As there is no sign that fragmentation in the foreign exchange market will reverse any time soon, market participants must weigh their options carefully when looking to source liquidity in a secure and reliable manner.
And with more than 120 FX liquidity pools available in the market, participants look for solutions that will optimise their liquidity provision while minimising their costs.
The situation plays to smartTrade’s strengths, says David Vincent, co-founder and chief executive of the technology provider.
The Aix-en-Provence-based firm does not charge a fee per-million-dollars-traded to use its LiquidityFX platform, nor does it intervene in the prices provided by liquidity providers. As market participants simply pay for the plumbing the company provides and not for how much they trade it, Vincent emphasises this enables clients to take a longer-term approach to optimising their costs.
“The idea is to have a coherent pricing model for all of our clients,” says Vincent. “People pay for the use of the technology, not the volume that they do.”
smartTrade, which was voted Best liquidity aggregation system provider of the year at the 2019 FX Week e-FX Awards, provides its clients with a protected environment in which each receives dedicated hardware, software and connectivity, separate from others.
“We provide a single tenant solution for our clients, where each one is provided with their independent architecture,” says Vincent. “Each client has their own dedicated server, network connection, database and physical connectivity, which allows us to guarantee complete independence, greater data protection and Chinese walls between clients.”
With a 20-year history to bank on, SmartTrade has been a pioneer in the electronification of the FX market. Since the very first line of code, the company has remained focused on providing cross-asset solutions to its clients. While its core emphasis continues to be FX and fixed income, it does provide various modules for equities, commodities and, most recently, cryptocurrencies.
Vincent likens the company to a chameleon that can deliver variable end-to-end solutions to institutions on the buy as well as the sell side, ranging from large banks to very small trading firms. As such, all of SmartTrade’s clients benefit from the solutions it develops for each client segment.
“That means all our clients are winners,” says Vincent. “Small clients will be able to take advantage of solutions developed for larger clients, while the bigger clients will benefit from the more agile solutions we develop for our smaller clients.”
As the regulatory push of recent years has receded, Vincent says a major area of development for SmartTrade in the past year has focused on data, and particularly analytics, which provide market participants with an in-depth analysis of their trading.
The next step, he says, is to incorporate artificial intelligence capabilities to offer trading strategy suggestions based on past behaviour.
Mikael Latreille - FX-Week