The API Ecosystem Defined

APIs have become pervasive. We’ve moved from the days when people would joke that they knew how to spell “API” to APIs driving most of the apps, sites and tools we all use day in and day out. The ecosystems powered by APIs have grown by leaps and bounds, and with this growth, the types of APIs have shifted as providers emerge with specialities and unique value adds. Niche players have grown and API portals have expanded into various industry and functional categories. Many APIs and API providers fall into categories such as thin layer, transactional, or even APIs built based on multiple APIs.    

In looking at the ever-expanding API landscape, there are some basic categories and axises to evaluate APIs. More than ever, API infrastructure is ripe for investment and today’s marketplace is being dubbed the ‘rise of the API economy.’ One of the reasons is overlap; APIs partner together and thrive off each other to function at the highest, most efficient level and drive each other’s success. As we have written in the past, the value chain has morphed in many sectors from a horizontal supply chain to an ecosystem. And this “big bang” has been powered by and enabled by APIs.   

APIs at Work

Let’s use Uber as an example. In order for Uber to meet your needs as a customer it needs to allow you to pay ahead of time, have the vehicle locate you and ensure your driver knows how to get to your destination. To do this, it taps into a payment API (e.g. Stripe), leverages Google Maps to plot the route and then uses an alerting API like Twilio to make sure you know when your driver has arrived.

We can learn a lot from this example, as Uber’s success is driven by different APIs that use different key components to make a robust end user and driver experience. Uber perfectly showcases the use of thin layer APIs, read only APIs, and transaction APIs, as well as partners providing a variety of API management tools — monitoring, analytics, customer support, encryption, etc. All of them coexist and support each other.

API Landscape: Defined

Outlined below are four key categories we have identified in the API landscape. These all bring value and many market participants can and do leverage multiple providers from these different categories. FI’s are great examples of the the type of partner that taps into multiple categories. Many will work with an Apigee to provide a proxy layer, while also working with TradeIt to help open up their APIs to app developers.  

API Portals

Portals bridge providers and consumers and provide information about the API along all stages of its life cycle both on the front and backend. They not only offer tools that cater to developers, they allow providers to make their APIs public, providing consumer access to applications and credentials. And they’re on the rise. In fact, the number of APIs that Apigee’s customers ran on their platform climbed more than 160%, to nearly 36,000, and the traffic running through the Apigee cloud nearly doubled, to an average of 5.3 billion API calls per day at the end of last year.

Key players in this category include:

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Portal benefits:

  • Monitoring tools and dashboards
  • Best practices
  • Analytics
  • Scale
  • Developer portals, deep with resources and documentation

API Integrators

With a consultative approach, Integrators can help you build an API with market requirements and specs. Integrators partner with you to easily bring the functional tech that is the API to your platform. These companies can staff a team for you to work through each aspect of your project and build, distilling services down to the basics to allow for easy building blocks.

Key Integrators: 

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Integrator benefits:

  • Consultative approach
  • Spec and build APIs
  • Bring the knowledge of best practices to the table

Screenscrapers

Screenscrapers offer a wide breadth of coverage among FIs. They go deep into the small and community banks for some of the widest coverage available. This space is active…and lucrative. (See Plaid’s recent acquisition of Quovo for $200M)

Key API Players driven by Screenscraping:

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Screenscraper benefits:

  • No oAuth security speed bump
  • Single turnkey API
  • Screen-scraped access to multiple FIs
  • Read only data vs. transactional

API Ecosystems

As platforms have emerged, ecosystems have become the dominant force vs. a traditional linear supply chain. APIs have helped to move this evolution along further. The Uber example above is a byproduct of the growth and development of these API ecosystems. Both TradeIt and Stripe offer the technology that provides the connective tissue of an ecosystem in order to bring together partners, but they do this by providing the transactional service required for partner A and partner B (and perhaps C and D) to work together — easily and with streamlined integration. API ecosystems also provide developer tools like an API portal does, but it’s not just a point of connection for data or content; it’s by bringing partners together via a transactional service.

Ecosystem benefits:

  • Analytics
  • Distribution
  • Multiple FIs
  • Security vs. oAuth speed bumps and tokens
  • Visibility
  • Transactional, not a thin API layer

Another Lens

Gartner’s Magic quadrant provides another lens for evaluating the API landscape. By using quadrants for challengers, leaders, visionaries and niche players it compares the completeness of vision vs. an ability to execute.

As the ecosystem for APIs continues to grow with new players and providers — and no matter which type of API technology we’re talking about — there’s no denying that investing in API infrastructure, especially in finance, is growing and necessary. Understanding the unique selling proposition and value add of each is crucial when navigating potential partners. Companies that see the value in creating these shared ecosystems are setting themselves up for mutually beneficial partnerships and of course, financial returns.

Take Amazon, for example. They have a policy of creating open APIs. Their 33 open APIs have been combined with other APIs to create over 300 API mashups. Walmart, by contrast, has only one API that has yielded only one mashup. And while Walmart still beats Amazon in overall sales, it lags behind Amazon with less than one-sixth the online sales. “While there are a variety of explanations for these results, the differences in APIs strategy provide valuable clues contrasting approaches to innovation and customer engagement.”

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First-mover Advantages Matter

The lesson we take from this research is significant. Do you have an API portal? Do you have readily available APIs for developers? Are you requiring APIs from your vendors? We encourage you to think about how APIs working together can enhance the end user experience and bring value to individuals where they are and through the channels they’re engaged with. At TradeIt, we believe building solutions and forging partnerships with this in mind, helps drive value for everyone in the ecosystem.  

 

TradeIt Account Opening is LIVE

TradeIt Launches Direct Mobile Account Opening for Major Brokers

Our first of its kind, application tool leverages an ID scan to eliminate user abandonment and reduce client acquisition costs…. And users can complete their account opening applications in under 2 minutes!  

We are excited to announce that our new Account Opening SDK is up and running – this new iOS SDK delivers a seamless, fully native experience that will allow users to open new accounts without leaving an app. We have simplified the account opening process by greatly reducing the amount of information the customer must enter manually. Using the iPhone camera, our SDK can scan a driver’s license and pre-populate many of the fields required to open an account. Additionally, all addresses are pre-filled within a few taps using our integration with Google Maps. (Shameless plug… check out a video of one of our first partner’s integration!)

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As we wrote last Spring, financial institutions spend the lion-share of their marketing dollars on account acquisition.  Significant dollars are spent for acquisition and yet, abandonment rates are high and continue to be. “According to Forrester, 54% of people filling out financial application forms abandon prior to completion, and on top of this, a recent study by SaleCycle saw financial abandonments reach an average of 79.3%,” quoted Nathan Richardson, CEO of TradeIt. “This is a huge, wasted opportunity considering that customers who attempt to complete an application are expressing a genuine interest in your products and services. In other words, if your process is quick and easy, they will complete their sign up quickly and easily. If it’s not, then you’ve lost a customer and revenue.”

In a previous post, TradeIt conducted time trials to open new brokerage accounts on mobile, only to see application processes take anywhere from 6 minutes to a whooping 12 minutes.  The lengthy process we experienced, coupled with a mobile responsive web experience highlighted to us exactly why drop-off rates are so high. Applying the best practices of mobile UX, we are reducing the user application time by 80%, resulting in more completed applications and reduced client acquisition costs, and a new channel for revenue for our partners.

With only two or three lines of code, partners can simply link into the iOS SDK from an ad or a new menu option. Or add TradeIt’s Broker Center, a pre-build, mobile optimized comparison tool, populated with offers.  Each of these options offers a partner’s audience a variety of compelling offers for brokerage accounts sourced by TradeIt or populated with partners’ own advertisers’ offers. For brokers, we will customize the experience to reflect your specific KYC requirements.  

“We are very excited to be one of the first launch partners of this brand new acquisition tool that no one else is doing,”  says Max Grigoryev, Product Manager at Just2Trade.  “This pioneering solution solves for the 90% abandonment rate seen through traditional account open workflows, and complements the other innovative account opening tools we’ve been developing like our Facebook bot.“

With a simplified flow and best practices for mobile UX in place, we are pushing towards easy and fast, a surefire way to win the acquisition game in the long run.  

For more information on TradeIt’s partnerships, or to create an account, please visit https://www.trade.it/.

 

The Evolution of Value Chain and Porter’s 5 Forces

Millions of eager MBAs populate the executive suites and boardrooms of top companies around the globe, and the vast majority were indoctrinated in strategy classes with Michael Porter’s Five Forces and value chain analysis. These value chains have served corporations as they examine vertical integrations, mergers & acquisitions and the strategic fit of business lines since the Industrial Revolution.

Screen Shot 2018-04-11 at 8.59.39 AM.pngExample: Linear value-chain which offers one direction for business flow only.

This traditional model is no longer useful or practical and the technology revolution of the last 30 years is forcing companies to re-evaluate linear value chain analysis in favor of a “constellation” approach to building businesses.
Untitled123.pngExample: Constellation approach using TradeIt to showcase the potential of a living breathing value ecosystem that flows to all entities.

As we see in the TradeIt model, the relationship between buyers and suppliers now features a “big bang” view of the ecosystem—partners that support each other and need each other to grow, branching off in every direction.

So why is this beneficial?

The TradeIt model would not be possible without APIs. APIs allow companies to securely work with each other through technical channels in order to focus, build and scale without the same linear approach as historically conceived. But we’re getting ahead of ourselves. First, a refresher…

Five Forces

First described by Michael Porter in his classic 1979 Harvard Business Review article, Porter’s insights started a revolution in the strategy field. A Five Forces analysis can help companies assess industry attractiveness, how trends will affect industry competition, which industries a company should compete in—and how companies can position themselves for success.

Essentially Porter built a framework for understanding competitive forces in an industry and how those drive economic value among the industry players. Today we’re still trying to understand how to drive value, but what’s clear is that it’s no longer through a linear value chain. Instead, we drive value through a platform model where you have contributors owning different pieces, therefore making the sum of the parts greater.

Evolution of the Value Chain

“The value chain describes the full range of activities that firms and workers do to bring a product from its conception to its end use and beyond. This includes activities such as design, production, marketing, distribution and support to the final consumer.” Nowhere does it say the chain has to be linear.

Enter the API

APIs are revolutionizing traditional business alliances and partnerships through scalability, flexibility, and fluidity.1

When companies share APIs, the world expands. Uber relies on Braintree for payments, Google integrates Uber into its map feature, and the list of interdependent API-driven technology businesses becomes more and more apparent.

Similar to the relationships between Uber, Google and Braintree—which are all focused on delivering a service to an end user—in finance, Cross River Bank allows companies like Affirm, TransferWise, and others to be free to build client-facing tools and services without having to do the core banking functions that often slow large incumbents. The ‘big bang’ approach to an ecosystem allows innovative service providers to enter a space with one “killer app” or a new tactic to solve a pain point.

Power in Partnerships

Large incumbents, where all the technology and related services are all under one roof, may not be able to move as quickly due to silos, legacy systems and/or risk and compliance requirements. The keys to this new value chain approach and the ecosystem are the partnerships and the ability to work together in new and innovative ways to meet the end user’s needs.

The visual below shows how TradeIt acts as a hub between supply and demand (brokers vs publishers) and how other partners come into the equation with ancillary and related services.

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This type of model not only offers much more flexibility for other players, it also opens the door for additional revenue streams and increased profitability. By creating value at every touchpoint, from broker to publisher and supplier to distributor, the ecosystem will only continue to expand and grow…to the benefit of everyone.   


1Bala Iyer and Mohan Subramaniam, “Corporate Alliances Matter Less Thanks to APIs,” Harvard Business Review, June 8, 2015.

TradeIt’s Bot is Live on Facebook Messenger

We are excited to announce the launch of the TradeIt Bot, live on Facebook Messenger. The new bot allows investors to securely link to their brokerage accounts to view account balances, receive alerts, such as end of day market roundups on the performance of their positions. The bot also provides pricing data for the equities and crypto markets. Giving investors greater control and sense of security, TradeIt securely links investors to their accounts via brokers’ APIs; we do not screen scrape the data.

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“Our partners have reported increased engagement when leveraging TradeIt. When an end user simply sets up a watchlist, retention increases 5x over a 3 or 6-month timeframe.  With a portfolio linked via TradeIt’s technology, partners reported 10x and 12x increases in retention for 3 and 6-month timeframes, respectively,” Nathan Richardson, CEO, and co-founder, noted.  “We expect with the large volume of users on Facebook’s Messenger Bot and high retention numbers reported among our partners, TradeIt can support investors with real-time portfolio data and account balances.”  

In November 2017, Facebook reported continued growth and adoption for the Messenger app by hitting 103.5 million MAU in USA.  Global adoption was 1.3 billion MAU globally.  As we explored in our summer series on FANGs, Facebook laid out plans to embed business services into the Messenger platform, in line with WeChat’s strategy.  Ordering an uber, booking a reservation, shopping for new clothes, and with TradeIt’s Messenger Bot, now, monitoring your investment platform and track market prices for equities and crypto.  

With Messenger’s numbers increasing and Facebook’s stated strategy to follow cues from WeChat, looking to Tencent is likely a sign of what’s coming to the US markets.  Tencent, WeChat’s parent company, has received a license that allows it to sell mutual funds on WeChat and give the popular messaging app’s 980 million users.  Coupling the mutual fund license with the licenses to operate mobile payments, insurance and micro-financing on the WeChat messenger platform, the market is seeing… and validating the need… new avenues for individuals to manage their wealth and pursue the business of their lives.  

The TradeIt Bot for Facebook Messenger can be integrated for a single broker on their Facebook page, giving our brokerage partners an easy way to enter the Messenger space and provide access to their investors where their investors are active and engaged.  Also if you head over to the TradeIt homepage you can see the bot experience embedded on the page.  Over time, we expect the bot to support additional parts of the customer journey, specifically account opening.  For more information, please contact us at support@trade.it or check out the bot here.

TradeIt’s Developer Portal is Live, Supporting Ecosystem Expansion

In TradeIt’s ongoing efforts to support FinTechs, financial institutions and app developers, we are excited to launch our Developer Portal, available at developers.trade.it. The new site is designed for our partners looking to access our SDK or API and to begin integrating our platform into their apps for end users.  

Once registered for the site, a developer will be issued a key to our staging environment. For developers who already have a key to the TradeIt API, they can link their key to an account and leverage the portal for information. The site includes a hub for documentation and integration guides, including dummy accounts for deeper testing of one’s integration.  Users will be able to request production access as they prepare for deployment and reference broker details.  

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Future upgrades and additional functionality to the Developer Portal will include broker profiles, deployment checklist to help developer prep for production release, analytics, community threads, and support.  We believe the new developer portal is one more tool to help expand the ecosystem and help support our partners.

To sign up for the developer portal, click here.  For additional questions, comments or feature requests, please contact us at support@trade.it.

Product Announcement: New SDK Screens for Transactions

Expanding investors’ visibility to their brokerage accounts

We’re excited to announce that we’ve launched new transactions screens to our SDK to support our core products, PortfolioView and TradingTicket.  These new screens provide investors with great visibility into their accounts.   

Users will now be able to view their transactions… trades, deposits, dividends, interest, etc.  The new screens for transactions will be accessible via PortfolioView, where the end user can select from the activity menu in the upper right corner.  These new screens can be stand-alone screens as well if you have built your own portfolio tools, similar to how partners can integrate the order history screens.

We’re thrilled to extend this new feature and hope your app users will benefit from it!

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For more information about the new screens, check out the documentation here.

Email support@trade.it for more details or with any questions.  

Product Announcement: New SDK Screens for Orders

Greater visibility for investors looking to manage their brokerage accounts

We’re excited to announce that we’ve expanded our core products, PortfolioView and TradingTicket, to now include order details as part of the SDK screens.  

End users will now have great visibility into the details of their brokerage accounts and their trades. The new screens provide an easy view of all orders an investor has active – open and pending orders, partially filled orders and orders filled that day. A simple swipe down will refresh the screen and with an easy swipe to the left, users can cancel an open order. The new screens can be accessed from the PortfolioView or TradingTicket.

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For more information about the new screens, check out the documentation here.

Email support@trade.it for more details or with any questions.