Global financial institutions’ foreign exchange (FX) post-trade systems are aging, becoming increasingly inefficient, risk-laden and costly.
Many are struggling to cope with the demands of accurate data capture during the life cycle of trades. This is creating operational risk and could undermine regulatory compliance.
But institutions can now benefit from the latest distributed ledger technology innovation thanks to collaboration between BT and Cobalt.
Cobalt is a London-based fintech that delivers a shared back and middle office infrastructure using a combination of an immutable shared ledger and low latency technology to significantly reduce post-trade cost and risk for the financial markets. By creating a shared view of trade data, Cobalt frees up back and middle office resources from multiple layers of reconciliation; creating one immutable record of FX transactions from which to provide multiple services. Cobalt’s private network dramatically reduces risk and post-trade costs for financial market participants by up to 80 per cent.
It has been working with BT to deploy its systems in the BT Radianz Cloud, one of the world’s largest secure networked financial communities linking thousands of brokers, institutions, exchanges and clearing and settlement houses globally.
By hosting its systems in the Radianz Cloud, Cobalt benefits from a ready-to-exploit global market reach, ability to scale and a commercial structure that enables it to meet the requirements of its target customers — large financial institutions. Security and resilience are key. Radianz connectivity and managed hosting services help Cobalt meet strict service level agreements and customers’ high security requirements.
Michael Woodman, managing director, Radianz Services, BT: “The Radianz Cloud is a catalyst for innovation, giving institutions access to the very latest technologies and services via a platform and commercial framework built for the exacting demands of the global financial markets. With the launch of Cobalt’s new low-latency private network services, the Radianz Cloud community can now benefit from blockchain technologies supporting encryption, digital signatures and consensus to deliver a single, immutable record for each trade. This will create new efficiencies for institutions in what were previously admin-heavy post-trade processes.”
Adrian Patten, Co-Founder & Chairman, Cobalt said: “While other firms in the blockchain space have been experimenting with the technology, we have designed, built and tested a solution to a very specific and pressing challenge in FX and are now making it live with BT Radianz. This will give Cobalt the scale and reach it needs on tap, backed by BT’s experience and capability of delivering solutions to large financial services organisations. It’s an ideal platform for growth and will help us achieve our aim of revolutionising the post-trade space in the biggest financial market in the world.”
Cobalt is offered as two solutions hosted independently in Radianz Cloud centres in London and New York — the world’s leading FX markets. It is being launched following a successful deployment with a major global institution.