FX Markets Best Banks Awards 2021: Best professional e-trading venue – 360T

In addition to consolidating spot liquidity across its trading platforms and opening up the non-deliverable forwards (NDFs) space to streamed pricing, 360T continued to change the FX swaps space in 2021 with its fully automated trading solution

The momentum in the FX swaps space is clearly heading in the direction 360T imagined when, in late 2019, the FX platform provider announced the launch of a fully automated FX swaps limit order book with a mid-rate matching capability. At the time, 360T was driven by the vision that one day FX swaps would commonly be executed via algorithms, just as spot is today.

That vision is closer to reality with each passing day as the roll-out of 360TGTX MidMatch has put the FX swaps space on the path to full electronification. That path has been fraught with challenges – and continues to be – since there has been so little investment in FX swaps across the industry for quite some time, despite being the most widely traded FX instrument and representing nearly half of the world’s FX turnover.

“Hedging with FX swaps has changed little in the last 30 years,” says Simon Jones, chief growth officer at 360T. “The change that is starting now is long overdue. Existing participants have been starved of innovation for too long, and new entrants coming into the space to use swaps for funding have higher expectations about their trading options.”

Addressing electronic capability

With an FX swaps order book established, clients are becoming increasingly keen to try new order types, and businesses are actively planning for automated trading solutions, smart transaction cost analysis and, ultimately, algo solutions. As more banks come onboard, the momentum is self-reinforcing.

“The algorithmic execution of FX swaps is still the next big thing,” says Jones. “We are close to a continuous liquid pool where these products can differentiate themselves. Big algo banks have dedicated resources to this already, which says they share our vision. We are also seeing aggregators being built for FX swap traders – another strong sign that the view we so firmly believe in is fast becoming a reality.”

To achieve this reality, 360T has been attentive in addressing the challenges banks face to get their electronic capability to where it needs to be in FX swaps. Over the past two years, banks have outlined the path that works best for them and 360T has adapted the development of its platform to cater for this.

To this end, 360T designed five different paths for credit integration, working with partners – such as Cobalt – to accommodate banks’ most niche approaches to credit distribution. On the trading technology side, 360T expanded beyond building an advanced application programme interface (API) offering for FX swaps to developing a highly sophisticated graphic user interface (GUI) to ensure all traders had access to the kind of order types that will be needed in this space where change is now accelerating. This widening of the scope wasn’t without its own set of challenges.

A critical cog

“GUI design is notoriously difficult,” explains Jones. “Channelling hundreds of inputs into a platform that caters for everyone takes time and, most importantly, industry knowledge, which thankfully we have in abundance through Gavin Wells and Robin Nicholas, who are leading this initiative.”

“The uptake on the GUI front has really surprised us,” points out Jones. “To the point where we decided to do a full overhaul of the launch beta and move straight to a new HTML5 version, which is now in roll-out. The results are very impressive.”

With banks now making service investments in this direction, particularly around hedging algorithms and credit, the vision of fully automated swaps trading is finally reality. The spin-off opportunities for clients include algos, better transaction cost analysis, improved benchmarks and greater opportunity to reduce the spread. 360T MidMatch has been a critical cog in turning this wheel.

360T was voted Best professional e-trading venue at the 2021 FX Markets Best Banks Awards.

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