Finalto at iFX EXPO Asia 2023: Alex Mackinnon on taking advantage of SG3

This years’ iFX EXPO Asia took place at the Centara Grand & Bangkok Convention Centre at CentralWorld.

From 20 to 22 June, the arena hosted 3,000 attendees, exhibitors and sponsors which included successful start-ups, leading international brands, and industry giants.

Among the leading FX brands present at iFX EXPO Asia 2023 was Finalto, the provider of trading and liquidity solutions to over 600 clients, from more than 80 countries, spanning retail brokers, banks, hedge funds, professional traders, asset managers.

Finalto to make the most out of SG3 connectivity

Finalto has become a truly global broker in 2023, with the addition of New York (NY4) and Singapore (SG3) connectivity, the latter of which was announced the week before the forex expo. This milestone for the London-headquartered firm will significantly enhance the trading experience for its customers and end-users as it is now able to ensure local execution for those in the Americas and those in the APAC region. Ultra-low latency for everyone.

To discuss this breakthrough as well as new products and Finalto’s approach to the region, FinanceFeeds Editor-in-Chief Nikolai Isayev spoke with Alex Mackinnon, CEO of Finalto Asia.

“We’re now live and releasing price discovery and execution in SG3, so that makes us a very unique global broker”, he said about the Singapore data center integration which was implemented by Finalto’s cross-functional team in just five months.

“We’re looking for collaboration with retail brokers in Asia that want to reduce their clients’ latency by executing locally and not on LD4 or NY4”, he continued, adding that the ‘click’ happened with COVID-19 shortly after Finalto secured regulatory approval from the Monetary Authority of Singapore. The pandemic made them realize they needed Asian liquidity to make sure they could always deliver even if London (LD4) or New York (NY3) were down.

The connectivity expansion turned Finalto into a truly global broker catering to all retail brokers and funds wanting faster execution and reduced latency, with more efficient access to liquidity.

Liquidity configuration in Asia is different than in Europe

In the follow-up of the launch of SG3, Finalto announced the appointment of Kenneth Lim as Head of Liquidity Asia to spearhead the expansion of liquidity provision in the region. He joins Finalto after more than 10 years working with institutional investors and prime brokerage services in diverse markets including FX, Futures, and Crypto.

“He is very well known with the banks and clients. We’re very excited to have him join us as a significant part of our business comes from Asia ”, Alex Mackinnon told FinanceFeeds’ Nikolai Isayev, as he pointed to differences between retail brokers in Asia and in Europe. “We see larger tickets here (Asia). The liquidity configuration is very different”, he continued. Finalto’s expanded connectivity is likely to bring in several players based out of Singapore and Tokyo. “It’s really embracing the global footprint and have a liquidity manager that takes us to the next level.”

Finalto expands Asia-focused products with XAUJPY and Taiwanese Dollar NDF

Finalto has been offering gold liquidity in grams against USD and CNH and taels against HKD in Hong Kong. Alex Mackinnon also commented on the latest news coming from that product segment, which was the introduction of the Gold Yen (XAUJPY).

“The bullion market in Asia is significantly larger than in Europe ”, he noted, as he stated that the launch of XAUJPY came amid a lot of requests for expanding the bullion product further to include all Asian currencies beyond the mining countries. The XAUJPY pair addresses the increased demand for exposure to Gold while allowing market participants to short the Yen against another asset class.

Also on the product offering front, Finalto continues to expand the non-deliverable forwards (NDFs) line up, with the addition of the Taiwanese Dollar (TWD) generating much interest, as the currency has become a favorite proxy for market risks in Asia triggered by Russia’s invasion of Ukraine.

The expansion of NDF products helps meet the needs of its corporate and institutional clients, including local banks, pension funds, hedge funds, brokers and end users, for hedging and execution of real Asian FX and non-deliverable forwards business, leading up to improved counterparty risk management.

NDFs comprise a small portion of overall FX turnover but the product has experienced impressive growth in recent years as it provides a way to trade spot FX in restricted markets where currencies are not deliverable. NDFs are distinct from other currency products because they do not have central exchange or delivery. Rather, the trades are cash settled based on the difference between the exchange rate at the time of the trade and the exchange rate at maturity.

Alex Mackinnon noted that Finalto is also significantly expanding its NDF offering for African and LATAM markets by adding the majority of both region’s currencies to the product range. “We’re focused on providing a unique offering for brokers to obtain clients in those regions”, he said, while adding that NDFs are very regionally-focused – “a Uganda broker won’t need USD/BRL and a Brazilian broker won’t need USD/UGX.

Finalto 360 certified, CRM awarded, and ad-hoc pre-PB netting solution

On the trading technology side, Finalto recently became one of a few providers to have obtained the MAS-recognized Singapore FinTech Association (SFA) certification, in this case for its 360 offering, Finalto’s all-in-one trading, client relations and back-office system for brokers and financial institutions. Mackinnon reminded that the SFA review and certification of Finalto 360 further solidifies the technology’s credibility in the strictly regulated jurisdiction that is Singapore.

Finalto 360 is an end-to-end broker solution, available on SaaS subscription basis or in a fully deployed basis, that covers relationship management, compliance, trading & liquidity, marketing and risk management all under the same roof.

The proprietary technology helps brokers efficiently onboard, retain and boost customers’ trading activity as it includes a CRM (recently awarded Best CRM Provider at the Global Forex Awards 2023), connections to PSPs, marketing, compliance and reporting tools all connected to Finalto’s white labeled trading platform.

“We’re very agile and can deliver unique things that clients want. We do a lot of ad-hoc work but we’ve developed a number of things for the larger retail broker” who has to deal with Net Open Positions (NOP) limits.

NOP limits set the maximum amounts for the single and total instrument exposure for all assets classes on Forex and CFDs. These are adjusted dynamically based on the size, leverage ratio and underlying currencies of the positions you take. To assist brokers with margin requirements, Finalto created a pre-PB netting solution.

Finalto Asia very culturally aware for the benefit of retail broker clients

Fintech Asia is licensed in Australia (ASIC) and Singapore (MAS) and covers as much languages as possible within its team.

“We’re very lucky when compared to some other Western brokers”, Mackinnon remarked, noting that the team tries to be very culturally aware, which is even reflected on its product range, while admitting the enormity of the task. After all, Asia is made out of dozens of countries and many more languages.

“How do we cater for all those? It’s very hard. The team that we are hiring comes from different backgrounds and languages. We are well placed to cater to our retail broker clients.”

With the FinanceFeeds interview finished, Alex Mackinnon got back to networking ahead of speaking on a panel about Liquidity in APAC: challenges and opportunities, and how to optimize liquidity and multi-currency management in the region.