Henrik, Aphelion was launched in 2006. What range of software and services does the firm now provide?
HD: Aphelion’s mission is to provide hosted and fully managed turn-key eFX solutions to banks, brokerages and buy-side institutions. Having worked for tier 1 banks in the past Aphelion wants to provide tier 1 technology off-the-shelf but to tier 1-3 banks. Even though we provide true end-to-end platforms this most often include some customizations work. But the work required is nowhere near competing platforms or in-house built systems. Our purpose has never been to be one-solution-fits-all but to provide an absolute edge for when the platform does fit. This strategy somewhat limit the number of banks and institutions that would choose us as a supplier but for those who do, the fact that we provide fully contained solutions come with great advantages in terms of speed, performance, stability, time-to-market, Total-Cost-of-Ownership etc, compared to other solutions on the markets.
What types of client are you providing e-FX solutions for?
HD: In the past banks and brokerages have been dominating our client list but in 2015 we added a buy-side platform to our technology stack and started to onboard buy-side institutions as well.
Aphelion has always particularly focused on the relationship between your clients and their providers. Why is that?
HD: We focus on this because we know that the best way for our clients to get the best prices and service from their providers is to make sure the technology cater for both parties. With our aggregator our client have a direct connection to their providers. This direct connectivity is totally free of technological limitations in how the provider can express its business model and construct their prices. Compared to most other solutions on the market, technical restrictions in the form of limited number of streams, maximum updates per sec etc, often interferes with the business-reality of the provider and forces them to mark up prices. Secondly, the level of execution-sophistication is very limited without the direct connection. Thirdly, the direct connection is completely free of brokerage for both for the liquidity taker and the liquidity maker.
Having been in the aggregator business for 10 years, doing multiple iterations of aggregator technology, we have learnt what is important.
Anyone can build connectivity and anyone can build an aggregator, but to build a good aggregator is very difficult. A problem when shopping for an aggregator in a vendor selection process, is that it is almost impossible to look under the hood of an aggregator. Or to weed out vendors with limitations in their solution. Only after a system has been implemented in a live environment does the aggregator sow its true colors. Inadequate implementations will result in worse prices, high rejection rates and prices that are not truly executable. This is why a proven track record is instrumental in this business.
Your team has developed and built a powerful FX technology software architecture called Quasar eFX. What functionality does this offer and what makes it so unique?
HD: Quasar eFX offer all the functionality required in an eFX structure such as Price Engine, Aggregation Services, Algorithmic Trading Engine, Smart-Order-Routing, Internal Markets, Auto Hedge, Rules & Decision Engine, Credit System, Limit Order Management, Margin/Spreading Module, Report & Statistics etc. The platform is unique in that everything is built in the very same architecture and each component is built with the purpose of being part of the whole solution. This has proven to be very valuable in a business where micro seconds counts.
For banks and brokerages, we then add connectivity to all required distribution channels such as a palette of White Label Portals, Multibank portals/ECN’s, Retail portals and FIX distribution API’s.
How would you summarise the key benefits that Quasar eFX delivers to clients and what sort of feedback have you had from them about it?
HD: The key benefit has been that the technology has supported our clients growth. The relationship technology in our aggregation services strengthen the relationship between our clients and their liquidity providers and give our clients the very best prices and service possible. This in combination with superior tooling and technological flexibility when expressing your business models in the distribution layer have given them the technological assistance required to grow their business considerably.
What makes the Total Cost of Ownership (TCO) for Quasar eFX so competitive?
HD: Again, much of this come as a benefit of having a contained end-to-end suite which is hosted and fully managed. The resources required when the platform is being deployed within a new bank differs very much from most of our competitors. Some of them have teams of developers and consultants involved with building and integrating different parts to form a structure. As Quasar eFX have everything in one turn-key-solution, a minimum of resources is required on both client as well as on the Aphelion side.
Also, regarding new features and requirements these will be developed within the existing architecture. This make adding of new functionality and adjusting to new requirements easier and quicker.
Finally, the Rules & Decision Engine in Quasar eFX has been ‘taken out of the code’ and is instead available on the user’s desktop. The great benefit of this is that the need for new code with accompanying releases (on the back of changes in your every-day business reality) is greatly reduced as you can elaborate new strategies without new code + release. This makes working with new strategies very dynamic and flexible. What should be auto priced and what shouldn’t. How it should be auto priced. How different RFQ’s should be handled. Skews, maximum latency loss, speed bumps, etc. The possibilities to configure the system are many. And all this is handled by the users with no need for support from neither Aphelion nor from within their own organization.
You recently launched a new White Label Trader portal. What services does this provide?
HD: We aim to support all services that makes sense for business. Currently our White Label offerings support Spot, Forwards, Swaps, Block trades, Precious Metals, NDF’s, Time Options/Window Forwards, MM deposits and Limit Orders configurable on individual end-client basis. And we plan to add FX Options during Q3 2016.Our White label of White label have also proven to be a successful launch. It allow banking groups to offer their affiliate banks their own White label portal setup in an integrated setup allowing internal market making and crossing.
Peter, Aphelion now has offices in Stockholm, London and New York. What plans do you have for expanding the business beyond these core markets?
PJ: The next obvious step in our evolution is Asia and we are already set up there with a hosting solution in Tokyo.
However for us it is essential to create a success with every new customer.
That is more important than geographical expansion. So we are in no rush.
Instead we take our expansion client by client, success by success and that will lead us into new geographical areas.
The DI Gasell Award is awarded to the most prosperous and fast growing companies in Sweden and Aphelion has received it twice in recent years. How will you build on that success in your mission to transform the future of FX trading?
PJ: Actually we have qualified for it this year as well ending April 30th. The Gasell award does not really add any support in our mission. What it does is provide a good framework of KPI’s to follow for growth that comes natural to us. One is growing profitably and another is doubling the revenue at least every fourth year. We have no loans, activation or goodwill and such on our balance sheet which builds a foundation for a sound company.