Best liquidity aggregation service: smartTrade Technologies

With more sophisticated workflows at their fingertips, second-tier market participants are capitalising on smartTrade Technologies’ bespoke services and modules to gain a competitive edge

Following extensive investment in ever more sophisticated workflows over the past several years, regional and superregional banks have made great strides in adopting more intricate solutions that provide them with a competitive advantage in the market. Backed by smartTrade’s powerful modules, market participants now have more than 100 algorithms at their fingertips that allow them, among other things, to adjust their pricing profiles and manage their trades in real time.

Equipped with the tools smartTrade offers, these players have been encouraged to venture into areas of the market that were once the preserve of larger banks, such as the automated distribution of FX options. Options pricing and distribution have long been heavily manual and voice-led processes but, with the rising use of FX options in the market – for hedging and other purposes – tier two market participants are seeing opportunities in the product, for the benefit of their clients and their own bottom lines.

Driven by attractive margins in options pricing, a significant number of market players are taking advantage of one of smartTrade’s newest modules, which helps them electronically distribute FX options prices to their clients. For some, this means providing a bridge via an application programming interface between their options providers and customers; for others, it involves obtaining direct market access to another bank’s pricing, and straight-through processing these prices to their customers.

“With the modules that smartTrade makes available to its clients, we have levelled the playing field in the world of FX options,” says John Stead, sales enablement and marketing director at smartTrade Technologies. “Today, banks of all sizes can offer vanilla options, but also more complex exotic options and, soon, even structured products. This development allows regional, private and superregional banks to compete more effectively and provide comprehensive solutions to their clients. Offering such functionality sets smartTrade apart from its competitors. And we’ve seen great interest from our clients.”

It is through such strategic innovation on its platform that smartTrade distinguishes itself in the liquidity aggregation market. The provider is committed to the success of its clients and tailors its technology to meet their complex and evolving needs. To this end, the vendor has introduced new features to its platforms over the past year – such as real-time risk management tools, including credit check notifications, advanced auto-skews and granular auto-hedging features – to help clients manage risk effectively and ensure best execution.

To maximise liquidity-sourcing efficiency, smartTrade provides customers with access to a network of more than 130 financial entities complemented by co-location services in a variety of jurisdictions to ensure low latency and quick market access.

To further strengthen its geographical reach, in the past 18 months, smartTrade has expanded its presence in emerging markets, most notably in South America and the Middle East. Doing so has enhanced the vendor’s toolkit for managing the nuances of emerging markets currencies, allowing it to cater to a broader client base. And, in response to customer demand for enhanced hosting and disaster recovery capabilities in mainland Europe, the firm established a presence in Zurich in May.

Recognising that every client has different requirements, smartTrade has designed its platforms to be scalable in line with clients’ needs at the particular stage of their evolution. In addition to a wealth of prepackaged trading applications, clients that desire greater control over trading applications can customise their environment by running their own code hosted by smartTrade alongside, and in conjunction with, all the vendor’s other applications.

“We have observed a significant increase in clients looking to write their own code and have it hosted by smartTrade,” explains Stead. “We have enhanced our platforms to support this autonomy and created a scalable hosting environment that empowers our clients to deploy their solutions with confidence.”

To further solidify these solutions, smartTrade has developed dynamic analysis tools that use machine learning and artificial intelligence to sift through vast amounts of data and give clients insights into areas such as optimising their trading strategies or managing their customers.

smartTrade Technologies was named Best liquidity aggregation service at the FX Markets e-FX Awards 2024.

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