APIs Move Beyond Payments to the Securities Servicing Industry

Ahead of Sibos 2019—taking place in London from 23 to 26 September—we talk to Juliette Kennel, head of securities and FX at Swift, about how APIs can be deployed effectively in the securities industry.

WatersTechnology: What are APIs and why are they useful?

Juliette Kennel: Application programming interfaces, or APIs for short, are emerging as a leading force to improve productivity in financial services. In sectors from transport to hospitality, we have witnessed the transformation of whole industries with API technology, and it is now proving sufficiently secure and mature for further use in the financial services industry. The technology is creating new opportunities that will deliver financial services more efficiently and thereby satisfy evolving customer expectations. Financial institutions, payment service providers, and fintechs are using APIs to expose business data, functionality, and services to their customers in exciting and more effective ways.

WT: Can this functionality be translated to securities too?

Kennel: Of course. API technology—because of its maturity and myriad uses—has the potential to be a powerful enabler of innovation in the post-trade industry, just as it has been in payments and other areas of banking. In fact, it is well suited to the securities servicing industry, because it has the potential to improve the  way we exchange data, particularly in areas where there is still room to improve operational efficiency, or where there is a real need to get information in real-time. 

We have identified four areas in particular in which APIs can benefit the industry. Firstly, cost. The efficiency and savings made possible through automated data exchange will be significant.

Secondly, they will allow for real-time visibility of information such as settlement status and intraday risk. This way, clients can get the information they need throughout the day as they need it.

Thirdly, APIs will allow for the value-added services, such as enriched data and analytics, that customers are naturally demanding.

Finally, the adoption of APIs will create and make available operational benchmarks to help institutions compare their performance with their peers.

WT: Is the appetite there for it to happen?

Kennel: Adoption of APIs in the securities servicing industry has been relatively slower than in other areas of financial services in part because it has lacked a regulatory catalyst, such as the EU’s payments directive (PSD2), which has driven the use of API technology in the payments industry.

However, yes, there is growing commercial interest is driving more pilot schemes and new use cases, and we are working on this now with some key customers.

We expect more progress as a number of pilot schemes and initial commercial offerings begin to fulfil expectations. By mutualizing foundational API infrastructure, aligning a standards approach, and pursuing networked rather than point-to-point solutions, the securities servicing industry stands poised to unlock significant collective value generated by greater use of APIs.

WT: What’s happening at Sibos?

Kennel: This year’s Sibos will feature a host of sessions and speakers looking at how APIs are transforming financial services, not least in the securities services industry. On Monday, we will host a session titled, APIs: The connective tissue enabling platforms and creating thriving ecosystems, while on Wednesday we have a session on APIs: Practical use cases in securities services.

More from Swift: Hosted in London for the first time, Sibos will welcome thousands of delegates and hundreds of speakers to what is sure to be our best conference yet. Take a look at www.sibos.com for more details about the exciting program we have lined up and info on how to register.