just now
May 31, 2023 - BNP Paribas and NatWest are now going live with ‘Dynamic Credit’ from CobaltFX, part of United Fintech, in efforts to simplify and streamline the allocation of credit for FX transactions between banks and improve access to liquidity. According to CobaltFX, the moves are indicative of an increasing trend of financial institutions wanting to optimise the disbursement of credit for FX trades and simultaneously improve market access and control.
Having been longstanding partners of CobaltFX, a division of United Fintech, both BNP Paribas and NatWest have recently increased their collaboration with te firm by adopting CobaltFX's latest product, Dynamic Credit, enabling them to effectively manage credit exposures within their respective financial institutions, tackling issues related to cumbersome manual processes, market access, and control.
Joe Nash, Digital COO for Foreign Exchange, Rates and Commodities, BNP Paribas said, “Industry-wide, we see that banks are adopting innovative techniques to manage credit exposures for FX trades and maintain market stability through digitalisation. CobaltFX's solution offers a much needed improvement to the manual process of updating credit limits with interbank trading venues. By providing a standardised and digitised approach, and aggregating IT infrastructure across multiple venues, ‘Dynamic Credit’ gives banks unprecedented control to navigate fast-moving FX markets and proactively manage credit exposure. This is a very important step in delivering a solution for credit providers, taking full advantage of new technical advancements”
At the end of March this year, after only three months of ownership by United Fintech, a relaunch from Cobalt to CobaltFX was announced along with the spin-off of its Digital Asset arm, signalling a “return to its roots” for the FX business. The British fintech emphasises the importance of simplifying and streamlining credit disbursement to mitigate risks. CobaltFX, operating under United Fintech, aims to address a range of "very current and real problems" in the FX industry, as stated by CobaltFX Founder, Andrew Coyne, "The problem CobaltFX is solving is essentially simplifying and streamlining many of the manual processes tied to allocation of credit which creates challenges for financial institutions. I.e. leveraging tech to enhance market stability. Thus, correcting the supply of credit and at the same time deepening the availability of liquidity, CobaltFX’s Dynamic Credit technology ensures that for less credit deployed, there is more liquidity, administrative simplification and, essentially, superior market access control - the latter being a key factor for financial institutions around the world”, says Andrew Coyne.
Since its acquisition by United Fintech in late 2022, CobaltFX has experienced “tremendous traction” according to CobaltFX CEO Marc Levin, calling it a“prime example of United Fintech and partner companies showcasing their best case practises, collaborating to drive innovation in big banks’ digital transition - and become lead industry vendor for fintech solutions”, pointing to another prevailing trend. United Fintech sees that more than ever, banks and financial institutions are actively pursuing collaborations with technology vendors that offer comprehensive solutions, as opposed to single-purpose product firms, with the shift being driven by the increasing importance of compliance and security in the industry.
United Fintech’s Founder & CEO Christian Frahm elaborates, “What we see is that leading financial institutions are seeking to decrease the number of third-party vendors which used to mean bigger contracts with so-called legacy providers, yet this is where United Fintech differentiates with a fresh approach to cater to the trend: We offer a selection of best of breed technology products under one umbrella to financial institutions wanting to challenge legacy providers and solutions, thus giving both sides the benefits of becoming part of something bigger. And our prediction is that we will see many more banks and fintechs follow suit and join each other's journeys on our digital platform”.
