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APIs ARE POWERING FINTECH INNOVATIONWHAT IS NEXT?
xignite@sduboisStephane Dubois – CEO & Founder – Xignite
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FINANCIAL MARKET DATA APIS
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MARKET DATA IS THE LIFEBLOOD OF FINTECH xignite@sdubois
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MARKET DATA INDUSTRY
175 Years Old $26.6 Billion +1.2% Annual Growth
xigniteSource: Burton-Taylor@sdubois
xignite@sdubois Source: Bloomberg xignite@sdubois
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FINSERV EMPLOYEMENT
19801981
19821983
19841985
19861987
19881989
19901991
19921993
19941995
19961997
19981999
20002001
20022003
20042005
20062007
20082009
20102011
20122013
20142015
20165M
6M
7M
8M
Source: Bureau of Labor Statistics
xignite@sdubois xignite@sdubois1910’s-60’sTICKER TAPE
1990’sCLIENT SERVER
2000’sWEB
2010’sAPIs
1970’sMAINFRAME
quotron
Vehicles
Terminals
Displays
Mobile Wearables
IoT
Robo-Advisors
Trading
1,000s OF BROKERS 10,000s OF TRADERS 100,000s OF ANALYSTS MILLIONS OF USERS BILLIONS OF DEVICES xignite
EXPLOSION OF END POINTS
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2020 CONNECTED DEVICES
21 BILLIONSource: Gartner
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HOW DO YOU SERVE 20B DEVICES?
CLOUD APIS
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WHAT’S A CLOUD API?
•Simple To Use•Standard Based•Unlimited Power
www.xignite.com – San Mateo, California – Copyright © 2016. All Rights Reserved
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API GENERATIONS
Program
Library
Program
Program
Program
Server
Program
Cloud
Pre-HistoryExternal Libraries
(60’s)
1st Generation APIsRPCs
(70’s-80’s)
Network
2rd Generation APIsWeb APIs(90’s-00’s)
3h Generation APIsCloud APIs(00’s-10’s)
Local Not Sharable Complex Not Scalable
Remote Sharable Complex Not Scalable
Internet Shared Simpler Scalable
Internet Mutualized Simple Zero-Footprint
Internet Internet
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API HISTORY
HTMLW3C Standard
IMG TagFirst pointer to resources on external servers
JavaScriptFirst smart client capabilities
IFRAME TagComplex resource embedding
1996 FlashComplex resource embedding
XMLHttpRequestFirst Web API Implementation
AJAXFirst smart client logic
First API(Maps)
JSONPCall a server without a server
RESTRoy Fielding publishes his dissertation on REST
CORBAFirst standardRPC
First API
First API
First API
JSONFirst Spec
XMLW3C Standard
xigniteFirst Commercial API
First API First API
First API
S3 EC2
HTML5First Spec
SOAPW3C Standard
xigniteFirst Cloud API
First API
1990 1991
1993
1995 1996
1999 Feb-00
2000 2001
Jul-02Nov-00 Jun-05
Feb-05 Dec-05
1996 Aug-03 Jul-04 Aug-06 Sep-06Mar-06
Sep-121998
Oct-10Oct-08 Nov-13
FINTECHWAVE
First API
Oct-08
Jun-07 Jun-08
App Store
iPhone 1
First API
Oct-02
Jeff Bezos API Memo
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THE ENABLER
https://www.ics.uci.edu/~fielding/pubs/dissertation/fielding_dissertation.pdf
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THE CATALYST
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XIGNITE FIRST API
http://web.archive.org/web/20031024042925/http://www.xignite.com/xRealTime.asmx?op=GetRealQuote
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USAGE SINCE INCEPTION
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Fcast 0.0002B 0.002B 0.02B 0.2B 1.6B 3.8B
40B 71B
137B
456B
1,395B
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API 4 COMMA CLUB,,,,xignite ?
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SOFTWARE IS EATING THE
WORLDAPIs ARE
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XIGNITE IN NUMBERS
750BRequests 16’ YTD
650API End Points
150 Data Sources
1100+ Clients
$37MRaised
45 Employees
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THE FINTECH REVOLUTION
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POST-CRISIS REGULATIONOPENED THE ROAD
FOR FINTECH
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0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
0
500
1000
1500
2000
2500
MARKETS AT AN ALL-TIME HIGH
DOW JONES INDUSTRIAL AND S&P500 2000-2015
2000 2005 2009 2011
$5,000,000
$500,000
$50,000 $5,000
FINTECH REVOLUTION DRIVERS
ECONOMICALFACTORS
SOCIALFACTORS
TECHNOLOGICALFACTORS
NEW MILLENIAL EXPERIENCE
COST TO BUILD APPS DROPPED
MaturingOf App
DevelopmentScaling
of PublicCloud
SocialCustomer
Acquisition
Dawnof APIs
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FINTECH NOT SLOWING DOWN
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30$0B
$2B
$4B
$6B
$8B
$10B
$12B
$14B
$16B
$18B
$20B
Fintech Fundings 2015 vs 2016 Week by Week
2016
2015
Week in Year
Sources: Finovate
xignite@sdubois
ANDY RACHLEFFCHAIRMAN & FOUNDER
“WEALTHFRONTWAS ENABLED BY 3TECHNOLOGIES:ETFs, TRADING APIs, AND MARKET DATA APIS.”
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APIS POWERING INNOVATIONRobo-Advisors & Robo-Platforms
Brokerage & Trading
Media
Retirement
Investor Reporting, IR & HR
Lending & Payments
Wealth & Portfolio Management
Compliance
Horizontal Enterprise Applications
Terminals
IoTE-Commerce Enterprise Financial Reporting
Research & Analytics
Social & Analytics
Search Engines
Back-Office & Processing
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TECTONIC SHIFT APP DEVELOPMENT INFRASTRUCTURE CUSTOMER ACQUISITION CORE SERVICES
100XFasterCheaper
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FINSERV BIG SQUEEZE
Fintech
User Experience Pressures
Business ModelPressures
Cost StructurePressures
Regulator
Balance Sheet Pressures
Business ModelPressures
Operational CostPressures
Since 2013 Since 2008INNOVATION REGULATION
FinServ
INNOVATETRANSFORM
REDUCE COSTSCOMPETE COMPLY
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THE GREAT WEDGESuper HNW
HNW
Retail
Robo Advisors Powered by APIs
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AWARENESS AT THE TOP
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"Silicon Valley is coming.“Jamie DimonChairman & CEO – JPMorgan ChaseLetter to Shareholders - 2015
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THE MARKET DATA CHALLENGE
Market data is one of the largest expenses for many firms.
Previously neglected or hidden is the cost of market data infrastructure.
Legacy market data infrastructure stifles innovation, prevents transformation and drives up costs.
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MARKET DATA
@sdubois
xignite@sdubois
ColocationColocation
TYPICAL LANDSCAPE
Lots of legacy in-house infrastructure Vendor lock-in and point to point interfaces Significant compliance risks and costs Many data silos across vendor technologies Reliability and maintenance issues Redundant or unnecessary expenses Rigid, expensive and innovation killer New app development nearly impossible Unable to disconnect legacy systems Costs continue to increase with scale
EXCHANGES VENDORS
Databases
Handlers
Databases
Analytics Engines
Databases
Tick Databases
App Servers
Cache Servers
Fanout Servers
Messaging Servers
Processing Engines
Search Engines
Trading & Algos
Handlers
Feeds FilesFeeds
Proprietary Processing Engines
Vendor Proprietary Servers
Redundancy
Compliance
Silos
Personnel
Upgrades
Lock-inPoint to Point
Legacy
Front-Office Mobile & Web
xignite@sdubois
MARKET DATA INFRASTRUCTUREInfra-
structure$76M
Market Data
$100M
MARKET DATA SPEND
Hardware
Software
Networking
Personnel
$33M
$21M
$14M
$8M
INFRASTRUCTURE SPENDING
Typical Top Tier FirmSource: Rosenblatt Securities
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INDUSTRY-LEVEL ISSUE
Much replicated data and infrastructure• Same feeds from same exchanges• Same files from same vendors• Same databases to store and manage the same
data.• Massive replicated data centers, storage an
processing• Same hardware and system administration
burden• Same staff to monitor and administer
No significant competitive benefit• 95% of infrastructure is commoditized• Billions of dollars wasted on replication• Enormous innovation inertia
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INDUSTRY-LEVEL ISSUE
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THE CASE FOR MUTUALIZATION
DATA SHOULD BE STORED ONLY ONCE
RULE OF NORMALIZATION:
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WHERE TO PUT THE DATA?
Source: Gartner Group
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Ex-Market Data ProfessionalCirca, 2008
“APIs ARE TOYS!“
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FINSERV VS FINTECH
Innovation
Legacy
Innovation
CloudAPI
s
xignite@sdubois
WHY APIS MATTERReducing the Cost Structure• Build a new tech stack from scratch• Leverage the public Cloud• Leverage third-parties
Improving the Experience• Improve User interface & workflow• Reduce friction and automate• Increase access to information
xignite@sdubois
NEW THINKINGTrading & Algos Front-Office Mobile & Web
ColocationColocation
Databases
Handlers
Databases
Analytics Engines
Databases
Tick Databases
App Servers
Cache Servers
Fanout Servers
Messaging Servers
Processing Engines
Search Engines
Trading & Algos
Handlers
Feeds FilesFeeds
Proprietary Processing Engines
Vendor Proprietary Servers
Redundancy
Compliance
Silos
Personnel
Upgrades
Lock-inPoint to Point
Legacy
42
EXCHANGES VENDORS
Cloud?
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ADOPTION ROADMAP
First Use Case• Customer Facing/Backup• Mobile/Web• Critical Innovation• Critical Time to Market• No New Infrastructure• Get Comfortable• Align with API Strategy
Adopt Broadly• Deploy for all new apps• Reduce dependency on legacy• Eliminate fringe infrastructure• Replace some data sources
Remove Legacy• Onboard data sets • Add contributed data sets• Migrate legacy back ends• Eliminate core infrastructure
6-18 Months
1-3 Years2-5 Years
43
xignite@sdubois
THE NEXT GENERATION APPS
1990 1995 2000 2005 2020 2025
Client-Server Generation Web Generation
MainstreamApplications
The Next Big Thing
Fintech Mainstream Generational Replacement
FinTech EarlyAdopter Wave
2010
Cloud Generation2015
Internet – HTML – Browser – Active Server Pages – Broadband – AJAX
RDBMS – LANs – PCs – Mini Computers
Virtualization – SOAP – XML – JSON – REST – HTML5
Fat Client
DB Server
HTML
Web Server
HTML5
Cloud APIs
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THE FINSERV API VALUE CHAIN
Customers
Employees
Apps Developers APIs Market Data
Markets
Back-Ends
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EXAMPLE 1: REAL-TIME DATA TO MOBILE USERS
ColocationColocation
Handlers
Parsing Engines
Handlers
Feeds
EXCHANGES
Databases
Tick Databases
Fanout Servers
PROBLEMS Tons of infrastructure Peak activity scaling Software licensing Custom processing Complex programming 6-12 months minimum Scaling lead time Monitoring required Large capex and opex
TRADITIONAL APPROACH: IN HOUSE
Silos
Redundancy
Legacy
Monitoring
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SOLUTION: CLOUDSTREAMING API
ColocationColocation
Handlers
Parsing Engines
Handlers
Feeds
EXCHANGES
Databases
Tick Databases
Fanout Servers
CLOUD APIS
CloudStreaming API
EXCHANGES
Deploy instantly High reliability Scalable to millions No capex No worries
TRADITIONAL APPROACH: IN HOUSE CLOUD APPROACH
Redundancy
Legacy
Monitoring
Silos
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EXAMPLE 2: ENGAGING CUSTOMERS WITH ALERTS
TRADITIONAL APPROACH: IN HOUSE
ColocationColocation
Databases
Handlers
Databases
Analytics Engines
App Servers
Messaging Servers
Processing Engines
Handlers
Feeds FilesFeeds
Proprietary Processing Engines
Vendor Proprietary Servers
Redundancy
Compliance
Silos
Personnel
Upgrades
Lock-inPoint to Point
Legacy
EXCHANGES VENDORS
PROBLEMS Tons of infrastructure Huge amounts of data Significant integration Custom processing Complex programming 6-12 months minimum Scaling lead time Monitoring required Large capex and opex
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SOLUTION: CLOUDALERT API
CLOUD APIS
CloudAlert API
Internal Systems
Short time to market Scalable to millions No data management No capex No worries
CLOUD APPROACHTRADITIONAL APPROACH: IN HOUSE
ColocationColocation
Databases
Handlers
Databases
Analytics Engines
App Servers
Messaging Servers
Processing Engines
Handlers
Feeds FilesFeeds
Proprietary Processing Engines
Vendor Proprietary Servers
Redundancy
Compliance
Silos
Personnel
Upgrades
Lock-inPoint to Point
Legacy
EXCHANGES VENDORS
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TRANSACTIONAL APIs
BUSINESS APIs
THE NEXT-GENERATION APPS
INFRASTRUCTURE APIs
MARKET DATA APIs
ANALYTICS APIs
WORKFLOW APIs
THE FINTECH API ECOSYSTEM
www.xignite.com – San Mateo, California – Copyright © 2016. All Rights Reserved
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xignite@sdubois xignite@sdubois
MARKET DATA CLOUD
INFRASTRUCTURE APISStorage, Processing & More
DATA APISMarket Data – Reference Data – Contributed Data
ADVANCED APISStreaming – Alerts – Visualization – Analytics – Screening
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XIGNITE GLOBAL MARKET DATA CLOUD
Equities Funds Fixed Income Indices Futures Options Forex Metals Derivatives
Real-Time Quotes Valuation Fundamentals Master Ticks & Bars Analytics Markets
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THE INDUSTRY’S EASIEST APIS
Standard Based Comprehensive Consistent Integrated Scalable
Real-Time Data Master Data Fundamental Data
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THANK YOU
xignite@sdubois
Stephane Dubois – CEO & Founder – Xignite – [email protected] – @sdubois