In the age of the super app, the onboard experience is the holy grail of businesses – regardless of vertical – looking to retain end users and new use cases.
And application programming interfaces (APIs) allow developers at these companies to design new offerings and create new functions directly within their platforms, changing entire industries.
Businesses can leverage the power of APIs to digitize and modernize all kinds of interactions. Not so long ago, for example, Square introduced a new business model for payments for a wide range of businesses that wanted to accept debit and credit payments online. In the 12 years since its inception, the company has now used APIs to create a dedicated ecosystem to meet the needs of sellers and consumers far beyond payments, including billing, marketing and reservation.
In an interview with Karen Webster, David Dindi, CEO of FinTech Atomic, said the landscapes of wealth creation and wealth management are ripe for change and ready for a leveling of the playing field against the powers of the world. investment that dominated Wall Street for decades.
He said the company’s investment API, which launched in stealth mode Thursday, November 11, will ultimately help create a collection of apps that democratizes the entire industry.
As it stands, he said, asset management is largely the domain of the big names. Companies like Vanguard and Fidelity have built a significant brand presence (and sizable trust) over the decades.
âPeople are looking for them as financial solutions,â he told Webster.
Dindi said he believes unbundled services will become the new model. Businesses that have built a large following by providing some form of unbundled financial services will ultimately be able to target specific groups in specific niches.
With these targeted options, they will provide a range of personalized services instead of trying to cater for the full range of users that a Vanguard might serve.
Retail investing, in general, has become much more widely adopted, he said, and while product managers and organizations of all kinds of financial services companies are not yet considering launching products in space, Dindi said they would be soon.
But, as he said, “it is very difficult to democratize access to something that is also regulated – and it is difficult for any entity.”
New service deployments in weeks, not months
In this context, the Atomic API offers FinTechs and banks in direct contact with consumers a simpler way to integrate investment accounts into their services. It helps these institutions put in place the infrastructure they need to bring new investment experiences to market in weeks, rather than months.
Dindi told Webster that this would allow corporate clients to integrate a wide range of investment products and services, including direct indexing (attempting to replicate the performance of an index like the S&P 500, for example, by buying the stocks it contains), ethical investing and currency trading in 60 markets. In doing so, the integration of investments means that the playing field is leveled a bit for small investors.
âWe’re a broadcast asset manager,â he told Webster, noting that Atomic is ânot just an API. In a way, we are also a group purchasing organization.
As he explained, a single firm might not have the size or infrastructure to provide these new investment services in a cost-neutral manner. But by leveraging the scale of different institutions and departments, those same companies don’t have to struggle with the time (let alone the expense) of developing internal regulatory and compliance operations.
No easy task, given the many complex obstacles to overcome when developing a solution.
âIt’s the type of business where you have to do everything right,â Dindi said, adding that the company is regulated by the Securities and Exchange Commission (SEC). (Before Atomic, Dindi also made a stint in healthcare, a vertical industry known for its regulatory complexity.)
Exploring the company’s model, he said partners can leverage pre-tested and developed designs or choose to leverage Atomic’s API and build their own front-end experiences.
Behind the scenes, he said, Atomic takes on the fiduciary relationship between the corporate client – your customer knowledge management (KYC), onboarding, and account openings – and its end users. Company services are white label and partners can choose to use Atomic’s brand or their own.
âWe have structured ourselves in such a way that we can offer all forms of investment experiences,â he said.
This approach will help businesses looking to own at least some of the financial lives of users. Investment remains a critical part of that relationship, providing what Dindi called longitudinal growth – bringing in commodities, improving them, and deepening relationships along the way.
The company has secured $ 25 million in a Series A funding round led by QED Investors and Anthemis, with participation from Softbank and Y Combinator. The company also said it has partnered with Upside, an app that turns student debt into investment opportunities. Upside, according to Thursday’s announcement, has built a wealth management offering that allows its users to refinance their student loans and reinvest savings related to refinancing.
Atomic also sees demand from regional banks and large institutions looking for new ways to deliver services to their users, Dindi said.
âWe have spoken to regional banks and we are also starting conversations with credit unions,â he told Webster. âInvesting provides that long-term grip that platforms are looking for. “