In the age of the super app, the embedded experience is the holy grail of companies — no matter the vertical — seeking to cement their end users’ loyalty and new use cases.
And application programming interfaces (APIs) enable developers at those firms to craft new offerings and build new functions directly into their platforms, changing whole industries in the process.
Companies can leverage the power of APIs to digitize and modernize all manner of interactions. Not all that long ago, for instance, Square introduced a new business model to payments for a broad range of enterprises that wanted to accept debit and credit payments online. In the 12 years since its founding, the company now uses APIs to build a dedicated ecosystem to meet seller and consumer needs well beyond payments, including invoicing, marketing and booking.
In an interview with Karen Webster, David Dindi, CEO of FinTech Atomic, said the wealth building and wealth management landscapes are ripe for change and ready for a leveling of the playing field against the investment powerhouses that have dominated Wall Street for decades.
He said the company’s Investing API, launched out of stealth mode Thursday (Nov. 11) will eventually help build a collection of apps that democratizes the entire industry.
As it stands today, he said, asset management is largely the domain of huge names. Companies like Vanguard and Fidelity have built significant brand presence (and no small amount of trust) over the decades.
“People seek them out as financial solutions,” he told Webster.
Dindi said he believes that unbundled services will become the new model. Companies that have built large audiences by providing some form of unbundled financial services will be eventually able to target specific groups in specific niches.
Through those targeted options, they’ll provide a range of customized services instead of trying to cater to the full range of users that a Vanguard might service.
Retail investing, in general, has become much more widely embraced, he said, and if product leaders and organizations across all manner of financial services firms are not yet considering launching products in the space, Dindi said they will be soon.
But, as he said, “it’s very hard to democratize access to something that is this regulated — and it’s hard for any entity.”
New Service Rollouts in Weeks, Not Months
Against that backdrop, Atomic’s API gives consumer-facing FinTechs and banks an easier way to embed investment accounts into their services. It helps these institutions build the infrastructure they need to bring new investing experiences to market in weeks, rather than months.
Dindi told Webster that it will allow enterprise clients to embed a broad range of investment products and services, including direct indexing (attempting to replicate the performance of an index like the S&P 500, for instance, by buying the equities in it), ethical investing and currency trading in 60 markets. In doing so, embedding investments means that the playing field is leveled a bit for smaller investors.
“We’re an asset manager by diffusion,” he told Webster, noting that Atomic is “not just an API. In a way, we’re also a group-purchasing organization.”
As he explained it, a single company might not have the scale or infrastructure to provide those new investments services in a cost neutral manner. But by leveraging scale across different institutions and services, these same firms don’t have to grapple with the time (not to mention expense) of developing in-house regulatory and compliance operations.
No easy task, given the numerous and complex hurdles to surmount when crafting a solution.
“This is the type of business where you have to do everything right,” Dindi said, adding that that the company is regulated by the Securities and Exchange Commission (SEC). (Before Atomic, Dindi also did a stint in healthcare, a vertical famous for regulatory complexity.)
Delving into the company’s model, he said that partners can tap into pretested and developed designs or opt to build on top of Atomic’s API and craft their own front-end experiences.
In the background, he said, Atomic assumes the fiduciary relationship between the client firm — handling know your customer (KYC), onboarding and account openings — and its end users. The company’s services are white labeled, and partners can choose whether to use Atomic’s branding or their own.
“We’ve structured ourselves in such a way that we can feature all forms of investing experiences,” he said.
That approach will help firms that are looking to own at least a portion of users’ financial lives. Investing remains a critical piece of that relationship, providing what Dindi called longitudinal growth —introducing core products, enhancing 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 struck a partnership with Upside, an app that transforms student debt into investment opportunities. Upside, according to Thursday’s announcement, built a wealth management offering that allows its users to refinance their student loans and reinvest savings tied to the refinancing.
Atomic is also seeing demand from regional banks and larger institutions looking for new ways to provide services to their users, Dindi said.
“We’ve spoken to regional banks, and we’re starting the conversations with credit unions as well,” he told Webster. “Investing offers that long-term stickiness that platforms are looking for.”
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