Next Generation Algo Execution

While there may have been some questions over the ultimate ambition BNP Paribas’ board had for its FX business, there is no doubt that execution services has been viewed favourably – and it has showed in a series of excellent product innovations and roll outs over the previous few years.

This award is not necessarily aimed at one product, rather it is about the entire execution experience and the extra little steps the bank takes. If we had to hang our hat on one aspect of the service to demonstrate BNP’s continuing innovation it is its work around “in-flight” alerts – look out for Alix, coming to a desktop near you soon!

From the services provided to help users select the right algo for their trade, including ‘what if’ analysis across different strategies and alerts to any likely events during the window, through the adaptive algos to the execution manager service that allows the client to run the strategies on a third-party platform but receive real-time feedback during execution (with STP to the third party’s systems), BNP Paribas has developed a superior execution experience.

Aside from the “in-flight” experience we also believe BNP has pioneered an excellent way to use the bank’s own TCA services in producing portfolio-based TCA reports. The actual trade can be benchmarked independently, but then BNP’s analysts go to work to review a portfolio of executions to see where, if at all, the client experience can be enhanced. Because the analysis is empirical the bank can offer constructive criticism of a strategy or the benchmark being used without upsetting the client unduly (hopefully!)

Workflow Integration

The second ‘C’ in FICC – commodities – is often either overlooked completely by banks or sold as the precious metals business alone, however it is much, much more than that. Of course precious metals are commodities in the purest sense but they are traded very much as a financial instrument, whereas aficianados of commodities will tell you that the real business starts when you go beyond those headline acts.

In recent years this has been the domain of just two or three banks with BNP Paribas seen very much as a specialist provider, good in certain areas, most commonly those around the requirements of smaller corporates. That changed last year when the bank made a concerted push into the broader commodities markets, in particular energy and metals.

The scalability of the Cortex platform has allowed the bank to add more detailed products and they will look familiar to wider users of the platform, but the real benefit is in how it has allowed BNP to reach the larger corporates and therefore broaden its footprint in that client segment.

Galen Stops

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