Improving functionality of an asset management software with APIs

Over the past decade, the financial industry has been undergoing massive changes from the regulatory and digital customer service sides, making financial institutions to rethink their existence and ways of providing services to customers. The times of old, hard-to-use software are coming to an end and the new standards of financial software are coming, turning complex software into flexible and easy-to-customize platforms.

But how to keep the software up-to-date in the rapidly changing environment and not to waste time on moving data from one platform to another manually? This is when so-called APIs are coming into play, helping to interconnect different platforms for a flawless information flow between them.

Looking a few years in the past, the range of functionalities of a financial software wasn’t as wide as nowadays. All the services were hardcoded and built according to the exact customer’s wishes, giving no possibility to change its functionality without changing the whole solution, which often would cost thousands and take months to develop. However, as the technologies kept developing and more of the different tools became available in the market, the need for “communication” between them has become clear. Soon, a solution to the problem was found – Application Programming Interfaces, also known as APIs.

In simple words, API is a web interface that allows software to “communicate” and share information with other tools as well as extract it from them. Let’s take a look at an example. You’re using an asset management platform where you keep track of your portfolios. When you decide to make a trade, you need to keep track on trade orders and executed trades in (at least) two different platforms and type in duplicate information manually. Imagine this process with various portfolios and thousands of trades. With the help of APIs, your asset management platform can connect to the trading platform and automatically send in trade orders as well as fetch trade execution information by sending a request to the trading platform. These requests can be sent with a click of a button or fully automated.

There are many types of APIs serving different functions. Within the financial industry, APIs work for example with prices and instrument data, payment data, reporting, and so forth. This brings us to another perk of using APIs: flexibility. With APIs, financial software can be “shaped” according to the current needs of a company and are easily added or changed later when there’s a need for a new kind of information or reporting type.