An API is a set of programming instructions and standards for accessing and exchanging data. Basic interoperability programmes supporting information exchanges can be traced back to the 1960s. Yet the growth of APIs in the last decade has been nothing short of astronomical.
An API provides a frictionless system-to-system communication channel to facilitate automated sharing of data in accordance with a pre-agreed structure. It eases the access to data, the creation of new tools and reports and the exchange of information between platforms, as it is eliminating the time consuming process of multiple integration points in the clients internal applications.
In a nutshell
- API is code that is utilised by computer systems to communicate in ‘conversation mode’, asking questions and obtaining answers in real time.
- Aside from improving connectivity, APIs can help companies augment user experience and acquire insights into customer behaviour.
- APIs have the potential to significantly transform current market practices, and how our industry processes data and provides services.
Some examples of APIs
- New business and new revenue models are enabled thanks to API platforms and ecosystems. API platforms allow combining of different services from different providers from one single point of entry, in an API store, to facilitate engagement with final user.
Mutual benefits
- The bike sharing platform can reach customers beyond its existing client base
- Mapping apps can integrate services from third-parties and aggregate data from multiple parties
- Increase usage of the app
- Development of commercial agreement
In Securities Services industry
To date, API adoption has been relatively low in the securities services industry, with industry concerns around security and interoperability. However, the interest is rising and APIs are now being viewed as pivotal in delivering value in 3 key areas:
- Improve process efficiency / Reduce risk: drive cost reductions by improving or removing inefficient or manual processes
- Data on-demand: allowing clients to access the data they need when they need it
- Unlock next generation services: bespoke reporting with the ability to enrich the data with additional sources
“Aligning an approach to set standards, and pursuing networked rather than point-to-point solutions, the securities servicing industry stands to unlock significant collective value generated by greater use of APIs.”*
* Source : BCG SWIF TPI securities services white paper 2019.
Clients’ key priorities in relation to API development **
CUSTODY
- Trade status & settlement confirmation, statements of holdings & transactions, corporate actions announcement & status and processing advice, settlement & voluntary/choice corporate event instructions
OTHER POTENTIAL AREAS
- Agency lending, risk & portfolio analytics, regulatory & compliance
CASH
- Cash intraday, cash balances, reporting, balance enquiries, instruction follow-up, currency
FUND ADMINISTRATION
- NAV calculations and distribution, settlement instructions and status, NAV validation
** Source : Digital Client Sensor 2019
What are we doing?
- The API Programme at BNP Paribas Securities Services is built around three pillars
- Defining the API roadmap with our clients to ensure a strong focus on delivering relevant solutions to our clients
- Building the foundations of the APIs in terms of infrastructure and interoperability
- Enabling self-servicing by leveraging API to enhance client communication tools: Symphony, BP2S virtual agent and webportals, and data consistency across communication channels
- We have set up an extensive catalogue of Fund Administration APIs to help our Paris and Luxembourg clients facilitate their operations. NAV (Net Asset Value) API integration provides clients with a self-service solution : they can choose which API to call, the download frequency, modify their set up and send instructions (NAV Validation). APIs can provide clients with a frictionless alternative to CFT or FTP transfer. We are working on custody APIs and cash APIs and exploring how APIs can help with regulations such as SRD II and CSDR.
- Our approach is based on the standardisation of APIs to manage the traditional flows for the benefit of the full investment community. We are also collaborating actively with various stakeholders in the industry, such as SWIFT, to drive forward the use of ISO 20022 standard data models in the development of APIs
- We are concurrently working to leverage Google’s API Management System (Apigee) in order to further industrialise our approach.
- We are also using APIs to modernise IT architecture and facilitate “road to near-real time”
Our vision
APIs are at the core of our digital transformation and data strategy for BNP Paribas Securities Services. We want to leverage APIs and other client facing technologies to drive efficiency and the emergence of new services. APIs are viewed as key to streamlining our internal processes and enhancing our client’s experience by providing a channel that allows retrieval of the information when it’s wanted, in a format that is user friendly.
Easing access to data, creation of new tools, reports and information exchange between platforms, clients can make better informed business decisions. To do this BNP Paribas Securities Services has defined a multi-layered enterprise API strategy in collaboration with our clients and partners which ensures we are progressing towards an “API ready” ecosystem that addresses both internal and external considerations.
Regulation
Unlike the payment world where the PSD2 was instrumental in driving the adoption of APIs there is no such regulation in the security services industry which has been identified as a reason for slower adoption of API solutions. However, there is a potential opportunity to leverage APIs to address upcoming industry regulation such as SRD II and CSDR which BNP Paribas Securities Services is actively investigating.
Glossary
- API Application Programming Interface: Enables different systems to interact with each other programmatically.
Two types of APIs are REST APIs (web APIs) and native-library APIs. REST API stands for Representational State Transfer. Uses web protocols (HTTP) to make requests and provide responses in a language agnostic way, meaning that users can choose whatever programming language they want to make the calls. - API Gateway: A service that makes it easy for developers to create, publish, maintain, monitor, and secure APIs at any scale.
- Apigee: provides services for you to manage the whole lifecycle of your API. Specifically, Apigee lets you “manage API complexity and risk in a multi-and hybrid-cloud world by ensuring security, visibility, and performance across the entire API landscape.”
Supports the OpenAPI spec. - Microservices: are an architectural pattern where various loosely coupled services work together to form an application. Each of these services focus on one single purpose only, encapsulating all related logic and data.
Where to learn more
- https://www.cgi.com/sites/default/files/pdf/open-api-whitepaper.pdf
- https://www.swift.com/news-events/press-releases/swift-and-bcg-say-securities-industry-ripe-for-apis
Contacts
denis.farrell@bnpparibas.com
paud.okeeffe@bnpparibas.com
