The application interoperability movement has been one of the key tech developments in the capital markets over the last five years. In order for it to succeed, it requires vendors and banks to work together in good faith. But what happens if one of the key vendors driving the movement decides to go in a different direction?

In 2018, OpenFin, a provider of desktop application interoperability, contributed a set of codified specifications for writing APIs and for messaging format, known as FDC3, to the Fintech Open Source Foundation (Finos), a nonprofit under the Linux Foundation and whose mission is to promote the adoption of open-source software and open standards in finance. Over the last three years under the auspices of Finos, OpenFin, along with rival container tech vendors Cosaic (formerly ChartIQ) and Glue42 (formerly Tick42), a growing roster of financial institutions, and a patchwork of other data and software vendors have worked collaboratively to increase industry adoption of FDC3 through conferences, publications, big-name partnerships, and actual implementations.

But while FDC3 has grown in size and scope—version 1.2 was released at the beginning of May, and version 2.0 is already in development—sources interviewed for this story say OpenFin has given up on the idea of FDC3 as an industry-led, open-source initiative. OpenFin officials refute this claim.

“Finos membership benefits are primarily marketing related. At OpenFin, we’ve chosen to aim our marketing spend in other areas. We remain committed supporters of Finos and its mission. Any suggestion to the contrary is false,” says Mitra Roknabadi, vice president and global head of marketing at OpenFin.

Interoperability has become something of a buzzword in Wall Street tech circles, akin to others such as cloud, big data, and machine learning—and for good reason. Beyond vying to be a solution for traders who just don’t have enough “screen real estate,” the average consumer with a smartphone uses interoperating applications seamlessly, and mostly unbeknownst to them, every day. Now, like a genie that won’t be put back into a bottle, big enterprise organizations want in on the ease interop offers.

In consultation with Finos management, we decided to review our open source approach and in the meantime we have been collaborating directly with our customers and we’ve been able to achieve the same objectives.

Mazy Dar, OpenFin

It was little more than a decade ago that former Goldman Sachs programmer Sergey Aleynikov was first prosecuted—and subsequently exonerated—on charges that he had stolen high-frequency trading code from the bank. With open-sourced tools now even in the good graces of Goldman Sachs—it contributed its own open-source project, Alloy, to Finos in 2019—and with containerization techniques, compute power, and storage all exponentially improving, gone are the days of closed-off, monolithic platforms. At least, in theory.

FDC3, which stands for the Financial Desktop Connectivity and Collaboration Consortium, was, in the beginning, led by OpenFin and backed by the likes of Citadel, Barclays, JP Morgan and others, before lending its name to what is now a group of standards that govern modern desktop application interoperability.

The aim of FDC3 is to enable interoperability between apps that sit on the financial desktop, and works by codifying standard patterns that application developers use for cross-application workflows between web and native apps. The end goal is to create an ecosystem for financial workflows to interoperate in a plug-and-play fashion without prior bilateral agreements, according to the FDC3 charter.

Over the last month, WatersTechnology spoke to nine people who have been actively involved with the development of FDC3 about OpenFin’s decreased participation in the initiative, and its new offering, Workspace. Sources say the new offering contains a “skin-deep” incompatibility with FDC3, prompting suspicion that OpenFin is straying from the standard it had been proud to lead for years—and concern that it’ll take its clients with them.

OpenFin says ‘so long’ to Finos

In January, OpenFin quietly ended its gold membership with Finos, which it had joined in 2016 before Finos was Finos, as it was then known as the Symphony Software Foundation. The gold membership tier accounts for the second-highest member rank within Finos, coming with a $50,000 price tag but offering positioning at Finos events and marketing efforts, as well as the opportunity to participate in elections for up to five Finos board members. Other gold members include IHS Markit, HSBC, Refinitiv, RedHat, Symphony, and Tradeweb. The highest tier, platinum members who pay $200,000 and can each appoint a member of the Finos governing board, encompasses mostly institutions: Citi, Deutsche Bank, Goldman Sachs, JP Morgan, RBC, Nomura, UBS, and consulting giant Accenture.

According to public metrics, OpenFin’s participation in FDC3 and all other Finos projects to which they were contributing came to a near-halt by mid-2020. Participation is measured by commits (contributed snippets of code), pull requests (requests for review of such contributions), issues (tasks or raised requests), meetings attended, and emails sent.

I’m actually not that fussed about a little bit of drama around one of our standards because that means what we’re doing is important. If nobody cared about what we were doing, then they wouldn’t fight about it.

Gabriele Columbro, Finos

By all criteria, OpenFin’s participation reached its height in March of 2019, at which time the vendor had 281 commits and 112 pull requests active. Despite these numbers dipping by June, they rose again to their second highest-level in September before tapering off to zero for all criteria except meetings and emails (both of which have plateaued at one) in June 2020.

OpenFin CEO Mazy Dar declined to comment on the accuracy of these metrics, as well as specify methods by which the vendor contributed to FDC3 version 1.2 and the ongoing development of version 2.0.

“The true measure of support for FDC3 is not in meeting attendance; it’s in promoting the standard with customers, and by that measure OpenFin is far and away the No. 1 supporter of FDC3,” Dar says. “By the end of 2019, the majority of work had already been completed on FDC3 standards with leadership from OpenFin. Our meeting attendance dropped due to personnel changes, but we are now back and regularly attending meetings.”

Gabriele Columbro, executive director at Finos, says OpenFin has indeed engaged less actively with the non-profit since early 2020, but that he wouldn’t construe that as abandonment of FDC3 or open-source, at least not until it’s better known what Workspace is and what it does.

“I’m actually not that fussed about a little bit of drama around one of our standards because that means what we’re doing is important. If nobody cared about what we were doing, then they wouldn’t fight about it,” Columbro says.

Notably, OpenFin has also discontinued its public work on Hadouken, the open-source version of the OpenFin operating system that the vendor also contributed to Finos.

“When we started the Hadouken project, our goal was to collaborate with our customers within Finos. However, the software we were developing was part of our commercial model and therefore not appropriate to have developed within Finos,” Dar says. “In consultation with Finos management, we decided to review our open-source approach and in the meantime we have been collaborating directly with our customers and we’ve been able to achieve the same objectives.”

A former OpenFin employee explains that the decision to end Hadouken as a Finos project arrived as the vendor began to resent its decision to be open-source, as its rivals were doing similar work with access to OpenFin’s source code. The source adds that while it’s disappointing that OpenFin seems to be moving more toward a closed-off approach to software development, “it’s certainly not surprising.”

Under the Workspace hood

In early May, OpenFin unveiled a first-of-its-kind offering for the vendor: an out-of-the-box user interface, dubbed Workspace, complete with a digital assistant, notification center, browser, and app store. Having decidedly outgrown its container tech origins, Dar and Adam Toms, CEO of OpenFin Europe, told WatersTechnology at the time that the launch was “much, much bigger than FDC3” and “much bigger than just interop.”

With the introduction of Workspace came the release of OpenFin’s new, “experimental” Interop API. The API documentation states that the API does not currently support intents—a foundational component of FDC3— though the capability is coming soon. FDC3 intents define a standard set of verbs that can be used to join cross-application workflows, according to FDC3 1.2 documentation, though intents were part of the FDC3 standard well before the latest version release, sources say.

To understand FDC3 in its entirety, one must first know that it isn’t one standard, but a set of standards that work together to create an underlying language so that applications operating within a container can communicate with one another. There are four main components to that language: context, which can be likened to nouns, is an agreed-upon, structured message format that constitutes an entity (like a ticker symbol or a company name); intents can be thought of as verbs, or the command (such as “open”) that a user wants to give to the noun; app directories, or the list of applications that have the capability to open a link; and APIs, for which the closest analogy is a conversation, or an agreed-upon back-and-forth between applications.

When you tap an underlined physical address on an iPhone, your phone knows to open that location in Apple Maps (or Google Maps). The map service and the app in which the address is displayed know how to communicate the end result to the user because they’re speaking in the same pre-negotiated manner. On the financial desktop, modern interoperability of that kind is largely to the credit of the FDC3 standards.

An example of an FDC3-standardized API command to open Apple News would be written as: fdc3.raiseIntent(“news”, {type: “fdc3.instrument”, id: { ticker: “AAPL”}});

With its new Interop API, OpenFin has tweaked that pre-negotiated syntax slightly. Dar confirms that writing to the Interop API, should clients choose to use it in production, should read: “interop.makeIntent” and the third foundational component, the app directory, is now referred to as the content discovery store.

As far as differences go, it’s a very small one, says Matt Barrett, CEO and co-founder at Adaptive Financial Consulting, the organization now chairing Finos’s FDC3 standards working group, newly-led by Adaptive’s head of desktop strategy Riko Eksteen.

“As to whether or not OpenFin and FDC3 are compatible, from what we understand so far from the analysis we’ve done, it’s really a skin-deep incompatibility. It’s still an incompatibility, but it’s a very skin-deep one, and technologists and programmers can pretty easily work around that, should they need to,” Barrett says. “[As for] what the longer-term future holds, only OpenFin knows their roadmap.”

At the end of May, OpenFin made updates to its Interop API documentation, adding information as to how it was still supporting FDC3 both through the new API and through ongoing outreach efforts.

A new sidebar section on its interoperability documentation details the differences from the previous FDC3 support and how to migrate off the previous support to the new version, which the docs again note is still in active development. The stable versions—named so because they are deemed final and unchanging as opposed to a beta version—of the InteropClient API, for content-facing APIs and context-grouping APIs, and InteropBroker API, for keeping track of the interop state of the platform and for directing messages to the proper locations, do not mention FDC3. The stable version’s code is 19.89.60.5 and was last modified on May 10 alongside the launch of Workspace.

The release-candidate, version 19.89.61.4, was last modified on June 2 and is not yet launched, but features a section devoted to the upcoming FDC3 Client Library, essentially an adapter which “provides a set [of] APIs to be used for FDC3 compliance, while using our Interop API under the hood.”

“Once you’ve had a look at the new Interop API, you will notice differences in the naming of the APIs from the names used by FDC3,” Dar tells WatersTechnology, and OpenFin re-iterated in a recent blog post. “Does that mean we’re moving off the FDC3 standard? The answer is an emphatic no. Nothing could be further from the truth. We are 100% committed to the FDC3 standard and believe it is more important now than ever.”

Dar says the changes made in FDC3’s agreed-upon grammar can be explained simply: they allow OpenFin to move fast and avoid developer confusion. It’s also possible, Dar adds, that OpenFin’s changes may be adopted officially by the FDC3 standard working group anyway.

“Standards, by their design and nature, move slowly. Innovations that start with one vendor are eventually used by others and eventually—if they are successful—they become worthy of inclusion in the standard. That’s how it works with web browsers where Google might introduce a new capability that’s not part of HTML5 today, but eventually becomes part of the standard after other browsers introduce similar features,” he says.

Finos’s Columbro, who has not evaluated OpenFin’s latest software and whose role does not really include technical evaluations, says he thinks the confusion clearly calls for instituting a formal certification program for compatibility and conformance, a common part of other open-source ecosystems.

“We need to move out of this he-said-she-said conversation,” Columbro says. “I think it’s become abundantly clear by now that the standard has grown enough in contribution, enough in adoption, and enough in interest revolving around it, that we should seriously start to look to roll out a Finos software conformance programmer against the standard. Then we’ll be able to make an actual black-or-white determination, as well as a statement, on who’s compatible and what’s not.”

Speaking of Context…

Interop can mean different things to different companies. There’s a specific kind for web-based and browser-based applications, which is the realm in which FDC3 resides. There’s also server-side interop, which is about plugging and playing different components from large, monolithic systems like order management systems to create user-customized platforms. And there’s a third kind, which is done namely through deep integrations between a couple of providers—for example, that of State Street Alpha and Charles River Development or BlackRock Aladdin and eFront, in both of which the central idea is interoperability with another third-party platform, but the central ecosystem is proprietary to and controlled by the respective companies.

With application interop, the prevailing school of thought to executing on it has come to be open-source technology, the core distinction from other forms of interoperability. It’s also come to be its Achilles heel. Sources interviewed for this article say that intellectual property concerns and infighting among participants have plagued the space, despite its growth.

Even with commitments to using and contributing to open-source tech by OpenFin, Cosaic, and Glue42, each of the providers has its own commercial interests, whether it’s to be seen as the leader in the space—as OpenFin arguably has become—or to quietly snap up high-paying customers.

A source at a company which utilizes OpenFin, and who has been involved with the FDC3 working group, calls claims that OpenFin is pivoting away from its brainchild standard “a bit of an overstatement.”

“What has kind of happened over the last two or three years is that there’s almost become a little turf fight between OpenFin as the original desktop interop provider and the others,” they say. “So I feel that what OpenFin has done now is that they have launched Workspace and a bunch of internal or OpenFin-specific tools to rival what is offered by Finsemble [Cosaic’s desktop interop platform].”

Without having yet looked into OpenFin’s latest addition with a very technical lens, the source adds that all three offerings are compliant with FDC3 underneath their bells and whistles, and it’s understood by the source that the Interop API is meant to be an addition that clients can take or leave.

OpenFin’s view is that they discovered interop and created the first implementation of FDC3. And therefore, what is FDC3? FCD3 is interop in OpenFin. And well, actually, it’s not. 

Leslie Spiro, Glue42

Aggressive marketing tactics and heated disagreements over who plays the leader in this space have fueled this growing rift between these half-competitor-half-partner hybrids. For one, Glue42 is actually older than either of its main competitors, having launched in 1996 as a provider of component-based market data platform toolkits. It wasn’t until 2015 that Tick42 launched Glue42, now its primary product focus and de facto namesake.

Similarly last summer, Cosaic got its new name when CEO Dan Schleifer moved to better represent the companies’ separate business lines, Finsemble, its interop arm, and ChartIQ, a suite of charting and visualization solutions. Having begun as a pure charting vendor under the moniker ChartIQ in 2014, Cosaic launched Finsemble in 2017. Prior to the rebrand, Schleifer told WatersTechnology last year that it had been frustrating to “tell the whole story of what we do with the name ChartIQ.”

In another marketing maneuver, Google search results for any three of the vendors often presents the Googler with a paid advertisement for one of the other two as a top search result. A search of “OpenFin” offers up a Cosaic ad. A search for “Finsemble” prompts an OpenFin ad. A “Glue42” search reveals a Cosaic ad. On it goes.

The entire ordeal, however, begs questions from finance as a whole: In a kingdom where dollars rule, does it make sense to work together? And though open-source certainly demands it, is it possible? If it is, is it sustainable?

OpenFin’s Dar has contemplated the same questions.

“Counterintuitively, open-source is sometimes an impediment to interoperability,” he says. “For example, if one firm takes the open-source code of a chat platform and forks it, the result could be a second chat platform that no longer interoperates with the first. The better model is not open-source but open APIs that enable interoperability. That’s what we offer with our container software, and our approach has been welcomed by banks, buy-side firms, and vendors across the industry,” he says.

What’s in a standard?

To accomplish something like making FDC3 a true standard—in the fashion of, most notably, the Fix protocol, the backbone of electronic message exchange across the buy and sell sides—some level of sacrifice is necessary. Industry necessity rams into competition. And in order to build trust with end-users, it’s generally a good idea to hand over governance and oversight duties to a neutral party, such as OpenFin’s handing of the reins to Finos, or Fidelity’s and Salomon Brothers’ Fix, which has been under the auspices of the Fix Trading Community, another non-profit financial standards body established in 1991.

“You need a combination of vendors, buy sides, and sell sides all to participate in their own self-interest, but also their mutual interest,” says Cosaic’s Schleifer. He adds that open standards allow for better innovation and competition and an overall faster industry for all participants, be it vendors and sell sides who both compete among one another, or buy sides, which compete for AUM. However, he believes that currently, not all participants within FDC3 have the industry’s interests in mind.

“OpenFin deserves credit for having started FDC3—they do. We were one of the founding members with them, and it was a great idea,” Schleifer says. “That said, only two of the three desktop interoperability vendors are actively participating in the standard at this point, and that is Glue42 and Cosaic Finsemble.”

For FDC3 to continue to be successful, Schleifer says all the key vendors should participate in it, especially given that OpenFin, to date, has been a driving force behind its adoption. Working privately with clients on FDC3 use-cases and specifications doesn’t constitute active participation, he says; in any open standard, active participation means collaboration with all stakeholders. 

“With their announcement of Workspace and their new APIs, it appears they had turned away from FDC3. Their API was different than the FDC3 API, not in ways that appear to be innovative, but just different. And yet, it looks like maybe they’re coming around,” Schleifer says, in reference to OpenFin’s recent statement affirming its commitment to FDC3 and to its upcoming release-candidate version of the Interop API. “I hope they do.”

Leslie Spiro, CEO of Glue42 and active participant in FDC3, takes issue with OpenFin’s view, spelled out in its recent statement and also said to WatersTechnology, that FDC3 is “ready to move into its next phase of adoption” and that OpenFin seems to be working on that next phase—its next generation—on its own time.

“OpenFin’s view is that they discovered interop and created the first implementation of FDC3. And therefore, what is FDC3? FCD3 is interop in OpenFin. And well, actually, it’s not,” Spiro says. “No, FDC3 is an API that [OpenFin] ceded the rights to Symphony Software Foundation and then Finos. And now there’s a community in which [they] stopped participating. … So to say that the next phase of FDC3 is the OpenFin API is exactly like Captain [James] Cook saying ‘This is an empty country, I’m claiming it for King George, and anyone there doesn’t really exist.’”

Still, because OpenFin spearheaded the launch of FDC3, it became something of the face of this type of open-source interoperability throughout the industry. According to data supplied by OpenFin, the vendor’s technology is used by 23 of 25 global banks, and backers include major banks Wells Fargo, Barclays, JP Morgan, HSBC, as well as leading fintechs-focused VCs.

“We welcome competition in this space and we don’t think it’s helpful for anyone to make baseless claims about OpenFin turning away from open-source and FDC3. It’s patently false,” Dar says.