Exclusive: FinIQ sets MIP world record, aims at US$100bn

FinIQ has taken the lead in the multi-issuer platform (MIP) space after transacting some US$50 billion in 2020. It also overtook the biggest multi-issuer platform in the world - Vontobel’s Deritrade - which has been transacting around US$12-15 billion of volume per year.

“We already recorded over US$18 billion on our platform in 2019 and this was an indication that we were on the right path. We can confidently say that, to our knowledge, no other platform is doing this kind of volume - we lead by a large margin,” Mahesh Bulchandani (pictured), FinIQ’s CEO and director for Europe told SRP.

We have benefitted from a surge in activity around structured products

The fintech’s landmark achievement follows several high profile developments in 2020 including the addition of new dealers to its Market Connect Trading Platform, an agreement with a UAE Bank to replace their Swiss-made Wealth Core System, as well as the signing of BBVA which went live in Latin America and Europe with FinIQ's SPConnect cloud platform. Several new clients were onboarded to FinIQ’s EQ Connect, FX Connect, FXD Connect and SPConnect platforms.

Bulchandani points at four factors behind the growth in volume: the increase in structured product activity across markets especially in the Apac market where there has been a huge growth in volumes. FinIQ’s expansion of its payoff coverage and further integration to other upstream and downstream systems of private banks have also made it easier for bankers and dealers to trade through FinIQ. Finally, the addition of a number of new clients brought additional volume to the platform.

“A number of products that were being done manually in 2019 have been automated and are now going through the platform,” said Bulchandani. “We have benefitted from a surge in activity around structured products to more than double the volume going through FinIQ. We had a pretty good run this year in terms of adding new sell- and buy-side clients to the platform.”

FinIQ has now more than 20 issuers providing pricing on the platform and about 15 private banks using the platform to price and transact products for their clients.

“Most of the new clients come from the Middle East and Asia - they are not Asian banks but global banks seeking to automate their activities in the region,” said Bulchandani.

Enhancements

In 2020, FinIQ’s EQ Connect platform added memory knockout autocallables, Phoenix structures, expanded the coverage of Hong Kong ELI product, and included total return swaps and structured deposits.

According to Bulchandani, these additional payoffs are expected to bring more volumes in 2021.

“Small improvements can have a big impact in the volumes especially if those improvements come in areas where there is increasing demand as it gives the platform more scope to deliver what the market wants,” he said.

As an established fintech player FinIQ is also taking advantage of the fragmentation around structured products platforms which is not only reflected in the number of different platforms in the market but on the capabilities of each of those platforms.

“The feedback we get from clients is that having to use different platforms for different asset classes is not an efficient way to operate so we have focused on adding functionalities and expanding the coverage to those payoffs and underlyings that are driving activity in the market,” said Bulchandani. “Our goal is to have a holistic platform that can help clients to use it as a one-stop-shop.”

Areas such as FX where there is little coverage out there and can give a significant edge and competitive advantage against other providers which have not such capabilities are on FinIQ’s short-term plans.

“Some of the clients we have onboarded have a specific focus on some of these products (FX and FX derivatives) and being able to serve those clients means that we could be talking about another US$20+ billion going through the platform on top of the US$50 billion for equity linked structured products. We hope that in 2021 we can get close to US$100 billion mark,” Bulchandani said.