Why RBC, JPMorgan are backing a new standard for financial apps
Key to the iPhone experience is synergy — the ability for apps to easily communicate with each other to save users time and money.
For example, if a customer uses an iPhone app to book a hotel room in Dallas, and then visits United Airlines' app, the airline will show flights to the city. It knows where the customer is interested in traveling and where he or she lives, because iPhone apps are aware of each other and work efficiently together across Apple's iOS operating system.
Now some are working on an ambitious plan to let financial applications function together in the same way outside of just the smartphone.
So far, 50 banks and vendors, including JPMorgan Chase, Morgan Stanley, Royal Bank of Canada, Barclays and BNP Paribas, have signed up for a standard called FDC3 (Financial Desktop Connectivity and Collaboration Consortium).
The idea is to let applications work together across platforms and browsers, helping users handle tasks that involve multiple apps. For instance, if a client asks a trader or salesperson about a particular bond, that person might need to query an inventory manager app to see if they have it, then open a graphical application and graph it versus a two-year or 30-year note to see if it’s a good price. Then the user might open a holdings app to see if other clients also hold the bond. With interoperability, the first query would automatically stimulate responses in the other apps.
Kim Prado, global head of client insight, banking and digital channels technology at RBC, says banks need this kind of interoperability for their apps. The bank uses OpenFin OS, which embodies FDC3 in an iOS-like desktop operating system.
“By leveraging OpenFin, we’re able to seamlessly join multiple technologies together without impacting the end user,” Prado said.
OpenFin OS is also helping the bank move from large applications to small, interoperable apps.
The traditional model in finance has been, “I'm going to give you this one big, monolithic application that's going to give you everything you need to delight the end users,” said Mazy Dar, OpenFin's CEO. “That approach has worked in zero percent of the places. It's a hard thing to do and it's fraught with all kinds of risk.”
Banks are accepting the idea of software in the form of apps or widgets — smaller components that are easy to deliver and update.
RBC started deploying OpenFin on front-office desktops, where the typical user has many apps open on multiple monitors at all times. OpenFin enables applications to be browser agnostic, Prado said.
“As we partner with leading technology vendors that adhere to the FDC3 standard, new applications are deployed quicker to the desktop,” she said.
Eventually, Prado envisions rolling OpenFin OS out to all desktop users who use more than one application.
Dar says this is common, that bank customers tend to start using OpenFin in a specific area like trading, then they'll deploy it into other parts of the bank.
David Weiss, principal of Market Structure Metrics, said he expects this type of technology to catch on across the industry.
“In any business, there’s always a need for interoperability,” he said. “Heretofore we’ve had these bespoke apps or apps that vendors write, and it’s a question of piecing APIs together or writing code” to make them compatible.
There are environments where apps can work together, such as the Bloomberg terminal or Fidessa’s platform, but they are restricted to a vendor-defined, prescribed set of applications. Banks sometimes want to be able to choose their own set of best-of-breed software.
Vendors are sensing this client need and becoming more interested in making their software interoperable with others in order to sell more, Weiss said.
“This notion of FDC3 and FINOS" — the Fintech Open Source Foundation — "it’s this notion of playing nice with others,” he said.
What could go wrong?
Anytime there’s a movement to adopt a common operating system or protocol, a key question is whether it will stand the test of time, or will adopters be locked into something from which they can't escape.
Prado is confident that as technology changes and the next common financial app language after HTML5 comes along, OpenFin will keep up. There are two reasons for this, she said.
“One is, they’re in the forefront, so they’re keeping ahead of schedule as new technologies emerge,” she said. “The second reason is, they’re building a consortium and promoting the FDC3 standard. If more and more vendors and banks adhere to this standard, newer technologies will be easier to implement.”
Weiss agreed that this standard has staying power.
“It’s more abstract than, say, a Java messaging bus,” he said. “If I’m a customer of app A and I’m a customer of application B, I know that so long as I’m in good standing with both, they’ll sync together.”
OpenFin is “in a good space and they have a good network effect,” Weiss said, pointing to the involvement of heavyweight vendors like IHSMarkit, Thomson Reuters and Factset.
“They’re taking it seriously,” he said. “Any vendor involved is clearly sending a message — we are on the record as wanting to play well with others, it’s a goal of ours, we mean it, look what we’re doing here with all these other players.”
Another issue is how much work is involved in making legacy applications compatible with FDC3. Dar said only a small amount.
“To go from a web application to OpenFin is a 30-second task, with one command line,” he said. “It's not always that easy and sometimes the things people want to build can be quite complex, but even for the very complex tasks, the OpenFin part of that is the easiest part.”
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