The ‘mighty’ Deutsche Bank, has released their ‘next gen’ FX pricing API called “Rapid” (Revolutionary API Design). The next stage in the ongoing ‘FX arms race’ amongst top-tier banks?
Although Deutsche has been the undisputed Global #1 in FX since forever, they have steadily seen their global market share eroded as the chart below shows, and more fully discussed in this post following the EuroMoney 2012 FX survey results.
We will have to wait and see if this is what is needed for Deutsche to reverse the trend, and start to regain lost absolute market share, and preserve their coveted position as #1 Global FX Bank.
Coverage in EuroMoneyFXNews talks about RAPID combining:
…. advanced low-latency trading technology with the bank’s large-scale market-making capabilities for the first time. This will lead to faster, more consistent pricing across Deutsche’s client base, and allow it to more effectively manage the risk generated by these transactions.
And, this bit is good,
… Secondly, Rapid will use cross-asset alpha signals derived from Deutsche’s own models, which calculate where the likely market price will be when the market maker clears the risk on the client trade.
I would think this is a measure of their ability to ‘absorb’ risk, by re-packaging it to other clients, thus more effectively internalising flows, creating deeper and more robust client pricing. And as discussed in Don’t forget it’s people that build FX Pricing Engines effective pricing engine and risk management competence is at the heart of any successful etrading franchise.
According to Zar Amrolia, Global Head of FX and Markets Electronic Trading
“We can benefit from local risk management or global risk management, depending on the flows in each location. It’s bespoke risk management based on latency and flows in other centres.”
As we know, where Deutsche leads, others will undoubtedly follow!
Full EuroMoneyFXNews coverage here: Deutsche Bank unleashes next generation Rapid API on FX market