How Do We Get Systems to Talk to Each Other? Highlights from the February Investment Forum Part 1

This is the first post bringing together selections from the great conversation at our February Investment Forum focusing on integrations, APIs, integration hubs, and app stores. The session featured expert panellists Matt Noble of Origo, Paul Richards of Fidelity Fundsnetwork, and Oliver Oehri of CSSP, NameYourSRI.com.

Matt Noble:

I’m Matt Noble from Origo, head of Business Development. I’ve been talking about integration in various different guises for the past 10 years, and most recently I joined Origo about three years ago. And I suppose one of the things that I found probably around 2015, 2016 was that the appetite from providers and indeed adviser software systems to continuously create point-to-point integrations over and over again with the same business process. So repeatedly building valuation integrations, for instance, the appetite was getting smaller and smaller to continue doing these things– a costly project, these integration things. And it just became very apparent then that there had to be a better way of doing it.

And, of course you’ve got certain businesses, some of you included, that have created your own APIs. And that’s a good starting point. But ultimately, even if you’ve created your APIs, somebody still then has to go and integrate to those APIs. So whilst it opens up your system to other people to integrate, the point is that people still have to go and do these projects. I became aware of something that Origo was doing when I was at Dynamic Planner and this thing was called the Origo Integration Hub. And very simply, it’s a build-once, deploy-to-many integration solution which covers the usual business processes that we’re all familiar with in terms of things like contract enquiry, bulk valuations, bulk transaction history.

But the purpose is that as a business, you can connect to the hub for one of those business processes and do the integration with us once. But then if there are any partners over the other side of the hub, the other side of the fence, if you like, that have also got that business process connected, it means that you can pick up those data feeds and those  integrations without having to do further work. So effectively, it’s the most efficient way of creating an integration infrastructure across all of the partners on the other side.

If you’re an adviser software system and you’ve connected, that means that you can pick up all the provider feeds that are on the other side. Similarly, if you’re providing or a platform and you want to widen (the adoption of) your new bulk transaction history feed, for instance, to a wider range of software suppliers but don’t want to build repetitive point-to-point integrations, then the integration hub is absolutely key in that respect.

And I suppose the other point to mention we might get onto later, is that we as the hub act as, if you like, a single translation point, so that regardless of whether  you’re using your own APIs or you want to use what is now deemed as the Criterion Standards, whatever method that you want to use to integrate, we typically can use that method and then transform your integration message such that it works across the other side of the fence without you having to do anything else. So in that respect, we take all of the hard work away from the integration piece for you.

Paul Richards:

I think it’s not so much about what our approach to integration is, but how we react to our client’s needs particularly the needs of advisers. Everyone on the call will know that firms like us have been integrating with adviser back office software for many years. And we think we all do that pretty well, as far as I’m aware. And I certainly know that we do.

I’ve been at Fidelity for 14 years and about 12 years ago, I started having nightmares about one of our competitors doing a deal with someone like Intelliflo or Iress and waking up one morning and seeing it in the press and suddenly where we’re cut out. So I’ve been a big advocate of integrations with systems which can make advisers’ life easier. And I think traditionally, the objection I used to get internally, that was probably replicated around the market, was that “we’re not sure about this because if we do deals with these sort of companies, then aren’t we going to become intermediated”?

That was the expression that was thrown at me. And I’m sure it was thrown around a lot of meeting rooms of platforms. And that was a fair point, because platforms such as us spent lots and lots of money developing adviser-friendly front-ends to attract the adviser to our own website. And it was this whole battle for the adviser desktop -who’s going to win? Is it going to be us? Is it going to be a wrap or is it is it going to be the back office? And I think it’s pretty clear that the back office has won that.

So that’s a bit of historical perspective. I think going back to the point about adviser needs and demands, everybody on the call is familiar with the changes in the market at the moment and the fact that the market is developing very rapidly. It’s consolidating for all the reasons we know with regulatory pressure, commercial pressure or whatever. And what we’re finding is that more and more firms are consolidating, they’re getting bigger, and they’re wanting to have a bigger role in what their adviser experience looks like and increasingly wanting to drive a unique adviser and client experience.

And the platform then plays a different role from what it has traditionally played. And it’s really a question for people. Fidelity is always happy to play that role and play a different role for different people. We have spent lots of money on our platform developing an adviser front-end, and we’ll continue to do it because there’s plenty of advisers, in what you might regard as the Heart Land who continue to want this service. But there are plenty of others who want a different service from a platform, and that’s when we get into the APIs side of the equation and other ways of providing integration.

Oliver Oehri:

My name is Oliver and I think we’re now in the eighth week in FEfundinfo. So before that I was fifty years in the ESG space where I founded the company, which has now been acquired by FEfundinfo called CSSP with products that are more or less fintech. What we do is we are in the space of technology, finance, and sustainability data. I think we have 15 trillion asset under management at the moment and it’s something about 60,000 funds and ETFs on a daily basis on different data providers. And this played out on platforms around Europe.

And we have two types of clients, those who already have data in their systems. There we are making software as a service, reporting, automatic, multi-language and all the nice things with APIs and then what I mentioned, we have seen an older market more driven by IFAs, IFA advisers, asset owners, for example, pension funds, insurances, and those are really interested in that topic, but probably will not buy 100K and more per annum for a data licence. And that’s the starting point, more or less. And I think 10 years ago, we had this vision of how we can work like iTunes, eBay, Amazon in this financial route.

So coming from a user experience, coming from a client, from an adviser who just says, “I know exactly what I need, I need an SFR, TFD reporting” nowadays, we would call it, or a client demanding reporting for fund factsheet with an easy addendum or to pay to retail or self indicated pension fund report. “And I have full holdings of my client and I just want to upload it.” Click, half the data is transported in that ready-to-use report pay per credit card, PayPal and Leaf, and that’s after two minutes in different language. And this idea of App Store, that was what we were driven and that was what we also produced. And it’s existing and doing.

And I think that’s probably also from the experience we had in the field. It’s coming more and more in the whole industry, this more B2C store, I would call it, and neither the B2B source, both are great. But we see in the financial industry more to B2B this is driven and less the B2C. And I think this App Store or whatever you call it, pay-on-request idea is coming more and more. And I’m more than happy to talk about that as well if it is ESG, which I feel like familiar because we do a lot on that.

Matt Noble:

I think it’s a good point to make in that when the integration hub first started it had one  service on it that was live and that was was contract enquiry. And whilst that serves a purpose and some very valuable purpose as well, which we’ll come on to later. But the point is that it had to start somewhere and contract enquiry seemed like a good place to start to be able to get a valuation on the fly  for a client’s holding.

In terms of what we’re doing now to broaden the type of data that can then be sent through the hub to adviser systems, which can then be obviously replayed to client portals that those client systems have? We’ve enhancedthe service to include bulk valuations. That was done about 18 months ago. We built on bulk transaction history, that was done shortly after. We’ve now started to look at remuneration feeds and that’s working with one provider and the back office systems.

And then most recently, we’ve looked at the account opening process as well so we get data from an adviser system such that the application process can benefit from the reuse of data that sits on the client record and any recommendation that’s come from the advice process. The point that I’m going to make here is that we’ve got to the stage where those types of data feeds that you would traditionally build on a point to point basis are all now covered on the integration hub.

We’re able to  provide the pipework for the most comprehensive sets of data into adviser systems from providers and indeed the other way. And the interesting thing to note is that when we’re talking to new partners of the hub, whether that’s a provider or indeed an adviser software system, they’re not signing up to use the hub for one particular service, typically, they’re signing up to use a multitude of different services.

So if we look at somebody like Aegon, for instance, they’re doing bulk valuations, bulk transaction history, remuneration and account opening, and already people are connecting to those services and making the best use of it with things that they didn’t have in the past. A really good example of that is. That Intelliflo did not have bulk transaction history from Aegon in the past, but now they do and it’s via the hub.

All I can say is that I just see that that scenario growing and growing to the point that actually the utopia is that we’ll have as many of these ‘standard business processes’ I’m saying in inverted commas, connected to the hub from various different platforms, life office platforms, retail platforms, DFM platforms. And they’ll all be pushing data through the hub into  back office systems. And ultimately, that is the thing that we want, because data is key because the advisers need it and the client needs it.

Paul Richards:

We are indeed working with Matt and the team at Origo on the Integration Hub, on a variety of journeys that now from account set up through re-registration, switches, CELTA cash etc. And you must take this in the context that I am just the sales point within Fidelity, so when I talk APIs, I can just about spell out that three letter abbreviation, but that’s about it. But as I understand it, we have built a whole range of internal architecture around APIs, which means you can deploy them to third parties quite easily, given that they’re there in our internal environment as it is.

And I think to the point, yeah, you’re right. And if nobody else bothers with it, then it’s been a waste of time for everybody. But what I can tell you is that we’ve got significant demand from clients and from significant clients to work on systems such as this. And going back to the point I made earlier about my nightmares about one of our competitors announcing a deal with Intelliflo or Iress, then I think it will be the commercial realities which dictate how this goes. If the boot were on the other foot and we hadn’t started the work with Origo and we lost a significant count because one of our competitors had done, then it’s not good. It’s not a good message, is it? Certainly not very good for me in my job.

And you have to adapt. And yes, we collectively have to get over this point about disintermediation and accept that the market is moving forward in certain areas, and accept that if we don’t get on board with this sort of thing, then we are going to become the legacy. Ian, you and I spoke a bit ago about legacy providers, and you may want to come onto this, but one of the issues with moving assets around the market is the reluctance of companies to play ball.

They are the legacy now, and every adviser under the sun is looking to move assets away from their providers onto Platforms to get their clients into modern solutions, modern products, more flexible products. And unfortunately, due to factors that are beyond our control, like regulation and an unwillingness of the legacy providers to do anything about it, then clients are stuck. But I think the commercial aspect, we should be totally on it.