United Fintech on why time for CobaltFX relaunch is now
The acquisitive fintech group reckons it can accelerate the transition from legacy FX technology by making it easier for tech firms to get their products to market.
Last year was a challenging period for the fintech sector. According to CB Insights, global funding volumes were down 46% from 2021, with the fourth quarter of 2022 recording the lowest quarterly level since 2018.
Analysis of fintech mergers and acquisitions undertaken by The Paypers shows fintech M&A activity at its lowest level since 2017.
But this did not stop United Fintech making its latest FX-focused acquisition with the purchase of post-trade processing network Cobalt in December, which followed a deal in 2021 to acquire trading analytics firm FairXchange and the purchase of trading data provider NetDania.
In late March, the company announced that its most recent acquisition would relaunch as CobaltFX and focus on credit optimization and post-trade FX, with its digital asset division being spun off.
Marc Levin, chief executive of CobaltFX and group COO of United Fintech, says that while digital assets and FX are likely to merge in the future, they are currently at very different stages of maturity and therefore require different approaches to be successful.
The settlement process in the post-trade space is just one aspect of the FX market that is still behind the curve in terms of the use of technology
Christian Frahm, founder and chief executive of United Fintech, adds that with FX being a core asset class for banks and large institutions, deals like these fit into his company’s strategy to help these clients move away from outdated technology and reduce costs.