Tradier uses the Apigee API management platform from Google to abstract the legacy complexities of capital markets so that developers can build FinTech applications in an agile, nimble, and quick fashion at minimal cost. The company embodies the evolution of what cloud technology can enable in the form of an API-first business delivered as a service.

The rise of API-powered FinTech

Historically, companies that wanted to build systems, applications, or services to interact with the stock market would have to build an entire brokerage operation from scratch. This would include data infrastructure, compliance infrastructure, and storage capabilities. It could take years and massive capital expense to accomplish everything that was required to be ready to serve customers.

Tradier provides this infrastructure as an API-based service so that the same companies can launch investor applications in as little as a few weeks. This democratized access means that FinTech innovation can come from anywhere, giving the same opportunities to create new products to everyone, from enterprise customers to startups.

“Financial markets are becoming fundamentally decentralized and unbundled,” says Dan Raju, co-founder, CEO, and chairman at Tradier. “The services that large legacy banks and brokerage firms used to offer are being supplanted by Tradier’s microservices and APIs, which power innovation.”

More than 200 companies use Tradier to develop and launch new products, or to add new features and functions that they traditionally would not have offered in existing products. With a large and diverse user base, Tradier faced the challenge of managing its partners in way that helps ensure it can grant credentials, track, monitor, and report in an efficient and equitable manner.

At the same time, the company recognized the inherent value of its partners for their power to leverage Tradier APIs to innovate. Tradier’s fundamental market disruption is the partner ecosystem, where the company is engaged along with its partners to deliver value to the entire ecosystem in the form of new products and services.

Embracing an API-powered ecosystem

Tradier has moved beyond providing great APIs toward engaging its ecosystem. If a customer wants a specific dataset, the company doesn’t automatically build a new product. Instead, Tradier looks to the ecosystem to build the product. With this approach, Tradier has taken its capabilities and multiplied them by hundreds.

“The fundamental difference between thinking about an API ecosystem versus an API product is the difference between being a participant who’s enabling innovation and not just a company delivering a set of technical capabilities,” Raju says.

Tradier takes an outside-in approach toward engaging its API ecosystem. Constantly listening to participants and helping to enable and empower them to create value is fundamental to the company’s business model. Rather than simply focusing on building new capabilities on its own, Tradier listens to what functionalities customers need and facilitates development. In many cases, the ecosystem generates the requested product organically rather than Tradier needing to do it.

“I love APIs because they allow you to empower others to create value. The concept of empowering others to create value along with you is what is the most satisfying, and the most fascinating, thing about APIs,” says Raju.

Delivering value at scale

Tradier handles between 500 million to 1 billion API calls and a billion dollars in transactions a month, and all of them run through the Apigee API management platform. Apigee’s last mile forms the single layer that manages Tradier’s infrastructure, including security, analytics, developer interactions, and execution. The company also uses Apigee to comply with an array of regulatory reporting, mandated by Tradier’s status as a FINRA (Financial Industry Regulatory Authority)-regulated entity.

“Apigee is integral to the Tradier offering. They have been great partners and have always collaborated and enabled us to innovate at a pace that helped Tradier attract developers and innovative companies. We see tremendous potential in the synergy of Apigee and Google as it brings to the market a vast extended capability set based on the Google Cloud Platform.”

Tradier is an API-centric ecosystem that delivers value to an entire set of players where the nucleus is the Apigee API management suite, which helps deliver, innovate, publish, manage, monitor, and secure the ecosystem on a day-to-day basis. Simplicity combined with product evangelism is the key to success in the API space, Raju says.

Tradier’s capabilities to innovate, iterate, and travel the journey with its customers, partners, and developers has yielded many rewards. The company’s long history of working with Apigee has enabled it to assemble a set of people and resources for creating engagement, as well as to create a winning set of APIs for delivering FinTech capabilities.

Considering the transformative future

Looking toward a future in which the financial services industry will experience ongoing disruption, Raju predicts that Tradier will continue to leverage APIs to lead the way.

“I think traditional banks are under attack. They are being replaced by a set of nimble, agile players that are offering a lot of new functionality to customers. This is forcing banks to think about how they can digitize their products through APIs so that they can provide the same functionalities as newer players.”

With companies like Tradier and others offering functionality that used to be in-house and exposing it outside, traditional brokerage firms are also being forced to rethink their model. Raju believes that this line of thinking also extends to the Blockchain.

“Exposing Blockchain-like capabilities through APIs is going to be a disruptive influence, and it will be critical for companies to think about how APIs, and more importantly Blockchain, can create value for us.”

The benefits of APIs are becoming more clear in an ever-evolving tech landscape, yet ITDMs still struggle to convince executives and investors to buy into an API-first strategy. Here’s a look at the importance of APIs in a changing world, and how ITDMs can make the business case in order to secure the best API strategy for their organization.

According to Google Cloud’s new “State of the API Economy 2021” report, a majority of IT decision-makers view application programming interfaces, or APIs, as essential ingredients in improved customers experiences, expanded partner engagement, accelerated innovation, and other demands of today’s business environment. This is encouraging: APIs are how software talks to other software, and since much of digital transformation involves combining disparate data and functionality into rich user experiences and process automations, APIs are an essential ingredient in modern business strategies. 

What’s less encouraging: the research surveys primarily IT professionals, not business leaders. It’s clear that IT people see the benefits of APIs in the ever-changing tech landscape, but we still hear regular concerns from these same people that they have trouble convincing executives and investors to buy into an API-first strategy. In this article, we’ll look into why they are having these difficulties and some proven ways to successfully position an API strategy not just as a technological solution, but also as a business requirement.

The importance of APIs in a changing world

The rise of APIs has been heavily influenced by the introduction of disruptive new business models and evolving customer preferences that traditional technologies are not positioned to quickly and efficiently address. 

For example, traditionally, if your business sold tickets to events, it would build physical ticket booths and maybe a website or first-party mobile app. Today, tickets in many cases aren’t so much a physical thing presented to an usher as a digital code that an usher scans. Likewise, tickets are less-often purchased in person as opposed to online, and reliance on a first-party website can be unnecessarily restrictive. It places the burden on the business to attract customers, whereas surfacing organically in social media, search engine results, and other digital experiences lets the business meet customers where they’re already assembled. 

Moreover, as COVID-19 continues to disrupt events throughout the world, many ticket sellers—and most organizations, for that matter—have pivoted to digital-first business interactions as a matter of necessity. All of these changes in the business model, and all of the interacting systems and functionality that underpin them, rely on communication among APIs. 

Similarly, today’s banks cannot grow by simply building more branches or hiring more tellers. Instead, they need to make financial information and functionality available when and where customers require it, whether that means via an ATM, a first-party app, or within some other digital experience. Many banks also need to do more than just present this functionality, as customers are increasingly interested in the analytics and insights their spending patterns can yield. Again, all of these interactions—from customers making a purchase within an app to banks applying machine learning in order to offer customers financial insights—are enabled by APIs.     

Related: The “State of API Economy 2021” report describes how digital transformation initiatives evolved throughout 2020, as well as where they’re headed in the years to come. Download for free.

When guidance meets resistance

These examples do not illustrate technology that updates the status quo, but rather technology that unlocks business opportunities that transcend the status quo—and that help businesses to thrive even as the status quo fades into irrelevance and obsolescence. APIs are thus not just an IT topic but also important business enablers that should be understood by everyone involved with the enterprise’s investments, from internal stakeholders approving business strategies to external shareholders trying to assess an organization’s trajectory. 

The challenge for investor relations is to convey these financial and operational benefits in a way that clearly communicates the need for a new business model rather than refinements to the existing models. It’s essential that IT professionals understand APIs, but it’s also essential for business leaders to understand them too.

This is even trickier given that arguments for API investments are often based on future potential, while arguments for more conservative alternatives are based on past success. 

At a high level, the API value proposition is clear: In the past, valuable functionality and data have been encased in systems and applications, making them difficult to scale or leverage for new, evolving use cases. In contrast, APIs make functionality and data infinitely reusable, infinitely scalable, and modular such that APIs can easily be combined for new uses. All of this accrues to richer user experiences and more flexibility than ever for companies to monetize their digital assets, share them with partners, or combine them with assets from third parties. 

It’s essential that IT professionals understand APIs, but it’s also essential for business leaders to understand them too.

But investors typically want as much information as possible because their decisions can affect not just productivity and output, but company stock prices and potential future growth. High-level arguments may not be persuasive. The deeper assurances investors crave would normally come from guidance.

Guidance in this context refers to insights based on growth forecasts and customer adoption, but this can be difficult early in market entry. Robust forecasting processes need to be developed to demonstrate the efficacy and value of the API economy, which can be hard to predict: whereas APIs are well understood in some sectors, and especially among digital natives, they are in the early stages of the growth rate in other verticals, making it challenging to forecast developer adoption of a given API. And since there is a shortage of information, trying to use traditional guidance comes with a risk of being wrong and thus of little value to investors.

Related: Set your 2021 API resolutions with these top 2020 posts.

How to deliver a more useful value proposition

While guidance may be premature during the early stages of market entry, investor relations teams still need to convey the full value of an enterprise to investors. To do this, they need a value proposition that emphasizes the intrinsic value of the investment while reinforcing the benefits that can best drive business and stock growth. Considering how large an investment of time, effort, and money transitioning to an API economy can be, it is vital to convey that the benefits are substantial.

A solid value proposition should demonstrate maximum returns, and while this shouldn’t include far-fetched or unobtainable claims, it can include reasonable aspirational visions alongside statistical insights. To craft these aspirational narratives, investor relations teams should look to their organization’s existing business needs and challenges, and then demonstrate how APIs can benefit the organization in these areas. Here are some options that speak to a number of common business requirements:

• Sales channel: API investments are reusable, improve speed to market, enable automated processes and partner onboarding, and can uncover unanticipated opportunities.
• Cost: Businesses can reduce operational costs by using and reusing APIs for innovation and business development, and by using the services native to your partner’s digital surface, you can further reduce innovation costs and risks.
• Earnings: API-enabled digital ecosystems unlock a variety of partner services that leverage the business’s shared data to drive new customer acquisition, new market positions, new transaction volumes, and direct API monetization.
• Risk mitigation: By investing in a credible API, businesses can mitigate downside risks that traditional enterprises can face from market disruptors, industry-wide shifts to digital tools, and inabilities to ingest and analyze growing data sources.
• Intellectual property: Unlike project-driven innovation and customized, point-to-point integration that traps enterprise knowledge in small teams and divisional silos, APIs are reusable and modular, breaking down silos and encouraging intra-organizational collaboration.
• Speed to market: The efficient, repeatable API interface informs improvements to the fulfillment process with consistent access to data from across the organization, which drives solutions that more quickly and efficiently meet customer needs.
• Ethics: APIs offer the flexibility and economical advantages that give organizations the capacity to focus on their brand’s ethical “reason for being” beyond profitability by serving economically marginal and underserved market segments.
• Customer credibility: Organizations can deliver the extended, connected digital experiences that customers expect with the tools and flexibility included with API products.
• Employee retention: Businesses can avoid losing key employees by updating their legacy technologies with APIs, giving employees the opportunity to enhance their skills with modern technologies.
• Corporate strategy: Enterprises that use APIs’ reusable, modular structure and tools are more capable of adapting to rapid structural shifts in customer demand patterns and sectoral changes in the economy.

Whichever of these business challenges a team speaks to, it is imperative that they demonstrate the benefits of APIs, and that once they’ve determined the angle they intend to use, they keep their message consistent. While we’ve seen a number of viable ways to position APIs as a winning strategy, switching among them could make the presentation—and APIs in general—seem insubstantial and unreliable. 

This is why it’s key to decide on the most relevant business concerns, and once you’ve tailored your presentation, to make sure that you have message alignment, including buy-in and support from C-level executives. With a strong pitch built around solving existing business concerns and solidarity from relevant stakeholders, you can go into your investor meeting with the confidence to secure the best API strategy for your organization.

Strengthen your pitch with additional insights. Here are five key trends in 2021 for API-first digital transformation.

About the Author: Paul Rohan is a researcher on Open Banking and a Google Cloud solutions consultant. Paul works with banking C-Suites that are examining the impact of the Platform Economy and Digital Ecosystems on financial services industry growth, market structures and governance. Paul is the author of “PSD2 in Plain English” and “Open Banking Strategy Formation”.

Google Cloud Results

• Reduced smart parking/smart city IoT installation and operational support effort by more than half
• Enabled development of a Smart Cloud IoT platform in just four months
• Democratised data access and use across the organisation
• Built core infrastructure in under 4 months

Smart Parking’s core product is a sensor-based system called SmartPark, used in environments such as shopping centres, airports, commercial parking operations, universities, and municipal streets.

Smart Parking has deployed over 50,000 sensors worldwide to support parking systems. It estimates at least 70% of production-scale and currently operating smart parking environments globally are using its technologies.

“Our products include ground sensors that use an advanced combination of infrared and magnetic technologies to reliably register a vehicle’s arrival and communicate to a gateway,” says Brian Granatir, Technical Team Lead, Smart Parking. This enables operators to gain live insights into parking environment usage and manage capacity. They can also provide automated guidance and signage to tell customers how many vacant spaces are available on each level of a parking structure or street area of a city.

Additional functionality enables parking operators to identify whether vehicles parked in limited-time spots have overstayed. The operators may notify inspectors who can undertake enforcement actions such as issuing infringement notices.

Another Smart Parking mobile product enables parking operators to photograph licence plates to identify vehicles that have overstayed. The business is also developing applications that enable users to view the number of parking spots available in nearby parking structures.

Smart Parking is extending its operations into smart city developments. The business views this as a natural progression as its parking systems establish a powerful common foundation from which to deliver many other services. “Parking is just part of a very complex ecosystem that requires sophisticated interoperability and generalised analytics,” John Heard, Chief Technology Officer, Smart Parking, explains.

“The biggest trend in the space is towards the Internet of Things (IoT)–the integration of a large number of generic and specialised devices,” Heard adds. “This has led us to shift from the idea of our devices being the centre of the universe. Instead, we put data intelligence at the core.”

In October 2016, Smart Parking decided to develop a SmartCloud platform that would enable cities to manage and react to information from a connected network of IoT devices. The business wanted to start by rolling out the platform based on an event-driven architecture that could connect any device that sends or receives a sequence of data events to existing Smart Parking customers.

The platform would enable Smart Parking to address a wide range of highly complex and interrelated interactions. “Internally, we use the example that if everyone leaves a parking structure at 3pm, what will be the impact on traffic?” Heard says. “So, how can we correlate multiple factors to answer a larger question?”

Heard’s team elected to deploy SmartCloud on Google Cloud Platform (GCP), due primarily to its support for sophisticated big data management and machine learning in a serverless architecture. Furthermore, Google technologies were proven to operate at scale and GCP had baked-in best practices that could manage internet-scale datasets in near real time.

“By running on Google, we were able to develop SmartCloud at an incredible pace,” Granatir says. “We built the core infrastructure in under four months.” Furthermore, GCP enables the SmartCloud platform to operate at metropolis scale, combining streams of distributed data to deliver an unprecedented view of the events and interactions taking place in a city.

Smart Parking now uses a wide range of GCP services to deliver SmartCloud. Google Cloud Dataflow provides processing and Google BigQuery provides management and analytics of big data. Google Cloud Pub/Sub provides real-time messaging and Google Cloud Functions enables a serverless environment to enable delivery of streaming data. Google Cloud IoT Core connects, manages, and ingests data from Smart Parking devices while Google Cloud Identity & Access Management enables Smart Parking to control access to information. Google Cloud Pub/Sub and Google Cloud Functions also support the event-driven architecture.

Installation time and operational burdens cut by at least half

Using Google Cloud IoT Core has cut Smart Parking’s parking and smart city system installation times by at least half and eliminated the need to build a registration system, a device authorisation system, and a feedback loop for each project. This delivers a streamlined and simpler methodology for site installations, which flows on to a dramatic decrease in the operational burdens involved in monitoring and maintaining deployments of all scales.

Using GCP has revolutionised Smart Parking’s software development processes. “We’re building and deploying systems at a speed I could never have imagined before Google Cloud Platform,” Granatir says. Furthermore, using GCP has made data accessible to anyone within the Smart Parking business, and this is being extended to customers via SmartCloud information services.

This democratised approach has already realised considerable benefits. “One of our project managers was experimenting with the Google Data Studio service for visualising data and was able to make a query about utilisation efficiency,” Heard adds. “We found that simply changing the maximum stay time by a small amount could hugely impact the percentage of parking utilisation and, therefore, throughput.

“This is an illustration of a significant insight by someone who simply had a hunch and quick access to mountains of live and accurate data.”

Transition to a data-intelligence company

Using GCP has enabled Smart Parking to chart a path from a sales and maintenance organisation to a smart cities data-intelligence company. “How? Simply by providing amazing services that focus on massive data volumes and sharing documentation that helps us leverage best practices,” Heard says. “Because of Google Cloud Platform and its pricing, we don’t walk in the shadow of giants, we ride on their shoulders.”

Smart Parking is now looking to further extend its use of Google services to add value to its smart parking and future smart city clients. “With Google Cloud Machine Learning Engine, we could gain the ability to identify trends across every customer parking site and make recommendations to operators,” Heard says. “For example, we could provide data-driven insight and advice to operators about how to adjust their parking spot time limits and guidance about how to transform throughput and convenience while increasing revenue.”

Heard concludes, “As a result of being able to dramatically decrease our traditional development burdens by using GCP, we now have a number of exciting new capabilities we have been able to bring in to our roadmap and expand the journey we are able to open up for our customers as well.”