Nordea Engineering a digital FX product set for the future

Nordea has always been a pioneer in electronic trading, so e-Forex talked to Matti Honkanen, Head of Next Gen FX at the bank, to find out more about its FX digital product development and how it has been working to meet the needs of its clients in the twenty-first century.


Matti Honkanen

Matti, you lead a small, agile digital development team called Next Gen FX within Nordea. Please tell us more about that and what your job involves.

In a self-contained agile team, the product owner does quite a lot of stuff. The main task is to create and communicate the vision, and turn it into concrete priorities for the development team. On top of that, my daily work involves plenty of other activities, ranging from customer meetings to data analysis and urgent problem solving. I see my role as a messenger between the customers and the code, trying to narrow that gap so it’s non-existent. I give the business point of view to the development & data team, and the tech point of view to the business and customers. 

Nordea has always had a very strong FX franchise. Why has continuing investment in its digital capabilities been so important to the bank?

Traditionally FX trading has been digital but very manual; customers have traded through a digital interface – but only after they themselves have figured out what trades to do. However, we concluded some years ago that we needed to help customers more holistically in the digital channels, enabling them to turn their business data and FX policy into FX trades much more easily. The advantage of doing this digitally is that customers can do that wherever and whenever. This doesn’t make our human advisors obsolete; quite the opposite. They are needed, but they shouldn’t be the bottleneck. They advise customers on how to optimally use our digital channels.

Where is the pressure coming from to innovate in electronic FX? Is it mainly driven by client demand or other factors, such as a desire to reduce the costs of providing services?

It is both for sure. Our team is almost exclusively focusing on solutions that improve customer experience. However, that is only possible because others focus on the cost-reduction initiatives. There is one misconception about cost cuts I would like to correct. Some people think that when you develop great digital solutions, you can save on sales staff. That is completely wrong. No digital solution is so good that it sells itself. The profile of a sales manager is quite different in the digital age – but Sales is needed more than ever.

Our team is almost exclusively focusing on solutions that improve customer experience

Please tell us about the range of electronic FX trading platforms, products and services that Nordea now offers its clients.

Our AutoFX toolbox consists of four main elements. First, our oldest flagship solution is AutoFX Liquidity Management, previously known as AutoFX. It completely automates FX liquidity management for a growing number of customers. Second, our more recent AutoFX Hedging helps customers execute their FX risk management more easily. Third, our extensive AutoFX API library allows customers to turn their TMSes, ERPs and other systems into trading platforms by integrating them together with our platforms. In addition, we recently launched AutoFX IQ in Denmark, which is an FX advisory service that helps companies analyse and forecast their currency cash flows for smarter decision-making, with expected roll-out to other Nordic countries in the near future.

In what key ways is Nordea working to revolutionise corporate FX trading by making it a more automated and intelligent process?

People often prefer human over digital service because the other person knows them and their needs without needing an explanation every time. Our ambition is to make our digital services do the same. We ask customers what they want to achieve, and we build services that help them achieve those goals with the least possible manual work. I like to compare this to control rooms of power plants: The engineers certainly want to have control, but they are not doing everything themselves – quite the opposite. The machines make the straightforward adjustments, and people step in only when needed. Also, the humans retain control, thanks to great dashboards.

Naturally, we also want to give customers insights about what they should do. Our ambition is to increasingly provide these insights automatically, instead of our staff manually going through each customer individually.

Nordea’s AutoFX Hedging platform

Nordea has recently launched a new product for automated FX hedging. What benefits does this deliver to clients, and how does it assist them with their hedging requirements?

The advantages are three-fold: An enhanced overview, easier and faster trade execution and improved control. To begin with, the customer gives their hedging principles to the platform, AutoFX Hedging. Then they give the platform, access to their underlying business data, such as cash flow forecasts, accounts receivable, etc. AutoFX Hedging can then figure out what trades the customers should do according to their policy. Today, most customers are struggling with self-made excel files that are increasingly complex and difficult to use. We help them move to the next level. Customers also get rid of the boring and error-prone task of copy-pasting data. With the help of APIs, data flows smoothly in the background.

FX data has now become an increasingly important resource for many market participants. In what ways is Nordea looking to help its clients unlock the insights their FX data can provide?

With extensive data about payments, account balances, FX transactions and the nature of the customers’ business, we can see the optimal ways to manage their liquidity and risk. We can also see which customers could benefit most from our solutions – and guide them on how to reap these benefits.

Many FX providers are now utilising the Cloud to deliver their services. Is Nordea also adopting the Cloud for e-FX distribution and capturing the benefits it offers?

Yes we are. So far this utilisation has mainly come from use of cloud-based solutions of our partners – but going forward we are certainly going to increase the use of cloud platforms ourselves.

Human-made strategic decisions done with the help of digital tools are generally better than those done without that help

In your opinion, how much more digital transformation of FX is possible, given that some parts of FX trading are strategic and still call for human input?

We get this question often. We believe that automation not only frees up time from manual work, but also improves strategic decisions. I would say that human-made strategic decisions done with the help of the digital tools are generally better than those done without that help. Let’s take our AutoFX IQ as an example. 

AutoFX IQ can fetch and visually present handpicked data from our clients’ historical and future cash flows for analysis and forecasting, helping them with decision-making when evaluating and developing their trading plan and strategy. So it merely complements the human decision making process, but it is always the human who makes the strategic decisions in the end. Both are needed. 

Looking ahead, what further FX digital product development from Nordea can we expect to see next?

The nice thing in the digitalisation journey is that the future is not all that predictable – especially when we are ahead of the curve. But of course we have a future vision, even if we change it constantly. Our vision is to further improve, especially the hedging solutions, and to integrate our solutions better with the other systems customers are using. 

We get plenty of feedback from our existing and potential customers on how we should improve our AutoFX tools – and I am sure that FX liquidity and risk management is going to be even more automated, integrated and intelligent in a few years’ time.

To read more about Nordea’s AutoFX Solutions, visit