Single Dealer Platforms – Coming Full Circle

Single Dealer Platforms – Coming Full Circle

Following the launch last week of FX Inside 7.0, in this supported article Colin Lambert talks to Vikas Srivastava, chief revenue officer of Integral, about why the single dealer platform is suddenly getting more attention and why FX Inside is different.

Colin Lambert: FX Inside is very much aimed at the banking and broking community – what’s different in the new version?

Vikas Srivastava:  It has been built on a ReactJS framework, so it is very customisable and tremendously flexible in terms of layouts, look and feel, and incorporating third-party modules.

Our bank and broker clients can offer a bespoke single dealer platform that looks how they want it to look and contains the services they want it to contain, be it pricing, research, news, charts or other analytics, delivered in weeks, not months or years. They can even service their different types of customers by using Integral’s responsive user interface to effectively present a single dealer platform to multiple customer segments using multiple look and feel.

Our big differentiator is that we provide our clients the ability to offer their unique services to their own customers in a white-labelled cloud environment, in a completely bespoke way.

CL: Many, many years ago you and I spoke about different shades of white labelling, this sounds like a modern version of that concept.

VS: In many ways it is because clients can take FX Inside and plug their own services in, or they can take those services from us – it really is very flexible. Clients who have spent a lot of resources building their pricing and risk engines are able to leverage that work, but for those who are looking to upgrade their technology, we offer the full tech stack, such as connectivity, liquidity aggregation, pricing engine, and internalisation/auto-risk management tools.

Clients can also embed third-party applications, so if they like a firm’s algos or pre-trade analytics, they can easily be plugged in to downstream to the end client.

CL: The cloud concept really works here doesn’t it?

VS: It does. Our model is very much based on the FANGs’ approach, meaning the approach adopted by Facebook, Amazon, Netflix and Google. We want to make it as easy as possible for clients to embed the services they want and seamlessly deliver them to their customers – that means there are no downloads or heavy installations. If a client wants to add a third-party service it’s a simple matter of quick integration and permissioning. As long as the APIs exist, it will be a simple process and as we are seeing more standardised APIs emerge, it makes it even easier.

There is also the versatility – what the client wants, they get, they can be as specific as they want in building their SDP. One size does not fit all when it comes to these platforms, some customers want the full tech stack, others just the GUI, but importantly our clients are able to leverage the same platform to offer a different UI for each of their different customer types.

CL: So what is the thinking behind enhancing FX Inside – are you seeing more interest in the SDP space?

VS: We are, and it appears to have come full circle. At the turn of the century there was a rush on the part of banks to build SDPs, every serious player had one and customers traded on RFQs, supported by rudimentary eFX technology. The next big evolution was the multi-dealer platform, so the focus quickly shifted as banks found they had to better automate their pricing if they were to remain competitive. After that we had the entry of the HFTs into the FX market, which required the banks to ensure that the prices they streamed were accurate and without any latency, so the investment focus shifted to smarter pricing engines to meet this challenge.

Then risk management and regulatory reporting became the next big focus for technology budgets during the 2008 global financial crisis, before banks went back to pricing and risk engines in order to meet head-on the strong competition from non-banks who had turned themselves into very effective market makers.

In all this time, the SDP was, with a few honourable exceptions, largely neglected, but that is now changing. We are getting more and more enquiries about FX Inside from banks and brokers who see a real need, especially in the COVID era, to strengthen and maintain relationships – and that means a strong, flexible and intuitive SDP. In a crisis, people tend to rely upon the firms they know and trust.

Equally, in a world in which travel is very difficult, how do you expand your footprint? With an SDP you can reach anyone, anywhere – and again the cloud works really well because work forces are so dispersed and having your SDP in the cloud allows anyone to access your services from anywhere.

CL: And are likely to stay that way in some shape or form for some time to come…

VS: Exactly. People are saying to us that they do need a distribution platform and they need it as quickly as possible. Even when the COVID crisis passes, firms will still be cautious about having all their staff in one or two offices, there will be a new structure to how people work and cloud-based technology allows them to access and distribute services at any time.

CL: Is it also the case that the SDP has been given a new lease of life thanks to better data and analytics? These have allowed firms to reduce the level of emotion in the bank-client relationship and demonstrate that often the SDP is the best channel to avoid issues such as market impact.

VS: Data science is changing the market for sure and analytics is one aspect that is evolving fast. As well as the demand for transaction cost analysis, which has emerged on the back of the growth in execution algos, clients are also keen to provide their sales-trading teams with the analytics to support the client relationship. It’s another look for the GUI – giving the information the client facing teams need while they are on the phone or chatting to their customer.

That’s certainly one use case for FX Inside, but as well as traders who want the full service GUI there is also one for business managers who want to monitor their service levels. They can access their business’ KPIs such as volumes traded by customers, round trip times, channels being used, the value of the flow and, of course, hit and fill rates. These data points can also be used to ask questions of the firm’s own LPs as well.

This is a great example of the flexibility we have built into FX Inside 7.0 – clients can use it to deliver their own or third-party services, but they can also create their own bespoke front end for their own teams.

CL: Again many years ago, you and I were involved in the buy or build debate, this seems the best of both?

VS: It is buy to configure, that’s what the HTML5 and ReactJS framework FX Inside is built on allows you to do. We offer the simple GUI and clients quickly and easily configure it to their own requirements. More top banks are looking at their platforms and seeing the need to re-skin them – they have the connectivity, pricing, and risk management sorted out but they need to think distribution.

The evolution I spoke of earlier has led to something of a neglect of their SDP on the part of many participants and they recognise the need to update them. We should not be surprised by this, because the single dealer platform is, especially in the current climate, very much the face of the institution. What we are offering is the ability to offer your own SDP to your customers on our distribution platform – it’s a simple, cost effective solution with a very quick delivery window.

Julie Ros
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Julie Ros

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