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Using APIs to source reference data

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Better, quicker access to accurate data holds the key to achieving some of the most greatly desired goals in financial services: improved customer service, operational efficiency, greater agility and competitiveness. Financial institutions are now realising the need for change, with many currently engaging in digital transformation projects.

Yet when it comes to instrument reference data, companies still cling to old habits. When obtaining reference information from commercial sources, financial institutions’ primary focus tends to be on pricing. All too often, instrument reference data is treated as an afterthought, with attributes simply tacked on to the end of the files firms receive from vendors.

Companies now need to take another look at the way they source and consume reference data, and one promising way forward is offered by APIs.

 

What is an API?

API stands for application programming interface, a software intermediary that allows two applications to talk to each other. Systems can be joined up across operations with electronic data from external sources fed in, which helps breathe new life into legacy infrastructure.

What are the different types of APIs?

There are three types of APIs commonly used today:

  • Open APIs (Public APIs) – these are publicly available to developers and users with minimal restriction. They may require a registration or an API key or may be completely open. This API focuses on external users accessing data or services.
  • Partner APIs – this type of API is exposed to strategic business partners who need specific entitlement to access them. Partner APIs are often used to communicate beyond the boundaries of the company and are usually exposed to a public API developer portal.
  • Internal APIs (Private APIs) – internal APIs are not meant for consumption outside of the company and are often used by internal development teams for better productivity and reuse of services.

What is an example of an API?

APIs are used behind the scenes for applications we use every day – from shopping online, browsing social media, or playing a game on your smartphone – every time you visit a page online, you are interacting with an API.

For example, the ‘Pay with PayPal’ button we often see when making an online payment – that is an API at work. When the user clicks this button, it then sends an order request to the PayPal API with the amount owed and other details, and then the API sends confirmation of payment back to the application.

How can I use an API to source reference data?

SmartStream’s Reference Data Uitlity API service hugely simplifies the process of sourcing and deriving the instrument reference data required for SFTR reporting. It can be integrated into existing IT systems easily, functioning either as part of a primary solution or serving as an additional source of information.

How does a reference data API work?

As a supplementary information source, the SmartStream RDU’s SFTR API can come in extremely handy. For example, if a firm has installed a transaction reporting solution but discovers that data is incorrect or missing, the API can be used to fill any gaps. Onboarding is rapid, and the service is also very user-friendly – simply identify the instrument that is the subject of the SFT, make a call to the cloud-based API, and the required data attributes are returned in an easily digestible form.

What are the benefits of using a reference data API?

The technology’s appeal lies in its ability to facilitate digital transformation without the need for a total overhaul of existing infrastructure – which firms have often found in the past, can be a costly, risky, and disruptive exercise.

For buyside firms that want to avoid putting in place hefty IT infrastructure or hiring costly support staff, APIs offer an attractive option. No complex, time-consuming and expensive technology projects have to be undertaken, no master database is necessary – all that is needed is a simple rest API call, providing organisations with a convenient, cost-effective means of obtaining the specific data they want.

Utilising this type of service not only allows firms to keep costs down, but enables them to drive up efficiency. Information users are no longer limited to the data they can obtain from within their own organisation and, by being able to get data simply and efficiently from a reliable external source, they can increase processing rates.

What types of API do SmartStream RDU offer?

In response to customer requirements, the SmartStream RDU is expanding its range of API services, and early 2021 will see the RDU offer its full suite of services via API. RDU services currently fall into two categories: security reference data and regulatory reference data.

Security reference data solutions becoming available on an API-basis will include a listed derivatives service – with data sourced from over one hundred exchanges, and comprehensive coverage for options, futures, options on futures, and calendar spreads – and an equities service. Early 2021 will also see a fixed income solution come on stream that can be accessed by API.

In addition, it will also be possible to access the RDU’s regulatory reference data services by API. Firms will be able to tap into the RDU’s MiFID II solution and the Systematic Internaliser Registry – the latter offering complete clarity into the systematic internaliser services available across Europe, down to individual security level. The SFTR enrichment API will also continue to be provided.

How do I get started?

You can create a new account on SmartStream RDU’s developer portal where you will get a new API Key which will have to be linked to any of our APIs. To activate it for a particular API, navigate to APIs and select the API you want. and click subscribe. This will enable you to make calls to this method.

Depending on the API configuration, subscribing to one API may subscribe you to several APIs. These APIs may have related functionality or share a pricing plan. Requests against any of them will be counted together in your usage.

We know that figuring out how to use APIs can be hard. Use the “Try it out!” feature to get examples of the request and response shapes of our APIs. This makes an API call to the backend service using your API Key and provides a sample curl request with all necessary input parameters and the real response.

Conclusion

Reference data has, all too often, been the forgotten child of the financial world. Change is underway, however, and accessing reliable reference data is becoming more vital than ever. For firms burdened by legacy architecture, or under pressure to keep costs to a minimum, API services supplying high quality reference data offer a much needed helping hand, allowing systems to be digitised, but without the disruptive impact usually associated with overhauling technology infrastructure.

The RDU APIs make reference data available as an affordable service, which is straightforward to deploy and can be called up at will. For more information, please get in touch with us.

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