BNP Paribas rolls out Cortex FX single-dealer electronic platform
BNP Paribas has unveiled its newly developed foreign exchange single-dealer electronic platform, making it the latest in a string of banks seeking to expand their market share in the competitive e-FX space.
The platform, dubbed Cortex FX, replaces the bank’s interim platform, FX eTrader, which it launched in late 2009 and was based on a white-label agreement. As reported by FX Week in December, Cortex FX was developed in-house and is based on Microsoft’s web-based Silverlight technology.
“This is an exciting new product launch for BNP Paribas. The philosophy behind Cortex FX is to offer clients a venue to trade all FX-related products in a very customisable and user-friendly format. We believe it ticks all the boxes for clients, but it will evolve as time goes on and we plan to maintain short release cycles so we can answer client requests,” said Thomas Soede, global head of electronic markets at BNP Paribas in London.
In the face of new trading and clearing regulations for over-the-counter derivatives, BNP Paribas has taken an implicit gamble in launching its platform to cover all FX products, including spot, swaps, outright forwards, non-deliverable forwards (NDFs) and options. Some of the bank’s competitors have chosen to hold off on options and NDFs, given the likelihood they will be required to be traded on multibank venues. But Soede believes there will always be demand for options and NDFs in a single-dealer environment, particularly from corporates, given their likely exemption from regulatory requirements.
“BNP Paribas has a very large client base and is approaching its different client segments with different sets of requirements. Despite regulatory uncertainty remaining, we decided to offer the full FX product scope, which includes products that might be impacted by changes in execution and clearing requirements, as some of our client segments will be unaffected by these changes,” said Soede.
Although electronic commerce platforms have increasingly focused on user experience and innovative functionality as their differentiator, pricing also remains critical if platforms are to retain client flow, according to Luke Waddington, deputy global head of electronic markets at BNP Paribas in London.
“We realise there are already a number of very successful single-dealer platforms and we need to ensure we have something to add. The bells and whistles on these platforms tend to be fairly commoditised, but as a bank that specialises in complex derivatives, we have very sophisticated pricing protocols for crosses that will go through up to eight different currency pairs to find the optimal price to produce for a client – that’s a unique selling point,” he said.