Citigroup builds fintech marketplace

It will be interesting to see if this rather less stable or credible market compared to the interbank FX market that Citigroup used to major on will be more successful for the bank than its own attempt to go down the retail FX route, having canned that after just a few years.

Citigroup ahead of the pack in virtual reality trading

For over 17 years, Citigroup was the largest interbank FX dealer by market share, until it tripped itself up by publishing a report in 2016 stating that it expects over 57% of all OTC counterparty credit agreements with all Tier 1 banks to end in default.

This led to a retraction of prime brokerage agreements to OTC derivatives firms by Tier 1 banks and a draconian implementation of high balance sheet requriements, meaning that any prime of prime broker which could not demonstrate that it was over $50 million in credit at the bank would have its prime brokerage agreement removed.

This paved the way for the non-bank market makers to come to the fore, with XTX Markets having been the leading Tier 1 FX liquidity provider globally since 2018, with many more non-banks in the top ten, whilst the Tier 1 banks, along with former leader Citigroup, languish and struggle.

Today, however, Citigroup’s new direction has come to light, as the bank jumps on the trendy bandwagon of Amazon-style marketplaces and goes looking for the unstable and untested ‘fintech’ startups rather than support its traditional and well ordered core business of FX dealing to OTC counterparties.

Citigroup is building a marketplace of third party fintech apps, signing data access agreements to customer-approved accounts with eight startups and data aggregators.

Citibank customers will be provided with a way to permission and share their account information with financial apps and services through the use of API token-based technology.

“At Citi, we believe in giving our customers choice, convenience and control of their financial data,” says Mike Naggar, chief digital officer, Citi’s US Consumer Bank. “Through the use of APIs, these agreements will help provide a seamless and secure data sharing experience for Citi customers who choose to share their financial data with third party apps and services.”

The first companies covered by the data sharing agreement include, BillGO, eMoney, Envestnet Yodlee, Expensify, Finicity, Intuit, MX, and Xero.

Citi was among the first banks to launch a global API Developer Portal in 2016 to spur collaboration with fintech companies, developers and consumer brands. The API catalogue currently houses over 120 APIs and thousands of users in 16 markets.

It will be interesting to see if this rather less stable or credible market compared to the interbank FX market that Citigroup used to major on will be more successful for the bank than its own attempt to go down the retail FX route, having canned that after just a few years.

Read this next

Executive Moves

Avelacom appoints Timothy Wong to run new Hong Kong office toward APAC expansion

Avelacom helps to achieve sub-millisecond speed of market data and order execution across both derivatives exchanges and crypto markets.

Executive Moves

XS.com hires Ahmed Negm, a popular market analyst on CNBC, Sky News, Bloomberg’s Asharq

“Ahmed’s expertise and passion for understanding the intricacies of the financial markets will be invaluable as we continue to grow our client base and expand into new jurisdictions.”

Institutional FX

ATFX uses blockchain to help clients verify IBs and vice versa

ATFX said it has been working on the IB verification project for a few months.

Industry News

Research market in dire straits as SEC’s ‘no-action’ letter on MiFID II lapses in June – survey

“Of all the regulatory news that has hit the research market in the last few months, this is the one change that will fundamentally impact what fund managers can access and pay for in future.”

Executive Moves

Wombat appoints ex-abrdn Richard Charnock as UK platform turns to Europe

Launched in 2019, Wombat provides a dedicated mobile investing platform – available on both iOS and Android – offering users both range and choice.

Institutional FX

Broadridge integrates Point Focal’s pre and post-market reports

“Point Focal provides a unique lens on the market which will help add alpha to the trading process and these new insights will rapidly improve performance while mitigating execution risk and simplify trading.”

Technology

XCritical integrates with Brokeree Solutions, allowing its clients to launch copy trading 

The forex software provider – XCritical, has integrated Social Trading by Brokeree Solutions into their CRM system.

Industry News

HKEX partners with Saudi exchange for cross listings, ESG, Fintech

“The Kingdom of Saudi Arabia, and the broader Middle Eastern region, are one of the world’s most dynamic and exciting economic and innovation hubs and also home to some of the fastest growing investor groups in the world. Hong Kong and HKEX’s markets offer significant opportunities for international investors and corporates, including unrivalled connectivity to the Mainland Chinese markets through our unique Connect programmes. This agreement signals the beginning of even greater collaboration between our companies and our home markets, and we look forward to exploring many future areas of cooperation.”

Executive Moves

CMC Markets Connect relocates APAC team led by Peter Foster to Singapore

“Singapore is a vibrant city and is now undoubtedly seen as Asia’s leading financial hub. The decision to bolster the CMC Markets Connect team here will help us cement the company’s position as a leading provider of multi asset liquidity and comprehensive trading solutions across the region.”

<