FX swaps markets are the single largest part of the global foreign-exchange market, registering meaningful growth over the years and accounting for 51% of the $7.5 trillion daily industry.
Despite its size and enduring popularity, FX swaps remain stubbornly resistant to electronification, especially when it comes to dealers hedging their positions. In recent years, some of the dealer-to-client flow has migrated to electronic trading venues, albeit at a restrained pace, but interbank deals remain overwhelmingly traded in over-the-counter (OTC) markets. There are signs this is changing, with automation and technology inevitably marching forward and leaving no FX products behind.
The electronification process has been greatly helped by the efforts of DIGITEC, which has become the global standard for FX swaps and non-deliverable forward (NDF) solutions, delivering data, workflow automation, core pricing technology and distribution. This year’s recognition by Euromoney comes after its D3 OMS integration project completed the automation of the workflow and advanced the move of the market to e-channels.
“We serve a very specific part of the FX market: the FX swaps market,” CEO Peer Joost tells Euromoney. “Our core value proposition is helping clients access accurate, real-time curves in the market – a critical component for effective trading.
“Pricing and analytics are delivered through our D3 Pricing service, data via the Swaps Data Feed and workflow automation through D3 OMS. This integrated suite enables traders to connect to and execute orders directly on interdealer FX swaps venues. It improves efficiency, strengthens risk management and supports higher trading volumes across platforms and distribution channels.”
Our core value proposition is helping clients access accurate, real-time curves in the market – a critical component for effective trading
Peer Joost
Interoperability is at the heart of the DIGITEC system, allowing users to plug their systems into upstream and downstream technology, which ensures smooth connectivity to existing infrastructure. D3 allows users to build their curves based on data from multiple sources, including lower-latency spot and futures data as well as “slower” OTC inputs.
As a result, banks can feed FX swaps, forwards, spot, STIR futures, OIS, IRS and cross-currency basis swaps data into D3 to build their curves. As and when new data-sources become available, these can be easily added to the system, resulting in an information and speed advantage for clients.
The DIGITEC suite of products includes D3 for core pricing and workflow automation, D3 OMS for automated order placement, and the Swaps Data Feed (SDF) and Precious Metals Data Feed (PMF). Pricing and analytics are provided by D3, a fully modular, scalable SaaS architecture, that empowers banks of all sizes to aggregate market data, build and auto-price FX swaps, NDFs, PMs or MMs, then distribute prices with precision.
The company has been able to demonstrate a double-digit increase in client numbers during the past year, marking a major step forward for a business that was established 45 years ago. Client retention is also remarkable, suggesting enduring satisfaction with the company’s services.
Order submission is fully automated, either via our D3 Pricing engine or via direct connectivity, and client feedback has been very positive
Stephan von Massenbach
Stephan von Massenbach, managing director and chief revenue officer, said that the completion of D3 OMS marks a major milestone. “Traders can manage more orders simultaneously, with automated updates as spot rates change, which is something current platforms don’t necessarily offer,” he adds. “Even manually entered orders are automatically repriced.
“Order submission is fully automated, either via our D3 Pricing engine or via direct connectivity, and client feedback has been very positive.”
The company launched the D3 Channels in April this year, bringing a new module to market to allow traders to further automate their FX swaps pricing while increasing control and visibility. It is the latest addition to the D3 suite of pricing tools, which includes D3 Sheets and D3 Curves, for FX swap and NDF pricing, curve and yield curve construction.
The service was developed in response to traders and eFX businesses that wanted workflow automation but still needed visibility and to control the trader price element of their client pricing.
“As the FX swaps market continues to evolve, we see significant opportunity,” Joost adds. “We’re supporting banks of all sizes as they shift to a more electronic FX swaps market and more automated trading workflows, rolling out D3 OMS, and following a clear product roadmap. It’s a journey we’re committed to and excited to lead.”
