Intraday FX swaps and repo platform

Challenge

• Intraday liquidity costs banks billion in profits every year
• Banks often need to make early outgoing payments. Each bank performs a one-side measurement for liquidity buffer needed and for regulators
• Banks with an intraday surplus today are unable to easily transact to earn a return, due to inefficient trade processing, settlement risk and credit risk

Solution

• Finteum is a bank treasury and trade management platform for intraday FX swaps, enabling banks to borrow for hours at a time, allowing them to meet temporary liquidity needs
• One of the first interbank venues to offer FX swaps and repo alongside each other in the same platform
• The solution leverages Corda to create a valuable market for intraday liquidity that was previously impossible

Why Corda?

• Corda was chosen for its unique peer-to-peer (P2P) data privacy architecture where data is only shared with parties involved in a transaction. This enables bank treasury teams to negotiate pre-trade using a shared trade record of truth, allowing faster confirmation and settlement.

Results

• Enables payment-vs-payment intraday FX swaps as well as delivery-vs-payment intraday repo transactions
• Creates an opportunity for new revenue streams by lending excess funds in the intraday market
• Streamlined trade execution and settlement (settlement in minutes rather than days)
• BNYM, Barclays, NatWest, Citi, Euroclear, and 9 other banks involved trial  (June 2022)
• Fnality and Finteum settled first pilot cross-chain FX demonstrating interoperability between Corda and Ethereum