The concept and idea of social trading has always played a role in the financial markets.
API Platform, Tradier, Sees Explosion Of Firms Looking To Build Robo-Advisors
Sneak peak in this great piece by Renee Caruthers of FierceFinanceIT: API Platform Sees Explosion Of Firms Looking To Build Robo-Advisors
API Platform Sees Explosion Of Firms Looking To Build Robo-Advisors
The level of publicity surrounding robo-advisory services has led to a pipeline of firms looking for quick ways to build and take proprietary robo-advisory offerings to market, according to one cloud-based platform provider.
"Robo-advisors are the greatest use case of how APIs and the digitization structure really kicks in," said Dan Raju, co-founder, chairman and CEO of Tradier, an API-based brokerage platform.
Raju said there are now 23 companies developing robo-advisory services on top of the Tradier platform, up from a handful last year and zero the year prior.
The unbundling is happening in the sense that everybody is now offering another product at a lower cost and it's creating more choice," Raju said. "If you really think of what is happening now, every fee-based advisor in the country is thinking, 'I need to offer a robo-product because the market is demanding a much lower cost.' It's creating more choice. "
"Tradier, which considers itself an API brokerage, is a FINRA-licensed cloud-based platform which offers aggregated market data and full connectivity to markets for trading equities, options, ETFs and mutual funds, with plans to expand into FX futures later this year. Leveraging Amazon Web Services and Apogee for API management, it offers secure scalable APIs that clients can build customized applications, services or tools on top of. Clients range from brokerage firms to independent advisors, Raju said.
Tradier developed out of what Raju and the other co-founders saw as a trend toward the unbundling of services from the traditional model years ago where investors would get a package of services through their broker for a fee. API technology, Raju said, is key to enabling an unbundled structure, allowing firms to focus on customizing an application for clients while leveraging a hosted infrastructure.
"The customer is demanding choice and the people that create these products are able to build them without having to build from the ground up," Raju said. "The heart of all of this is APIs, which instantly let you launch products. APIs are at the heart of digitalization, automation and what I call the unbundling of the financial markets."