APIs: from wheel reinvention to flywheel of innovation


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I’ve been thinking a lot about the power of ‘no-code’ solutions recently.

It’s always been a market I’ve thought was interesting, if a bit peripheral. But Ronak – our Product Manager who leads on a lot of our deeper, more technical areas – thrust it into centre stage with his recent hackathon.

Sometimes you need to see something in action before you really ‘get it’. Well, get it I now do. In under one working day, a few small teams of non-engineers were able to pull together some pretty impressive tools, including a client dashboard, a financial planning chatbot, and a pension platform – to name a few. (Ron’s showcased them in this fantastic blog here – go check it out.)

It showed just how ridiculously quickly you can knock up functioning prototypes that integrate with our APIs (or anyone else’s for that matter) – and how products and services that would’ve been at the cutting edge a decade ago can now be knocked together at pace with pretty much no developer input whatsoever.

And it got me thinking about the power of plug-and-play technology more generally, and what we’re doing here at Seccl.

The liberating impact of APIs

Anyone who’s heard me or anyone at Seccl talk will know that we’re passionate proponents of APIs.

From food to film, travel to retail, the ‘Application Programming Interface’ has transformed almost every area of our lives, by underpinning the rapid and cost-effective development of disruptive technology led businesses.

Their importance lies in the fact that they effectively unlock digital innovation. The more problems that can be solved through readily available APIs, the less time, energy and money needs to be spent solving them again. It creates a growing chain of efficiency gains, that frees up teams to focus on new and unexplored challenges.

We’re seeing it in banking at the moment. I was talking to someone recently who’s launching a bank specifically for the neurodiverse – helping them deal with impulse control around spending.

This sort of niche, hyper-customised banking experience would’ve been unthinkable even five years ago, but it’s now becoming a reality, thanks to our little friend the API.

Their founder explained to me how, by using Open Banking technology, they can focus on building an amazing UX targeted specifically at their well-defined audience – and just pull the required transaction and balance data directly from the existing banks underneath the surface.

The regulated activity of being a bank is incredibly challenging. So being able to build customer-specific technology on top of someone else’s regulated banking infrastructure is amazing – as the testimonials in this video made by the Open Banking Implementation Entity go to show. It supercharges innovation, leaving banks to become a sort of utility that sits below and powers technology companies that are building user-centric applications on top.

I’m not sure how the banks feel about that, but to me, it feels like customers will win big from the API economy that’s being driven by Open Banking. (It’s also something the too-often-berated UK regulator should get a lot of credit for, too).

So where does wealth management fit in?

I think it’s fair to say that wealth management is still a little way off realising the same level of disruption as we’ve seen in other sectors, even within financial services.

There are plenty of reasons for that, no doubt, but technology is a big one. While in other industries technology is shared openly and affordably, here in the retail wealth space it’s still highly siloed.

Even the word ‘platform’ has had its old and slightly parochial meaning preserved. In the modern economy, platforms have become synonymous with fast-growing online networks, but here they’re basically just dashboards for buying and selling and investments.

Elsewhere, platforms are built on connections: primarily of people, but also of technology, too. But in our world, they’re still kept apart – a function of closed technology stacks. And in my view, that’s a massive waste of a whole industry’s innovation potential.

It means each technology provider has to constantly reinvent the wheel, maintaining large and bloated code bases, in turn draining efficiency and diverting energy away from the development of genuinely new, market-advancing software.

It also makes for a technology infrastructure that’s less affordable and flexible for newer, nimbler entrants that are looking to emulate the forward-thinking value propositions of other sectors.

In other words, just as technology integration can create a flywheel of innovation, technology segregation can increasingly stifle it.

Looking to the future

The tide is turning, though, and we’re starting to see first-hand the sort of exciting future that’s within reach.

One of our clients, Penfold, is serving the self-employed with a pension experience designed around their specific needs and concerns; while another, Multiply, has built a financial advice journey for those early on in their saving and investing journey.

Both are built on the plug-and-play investing infrastructure that we offer through our API. By outsourcing the boring job of custody and trading, our clients can focus their energy on customer experience – developing amazing interfaces and neatly tailored journeys.

Because of this, I genuinely believe that we have the opportunity to change the industry we work in for the better, by making the world of investing and financial advice fairer, cheaper and more accessible. And we’ll do it by creating a standard infrastructure or ‘operating system’ for wealth management.

I genuinely believe that we have the opportunity to change our industry for the better. We’ll do it by creating a standard ‘operating system’ for wealth management.

The more we grow, the more value we hope to create – by connecting our clients together in what promises to be a vibrant and collaborative ecosystem of firms.

Fast forward ten years and I hope that the old (and somewhat false) divide between ‘traditional’ financial advice and ‘modern’ fintechs will have broken down. There’s no reason established firms and younger entrants can’t collaborate effectively (in many cases they already are) – while the proliferation of no-code tools will make it easier than ever to get viable, tech-first solutions to market built on top of our (or any other) API.

If we break down the traditional silos that keep our sector divided, and instead enable players new and old to connect more easily in an integration-friendly technology network, supported by modern cloud infrastructure and progressive architecture, then who knows what innovations could be unlocked…

If you’re interested in how APIs can change wealth management, are looking to build your own investment and advice proposition, or just find this sort of stuff interesting, I’d love to hear from you. Get in touch!