23 September 2019 (London/New York): Cobalt, the foreign exchange (FX) infrastructure based on shared ledger and high-performance technology, is now live with Deutsche Bank, XTX Markets and Saxo Bank.
Cobalt has been developed to re-engineer post trade FX infrastructure and processes. Its automated technology matches all versions of a trade into a single ‘trusted copy’, freeing up post trade resources from multiple layers of reconciliation and cost; generating one immutable data set of FX transactions from which Cobalt and third parties can provide multiple services.
The company worked with more than 20 leading financial institutions, many of which are currently being onboarded, to develop a solution designed for today’s markets where higher volumes but smaller ticket sizes make existing solutions unaffordable. Current post-trade service providers, particularly in the prime brokerage market, can often rely on fragmented, manual processes and dated legacy technology. A single trade today creates multiple records for all parties, introducing inconsistencies throughout lifecycle events and room for error.
By creating a single, standardised view of each transaction, clients can manage services such as aggregation and netting via a single platform, dramatically reducing duplication and position exposures. From analysis using executed trade data, Cobalt has been able to provide clients over 50% in cost savings across the FX lifecycle.
Russell LaScala, Co-head of Global FX at Deutsche Bank said: “The two biggest business issues banks face today are managing risk and the scaling of their business with the rise of smaller tickets. Cobalt’s solution ensures we can reduce operational risks associated with legacy systems and slash the cost of processing tickets for our entire FX business using a single platform.”
Mike Irwin, COO at XTX Markets, said: “As an institution with daily trading volumes of $150 billion, it’s vital we use the best technology to maximise efficiency and reduce costs. We have partnered with Cobalt as it is a neutral, independent market facilitator that offers the functionality and sophisticated technology we require to scale our business.”
Dave Reid, Global Head of FX Prime Broking at Deutsche Bank, commented: “Utilising Cobalt’s netting and aggregation service means we can more efficiently manage our bilateral and triparty transactions, reducing our exposure to risk and excess ticket processing”
Henrik Villberg, Global Head of Trading & Market Access, at Saxo Bank said: “As an institution that deals with high volumes of small ticket FX trades, we incur substantial cost from our back-office processes. It is in our interest therefore, to look at solutions to create efficiencies in this area. We are happy to adopt Cobalt’s processes that address this, whilst providing transparent and lower costs.”
Darren Coote, CEO of Cobalt said: “Having the backing of these three different FX players, one an established bank which has been innovating for over 20 years, a new breed of electronic market-maker and a technology pioneer in banking and retail trading technology, demonstrates that shared infrastructure is the future of post-trade FX.”
Cobalt has re-engineered post trade FX from the ground up. Focused on reducing cost and risk. Cobalt’s innovative platform serves all FX participants – bilateral, tri party and four way. Cobalts unique design means trades are matched, normalised and enriched into a single, joint record. Cobalt’s low latency ledger of standardised trade data is the backbone for all major back and middle functionality such as credit management and finality services.
About Deutsche Bank
Deutsche Bank provides commercial and investment banking, retail banking, transaction banking and asset and wealth management products and services to corporations, governments, institutional investors, small and medium-sized businesses, and private individuals. Deutsche Bank is Germany’s leading bank, with a strong position in Europe and a significant presence in the Americas and Asia Pacific.
Constantly evolving regulation and technology is changing market structures and the way counterparties trade. Through our investment in quantitative research expertise, we are able to rapidly evolve and adapt to changes in market structure and the regulatory landscape. XTX Markets is a leading quantitative-driven electronic market-maker partnering with counterparties, exchanges and e-trading venues globally to provide liquidity in the Equity, FX, Fixed Income and Commodity markets. We provide consistent liquidity, helping market participants throughout the world obtain the best prices in the various assets classes we cover, regardless of changing market conditions. Our pricing is about being smart and precise – not the fastest. In a changing world XTX Markets is at the forefront of making financial markets fairer and more efficient for all.
About Saxo Bank
Saxo Bank Group (Saxo) is a leading Fintech specialist focused on multi-asset trading and investment and delivering ‘Banking-as-a-Service’ to wholesale clients. For more than 25 years, Saxo’s mission has been to democratize investment and trading, enabling clients by facilitating their seamless access to global capital markets through technology and expertise. As a fully licensed and regulated bank, Saxo enables its direct clients to trade multiple asset classes across global financial markets from one single margin account and across multiple devices. Additionally, Saxo provides wholesale institutional clients such as banks and brokers with multi-asset execution, prime brokerage services and trading technology, supporting the full value chain delivering Banking-as-a-Service (BaaS). Saxo’s award winning trading platforms are available in more than 20 languages and form the technology backbone of more than 100 financial institutions worldwide.
Founded in 1992 and launching its first online trading platform in 1998, Saxo Bank was a Fintech even before the term was created. Headquartered in Copenhagen Saxo Bank today employs more than 1500 people in financial centers around the world including London, Paris, Zurich, Dubai, Singapore, Shanghai, Hong Kong and Tokyo.”
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Photo Source: Mario Andreya Via Flickr