HIGHLIGHTS
Client: TwoFour
Business Objectives
Partner with a trusted third-party derivatives analytics provider
Requirements
- Comprehensive derivatives analytics coverage
- Flexible, easy-to-use and affordable solution
"By partnering with FINCAD and leveraging its derivatives analytics library, our company has saved hundreds of thousands of dollars by not having to build and develop the pricing models ourselves."
Chris Davis, co-founder of TwoFour
Background
Founded in 2002, TwoFour is a product and services company focused on providing treasury, FX and cash management solutions to the world's leading financial services organizations.
Challenge
The explosive growth of derivatives in the industry, particularly in FX and interest rates, prompted TwoFour to expand its business in this area. However, developing the pricing models for a range of instruments across multiple asset classes would have taken TwoFour many person hours, thus increasing its costs and time to market. The company therefore sought to partner with a 3rd party derivatives analytics vendor with flexible, easy-to-use and affordable solutions.
Solution
FINCAD's analytics library was chosen based on its broad cross-asset class coverage, ease of use, and affordability. "FINCAD's low total cost of ownership and easy development tools compared to its closest competitor made it the ideal derivatives analytics solution to embed in our trading system," said Chris Davis, co-founder of TwoFour. "As a FINCAD Alliance Partner, we embed FINCAD analytics directly in our system so our clients can price their OTC FX options and calculate the Greeks (risk statistics) - up to 1,000 transactions in a second."
Results
FINCAD analytics are now embedded in the TwoFour System, a flexible, workflow-based trade processing solution. Results include:
Fast Time to Market: With FINCAD derivatives analytics embedded in TwoFour's trading system, the company was able to bring its product to market faster than if it developed the analytics models in-house.
Monetary Savings: "By partnering with FINCAD and leveraging its derivatives analytics library, our company has saved hundreds of thousands of dollars by not having to build and develop the pricing models ourselves," said Davis.
New Business: FINCAD analytics are helping TwoFour gain new clients. One example was during a demo of its entry screen for OTC options – the price and risk calculations provided by FINCAD were updated almost instantaneously, easing any concerns the client had about speed. TwoFour attributes such benefits of FINCAD in its success in securing new clients.
Looking Forward
The expanded instrument coverage continues to help TwoFour market to new prospects and enhance its offering to existing clients. "The FINCAD partnership enables us to be more flexible and further increases the competitive edge of our solution over more traditional legacy systems on the market," said Davis.
"Our partnership with FINCAD is certainly one to pay dividends in the years to come. I would recommend (FINCAD) to other companies looking to embed derivatives analytics in their system."