Want to know the best way to offer differentiated wealth solutions and use financial data and technology?
Retire the tech-stack mentality.
The financial services industry has been long plagued by a legacy infrastructure that holds back innovation. There are two main reasons for this. First, much of FinTech is run off data spread out across countless sources and several key custodians and back office providers. To access that data, which is the bloodline of most wealth technology, companies have been forced to create a tangled web of custom infrastructure to support their preferred data connections and unique file structures of each individual custodian.
Why is that important? Creation of separate architecture means financial innovators are locked into limitations. For one thing, they run the risk that the data lacks integrity, since they have to manually reconcile the data from multiple feeds. Then, there’s the cost of having to develop those separate feeds to even ingest the data, stealing development time. Lastly, because every custodian needs a separate feed, it makes consolidating that data in a useful application difficult. After all, you’re building new products using outdated processing of data files and FTP sites that just don’t scale well for modern needs.
Up to now, the work-arounds to this problem have been two-fold. Firms can pay heavily for an all-in-one solution from a large company that has based its own applications on legacy infrastructure. This provides access to the data, but financial advisors, asset managers or FinTechs have to use what’s provided. There’s no room to create custom solutions specifically for their unique use cases.
The second work around with legacy infrastructure has been to cobble together smaller, off-the-shelf solutions, creating the tech stack many firms already have. The market has a plentiful selection of FinTech options, but they have to be stacked together. Think of it as a game of Jenga: Implementation is slow for each and every block, and successful integration is close to impossible when the stack becomes unstable. Similarly, there are just too many different programs, with too many separate feeds.
The Emergence of WealthTech-as-a-Service Adds Flexibility and Supports Growth
The cloud changes the equation. The cloud offers the chance to fix the legacy issues with a single, open API that offers new, turnkey architecture which makes capturing data and putting it to use easier than ever before. In turn, that empowers advisors, asset managers, and FinTechs to create novel investment-driven solutions, expand or enhance existing functionality, and bring innovative ideas to life, faster – all on their own terms and without relying on legacy systems.
BridgeFT’s WealthTech API is the first single, open API to bring these solutions to the marketplace. WealthTech API represents a paradigm shift in how wealth management companies can think about their tech. Rather than creating a Frankenstein-like stack or submit to the cookie-cutter offerings of large, legacy providers, WealthTech API replaces the tech-stack mentality with the first WealthTech-as-a-Service offering, providing more cost-effective access to trade-ready, multi-custodial data and delivering a range of solutions to implement this same data in a variety of applications. Instead of a tech stack, those tapping WealthTech API have a whole new way of operating that allows them to plug in several applications that otherwise would have taken time, cost, and resources to implement.
While other industries have embraced the potential of the cloud, the financial industry has been slow to adopt more cloud-based solutions for many reasons. Mostly, many large financial technology providers based their systems on the legacy infrastructure. As a result, that has created a disincentive to modernize their own offerings.
Moving at the Speed of Innovation
Clients, of course, suffer. Advisors, asset management companies, and other financial institutions are unable to grow or scale because most of their systems are stacked together on an aging infrastructure. New solutions need to be rolled out at the pace of the outdated architecture rather than at the speed of innovation. Cloud-based API infrastructure allows companies to not only rethink their technology but also how they scale to provide better levels of service to their clients.
WealthTech API and other cloud-based solutions provide an agility not found in other technology partners. Implementing the WealthTech API platform once allows for:
- Delivery of trade-ready, accurate data from multiple custodians through a single API.
- Reduced the time spent on manual data reconciliation.
- Data enrichment to deliver powerful performance calculations, insight, and analytics across all accounts, no matter the source.
- Streamlined channels to support investment product or strategy distribution.
- The elimination of the time and resources spent on in-house custodial data aggregation.
- Access to a BridgeFT development team that not only speeds implementation but contributes to the creation of novel applications with both open-source documentation and human expertise.
Agility equals power. Firms can buy as many off-the-shelf solutions as they want, but that doesn’t mean that they are working in harmony to deliver the best client outcomes. Cloud-based solutions allow firms to rethink the entire concept of a stack and instead concentrate on what’s important: activating a range of applications that work together to meet clients’ goals and build wealth. The companies that retire their tech-stack mentality and harvest the power of the cloud are in the best position to differentiate and compete more effectively.