LATEST ARTICLES | FINTECH
Daily trading volumes in global foreign exchange markets topped $1.79 trillion in November 2020, according to CLS, making FX by far the most heavily traded asset class. Most of this trading volume is executed either indirectly through electronic platforms or bilaterally between counterparties, rather than on traditional ‘exchange-type’ venues.This fragmentation of liquidity – combined with an explosion of data as more electronic venues come to market – can make the marketplace tricky to navigate. As a result, market participants across both the buy side and the sell side are now demanding more from their technology vendors. So how are the vendors responding?
Foreign exchange settlement specialist CLS will provide its netting calculation platform to clients of global FinTech provider Finastra under a new partnership. Finastra’s clients, including over 800 corporate and buy-side firms, will gain access to the CLSNet platform following an integration between CLS and the Finastra Fusion confirmation matching service.
Thinking about how integral FIX protocol has become to electronic trading, it’s interesting to reflect on the long journey that has brought us to where we are today. FIX started out as an experiment between Salomon Brothers and Fidelity in the fledgling days of electronic trading with the aim of automating the sending of execution reports and IOI transmissions. Initially dubbed SBX (Salomon Brothers Exchange), the protocol was first used in anger during 1993. Recognising its potential value to the industry, Salomon and Fidelity looked to extend the community, inviting Goldman Sachs and Putnam to join the initiative.
Covid-19 has led to a strong increase in the use of fintech products and services, prompting central banks and other financial authorities to step up their own regulatory innovation efforts, according to a report from the World Bank and the Cambridge Centre For Alternative Finance (CCAF).The study, which gathered responses from 118 central banks and other financial regulatory authorities in 114 jurisdictions worldwide, shows strong fintech take-up since the outbreak of the pandemic.
Whilst a supporter of true artificial intelligence (AI) within investment management, I do have a problem with some of the references to artificial intelligence that I hear.I believe that most of us in the investment management world still do not truly understand artificial intelligence. What we often refer to as AI (and read about in the investment management media on a daily basis) is generally nothing more than intelligent rule-processing. Of course, nobody gets excited about intelligent rule-processing, whereas when you mention AI there is suddenly an air of expectation in the asset management boardroom.
Indian regulators have set out the framework for a fintech regulatory sandbox designed to help firms experiment in a live environment.The sandbox will let established players and startups in the banking, capital markets and insurance sectors test products and services in a live environment with a limited number of real customers for a set time frame.
Phil Flood, Chief Commercial Officer at Inforalgo, a Gresham Technologies company, demystifies the Consolidated Audit Trail (CAT) as we approach the first Interfirm Linkage deadline on 26 Oct.
Dispersed trading floors are here to stay. While sell-side traders will eventually make it back to the trading floor, banks are accepting that they will need to maintain partially-remote trading floors for the foreseeable future. Though triggered by the COVID-19 pandemic, this is just another step along the path away from trading pits and towards electronic communication and automation. Trading pits gave way to electronic trading, physically separating traders from different firms from each other. This further progressed within the firm as trading floors grew larger and global, leveraging technology to allow trading and sales to sit farther apart – sometimes in different offices. Although the driving cause today is different, traders, sales, support and operations staff within the same firm are forced to physically separate. Technology is filling the space in between.
When they burst into public view in 2009, the market for digital currencies was the Wild West. Bitcoin – and the many imitators that it spawned – was a fringe novelty that captured the attention of technologists and those looking for an alternative to mainstream financial services. In that early surge of activity and Utopian optimism, the digital currency market was certainly marked by innovation, but also by misunderstanding, volatility, fraud and minimal oversight.
As the head of fixed income trading at a European bank in 2007, Jens Kramarczik was troubled by the early stages of the US subprime mortgage crisis.He shifted out of risk assets, shorted Italian government bonds and bought the yen as a flight to safety. In this case, human judgement was the key, and the shift was made “long before the rocket science told us to,” he says.
The Financial Stability Board (FSB) has reported an increase in the use of regulatory technology (regtech) to help institutions meet their regulatory requirements and supervisory technology (suptech) to improve firm’s supervisory capabilities.In a report by the FSB, it explained that opportunities offered by both suptech and regtech have been created by a combination of factors that have come to the fore in recent years.
Fixed income e-trading platform, Trumid, has expanded its liquidity offering to include emerging markets bonds. Trumid said it had experienced record growth this year, with volumes up 430% year on year across a growing network of over 500 institutions. “We’re very excited to be bringing the efficiency and connectivity of Trumid to emerging markets credit trading,” said Trumid founder and chief executive Ronnie Mateo. “We look forward to expanding our trading community to include EM participants and to work together to build best-in-class trading and workflow solutions.”
The Cboe Theoretical Value is a sophisticated, next-generation improvement of Cboe’s existing datasets, and forms a foundational element of Cboe Information Solutions’ options analytics product suite. This cohesive dataset helps customers better understand risk, access markets and make more informed trading decisions. Cboe Theo is now available via Cboe Hanweck here and will soon be used across Cboe’s global derivatives marketplace.
BNP Paribas Securities Services has partnered with cloud-based digital asset security infrastructure Curv to transfer security tokens securely between market participants.The security token was transferred using Curv’s multi-party computation solution to ensure the security of the private keys.The proof of concept, which was successfully completed, helped to demonstrate that tokenised securities can be transferred quickly, safely and transparently on the blockchain.
Talos, a technology provider for the institutional trading of digital assets, today announced the public launch of its platform that connects the diverse group of participants involved in today’s crypto-asset market structure — institutional investors, prime brokers, exchanges, OTC desks, lenders and custodians. The Talos platform, which has been live for the last year, delivers a suite of solutions that supports clients through the full trading lifecycle — from price discovery to execution through clearing and settlement, across spot, futures and FX markets.
In collaboration with Tier 1 banks, SmartStream has launched Affinity, a new artificial intelligence (AI) ‘observational learning’ solution.SmartStream’s new solution is set to meet the technical demands and business agility for operational data management and data quality processes.
With financial technology firms growing fast and big tech outfits increasingly moving into the FS sector, a senior US politician has warned about the risks of "too-big-to-fail" fintechs.In a hearing of the House of Representatives Task Force on Financial Technology, chair Congressman Stephen Lynch said: "Technology and tech companies are playing an ever-increasing role in our finances, and our laws and regulations are struggling, to be kind, to keep pace."
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today issued its latest whitepaper, “From Physical to Digital: Advancing the Dematerialization of U.S. Securities,” outlining the necessary steps to reduce, and ultimately eliminate, certificated U.S. securities. Dematerialization, the transition from physical certificates to electronic records, would reduce the risks and costs associated with manual processing and human touchpoints, as well as increase efficiency and resiliency across the industry at a time when automation is more important than ever.
US financial market participants must pull together to achieve complete securities dematerialisation and improve market stability, according to the Depository Trust & Clearing Corporation (DTCC) in a new whitepaper.The transition from physical certificates to electronic records, DTCC argues, would reduce the risks and costs associated with manual processing and human touchpoints, while also increasing efficiency and resiliency at a time when automation is more important than ever.
Market volatility has been the order of the day in 2020, as firms across the globe react instantly to the latest developments, whether that be Covid-19, the global economic downturn or geopolitical tensions. This volatility shows no signs of letting up, with the uncertainty around this year’s presidential election stoking yet another wave of uncertainty.
The European Securities and Markets Authority (ESMA) has published draft regulatory and implementing technical standards (RTS and ITS) for third-country firms under the new Markets in Financial Instruments Regulation (MiFIR) and the second Markets in Financial Instruments Directive (MiFID II) regimes.The aims of the new rules are to give ESMA the information for all trading activity done in the EU by firms outside the EU.
Hedge Funds are absorbing a punishing $8 million annual hit to their Assets Under Management (AUM) due to high levels of manual processes and outdated trading systems that are causing delays in sending orders out to market. According to a new analysis from TradingScreen, a typical mid-sized long/short equity hedge fund ($5 billion AUM) wastes, on average, 2.5 hours per day dealing with 200 orders.
The pandemic and upcoming negotiations around Brexit are causing unprecedented uncertainty for fintech market participants, but many are still seeking to expand internationally, according to research conducted by Newfound, seen by bobsguide.The study – which was produced in July and surveyed 50 fintech executives - revealed that 68 percent of fintech executives expect to expand internationally in the next 18 months whilst only two percent said they wouldn’t expand anytime soon.
Apifiny, a leading fintech company that is building a new internet of financial services, today announced that ECS Fin will begin a pilot program to test the integration of Apifiny’s Roxe instant settlement network.The Roxe network is designed to save financial institutions significant time and costs by using blockchain technology to provide highly reliable, secure, and real-time clearing and cross-border settlement of payments and remittances, traditional assets, and digital assets.
Anders la Cour, CEO, Banking Circle, speaks about how financial institutions of all types need to learn the lessons of the past and the pandemic, to future-proof their businesses and better understand the role financial infrastructure plays in developing and delivering the best solutions. We learn how working together is the best way to optimise delivery of the right propositions to best meet customer needs and how banks are far more confident than FinTechs and PSPs in the face of approaching global recession.