Tackling data smog with APIs

by Debadrita Bhattacharya, Director of Digital Channels

There weren’t any marketing experts in the room when they named application programming interfaces (APIs). Looking past their utilitarian label, this remarkably efficient software tool has made it easier for computer programs to talk to each other and for everyday users to access information from sophisticated data sources.

A new generation of APIs is enabling users to extract and organize rich data sources through their own familiar software—even if they have no previous experience with APIs. These attributes make APIs particularly attractive to a data-rich industry like asset management, insurance and pensions.

What’s an API?

APIs were first developed more than a half-century ago when early software developers saw the advantages of creating routines that would make it easier for certain programs or platforms to talk to each other and share information. The development of APIs gained significant momentum when e-commerce giants and social media companies started launching their own API product suites to make the delivery of their services more efficient.

You are using an API when you ride with Uber

If you ride with Uber, for example, you’re using an API. With the universal accessibility and accuracy of Google Maps, Uber’s developers didn’t need to reinvent the wheel. The Uber app uses an API to access Google Maps’ geolocation data and integrate the data into its service. In addition, Amazon and eBay have launched APIs that enable online retailers to compare Amazon product prices with their own allowing them to adjust prices in real-time to stay competitive and attract more customers.

What’s driving increased API usage?

The ongoing democratization of APIs is coming from two directions. On the one hand, developers are creating cloud-based APIs that are easy to use and incorporate into existing systems, helping to change the narrative that APIs are only for organizations that possess sophisticated tech hubs. Today’s APIs are designed for those who have little or no previous involvement with APIs. Users don’t need a seasoned IT manager or developer to make APIs work—just basic programming skills.

APIs have broad appeal regardless of tech capability

This is driving existing API users to request new and enhanced features that add functionality and flexibility to their processes. The democratization process is also generating an increased appreciation of the potential benefits of APIs among new users, whose technology proficiency can range from the highly sophisticated to those with minimal technology resources at their disposal.

What are managers using APIs for?

APIs are already a regular feature of the asset servicing industry. For example, a number of RBC Investor Services’ larger asset manager clients are currently using APIs to generate net asset valuations (NAVs) of funds.

NAVS are currently being generated through APIs

Instead of requiring fund managers to manually download required information from the digital portal and ingest it into their downstream systems, the APIs bring together millions of data points from multiple sources to provide near real-time NAVs integrated into their downstream systems. The APIs even prompt the manager with an alert when a new set of data has been updated.

What’s next?

But it’s not just the large asset managers who are recognizing the benefits of APIs. Managers large and small are closely watching what’s happening in the technology space and they are seeing the growing promise of APIs. Ongoing dialogue with our clients about the friction points in their data systems is inspiring the creation of a whole new range of purpose-built APIs that provide the channel to deliver both inbound and outbound data.

We are creating a whole new range of purpose-built APIs

We’re designing APIs that drive operational efficiency through end-to-end automation that improves straight-through execution capabilities across the asset servicing realm. These APIs provide faster access to self-serve data through increased digitization, including the ability to “plug and play” into RBC’s architecture and capabilities. They can be easily onboarded, delivering practical insights and the ability for users to take appropriate action in a timely manner. Each API features rich documentation and use cases that make it easy to understand the tool’s purpose and functionality.

APIs will become the preferred data delivery channel

As we work in partnership with our clients going forward, the API tool will continue to evolve in the quest for improved two-way access to data. Based on the significant benefits offered by APIs, we believe that they will ultimately become the preferred data delivery channel of the future.