J.P. Morgan extending API program to post-execution

J.P. Morgan is taking an API program being piloted by clients in its markets division and rolling it out to post-execution functions – in other words, linking the back and middle office so that buy-side clients can connect data to their front-office activities.

Shaun Parkes, managing director and head of investor service sales for Asia Pacific, says the rollout for APIs (application programming interfaces) reflects the integration of custody with the investment and corporate bank.

The idea has been to better serve large institutional clients, mainly from the buy side, by adding prime services and futures and options to the investor services business. Parkes also created a new role for the tech team to engage directly with clients, rather than leaving it just to different business lines’ salespeople (Ali Shahrokhi, previously at HSBC’s prime finance team, took the job last year).

“We’ve always liked to think of ourselves as a ‘tech company with a banking license’,” Parkes told DigFin, noting custodians’ longstanding handling of client data. “But now technology has a new pace.”

Although this can take multiple forms, such as robotics, chatbots and other features clients find of interest, Parkes said, “It comes down to data.” Like other financial institutions, J.P. Morgan has focused its efforts on building a data lake, using cloud computing to support new data-crunching demands, and is rolling out APIs to let clients access and customize reports.

“Clients are transitioning to receiving passive files to new operating models using APIs,” Parkes said. “We’re going from a push model to a pull,” in which clients are increasingly able to draw from the bank’s data lake to satisfy their own reporting needs, rather than sit back and wait for a statement in the mail.

This began in the markets division of the investment bank, to process market and transaction data. Now it is moving into middle-office functions such as performance measurement and third-party fund-manager compliance.

Next will be to extend APIs into pre-trade areas, such as analytics, market intelligence, and ultimately investment decisions.