modern, tech-enabled society. APIs allow a simple and efficient way for different bits of software to interact, making it easier than ever to develop feature-rich user experiences.

In most areas of our life, we’ve come to expect a level of convenience, speed and personalisation that would have been unthinkable even a decade ago.

These seamless digital experiences are all made possible by ‘APIs’ – open-source technologies that make it easy for businesses to develop well-rounded experiences for their customers, without having to build everything themselves.

Take Uber, for example. Its app uses APIs to ‘talk’ to countless other bits of software every time you use it. Your driver’s progress will be shown via the Google Maps API. Your card will be processed using another company’s payment processing tool. And any notifications that you receive will be handled with the help of yet another firm’s messaging kit.

To put it in perspective, between Twitter, Google and Facebook there are over 30 billion API calls a day. That’s 30 billion times different pieces of software “talk” to each other by allowing actions and the sharing of information. Every single day.

If you’re new to APIs, check out this great summary from the New York Times.

Why are APIs relevant to advisers and wealth managers?

In the world of money management, the same integrated, joined up approach that we take for granted in our everyday life is nowhere to be seen. The infrastructure of investments is inefficient, inflexible and unwieldy – patched together by quick fixes and manual processes.

According to recent research, a typical firm will use as many as five standalone systems in the delivery of advice, planning and portfolio management, and two investment platforms.

85% of such firms believe that a lack of integrations between these systems is a major cause of inefficiency in their business, as they typically rekey client data across three or more of them (Origo & The Lang Cat, September 2019).

It’s slow, painful and riddled with errors. And it makes for a clunky, cookie cutter experience, where bespoke, customised offerings are hard to build – and even harder to flex to changing conditions or needs.

In short, Advisers are currently unserved with this kind of user experience-enhancing technology. But total open integration is exactly what financial advisers and their clients need. And it’s coming. 

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