Saxo Bank has integrated FairXchange’s liquidity management data analytics platform, Horizon, in a bid to maximise opportunities for the bank, its liquidity providers, and their clients.
Guy Hopkins
James Dewdney-Herbert, associate director – eFX sales and liquidity strategy at Saxo, told The TRADE that specifically “relevant insights in real-time are profoundly helpful for an eFX brokerage”.
“Additional to the LP KPI’s and yield curves we use today we are also interested in FairXchange’s monitoring capabilities, namely being alerted to changes in spreads, skews and client trading behaviours.”
He added that through working with a credible, third-party application the bank is able to mitigate conflicts of interest whilst replacing subjective perceptions with quality data.
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Speaking to The TRADE about the importance of liquidity management, Guy Hopkins, chief executive and founder of FairXchange, said: “Liquidity Management has really been around as long as trading, and certainly as long as trading has been electronic. In recent years however, it has seen a huge increase in sophistication and usage, particularly as margins continue to face pressure while technology becomes ever more efficient.
“A process that used to be undertaken quarterly or monthly now needs to happen daily or even in real-time, as liquidity dynamics change. Rapid access to actionable data is essential, and the audience for it has also grown significantly. Everyone who works in a business that relies on liquidity – be they in trading or sales – now relies on data-driven decision making as a key component of their working life.”
Danish investment bank, Saxo, was one of the first institutions to embrace data-driven dialogue with their liquidity providers.
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Dewdney-Herbert, asserted in an announcement that the bank’s relationship with FairXchange was already off to a strong start, having “already noted a material uplift in engagement from [our] trusted liquidity partners, leading to greater profitability both for them and for us, ultimately resulting in better liquidity for our clients”.
Last October, FXSpotStream – a subsidiary of LiquidityMatch – also joined the FairXchange ecosystem, Horizon in a bid to enhance trading execution and analysis. Specifically, the move was set to include the real-time analytics to make for more precise processes.
“The future of liquidity management is enormously exciting, particularly with the development of AI. Being able to quickly identify opportunities, or to spot issues before they become problems is probably the biggest growth in the space for the next three-to-five years,” Hopkins told The TRADE.