APIs and the need for interoperability in financial platforms
This is a repost of an article I wrote for our HedgeCoVest Newsletter (sign up here)
Last November, HedgeCoVest demonstrated a preview of our platform at Finovate in New York. One of the best parts about attending industry conferences is meeting with your counterparts at other firms, brainstorming the challenges you face and bragging about the successes you’ve achieved.
Being a bit of a technology nut, I tracked down an engineer from the now publicly traded Yodlee (Nasdaq:YDLE) and spent an hour picking his brain. Yodlee has built a successful business interfacing with company data and providing it to their clients.
Here’s the problem: When a large enterprise, we’ll use Bank of America as an example, develops a platform, they will create enterprise level software and a nice website to display the data to their users. What they may not provide is a way for the users, or partners, to access their own data easily outside the confines of the Bank of America website.
I use Bank of America as an example, because they are Yodlee’s biggest client. Yodlee aggregates Bank of America’s data, and then sells it back to them for an estimated $25 million a year. True story.
With an API (Application Programmable Interface), developers do not have to reverse engineer archaic code & often-changing formats to retrieve the data that they need. They can simply code-up to the documented API and use standard technology (REST, SOAP, XMLRPC) to retrieve and consume the data.
What Yodlee has accomplished is due to their early understanding of the need for APIs and data aggregation. Because of their work in making data available, a cottage industry of data centric applications has emerged creating other successful products such as Mint (purchased by Intuit), Personal Capital, Balance Financial, Credit Karma and around 600 others.
The reason why I bring this up is to stress how much has changed over the last decade when it comes to building enterprise-level financial systems. You can no longer get away with building silos which keep data in, it’s imperative for future growth to create standard interfaces which provide for future interoperability.
At HedgeCoVest we have built all of our independent n-tier architecture to communicate with each other using standardized APIs from the ground up. This not only provides an easy way for us to interface with our technology and data partners, but also gives us the ability to develop, test and scale each of our mission-critical components independently of each other.
Technology trends are moving faster than we’ve ever seen. The current trends are developing mobile and wearable technology. We can only guess at what platforms we will be faced with in the next decade. We are sure that a focus on interoperability will pay off and we’ll be ready to utilize our current infrastructure to develop and provide our content and data on the next big platform.
Aaron Wormus
Chief Technology Officer
HedgeCoVest
