This article is authored by Benjamin Becar, Head of Sales Enablement & Strategy (Trading) at smartTrade
For nearly two decades, I’ve been immersed in the world of capital markets, witnessing the evolution of algorithmic trading firsthand. Since 2008, I’ve seen ‘algos’ transition from a buzzword to a cornerstone of efficient eFX operations. Today, banks and financial institutions aren’t just seeking a competitive edge; they’re navigating a complex landscape where algorithmic strategies are essential for survival.
As Head of Sales Enablement and Strategy (Trading) at smartTrade, I’ve had the privilege of working with a diverse clientele, from regional banks to global giants. This experience has given me a unique perspective on the critical criteria for deploying effective algorithmic strategies. In today’s dynamic eFX landscape, banks are under immense pressure: increased competition, the need to process vast data volumes, and the constant drive to enhance client services amidst regulatory complexities. They’re looking for solutions that reduce execution costs, accelerate reaction times, and ultimately, differentiate them in a secure environment.
At smartTrade, we’ve built a suite of solutions tailored to these specific needs. With a significant portfolio of clients globally, I’ve seen firsthand how our unique algo technology elevates their competitive advantage. However, I understand that one size doesn’t fit all. The application of algos varies significantly based on a bank’s size and FX flow volumes.
For smaller firms aiming to offer advanced execution: I’ve seen the power of white-label algorithms. Leveraging the 150+ algorithms available on our platform, these firms can offer sophisticated strategies under their own brand, like for hedging large positions or passive strategies for market swings. This allows them to compete effectively without massive infrastructure investments.
For those seeking to differentiate further: Our “algos-as-a-service” model provides a pathway to bespoke algorithmic solutions. We work with our clients to develop and implement strategies tailored to their specific needs. We’ve recently seen significant success with multi-layered trading strategies, balancing P&L maximization with robust risk management. The launch of smartHedger, our advanced hedging product, further empowers clients with increased control and customization.
For larger institutions focused on proprietary IP: Our “Algobox” offers the flexibility to build and deploy proprietary algorithms, even white-labeling them for end clients. Over the past 24 months, I’ve witnessed a surge in interest in this area. Clients are leveraging it to:
- Optimize price distribution: Dynamically adjust spreads and skews based on market volatility.
- Customize liquidity sources: Create order books combining external and internal liquidity.
- Implement low-impact execution algorithms: Benefit large corporate clients with high value single-transactions.
- Conduct high-speed algorithmic surveillance: React to unusual trading activity in real-time.
- Enhance risk mitigation: Automate hedging decisions and provide comprehensive algorithm surveillance.
At smartTrade we understand that automation must also be underpinned with very robust protection mechanisms: circuit breakers, kill switches, and built-in limits. We have also prioritized seamless connectivity and an intuitive GUI, ensuring operational stability and risk mitigation.
In my years in this industry, I’ve learned that customization and control are paramount. At smartTrade, we empower banks of all sizes to navigate the eFX landscape, enhance efficiency, and deliver superior client services. I invite you to reach out and discuss how we can tailor our advanced algorithmic execution solutions to meet your specific needs.