At Edgewater, we deliver cutting-edge FX trading solutions to financial institutions around the world, applying our local market knowledge, vast network of relationships and multilingual support professionals to meet their every need. While each market is different, the technology goals of their participants – evolving their business in a rapid, scalable and economical manner – are universal.
There are a few reasons for this, and they compound each other. The rapid electronification of FX trading has fueled performance and growth for the largest entities with the deepest pockets, leaving the rest of the market to fight for market share. With more resources and more robust technology infrastructure in place, these institutions are moving faster than ever to diversify their business by directly entering new markets around the world. For firms both local and global that lack modern systems, the competition is intensifying quickly, and there’s nowhere to hide.
Much of our work centers around leveling this playing field. Our solutions deliver everything financial institutions need to transform manual workflows into automated processes, from pricing and liquidity tools to ultra-low-latency connectivity. While we offer benefits to any FX market participant, we built our technology to reflect the fact that every firm has a different set of requirements and goals. We empower clients with the flexibility to employ any combination of our technology, their proprietary tools and manual processes, as well as to evolve on any timeline, turning the age-old buy-or-build question on its head.
Let’s explore how. Read on to discover how FX market participants can buy AND build with Edgewater.
Many Roads to Innovation
While all FX market participants are incentivized to evolve their trading, they are also under significant pressure to do so quickly, strategically and at scale. That can take many different forms.
Luckily, our technology is highly modular and built for customization, so clients can refine their approach and leverage different components to support any set of needs, from getting to market quickly to augmenting their core competencies. Each use case is different, but this buy-and-build approach generally takes one of three basic forms:
- Permanent Hybrid – Many of our clients have their own technology organizations – they’re just not as massive as those of the global enterprises. For these firms, it often makes sense to focus internal resources on what they do best and lean on us for the rest. For example, they might employ a team of pricing specialists but lack risk management expertise, or vice versa. We bridge the gap between our clients’ capabilities and needs, so they aren’t forced to hire a large team to do it all on their own.
- Pathway to Proprietary – Other clients feel strongly about having proprietary trading technology across the board. Our pitch to these firms is simple: they should outsource core functions to us now so they can build their own tools incrementally over time. Instead of a big-bang approach, they can build in a more targeted manner, adapting in response to market changes or business realities. This means they can zero in on each step in the process and focus on lower-priority items later, so they can innovate without delay.
- Sprinting to Evolution – Firms in markets where the competition is really accelerating have a particular need to get new solutions to market quickly. While we offer everything they may require for FX trading success, we can begin with the areas that will make the largest impact on their business, enabling them to grow today while preparing for tomorrow. Ultimately, most of these firms end up working with us in a comprehensive manner, but this phased approach, supported by the same buy-and-build principle as in those outlined above, helps them realize the efficiencies far more rapidly.
The common thread in each of these strategies is that they enable firms to scale their business quickly and cost effectively. We unlock automation and straight-through processing across functions – generally following a roadmap from ecommerce to price generation to trading to risk to sales – staying as involved or hands-off as needed. Making phone calls to nail down a price, responding to hundreds of Bloomberg chats and the like rapidly become things of the past. We’ve invested millions in our technology and team, resulting in solutions that are far more powerful, available much faster and cost far less than what many firms could build in-house.
Enabling a buy-and-build approach is at the core of what sets us apart, but it isn’t the only way we enable FX market participants to stand up their ideal trading system. By emphasizing flexibility and client-centricity at every turn, we empower these firms to grow their business infinitely and in any direction.
For example, we enable our clients to add their own price discovery and order routing algorithms into our platform, so they can preserve their special sauce no matter how much they’re relying on our technology. They can choose between anonymous execution or disclosed matching, settle trades via our intermediaries or their existing relationships, and configure our visualization tools however they see fit. The sky is the limit.
This has particularly profound implications for regional and local banks in emerging markets, where the entry of well-heeled global entities has created enormous competitive pressure. With the right tools to rapidly meet client requests in a highly targeted manner, combined with on-the-ground recognition and familiarity, these firms can outperform the interlopers and reclaim market share.
In addition to all these technological efficiencies, we add a third “B” to the buy-and-build approach: business development. With our deep roster of global relationships, we can introduce banks to new clients around the world, enabling them to become a leading provider of liquidity in their home currency. In most cases, this access results in major increases in volume – so much so that we waive all technology licensing fees, creating further economic benefits. Through the combined power of rapid electronification and a larger, more diverse set of counterparties, we enable firms to not only survive, but thrive amid unprecedented disruption in the FX market.
It’s a compelling vision, but time is of the essence. By enabling clients to take a buy-and-build approach, outsourcing as little or as much as needed to achieve their goals, we help financial institutions grow their business and develop their competitive edge on an accelerated timeline. No matter what path they choose, our goal is to support their strategic vision and unique differentiators through modularity, flexibility and client service.
Want to learn more? Drop us a line.