As the demand for faster and more sophisticated financial trading tools increase it is envisaged that future trading platforms will need to adapt in terms of functionality and flexibility. What is required is a platform in the cloud that will revolutionize the way in which technology is used in the financial space from cumbersome, single vendor and unscalable applications to highly agile, cost effective and vendor neutral technology platforms delivering significant value and ease of use to end customers. Today, the financial data platform market has two well-known titans that dominate; namely, Bloomberg which in 2015 racked up $8.9B in financial markets revenue and Thomson Reuters with $6.5B (Burton-Taylor International Consulting). However, smaller fintech companies now see an opportunity for cloud-based open financial platforms offering services that are more user-friendly, flexible and scalable but at cut-rate prices.
Financial data coverage is key to success
Financial data coverage is key to the success of any cloud-based open ecosystem. Access to historical and real-time data, fundamental and reference data, pricing data, analytic capabilities, transaction capabilities are a just a few to mention. Open financial platforms offer far greater flexibility and by making use of multiple non-propriety and fully flexible APIs, any financial services company can court far more usage and mind share. The migration to cloud computing and open-source software further paves the way to reducing development and operating costs while more quickly supporting new services and across multiple devices. Companies can easily save millions of dollars by switching from on-site services to cloud services and moving to open-source content.
Delivery frequency of market data vendors can vary from real-time, delayed, conflated or end of day but the problem still remains with the data latency. Some vendors charge more to provide low latency or offer different products with different latencies. An open web container approach collects data from multiple sources then aggregates the different formats into one single format saving on time and money.
Market data providers are now looking for vendor neutral market data hubs with scalable, low latency distribution engines supporting cloud-hosted configurable widget ecosystems for developers. The key benefits include:
- Fully configurable and low latency HTML5 based web container for desktop, tablet and mobile devices with powerful features for interoperability
- Excel plug-in to access all controlled market data in the cloud and perform calculations, create presentations and even distribute controlled market data back to the cloud to share with other users
- Multi-tenant widget and data access control management capabilities to easily manage large accounts and enterprise solutions
Reasons for cloud-based open web containers
Cloud-based open web containers offer aggregated historical and real-time market data from many global exchanges and over the counter sources. They allow data providers that sit on “little treasures” to source another channel to sell their data via simple Excel integration. Developers can then leverage the market data infrastructure and use API platforms to build state of the art widgets. For partners looking to expand their own financial service offerings then white labeling a cloud-based open ecosystem and hosting it on their own website is an alternative approach. This allows partners to maintain their own bespoke branded services and products while gaining access to a far broader community. This can be a significant advantage for businesses that do not have the in-house resources to invest in the infrastructure, technology or experienced software developers.
According to Matthias Wiederwach, CTO & founder at Xinfinit GmbH and previous founder of the highly successful Financial.com company, “A cloud-based open and controlled web container is fuelling the way forward for the fintech sector. It will revolutionize the way in which the market data infrastructure is leveraged across the financial sector.” Xinfinit have created a configurable, scalable and cloud-based open ecosystem that will enable a paradigm shift in the way in which technology will be adopted within financial institutions. The platform allows partners and clients to gain access to a vast library of controlled market data or alternatively integrate their own market data back into the container.
In many ways a cloud-based open ecosystem can be considered a market data controlled distribution mechanism allowing fintech companies to bring their end products to market with the potential to reach a far broader end customer base. While on the surface it may make sense for a fintech company to operate it’s own distribution channel there are many factors preventing company’s to do so in terms of flexibility and scalability. The benefits of an open web container acting as a market data distribution channel include:
Flexibility and Choice – partners and clients gain access to controlled market data and products all inside one single, low latency web container. Using the open container the distribution coverage of market data and APIs can be separated into two groups; namely, mass coverage and exclusive coverage. Mass coverage is an intensive distribution approach where any controlled market data can be accessed or fed back into the cloud. The exclusive coverage is tailored for partners that would prefer not to share their own data but would still want access to the open cloud data.
Cost Savings – the distribution channel can provide specialists in what they do especially if developers in the partner community do not have the developer experience or bandwidth. Cloud hosting is also significantly cheaper and offers economies of scale in hardware side where the savings are really made.
An opportunity for the future of fintech
A cloud-based open web container approach is a tremendous opportunity for the future of the fintech community. Providing a world-class controlled market data infrastructure that can be hosted in the cloud is a far more cost effective way forward. There may well still be reservations within the financial sector today but there will always be those willing to embrace new technologies. In short, both the fintech industry and the financial sector are in need of a second curve that sets a new positive path away from the diminishing returns of the first and a cloud-based open and controlled web container is the way to go.