How Can Mid-Tier banks Compete in FX?


How can mid-tier banks compete?

Over on Tabb Forum, Harry Gozlan, CEO of SmartTrade makes some interesting points regarding how mid tier banks can more effectively compete with tier 1 banks in eFX, and discusses their new Liquidity FX offering.

The focus being that regional banks can compete in a number of areas including:

  • Reduced counterparty risk concentration and providing better customer service.
  • Strong overall relationships with corporate customers and regional know-how and balance sheet maintenance.
  • Through aggregate prices from ECNs and single-bank platforms, providing better FX prices to clients.
  • They can also make markets in regional currency pairs close to their domicile.

I would add strong UX design and workflow solutions to the above list, which can help level the playing field by enabling mid-tier banks who ‘know and understand their clients’ to deliver highly differentiated solutions that seamlessly integrate quality FX execution services with clients workflow requirements around allocations, payments, cash management and other transactional tools.

As Harry quite rightly mentions, mid-tier banks cant and indeed shouldn’t try to compete with tier 1 banks in terms of building complete platforms! For SmartTrade this leads to the introduction of their LiquidityFX, a packaged solution that offers FX aggregation and smart order routing out of the box.

At Caplin, we have a number of regional bank customers, where our CaplinTrader HTML webtrading framework, integrates with their hosted or installed back-end FX liquidity aggregation, and smart order routing capabilities, and through the use of innovative UX design, deliver strong workflow solutions to their clients.

Tabb Forum article here

One Response

  1. [...] in SDPs continues to outpace mutli-dealer platforms, as global ‘flow monsters‘, and regional banks continue to invest heavily to upgrade their client facing SDPs, as they seek to better [...]

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