Apply Financial: The right API works like a dream - Mark Bradbury

Dealing with data can be the stuff of nightmares for banks. It is tedious, time-consuming and costly. This is why Mark Bradbury, Apply Financial's founder, says his totally cloud-based and automated payment-validation solution is the best way to banish the sleepless nights.

It was Albert Einstein who said the definition of insanity is doing the same thing over and over again, and expecting different results. Mark Bradbury has not called anyone insane, but he tells a story illustrating the great physicist's sentiment.

One of Bradbury's clients reported how a customer was trying to make an international payment and managed to enter the wrong information more than 20 times in quick succession. Bradbury lets out a knowing chuckle but is quick to use this tale as proof of his product. Simply put, his application programming interface (API) protects banks and customers from incurring costs and suffering delays that come from trying to validate payments with incorrect data.

"If you were making a payment to Spain, for instance, you would want to put in a bank account number, bank code, IBAN or SWIFT BIC, and you might have to put something else in like an address," Bradbury says. "Well, we have in our solution the reference data, which is updated daily, the ability to check all that is correct."

Simplifying but sound

Bradbury, who founded Apply Financial in 2010, says that his company simplifies what is a very important service.

"It's a complete end-to-end capability to validate any single payment or payment file," he says. "If the information is incorrect, the system tells the user - or bank if it's using it internally - what's wrong and suggests a means to fix it."

Think about how easy it is to make a mistake. It could even be just one digit wrong. It's what Bradbury calls the "fat-fingered error". The payment bounces back. The bank gets charged a fee, which is passed on to the client, who then may incur further losses if subject to changes in exchange rates and an additional payment fee.

"It's expensive, time-consuming and it upsets the customer," Bradbury says. "Whoever is receiving the money doesn't get it on time so they also get upset and the bank has to do a manual process internally, which is also an added expense. So, if we can fix it or, at the very least, notify them it won't work and they shouldn't send the payment, then that saves a lot of hassle, time and money."

Waxing historical, Bradbury reminisces about how payments used to require consulting books from companies such as Bankers Almanac that published all the banks' branch details, addresses and BICs. Books turned to CDs, which moved to browsers and evolved into "dumb APIs that just fed data into a system on a daily basis".

Bradbury wanted to provide something smarter: an API that does all the functions and algorithms that the banks and FX companies were writing internally using there own software teams. Banks and FX companies have employed and still employ data managers to put the data on servers, support these servers and build functionality into them so they can maintain payment systems. Something Bradbury has a strong opinion on.

A chortle erupts in exasperation through the telephone. "Why would you want to manage the daily data?" Bradbury asks. "It's a nightmare. We provide this service in a secure cloud for more than 700 clients. We say to banks, 'We provide more functionality, constantly update data and software, and offer great reporting tools. You don't have to do any of that. You can remove it all from your company and we do it'."

While banks have been reluctant to hand over these types of data services to third-party companies, things are definitely changing. "We are six years old, and it has taken us this long to convince people that it's OK to use an API and get in the cloud," he says.

Apply Financial secured FX companies as its first clients. With less-stringent regulation and compliance issues, they could be a bit bolder. They didn't want to employ staff to monitor data in house. They wanted an automated system. "This is a low-margin competitive market," Bradbury says. "It's all about volume and automation."

Staying safe

Many banks are keeping abreast of this trend, although Bradbury says he initially had to "jump hurdles" to get some of the worlds largest banks to sign up with Apply Financial. So how did he convince them to ditch the tried and tested, albeit dated, method upon which they had previously relied in favour of his cloud-based API?

"The first thing we did is put our environment in a very secure private cloud provided by Sungard," he says. "Banks store their applications on hosted environments with Sunguard so it ticks the box for them."

Apply Financial then takes another step further ensuring PCI DSS compliance. "It is overkill for us," Bradbury says, "because we don't store address details. All we do is validate and it washes through."

The company also runs automated monthly penetration tests to check for any new bug, phishing or hacking attempts. "If you plug in our API," he says, "nobody should be able to get in with a third-party attack - when they get into your system through another system. We've invested a lot of time and money into security to make sure our clients are safe."

Beyond security concerns, banks are sometimes reluctant to make the shift because of the time and effort it takes to move away from internal systems and functions. Whereas an FX company can be live in four to eight weeks, banks can take as long as six months. "We're patient," Bradbury says. "We provide support all along the journey of going live and, afterwards, we provide 24/7 support with very stringent SLAs as we understand the challenges for banks."

The last concern banks have is that they don't want to be running another project. Bradbury says this is confusing the point. His cloud-based API is not another project. "You plug in our API and it removes projects."

It's time to digitise relationships. This is Bradbury's message. Digitisation allows seamless and automatic access to clients through their browsers or apps. It's easier, and saves time and money. "Put intelligence behind the screen," he says. "Guide them through the process of making a payment so they don't make mistakes and they'll love you for that."

When data is discussed these days, it is essential that real-time reporting tools feature. Apply Financial's API has a comprehensive reporting dashboard that is able to report on the number of validations being made, in what currencies, in which countries and what errors are being made - all in real time. It will also highlight immediately to the user if they are making an error and how to fix it.

Secure investment

Bradbury says a major factor to consider is return on investment. Banks are in the business of making money, and saving clients time and money. "With our Validate API," he says, "even if you increase your straight-through processing by just 0.25% across your environment for making payments, this will pay for our service.

"Most organisations take our API and improve their straight-through processing by high percentages. We have one client who went from 70.0 to 99.7%, so you can imagine how much money they save."

Apply Financial also works with its clients to see how its API is deployed in their systems, where to deploy it and whether any additional functions are needed such as soft features banks don't have to code. "Our system is not just an end-to-end solution for validation it is also a smart-data repository," Bradbury says. "For instance we take banks' corresponding banking data they've built up themselves like standard settlement instructions, and we store them in our database for them to use as part of the solution. This means that when banks plug in our API, not only do they get all our data, but they can also get their own data in one place."

The banks can access and update this data as normal, but have the added functionality of the cloud-based API.

All of the solutions can also be white labelled. Corporate clients, for instance, can clean their payment files by running it through Apply Financial's system, but it will look like the bank's system so as to maintain brand loyalty.

While running the APIs is straightforward for anyone who understands modern integration techniques, Apply Financial offers round-the-clock support with a response time within four hours. "We completely support our clients through the process," Bradbury says, "and we've got all the information online to guide developers and in-house users."

The present is busy for Apply Financial, but Bradbury has his eyes set on the future. Making sense out of data and integrating it with clients' solutions to save time and money will continue to be the driving force of all service and product development. However, Bradbury wants to add even more functionality, such as using data to address issues of fraud and sanctions. "We want to make sure the money is being sent to someone who is allowed to receive it," he says, "someone not on a blacklist. "Our principle goal is to offer 100%, totally automated, straight-through processing, requiring no manual intervention. It's real time, big volume and 24/7."

It is clear that Bradbury wants to help banks fight back, ditch the in-house data headaches and step on to the cloud of automated payment validation.