How APIs Are Reshaping the Future of e-FX Trading

Following on from his interview with eForex magazine, we decided to dig deeper into the world of APIs with a full interview with Barry Flanigan. Read below as the Head of Asia Pacific, iSAM Securities, delves into the effect of APIs on the world of e-FX trading.

Why have APIs become one of the main driving forces behind innovation and growth in e-FX trading?

“APIs make everything faster and more efficient. They allow retail brokers to plug directly into our pricing and execution, access real-time data, and scale up quickly. Using standardised industry protocols, almost everyone can learn how to confirm to APIs.

As we move further into an era driven by AI, they also cut costs by reducing manual work and automating the otherwise huge amounts of data and processing speeds.”

How are the API needs of FX trading firms (brokers, money managers, prop and algo traders, corporates, asset managers) evolving?

“Consumption of data and systematic execution are the two main drivers of this evolution.

Brokers want fast APIs for pricing and execution to stay competitive and ensure they consume and distribute these products efficiently.

Money managers typically need them for portfolio management across assets and connecting dots across the various asset classes.

Prop and algo traders are typically looking for super low latency for their automated strategies.”

In what ways are traders utilising APIs for more customised requirements, for example in the execution of trading strategies or to improve access to real time analytics?

“Traders are using APIs to run complex algo strategies which are becoming increasingly more sophisticated thanks to vast and growing data accessibility.

We’re seeing clients pulling live data to track market moves in FX and metals, building custom dashboards to see our pricing in action, and even back testing their models with historical data - all made easier by the increasing availability and usability of API-driven data.”

What are the merits of the various flavours of API (FIX, REST, WebSocket) and how do they differ?

“FIX is the for fast, reliable trade execution.

REST is simple and great for pulling market data. Typically used more for back-office report downloads and secure access to broker files without the need for emails or csv files sent across unsecure networks.

WebSocket is all about real-time streaming, so traders love it for live price updates on metals and FX.”

What impact is the growth of algorithmic, multi-asset class and crypto trading having on demand for API services – are you seeing increased interest in high performance, cross-asset APIs?

“Algorithmic trading is driving demand for faster, more responsive APIs. We’ve spoken a lot on our blog recently about the increase in volatility across markets, particularly driven by geopolitical tensions and uncertainty. As a result, speed is more important than ever. Regardless of if the chosen strategies are HFT, there is a growing expectation to move and react as quick as possible.

We’re definitely seeing more demand for high-performance APIs that can handle cross-asset trading without lag and seamlessly deliver the data in-house for execution & analytics.”

“APIs can pull liquidity from multiple sources like banks and ECNs to get the best prices for brokers.

They also enable smart order routing to optimise relationships with their hedging/counterparty partners. APIs can be used to consume and analyse liquidity analytics, allowing brokers to make more informed decisions based on this data – which is where our Radar analytics platform excels.

For market makers, this enhances their ability to have a data-driven approach and provide highly customised pricing to a greater subset of clients who often have unique requirements and USPs.”

Are APIs a catalyst for enhancing customer experiences and enabling FX providers to differentiate themselves?

“Absolutely. Delivery and maintenance of low latency pricing and infrastructure allows brokers and market makers to differentiate themselves with more than just spreads. As dependency on systems, networks and automation grows, the value of using forms of APIs grows with it.”

In what ways are APIs facilitating the use of next generation technologies in FX such as AI and where is the impact of this being felt?

“The biggest impact is in algo trading and risk management. APIs feed real-time data to AI systems for tasks like predicting trades or managing risk.

Real-time connectivity allows systems to respond instantly to market movements and optimise execution quality. From a risk management perspective, AI-driven insights ultimately help improve decision making. As trading environments become more complex, access to real-time analytics is crucial for teams to make informed decisions to drive profitability.”

How will APIs shape the evolution of electronic FX trading as they become more embedded on trading desks?

“In many ways, they already are. There is very little that happens on a trading desk without API connectivity – be it execution, pricing, or analytics. Even the most sophisticated trading desks have become fully automated. APIs connect FX with metals and crypto seamlessly, give desks real-time analytics to make smarter calls, and let them build custom workflows.”