Benefits of APIs in wealth management

Benefits of APIs in wealth management

The increased availability of digital wealth management solutions offers financial services providers immense gains in productivity and efficiency. However, compatibility between systems remains a significant issue. This is where application programming interfaces (API) come in handy, allowing bridges to be built between platforms from different providers.

Chartered banks and major wealth management firms depend on legacy systems for their operations. These systems sometimes struggle to keep pace with the advancement and development of the latest tools. While it’s important to keep abreast of trends so you can keep providing services that meet investors’ needs, breaking away from a central system can be risky business.

The growing demand for system interconnectivity has driven the widespread adoption of APIs. APIs have experienced a surge in usage across various sectors, facilitating the smooth integration of services through standardized communication. They enable independent solutions to interact freely, sharing data and advancing the entire system.

For instance, a financial service can maintain its legacy back office while seamlessly integrating it with a modern portfolio management system (PMS). This interoperability empowers businesses to evolve without discarding existing infrastructure, ensuring flexibility and innovation in an ever-evolving technological landscape.

“Wealth management firms can benefit greatly from API integrated ecosystems by increasing efficiency in the back office, middle office, and front office. Having integrated systems reduces the need to transfer data manually, eliminates the risk of human error, and increases the speed and the quality of the services offered by advisors” said Raghid Nami, product leader in charge of APIs and integration tools at Croesus.

Asset management teams have much to gain

“As the investment industry becomes more competitive and technologically advanced, the integration of API systems will likely become a standard practice,” said Nami.

APIs empower portfolio management firms to seamlessly merge their investment decision tools with trading platforms, granting swift market insight access and enhancing investment quality. This integration minimizes the delay between decision-making and trade execution.

Additionally, it offers the advantage of leveraging potent rebalancing tools through API calls, eliminating the need for extensive internal architecture adjustments. This efficiency and flexibility drive more effective asset management strategies.

Advanced data management tools

Primarily, the most fundamental yet indispensable role of an API is to offer real-time data access across platforms. Human error, financial, and efficiency costs of manual data entry are issues of the past with API integration.

In the realm of business operations, the progression of data management has been hindered due to challenges and redundancies in areas such as data sourcing and distribution. The implementation of APIs holds the potential to significantly enhance these dimensions.

Moreover, such an implementation can provide a significant return on investment. Also, the appropriate API can simplify data aggregation for higher-level uses. From creating complex data arrays for accounting to aggregating customer data for quarterly reports, creating advanced data structures is more accessible than ever with the correct tools.

User interfaces

Another compelling aspect of leveraging APIs is the ability to create richer user interfaces. Since APIs allow diverse systems to interact, building a more user-friendly interface that combines data from a range of sources is possible.

A software-as-a-service (SaaS) cloud-based system can also easily be connected to a back-office platform using APIs. This integration simplifies the incorporation of a cloud provider’s solution into an established ecosystem, fostering enhanced adaptability.

Enabling advanced data protection

APIs have revolutionized the way organizations handle data integrations, providing a structured and consistent approach to data access. They offer controlled endpoints through which specific actions can be executed, ensuring that only permitted data is accessed or modified.

“Modern API design further reinforces this by incorporating robust authentication and authorization mechanisms. When implemented successfully, these designs mitigate risks by trying to ensure that only verified users or systems can interact with the API within their granted permissions,” said Nami.

One of the standout features of APIs is their emphasis on data security during transmission. They predominantly rely on secure protocols to safeguard data in transit, ensuring it remains encrypted and shielded from potential eavesdroppers.

Furthermore, APIs can be configured to restrict the number of requests from a user or IP address within a given timeframe. This prevents threats such as denial-of-service attacks and unauthorized data scraping.

In an age where data transparency, traceability, and accountability are paramount, APIs stand out for their capability to track data access. They can be tailored to log detailed records of data interactions. Such logs are invaluable, providing essential audit trails and assisting organizations in pinpointing and investigating any suspicious activities.

Scalable to enhance business intelligence

An essential quality of APIs is their scalability. Their incredible modularity is perfect for firms who plan to expand within their system mosaic. Its incredible customizability allows businesses to construct a unique digital environment to meet all needs.

There’s no need for large-scale projects when you’re just starting out in FinTech. API-integrated systems can scale seamlessly, fostering adaptable solution ecosystems on-demand. This flexibility enables gradual adjustments to cater to the evolving needs of your company and clients, without the need for substantial initial investment.

API meaning

Application Programming Interfaces (APIs) allow different tech solutions to seamlessly and securely communicate with each other. In wealth management, this means that a financial service can integrate advanced technology without the need to discard its legacy systems.

For example, a wealth manager may use an automated rebalancing solution to oversee their clients’ portfolios. The software retrieves data from the manager’s data management platform using APIs, ensuring data access through standardized and secure protocols.

Types of APIs

Various types of APIs exist, each offering its own unique advantages and disadvantages.


Representational State Transfer (REST or RESTful) signifies a web API architectural style known for its ability to deliver improved scalability, speed, and reliability. RESTful APIs are top-of-the-line products that offer many unique benefits that other APIs do not. A significant advantage is that they rarely, if ever, require additional software to operate optimally, which in turn means that they can be customized to fit the user’s specific need with relatively little effort.

Currently, the industry relies mainly on REST APIs rather than old-school Simple Object Access Protocol (SOAP) APIs. Other popular protocols include gRPC, JSON-RPC, GraphQL, and Apache Thrift APIs.

How open are APIs?

Closed APIs, also called private or internal APIs, are usually best suited for back-office use (but not only) and are not accessible to the public, which makes them a safer choice for sensitive data.

Open APIs, also called public APIs, are publicly available platforms that third parties can use in response to diverse needs. Open APIs also allow for Open Banking in which user data is securely shared between financial institutions that have been authorized by the customer. Open APIs ensure uniform OAuth integrations, which in turn offer a more secure and speedier connection method without the need for sharing login details. Consequently, end users gain better visibility and access to a wider range of options. This paves the way for Open Banking.

In between, there are several levels of API openness in which APIs can be used as intermediary platforms between companies and their clients.


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