APIs help technology models innovate, scale, and optimize.
Business, organizations and digital ecosystems
Linedata’s clients manage trillions of dollars. Our clients have built businesses that thrive on providing value to their customers through effective organizations and efficient solutions. This effectiveness requires orchestrating multiple applications typically home grown and/or from third party vendors like Linedata. Collectively, these technology solutions form the digital ecosystem of the organization. End users access this digital ecosystem to execute daily business functions including investment decisions, trade execution and data analysis. It is therefore not a coincidence that success of these businesses directly correlates to the effectiveness of the digital ecosystem.
Am I choosing the right vendor and application for my organization?
Applications within the ecosystem consume and transform data that is subsequently consumed by other applications. It is imperative that applications participating in the ecosystem have 'friendly' interfaces to consume and share data with other applications in the ecosystem. Enter APIs (Application Programming Interface). At a high level, APIs are digital interfaces offering service to other pieces of software.
When choosing an application for your digital ecosystem, it is important that the application of interest exposes 'open API'. After all, the digital ecosystem is likely composed of applications built using different programming languages and technologies. A good API should therefore communicate in multiple 'standard languages' or, in other words, provide market standard or open interfaces. For example, Linedata products and solutions provides resilient APIs with multiple interfaces, including support for standard interfaces like JSON, GraphQL and REST. These interfaces enable open and unambiguous communication between applications.
Can APIs help businesses differentiate?
How can businesses differentiate from each other if most use a similar set of applications? Many factors including business philosophy, discipline, and organizational culture, make up the keys for differentiation and success. These make up the secret sauce translating into workflows and unique actions that get ‘coded’ within the ecosystem. The applications require the APIs (and extensible points) to accommodate and participate in creating the secret sauce. For instance, many of our customers have developed proprietary algorithms for generating portfolio trades. Linedata’s solutions provide extensibility points via APIs that allow customers to utilize their proprietary algorithms as part of the system. Applications that do not have APIs enabling such extensions restrict the business and fail to fully support competitive differentiation.
The ‘great resignation’ and shifting asset classes trigger new thinking.
Digitization and application platforms
Many successful businesses, especially financial services, have built their technology ecosystem over decades. Historically, upgrading or replacing an application within the ecosystem is expensive and could take months or even years. Applications with restrictive APIs contribute to making this process time consuming and expensive. This is mainly because legacy application APIs are tightly coupled to the underlying application, and upgrading or replacing the application results in breaking the API and custom extensions.
However, the wave of digitization and the pace at which technologies are evolving and being adopted means the ecosystems must evolve rapidly and regularly. Modern business cycles are not permitted to take years to add value to their customers. Technology leaders have no choice but to ensure the applications and API ecosystem evolves continuously to reduce time-to-market. To achieve this, technology vendors must ensure applications are built and deployed in modular fashion. Modularity means delivering products and services without increasing complexity, since modules, like building blocks, can be configured quickly and in different ways. And importantly, applications must expose standardized APIs like JSON, REST that are easy to integrate and fit well with the modern ecosystems optimized for cloud and microservices. Partnering with technology vendors using standardized APIs to decouple the API from the software component will ensure asset managers create more nimble and efficient operating models.
The API Gateway and standard APIs are critical components of today’s healthy technology ecosystem.
About the author, Vikram Aryan
Vikram Aryan is the Head of Technology, Asset Management.
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