DTCC launching API marketplace to improve access to processing services

The Depository Trust & Clearing Corp. is looking to modernize how banks, broker-dealers and asset managers access its services and market infrastructure.

Following in the steps of technology vendors and custodians, DTCC is launching a digital marketplace of application programming interfaces, or APIs. Software developers at DTCC’s client and partner firms can use these APIs to integrate DTCC services, data and functionality into their own technology.

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The first API available is for DTCC’s risk management service, which provides a view of current and historical positions that may impact risk and liquidity. Firms can use the API to embed this data directly into their own technology to more efficiently analyze and manage risk across firm functions, such as monitoring, surveillance and regulatory compliance.

DTCC plans to launch more APIs later this year, but Robert Palatnick, global head of technology research and innovation, wouldn’t specify what the company has on its road map.

It’s ultimately up to DTCC clients to decide how to use the APIs, similar to the way that Uber can use a Google API to embed maps directly into its ride-sharing app, Mr. Palatnick said.

The hope is to move DTCC from what Mr. Palatnick called “very prescribed interaction,” where firms would provide input and DTCC would later give output, to a more flexible environment in which firms can access its data and services in real time.

“The goal is to put as much data [as possible] into our clients’ hands, as soon as the client wants it, and whenever and wherever the client wants,” Mr. Palatnick said. “The traditional model did not support that client-centric focus.”

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Not even an industry-owned market infrastructure provider like DTCC is immune from technology disruption. Just as retail investors are demanding access to financial services via the same digital and mobile-friendly experience they get when they access Netflix and Amazon, financial institutions want to use services from companies like DTCC in ways that are unique to their individual business needs, said DTCC chief information officer Lynn Bishop.

“APIs will continue to play an important role in the future of financial services across the retail, institutional and post-trade areas,” Ms. Bishop said in a statement.  “APIs are the building blocks of this digital transformation, and in today’s interconnected world, they have risen in prominence and become important to every facet of the enterprise.”