JP Morgan and Societe Generale have invested in fintech firm, Wematch, a company that provides technology to augment how traders at banks match, negotiate and manage trades that are currently predominantly voice-traded, thus bringing, according to the firm, the audit and control benefits of electronic tools to voice trading, delivered as web-based software-as-a-service technology.
Wematch says there are now 40 banks and more than 750 traders on platform across asset classes.
Despite the growth and benefits of e-trading, in some markets institutional investors still conduct most of their trading over the phone, or through interdealer brokers, Wematch says, adding that it delivers the benefits of web technologies to traders at banks, improving the matching and negotiation process, cutting costs for banks and increasing efficiency and reducing conduct risk for traders.
Wematch came through JP Morgan’s In-Residence Programme and Societe Generale’s Global Markets Incubator to foster the expansion of the fintech’s offer across asset classes and instruments. The funding takes the banks’ relationship with Wematch from users to investors.
Wematch says it believes there is “enormous potential” to help the capital market industry in further adopting digital solutions across multiple markets globally, and to adapt this technology to internal and client-facing solutions. It adds that despite pressure from regulators for more trades to be conducted on electronic trading venues, it is estimated that over 80% of structured products and FX derivatives are still transacted by voice.
The interest rate swaps market is worth USD 2.1 trillion a day, according to the Bank for International Settlements, with over 70% of that business handled by phone negotiation.
Gregory Mimoun, co-CEO of Wematch, says, “Wematch is delivering the next generation in trading protocols, with intuitive GUIs and workflow tools to give voice trading professionals the edge. Everything we build is designed to support the trader’s decision, giving them the tools to make the right call with confidence and certainty.”
Joseph Seroussi, co-CEO of Wematch, adds: “Wematch is leveraging on the latest available technologies and the traders’ community permanent feedbacks and inputs to develop its capital market solutions. Our objective is to have a significant impact on the bottom line expenses of financial institutions by rolling out the Wematch technology on all markets, internal, or dealer-to-client activities.”