As we noted at the start of this article, the calendar was unkind to BNP Paribas in that our scheduled in-person meeting was cancelled due to the accelerating pandemic. As such, our views on the platform are necessarily limited. That said, there is plenty of feedback to share and, thankfully, our observations from looks at the platform we have had previously, both in BNP and on user desktops.

In terms of broader development, BNP continues to migrate its Cortex platform to HTML5 from Silverlight, which we know from experience is not a quick process, but the bank is also rolling out some interesting new products. Our feedback, and our own previous observations, confirm that the calling card for BNP Paribas remains execution services. Not only are they popular with clients, who tell us the pre- trade analysis packages are superb but they are also widely respected by that toughest of all groups, its peers.

A lot of what has been developed at BNP over the years has had some sort of genesis in the algo business and this year’s major development is no different. The bank officially rolled out Cortex Live in 2019 which featured a product we teased in these awards last year and then wrote about a couple of months later in some detail – Alix.

Alix started life in 2019 as an execution assistant that provided a live running commentary during order executions, alerting users to changes in market conditions and upcoming events, for example. Since then, however, its role has expanded to make it core to Cortex Live, alongside the bank’s Insight Live, BNP’s real-time intelligence portal.

We have always been fans of BNP’s execution services, it has won an award for them every year since 2013, but Alix is a really strong step forward in that it provides the opportunity for exception-based trading. We mentioned earlier how execution desks on the buy side are moving towards a multi- asset class model, well we have to be realistic enough to accept that FX is not necessarily going to be the number one priority for such a desk. If an execution trader can do the pre-trade analytics, set the algo operating, probably for a longer period of time in the current illiquid conditions, and only come back to it if alerted, then that is a huge efficiency gain. That is what Alix provides.

It also offers the opportunity to “hand hold” those customers less experienced or comfortable with algos, something that could help BNP further penetrate its client base with its algo suite.

The other big development at BNP fills a gap we have observed for some time now – access to principal liquidity. As we noted earlier, for an algo to work really well, surely it has to have access to the best possible pools of liquidity and that means more private and internalised pools. The challenge, of course, is that customers still want to know that their orders are not too exposed, something that is especially important for a business like BNP which grew up as an agency model.

The solution is BIX, BNP’s internal exchange. BIX is effectively a mini-ECN that has been built with a strict governance framework to prevent that information leakage. It is controlled by the algo business, thus ensuring the principal business has no other interaction other than to post interest or stream. BNP has long had, for example, a strong FX options business; connecting the algos with that flow is a huge step forward in improving performance.

Away from execution services, if our sense is correct and FX swaps is to be the next big development area for single dealer platforms then BNP will be in a strong position thanks to its previous work in enhancing the price and risk engine.

Awards for e-FX Excellence

Execution Services
Alix

Colin Lambert

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