The sustained levels of investment into FX and precious metals serve to highlight the paramount importance of these businesses to the whole UBS franchise. These asset classes are also considered key offerings for both institutional and wealth management clients, who form the DNA of the UBS core business model, says Hoeger. “UBS is already a powerhouse in the FX market and we continue to push ahead,” he adds. “We are investing heavily in the business across the board. In addition, the recent combination of UBS with Credit Suisse has only served to provide further opportunities to scale our business to the continued benefit of our clients.”
“We have continued developing our analytics offering to help clients better understand the microstructure side of spot FX.”
Stephan Hoeger
The newly combined investment bank has resulted the best of both worlds, notes Buttenmueller. “We can feel the additional scale and are looking to increase streaming and trading sizes to our clients, while on the precious metals front it means that two of the market’s strongest players have come together with a joint offering,” he says.
UBS also continues to expand its electronic FX capabilities, with a particular focus on spot and NDFs, Buttenmueller adds. “We recently started offering e-trading and risk management capabilities for Middle Eastern currencies,” he says. “NDFs have also been a focus for a few years now and we will keep expanding the offering, including the recent addition of the first IMM date. For large risk transfers, we have started selectively supporting larger amounts via API.”
The past year or so has also seen UBS grow significantly in market share across various products, most notably in FX spot and NDFs. “We also now operate one of the market leading franchises when it comes to our portfolio of emerging markets currencies,” adds Buttenmueller. As part of the expansion of the currency offering, UBS will also be going live with additional Frontier currency pairs this year.
The past few years has also witnessed a complete rebuild of the UBS Neo platform
Cutting edge innovations
UBS continues to make significant investments in its precious metals business, where it was already the global leader even before the addition of Credit Suisse, which also had a very strong PM offering. “The precious metals business is front and centre for UBS and we continue to invest,” Hoeger says. “We recently went live with our Loco London offering for Platinum Group Metals (PGMs) and we have increased liquidity for precious metals. Gold can now be priced and hedged electronically for up to 100k oz, while clients can trade physical gold on UBS Neo, our cross-asset trading platform, as well.”
A further key area of continued investment is analytics, adds Hoeger. “We launched our analytics platform, UBS Neo FX options analytics, around two years ago. In addition, we have continued developing our analytics offering to help clients better understand the microstructure side of spot FX, such as how liquidity evolves over certain events, holiday periods and how spreads and volumes are behaving,” he says.
Last year UBS also unveiled UBS Neo STIR Analytics, Ben Pearson adds “UBS Neo STIR analytics aim is to provide our clients with the right analytical tools to help them better navigate the volatile and often opaque STIR landscape. It allows clients to see each component of an FX Swap price separately, as a result it becomes easier for them to understand and predict the price action of market events. Furthermore, clients are able to find patterns, momentums, seasonalities and risks associated with each component of the price. Our institutional clients are very, very impressed with this tool,” says Pearson
“We also now operate one of the market leading franchises when it comes to our portfolio of emerging markets currencies.”
Paul Buttenmueller
Client feedback and ongoing investment
The past few years has also witnessed a complete rebuild of the UBS Neo platform, with significant investment going into the FX Trading Application, El-Hoss notes. The focus has subsequently shifted towards engaging clients and assessing their user experience, she adds. “This year, our development priorities centre around enhancing customisation options and fine-tuning the user experience,” El-Hoss explains. “As part of this push to further empower our clients, we are currently rolling out post trade as a self-service feature on Neo – enabling clients to handle amendments independently, further simplifying their interactions across the platform.”
“This year, our development priorities centre around enhancing customisation options and fine-tuning the user experience.”
Haifa El-Hoss
Looking ahead, El-Hoss notes that UBS is currently in the process of re-building its order book, incorporating a modern UI and increasing the number of different venues that UBS can meet its clients on for the submission of resting and fixing orders, all aimed at optimising fill and execution rates for clients across the various trade and order entry types. “This has been a major multi-year undertaking,” she adds. Building on the extensive client survey which the business conducted a few years ago, El-Hoss adds that UBS will be embarking on a similar exercise this year. “Our development extends beyond trading FX to encompass the client’s entire user journey from the moment they login,” she says.
“With UBS Neo STIR analytics clients are able to find patterns, momentums, seasonalities and risks associated with each component of the price.”
Ben Pearson
In addition, Buttenmueller shares that UBS has been working on developing a new order type which allows agency clients to access UBS e-FX principle liquidity, enabling agency orders to get their orders filled passively. Hoeger notes that while it may be easy for firms to create agency algo orders, the real value to clients using an algo is to access the deep principle book of the bank. “We continue to invest in our principal order book to help clients access our unrivalled liquidity as well as to further minimise information leakage. It is a compelling reason for clients to choose UBS,” he says. “The overarching theme across both our FX and PM franchises is all about this commitment to continuous investment and not standing still.”
