If you’re part of the IT staff at a large financial company, chances are you interact with APIs every day, whether you realize it or not. Whether you’re posting on social media, checking your weather app, using a GPS system or even recording notes with Mobile Assistant – you’re benefiting from API technology.
There are several ways your firm can harness APIs to streamline your services and create better client experiences from a tech standpoint – but before you dive in, it’s important to understand the basics of what APIs are, how they work and what advantages they can bring to your team.
The Basics of APIs
What are APIs?
API stands for “application programming interface.” Essentially, it’s a set of rules between software systems that allows them to communicate with one another – without giving them total access to internal workings at either end.
For example, Investopedia writes that a common API use in financial services is automated trading software:
“In the past, retail traders were forced to screen for opportunities in one application and separately place trades with their broker. Many retail brokers now provide APIs that enable traders to directly connect their screening software with the brokerage account to share real-time prices and place orders. Traders can even develop their own applications using programming languages like Python and execute trades using a broker’s API.”
APIs operate behind the scenes to make collaboration possible and enhance overall functionality. They’re primarily used by developers, offering standardization and security so they can safely and efficiently work between both internal and external systems.
Are APIs Secure?
When designed, implemented and maintained correctly, APIs can provide a very secure option for your firm.
API security should include:
- Authentication and authorization
- Data encryption
- Data validation
- Monitoring and logging
- Security keys and tokens
- Rate limiting (which protects against automated attacks by limiting the amount of API “calls” made at any given time)
Of course – as with any software system used by your firm – regular testing is key to ensuring your security processes are up to snuff.
What are Open vs. Closed APIs?
There are two basic kinds of APIs: Open and Closed.
Open APIs – sometimes called “public” – have easier access for you and developers within other organizations. They often come with documentation and guidelines, making it easier for external parties to integrate with the platform.
Closed APIs (“private”) differ in that they have more restricted access for developers outside your organization. They are intended for use within a specific organization or by selected partners, maintaining control over who can interact with the software.
APIs in Finance
What are Common Use Cases for APIs in Financial Technology?
One of the most-known use cases for APIs in financial services is automated trading systems, which provide real-time data to traders.
Additionally, APIs might be used by your CRM system to connect with other software. For example, Mobile Assistant employs open API-fueled integrations to provide availability of your client interaction data to be pulled directly into your favorite CRM.
Other common use cases for APIs include connecting accounting software (which can automate the transfer of financial data and reducing manual data entry) and credit scoring technology (to collect information on an individual via various sources).
As general understanding, knowledge and use of APIs continues to grow, we expect to see more streamlined processes for both advisors and their clients.
What are the Key Benefits (and Challenges) of APIs for Firms?
The benefits of APIs are plentiful, including:
- Higher efficiency: Your advisors can automate tasks (like entering data), thus saving time and money.
- Greater accuracy: APIs can be set with certain “protocols” to send and receive data. By embracing automation you’ll reduce the chance of human error .
- Better client experiences: APIs enable real-time data access, empowering your advisory team to provide clients with up-to-date information.
- A differentiating factor: Leveraging APIs allows you to adopt and integrate new technologies quickly, encouraging innovation within your organization.
Accurate and structured data is paramount for achieving optimal efficiency in utilizing API connections. For the communication bridge between different software systems to be effective, the data exchanged must adhere to a well-defined structure. Accurate data ensures that the information being transmitted is reliable and meaningful, preventing errors and inconsistencies that could compromise the functionality of connected applications. Moreover, structured data enables streamlined processing and interpretation by the receiving system, facilitating a more efficient workflow. When APIs are built upon accurate and structured data, developers can trust the integrity of the information exchanged, leading to smoother integration, improved system interoperability, and ultimately enhancing the overall performance and effectiveness of connected software applications.
How Exactly can APIs Enhance Data Integrity for Financial Firms?
Data security is of the utmost importance in financial services, especially as your advisors are constantly dealing with confidential client information.
Open APIs in particular can offer enhanced data security for your team through real-time data validation. This process uses certain set “protocols,” or the rules and formats for exchanging data, to ensure data is complete and formatted correctly.
APIs can also facilitate user and data security measures by eliminating the need to download spreadsheets and then reupload them – instead, the information is sent directly from system to system.
Lastly, APIs can be configured to provide audit trails for compliance purposes, effectively tracking each request, response and modification made through the API.
API Best Practices
How Should Firms Choose and Implement API Software?
It’s important to work closely with your advisors and compliance teams, as well as any potential third-party providers, to assess compatibility, security and scalability between the various applications part of your firm’s technology stack. Whether you’re implementing a custom API or a third-party API through existing technology partners, it’s critical that you make a timeline for the transition that includes:
- Thorough testing
- Staff training
- Ongoing monitoring
After implementation, be sure to stay aware of any updates that are available, and reassess frequently to ensure your new API technology is functioning well.
Should Firms Train their Staff on APIs?
Anyone who is using the new system should receive proper training on how to use it, which likely includes your IT team.
However, your advisors probably don’t need to know the intricacies of APIs – they’ll just need to be aware of any direct benefits for themselves and/or clients, as well as any changes the API might bring to their daily tasks.
How Can Advisory Firms Keep Data Safe within APIs?
It’s entirely possible for your firm to keep client data safe and secure while using APIs. The best course of action is to work only with trusted tech partners who understand your firm’s particular needs and risks, and then to implement regular monitoring thereafter.
How Does Mobile Assistant Use Open APIs – and How Do Our Users Benefit?
Mobile Assistant uses an open API framework, known as ConnectIt+ that merges our note-taking and transcription technology to your favorite fintech applications. With that API in place, your advisors can instantly and accurately share notes to CRMs like Redtail, Wealthbox and Salesforce.
Using Mobile Assistant is simple and easy – advisors hit record directly from their mobile device and then record notes following custom or pre-built templates. From there, the notes will be transcribed with over 99% accuracy by U.S.-based transcriptionists and delivered directly to your integration of choice.
Our template guided, human powered accuracy of client engagement interactions provides API delivered processes the source of truth that is essential to the success of processes and workflow.
With our suite of solutions and ConnectIt+ Open API technology, advisory firms are able to save upwards of 48 hours per year on administrative tasks, achieve 15% more detailed notes and even generate nearly $400k more in AUM!
APIs have quickly become a foundational part of modern technology, and with the right knowledge and plan in place, your firm can use APIs to streamline operations, enhance data integrity and stay ahead of the competition.
Learn More with Mobile Assistant
Want to bring standardization to your notes? Looking for more accuracy in your client records? Schedule a free trial of Mobile Assistant today to get started.
