Exclusive: Danske Bank Launches New Proprietary FX Platform - One Trader

Danske Bank’s latest display of trading architecture highlights the commitment tier-2 banks place on FX trading platforms as they compete against rivals, multiple dealer portals (MDP) and their seniors, the tier-1 banks. Forex Magnates can report that Danske Bank has released its latest Trading Platform for corporate and institutional clients trading in currency derivatives. The new platform, One Trader, offers users a number of key functionality, including pricing, trade execution, research and Analytics .

The new platform replaces the bank's single dealer platform (SDP) that was launched in 2006, Danske Trader. Danske Bank is one of the largest providers in the region, according to the recent Euromoney Survey, the bank sits in the19th position globally. Scandinavian currency pairs are commonly traded by global FX traders, data from the last BIS Survey shows that the Swedish kroner is the most liquid pair among Scandinavian currencies traded internationally, sitting in the 11th position in the world’s top traded FX pairs, followed by the Norwegian kroner in the 14th position and the Danish kroner in the 21st place.

One Trader is the bank's main FX derivatives portal, the bank also offers two additional multi-asset solutions, Pro Trader and Markets online. One Trader incorporates a number of standard features that are commonly available on SDPs, in addition it offers full pre and post-trade reporting, a recent necessity post regulatory reforms under Dodd-Frank and MiFID II.

SDP Revival

The constant battle between single bank portals and multi bank portals continues as each segment looks to differentiate itself in a fragmented landscape. In 2012, a number of MDPs were launched covering various aspects of the market from; anti-hft, disclosed to pure agency models of execution. The single bank market has been dominated by tier-1 players, however Danske Bank’s release is a clear sign of the evolution in the sector as MDPs face competition from secondary players. Leading Australian bank, Westpac, is another tier-2 provider that offers a strong proprietary trading platform under its OLFX solution.

Forex Magnates' research shows that single bank portals account for over 50% in FX trading volumes in the UK, as per the Bank of England Semi Annual Report 2013.

The bank’s e-trading solutions are headed up by David Steiner, who joined the bank after holding positions at 360T and SEB. The bank whose history spans over 140 years was formed on the 5th of October, 1871 as Den Danske Landmandsbank, Hypothek and Vexelbank i Kjøbenhavn.

According to its website, there are around 100 employees in the financial trading divisions covering FX & Money Markets across several locations including; Copenhagen (the bank’s headquarters) and at Helsinki, Oslo, Stockholm, London, Belfast and Dublin.

The single-dealer market was expected to crumble after Dodd-Frank rules covering OTC derivatives were expected to diminish the single pricing factor, the recently established Swap Execution Facilities (SEF) were set up to prevent the issues relating to OTC derivatives that caused the demise of major financial institutes such as Lehman Brothers, according to the rules, SEFs enable a number of providers to trade swaps by accepting bids and offers made by multiple participants.