Are you planning a fintech application or website that integrates financial data? Do you need a stock market API for your asset manager and data science team?
Before you commit to one provider, it's crucial to know the details of your stock data provider. We've put together 10 questions to help you review stock market APIs and identify key factors.
Although you can rely on a financial data provider, you should continue to review the data and licensing topics even after integration. The accuracy and timeliness of the data in your app, on your website, or for your internal research is still in your hands. It's therefore important to ensure that your data provider provides the data you need and that it can be seamlessly integrated into your application. This can be achieved by asking specific questions to the provider.
The questions you ask should help you clarify two important things:
It's important to note that the relevance of these questions depends on your organization's specific needs. You know your business priorities and restrictions best. Therefore, use these questions as a starting point and adapt them accordingly for your use case.
Let's first look at three simple yes/no questions that can quickly help identify potential issues with some vendors:
It's critical to know whether your data provider is ready to offer trial access or sample datasets so that you can verify the integration with your data before you actually start. Finding data issues after launching your app or integrating with your own databases for your research can be devastating. It is therefore advisable to check them in advance. A selection of sample data doesn't necessarily have to be enough for the entire app build, but it should be enough to ensure that the vendor's data can be seamlessly integrated into your app.
Some data may be limited to specific countries or regions. It is important to know in advance whether the data you receive from your financial data provider has such geographical or regulatory restrictions. This allows you to consider whether these restrictions meet your needs or whether they could impact your app development.
It is crucial to know the costs of using a provider's data. Obtaining data from financial data providers can be costly. There may also be additional fees, such as for exceeding API call limits. Before you choose a provider, it's important to ensure that you fully understand all costs associated with their data.
Let's now look at seven open-ended questions that you could ask that are a bit more nuanced. Make sure you get more than just a standard response. If necessary, ask for materials or brochures that clearly disclose the provider's data universe.
The type of data you need depends on your use case. Not all providers provide all types of data. So you need to make sure that you get all the data you need to develop and launch your application.
For example, you can retrieve some market data from other providers via the API. If you need economic data, you can obtain it from the IMF, for example. If you only need a specific type of data, individual datasets and sources might be right for you. However, you often need different data streams and data sources, and integrating different providers is complex and lengthy. In addition, some providers often only cover specific geographical areas, e.g. only North America, but this is a hindrance to the goal of having global coverage.
At Bavest, we recognized the challenges of using multiple stock market APIs early on. As a solution, we offer a comprehensive single API solution that deals elegantly with these issues. Our solution serves as a central point of contact for access to all required stock market data. Instead of having to deal with integrating multiple APIs from different providers, users can simply access our unified interface to get all the data they need.
Another question, somewhat related to the previous one, is how often the provider's data is updated. Because data in the financial industry is constantly changing, it's important that your app reflects this. Using data that is out of date could produce incorrect or unusable results. You must ensure that your financial data provider's data is updated in a timely manner. How often this happens depends on the type of data itself — stock market data must be updated within seconds, while some economic data may only need to be updated after weeks.
The reliability of financial data — in other words, its completeness, accuracy, and consistency — is one of its most important characteristics. Fintech applications built with inaccurate data are basically useless, and that goes for the data itself as well. When you understand how a data provider procures and validates their data, you can identify any deficiencies that could result in inaccurate and unreliable data. At Bavest, we carry out automated outlier investigations, take random samples and also analyze our data in our data teams.
To avoid security risks, you don't want anyone to gain unauthorized access to the data you're using. You must ensure that your financial data provider has the necessary processes and measures to ensure that their data is protected from unauthorized access.
Every company has different data needs, so no data provider offers standard packages for all possible use cases. If you have a need that a provider doesn't cover, it's worth asking if they offer customization options that allow you to tailor their data to suit your needs. At Bavest, we offer the option to only book data packages that you really need.
Monitoring the provider's API usage and infrastructure enables early detection and resolution of performance issues. In addition, tracking data usage and performance helps identify optimization opportunities and improve performance. At Bavest, we offer this.
Last but not least, you should ask about the latency period. Latency refers to the time it takes the financial data provider to transfer data from the source to your application. Low data latency means that your application always has up-to-date information and is actual real-time data.
When it comes to stock prices, you have to differentiate between real-time, 15-minute delay or EOD, as end-of-day data. In most cases, prices also vary significantly depending on how up-to-date the data is.
This article gives you a good overview of what you should ask your financial data provider before you build your app on the provider. As the list of questions shows, dealing with real-time data and financial data poses some challenges. Using a reputable provider of financial market data, such as Bavest, can help you overcome these difficulties. Are you interested? Then book a demo now for a non-binding conversation: https://www.bavest.co/en/book-a-demo
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