Digital Transmission: Saxo Bank's Open API Strategy Analysis

This case study examines Saxo Bank's journey towards adopting an Open API strategy, detailing its evolution from a traditional digital platform to a model leveraging Open API technology. It explores the initial challenges, including the lack of business ownership and poor requirement specifications,...Read More

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How has the Open API technology evolved since Saxo started to explore
technology?
Journey for openness as well as launch of Open API technology consists of several
phases. The background of project of Open API was found due to increase in complexity of
digital platform of Saxo bank, from setup which consist of a trading application and a core
banking platform to setup with trading applications’ growing number along with secondary user
interfaces which are developed for the promotional purposes. Saxo bank, in 2009, took first steps
for project of Open API. Clients were asking for native iPhone app for complicating existing
JavaScript/HTML based on SaxoMobileTrader (Fenwick and Schadler 2018). First test of Open
API technology was developed in SaxoTraderGO, new application of HTML5/JavaScript for
replacing every other mobile and web applications of Saxo. Sufficient levels of performance by
technology of Open API meant Saxo could create its new architecture.
What is the difference between the traditional business model of Saxo Bank
and the new business model based on Open APIs?
Traditional business model of Saxo bank was based on digital platform which allows to
trade within financial instruments’ multitude, which includes Forex stocks, funds, future spreads,
bonds and CFDs. IT systems of Saxo bank handle as well as support every operation necessary
for offering trade execution, reporting, trading management, auxiliary functions, functions of
back office and risk management (Geisler 2017). Cloud solution is offered by Saxo Bank and
hosts system as well as staff handles every task necessary for keeping engine as well as every
process of business running.

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Open API technology is used as internal architectural principle for enabling applications’
steadily growing portfolio. Open API technology is use for opening up trading platform to 3rd
party developers for creating complements to platform.
What do you see as the key strategic benefits of having a business model based
on Open API?
Through business model by using Open API technology, everything which user could
view was accessed as well as executed through Open API. In media, new design of application as
well as new functionality got substantive attention. However, technological solution of
application was not too much exciting for per day user. Financial trading is quite time crucial as
well as needs extensive security (Filianin 2019). It was possible in achieving sufficient levels of
performance by technology of Open API meant Saxo must continue in building new architecture.
This technology of Open API proved to be mature enough for enabling financial trading in
reliable, secure and efficient way.
What are the pros and cons of having the traditional and the API-based
platform-based business model in parallel?
Business of Saxo bank is based upon digital platform which allows to trade within
financial instruments’ multitude, which includes Forex stocks, funds, future spreads, bonds and
CFDs. Saxo bank launched web browser client (SaxoWebTrader) as well as mobile client
(SaxaMobileTrader).
After running the project of Open API for few months along with traditional business
model of Saxo bank, there was limited progress (Neyer 2017). Many views was there for failure.

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A major reason was lack of business ownership, due to making this project technical. Other
reason was poor specification of requirements. There was high complexity level as well as
maintenance cost which was disadvantages of running traditional along with platform-based
API-based business model together.
Does an open platform strategy require an approach to systems development
different from traditional ones?
Opening Open API to public needs to increase the focus to support potential developer
community along with documentation, forum and tutorials for interaction. There is addition of
Saxo select as a member to applications’ family leveraging technology to Open API. Sufficient
levels of performance needs to be achieved by technology of Open API for Saxo could build its
new architecture (Rubini 2018). There are possibilities of external 3rd part developers could be
opened up. Internally, this technology could financially trade in secure, reliable and efficient
way.
What are the particular issues when providing Open API’s for financial
trading and distribution of financial information?
A major issue was lack of business ownership, due to making this project technical. Other
issue was poor specification of requirements. There was high complexity level as well as
maintenance cost which was the particular issue when providing technology of Open API’s for
the financial trading as well as distribution of the financial information. Service owners basically
were asked in contributing resources as well as time, however doing this was voluntary as well
as several service owners had prioritized all other activities (Sharma 2019). As result from closed

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down project of Open API, Open API technology as a concept was dead internally. However,
individuals in Saxo bank gained experience to develop as well as think with respect to Open API.

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References
Fenwick, N. and Schadler, T., 2018. Digital rewrites the rules of business. Forrester,
Cambridge, Massachusettes.
Filianin, K., 2019. Securing FX Trading Customer Base against Disruptive Fintech in Business
Banking Environment.
Geisler, S.B., 2017. Innovation champions at Saxo Bank.
Neyer, G., 2017. ‘Mobile First’will become ‘API First’—PSD2: Changing banking as we know
it. Journal of Digital Banking, 2(2), pp.171-178.
Rubini, A., 2018. Fintech in a flash: Financial technology made easy. Walter de Gruyter GmbH
& Co KG.
Sharma, P., 2019. Impact of Technology and Regulation on Financial Services: Opportunities
and Challenges for the Banking Sector.