Finastra Enables Digitalization of OTC Derivatives

Finastra, a provider of financial software apps, announced on Tuesday a partnership with Fragmos Chain, a blockchain technology platform, which will enable the digitalization of over-the-counter (OTC) derivatives.

According to the press release, banks and financial institutions can digitalize their OTC products, reducing the risks and costs usually associated with manual processing. It is possible due to the automation of derivative confirmation and post-transaction processes.

Fragmos Chain is a cloud blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term platform that provides digitalized post-trade derivatives. Due to the integration with Finastra's solutions, market participants will take advantage of smart contract capabilities to improve regulatory reporting. Distributed ledger technology (DLT Distributed Ledger Technology (DLT) A distributed ledger or distributed ledger technology (DLT) is a database that is shared and synchronized across a number of different devices in different locations. DLT networks effectively eliminate the need for a centralized authority to act as the network’s custodian. In its place is a Peer-to-Peer (P2P) network as consensus algorithms to ensure replication across nodes is undertaken.The most common kind of distributed ledger network is a blockchain network. Blockchain networks are used to A distributed ledger or distributed ledger technology (DLT) is a database that is shared and synchronized across a number of different devices in different locations. DLT networks effectively eliminate the need for a centralized authority to act as the network’s custodian. In its place is a Peer-to-Peer (P2P) network as consensus algorithms to ensure replication across nodes is undertaken.The most common kind of distributed ledger network is a blockchain network. Blockchain networks are used to Read this Term) will allow better matching of trades, cash flows and market events for timely and hassle-free settlement of transactions.

"Our partnership enables us to transform our customers' business models by providing a digital market infrastructure underpinned by DLT. Integrating Fragmos Chain with Finastra's Summit, via our open platform for innovation FusionFabric.cloud, will help to reduce the challenges associated with traditional post-trade processes, such as reconciliations and disputes, to support a bank's continued growth," Benoit Riquet, the Chief Product Officer, Treasury & Capital Markets at Finastra, said.

"We are delighted to partner with Fragmos Chain, bringing the benefits of our open ecosystem to our customers on top of our functionally rich trading solution."

Finastra's partnership with Fragmos Chain should transform the way banks are interoperating and eliminate paper by automating all post-trade processes, Daniel Ivanier, the CEO at Fragmos Chain, commented.

OTC Crypto Market Gains Popularity

At the same time, OTC instruments for the cryptocurrency market, including pos-trade services, are gaining popularity.

B2C2, a cryptocurrency market-maker owned by Japan's SBI Holdings, recently expanded its offering to include electronic options trading for OTC cryptocurrency products. It further provides options for post-trade functionalities.

Two weeks earlier, Hidden Road, a credit network for institutional investors, launched its first OTC prime brokerage service for digital tokens. The new platform onboarded most of the top 25 global liquidity providers, catering to international and US counterparties.