Cognotec is launching the latest incarnation of its Internet-based FX autodealing service, AutoDeal Direct, at this month’s Forex 2000, ACI’s World Congress in Paris.
Spearheading the marketing drive is Debbie Fuller, who was recently appointed as
director, Global Business Development, and Don Lloyd, who just joined the company to head the product marketing in the US from Chicago. Lloyd was the FX trading manager for Bank of Montreal in Chicago until recently, and also served as president of ACI – USA.
In another high profile appointment, Cognotec has hired David Ledsham, formerly of EBS, as its new chief financial officer. He succeeds Tim Lorigan, who will retire later in the year after a transition period.
AutoDeal Direct is an extension to the Liquidity Linq feature of the AutoDeal LITE system, which allows smaller tier banks to quote FX prices to their corporate and institutional customers via the Internet.
The Liquidity Linq feature, which was added to the AutoDeal LITE product last year, enables large banks to provide price taker banks with browser-based electronic FX dealing facilities. The Liquidity Linq service enables market maker banks to offer real-time executable prices to regional banks that do not want to assume market risk. The large bank assumes the market risk and the credit risk of the regional bank, while the regional banks assume the credit risk of the customers. The regional bank is able to guarantee spread income without assuming market risk.
Additionally, major international banks using Liquidity Linq can automatically quote and take prices to and from other large international banks throughout the day for currencies in which they predominantly trade. “Liquidity Linq provides large liquidity providing banks with new international and domestic business opportunities and regional banks with greatly enhanced service offerings to their clients,” says an official.
One of the key features of AutoDeal Direct is that it enables even the smallest of banks to quote FX prices to their customers via the Internet. And, because of the way Liquidity Linq operates, smaller ticket sizes can be processed rather than aggregated, making the service popular with banks’ clients, according to officials.
“We’re seeing the classic signs of a marketplace being created,” says Albert Maasland, Cognotec’s newly appointed global head of marketing. “Cognotec has been involved in the FX arena for more than 10 years – the first eight of which were spent developing bespoke software solutions to help banks automate their FX facilities for their branch network. A couple of years ago, the company began redeveloping itself as a business to business e-commerce vendor, and over the last few months, we’ve begun to see the fruits of our labour. We’ve had more than 60 banks sign up for our ASP platform. Our priority now is to reach 100 bank clients and push liquidity up in terms of transaction flows.”
“There are a lot of different approaches to Web-enabled trading, and Cognotec is clearly serving a particular need,” he adds. “Cognotec is helping financial services companies operate in a new technologically developed world, so banks can redefine what they offer to clients and how they offer it.”
“In FX, there is an extraordinary volume of underlying transactions that need to be effected – such as pure international trade and cross border investment – with banks under increasing pressure to control costs, it is essential they find more efficient ways of handling FX transactions,” says Maasland. “We’re automating the execution process, which drives down the error per transaction rate to virtually zero. If we can make banks more efficient, then they can spend more time looking at risk and using their relative strengths more effectively.”
“The most important aspects of e-commerce are rapid deployment and partnerships,” says Maasland. “We can get people up and running very quickly and, through Liquidity Linq, we can give smaller and mid-sized financial institutions a means of connecting to partner banks.”