The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.
Foreign Exchange

FX: Blockchain seen as the solution to enhanced post-trade efficiency

Under-investment in post-trade infrastructure is driving interest in distributed ledger technology as a means of reducing back-office costs.

blockchain-binary-780



Few market participants would deny that most of the investment in electronic FX trading has been about winning the trade rather than settling it.

Money has been spent on improving the post-trade element of the life cycle, acknowledges Frederic Ponzo, managing partner at capital markets consultancy GreySpark Partners, but reckons that investment in front-office systems has been at least three or four times higher.

The amount allocated to the back office, he argues, has been insufficient to properly decommission obsolete or less-relevant platforms. The result is stubbornly high operating costs due to duplication and limited automation.

Back-office processes that evolved to support nascent electronic trading were designed to handle low volume, large tickets, but as ticket sizes fall, post-trade infrastructure is unable to keep up.

Adrian-Patten-160x186

Adrian Patten,
Cobalt

That is also the view of Adrian Patten, co-founder and chairman of Cobalt, who says that incumbent post-trade providers rely on cumbersome, manual processes and disconnected legacy technology.

“As much as 80% of back-office time is spent purely on reconciling systems,” he says.




You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree