BNP Paribas is moving to capitalise on the success its Smart Derivatives platform has had in Europe by “accelerating” its marketing initiatives in the Asia Pacific region.

The recent introduction of Standard Chartered’s custom index platform and Vontobel’s Deritrade in Hong Kong and Singapore has brought platform trading back into the region’s spotlight, and Frederic Dussaux, head of BNP Paribas’s e-business in Asia Pacific, believes Smart Derivatives can adapt to the challenges of the region.

“Over the near term we certainly want to accelerate our marketing initiatives in the region, building on the success we have had in Europe,” he said. “Overall, our strategy is to further improve functions and interfaces of Smart Derivatives, reflecting ideas coming from diverse users across the world.”

Added value

According to Dussaux, to achieve this the bank has continued investing not only in pricing capabilities but also in increasing the range of “value-added services” offered on the platform.

“Through an improved data crunching methodology we want to go much further into understanding our clients’ behaviours and delivering the right solutions to the right clients,” he said. “We are also keen to build further on our brand among distributors and the professional investors (PI) community in Hong Kong, Singapore and other parts of Asia.”

Smart Derivatives was first marketed to Asian clients less than half a year ago and BNP Paribas has won approval from the Hong Kong Monetary Authority (HKMA) and Monetary Authority of Singapore (MAS) to conduct trading via the platform.

The initial idea behind Smart Derivatives, said Dussaux, stemmed from increasing demand for automating the pricing and trading process for both sales and clients, in light of the vast number of pricing inquires received from distributors on a diverse range of small, complicated structures for their clients.

The web-based platform made its debut in May 2012, targeted at external clients such as private banks and asset managers, and is now well established in Europe.

Challenges

From the technical point of view, said Dussaux, Smart Derivatives is extremely modular and, its web-based nature allows it to be easily deployed in a new jurisdiction without much need for system redesign. “The platform’s various modules can be selectively introduced in different markets and at different stages so the end users can gradually learn the most relevant bits without being overwhelmed by its multiple functionality,” he said.

However, Dussaux pointed out that the reason why only a few electronic platforms have yet made cross-border presence in Asia is explained by the high degree of fragmentation both in the market standard and regulatory environment.

“Replication across borders very much depends on the platform architecture itself and the level of technical complexity involved,” he said. “Regulatory restrictions such as platform licensing also vary widely across the Asian continent.”

Other challenges in the region for providers developing click-and-trade platforms are related to finding a balance between operational efficiency and responsiveness to local specificity, as there are a multitude of structuring needs across different jurisdictions in Asia due to different investment cultures and the varying pace of infrastructure developments.

Customisation

However, said Dussaux, Smart Derivatives has a fully customizable interface. “The result is that users in each country will be presented with only a filtered mix of underlying, payoff, and other features that are most relevant to their needs,” he said.

Dussaux concluded that the strength of the Smart Derivatives platform rests on the three “I”s – Innovation, Integration, and Interaction – and said that the platform has been already deployed in 30 countries.