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How APIs Are Changing Investment Platforms

What is an API? Why has this technology revolutionized the investment industry? Let's talk about API-based FinTech solutions used by financial institutions to introduce new products and services, increasing their competitive power in the market.


What an API is

The word 'API' stands for ‘Application Programming Interface’ and is used for one application to communicate with another in a request-response manner. Uber - a combination of Google maps, a payment system, and messaging services - wouldn’t exist without APIs. Thanks to this technology, people can order flight tickets, buy products online, view the weather forecast, book seats in restaurants, etc.

For example, the VISA network connects online stores, their applications, and a bank through its APIs for processing and recording payments. Here, VISA’s APIs acts as an intermediary.


Why APIs are advantageous for WealthTech

Why are investors tapping into APIs more and more often?


  • Real-time automation


APIs give the opportunity to automate processes for regular repetitive tasks, saving you time and effort. Such a tool converts data in real-time so that the business can make better client service decisions.


  • Time-saving and growth of income


APIs enable tech companies to quickly respond to market changes, create new products, and connect to the functionality their clients need. All this takes less time than when using standard tools because APIs connect different systems and have access to data outside the company. New services are quickly tested and released into production, and as the number of services increases, the system can be easily scaled up.


  • User-friendliness


With APIs, clients always have detailed information about banks, insurance, and deposits at hand. Users can view their account balance and transaction history at any time, as well as receive notifications about changes in the account or advice on the tax period. Thus, APIs provide clients with a single point of access to data stored in multiple systems. And when investors get the information they need promptly, they make the right decisions.

By applying Artificial Intelligence and Machine Learning tools, financial institutions can determine the most appropriate services for each user, which will increase client loyalty.


How APIs are changing WealthTech tools

APIs are taking investment platforms to the next level. Clients love unique products and services. When consultants offer the same technology with an identical client interface, not only functionality but also ease of use is important, which APIs provide.

APIs don’t limit developers, allowing them to use tools for solving unique problems. Thus, it is possible to create an ecosystem taking into account the wishes and needs of clients.


Another challenge that APIs are successfully addressing is uniting multiple technologies into a single system that includes budget planning, portfolio management, and reporting. Such functions are needed, for instance, for investors of retirement age. 

For example, in 2020, the retirement rate of the baby boomer generation quadrupled. This trend caught many by surprise, as their investment portfolios were not doing well. An API-driven ecosystem is effectively addressing this problem.


Examples of using APIs in WealthTech

What API-based solutions are already applied in investments? 


  • Vestwell


Savings and investment platform Vestwell has created a retirement solution called Riskalyze, which operates with the help of end-to-end (E2E) APIs. This solution helps in drafting retirement plans, organizing legal documentation, assessing investment risks, and performing other useful activities.

The program helps investors hold their course over the short term. For example, if a client's investment portfolio has a 95% chance of remaining within tolerable risk limits in six months’ time, the client can stay calm if the market falls. Vestwell’s API is designed in such a way that the firm exchanges the necessary information with its partners.


  • DriveWealth


DriveWealth has created a solution based on a set of APIs to make stock purchasing easier. Each client is given a specific API key. In addition, an SSL encrypted session key is provided for each session. Due to its structure, the system can easily handle five to seven million requests per day and provide any investment experience - from trading, deposits, and retirement to rewards in the form of shares.


  • Hydrogen 


The company has built its entire platform on APIs that can be used by financial institutions of different levels. Any of them can implement one of Hydrogen's products: applications for issuing physical and virtual cards, cash analytics, money and investment management, and various types of digital payments.


  • MyVest


The MyVest platform was created to manage the capital of companies in the era of digitalization. The enterprise has many web services built on REST APIs, which integrate parts of the platform (model management, rebalancing, and trading) with customers’ systems and applications (CRM, capital planning, etc.). Banks, broker-dealers, large RIAs, and service providers can build large-scale personalized portfolios by relying on the MyVest solution.

APIs are transforming investment platforms nowadays, helping financial institutions expand functionality and integrate their systems with third-party software. Solutions driven by APIs are helping investors to increase their value and outperform competitors and providing clients with access to profitable financial solutions and services.




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Tatsiana Kuchminskaya

Tatsiana Kuchminskaya

Chief Financial Officer (CFO)


Member since

04 Aug 2021



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