What is interoperability?
Interoperability is the ability of different computerized technology systems to exchange information with each other.
One of the best examples of interoperability is within healthcare.
Picture a patient from New York becoming critically ill on a trip in Los Angeles, needing emergency medical assistance. If the doctors in Los Angeles were able to quickly access the patient’s medical history from databases in New York, it could immensely positively impact his treatment, and make the process faster and more efficient.
Another example perhaps more relatable on a day-to-day scale are work computer systems. Remember the year 2000, when you had to avoid using your Macbook and were stuck using a work-provided, out-of-date computer? Now, the problem seems trivial, as nearly any computer can be integrated for different company systems almost instantly.
Every industry goes through this change, where early market leaders often have a closed system. Let’s go back to Windows, which historically was a very closed system as a way to reduce competition. In 2005, after regulatory pressure and demand from clients, Bill Gates’ new mantra became…. Interoperability. Now-a-days, we’re sending files back and forth between Macs and PCs, and with SaaS, we get to choose which computer is best for us.
The benefits of interoperability
Organizations or industries where data can be communicated effectively, without friction, and synchronized between systems recognize the following benefits:
- Increased productivity: When a vendor isn’t focused on how data is obtained, or when a user isn’t focusing on aligning data and having it synchronize, both parties are more productive.
- Cohesive data: When systems are isolated and independent, and are not communicating to one another, there is always an issue of which is the source of truth.
- Increased innovation: Both the vendors and the users can spend their time on innovation, rather than just getting things to work and communicate.
Growth in alternative investments is stunted
The alternative investment industry has made attempts at interoperability, as data distribution has become a top priority for asset managers and investors.
A survey of 200 asset managers globally conducted by BNY Mellon found that “the top priority for asset managers was in distribution through digital channels to improve real-time portfolio and account information, followed by improving access and self-service options for clients.”
In addition, 55% of respondents believe data science can assist with transforming unstructured data into meaningful insights. (Source: Asian Investor)
How we’re addressing interoperability at AltExchange
AltExchange, in its current form, is building interoperability in the alternative investment space in a top-up approach. We are spending tremendous amounts of time taking unstructured data from different formats, and then structuring it. We integrate with other wealth management platforms including Black Diamond, Addepar, and others for a seamless experience.
We’re increasingly developing ways to optimize interoperability. It’s not only the right thing for our business, but for the alternative investment space as a whole.