MahiFX is probably best known for the institutional level execution speeds and spreads provided to retail clients through its proprietary-built fully automated pricing and risk management technology.
We spoke with David Cooney Co-Founder and CEO of MahiFX to find out about MahiFX’s recently launched institutional offering MFX Compass e-FX Suite.
MFX Compass provides all the tools banks, brokerages and hedge funds need to monetize their e-FX business. The system architecture features a comprehensive suite of components to optimize FX pricing, control risk, produce the analytics and customize client rates to allow institutions to confidently internalize foreign exchange flow.
What led to the creation of MFX Compass?
As foreign exchange has become predominantly electronic, clients can compare rates more readily. That requires banks be more competitive. To do that they have to internalize risk. In a competitive environment, you will only win business where you are the best rate. You can’t then turn around and trade with the second best rate. You have to be prepared to wait for someone to come the other direction and take you out of the risk. Internalizing the maximum amount of the FX flow you originate, at the right rate, is key to increasing profitability and market share. But it’s not an easy proposition. Assembling the requisite expertise to build a solution is expensive. It takes a lot of time, and where the people have not done it before, the results can be uncertain.
We are fortunate in that our years in the interbank sector gave us a chance to learn how to do this stuff. MFX Compass is an evolution of that technological expertise which we can now provide to banks and businesses, enabling them to hit the ground running and implement a customizable e-FX business ‘out of the box’ while minimizing development cost, time to market and risk.
How long did it take to develop MFX Compass and what challenges did you face?
Here the difficulty is defining when it is finished. The first release happened after two years and it has been under development for three years.
When you are starting from scratch the biggest challenge is figuring out where to start. If you are in the fortunate spot of knowing what to do – which we were – then the biggest challenge becomes recruiting the right people to help. We were lucky to be able to assemble the team very early.
When it comes to your development team how important is their education?
We have a very strict standard technical standard we hold people to. How they got there we don’t really care. The next thing that is important is character because it is really about the team not an individual. So if we had someone that really stood out but interrupted the team we wouldn’t hire them. It’s about maximizing the team.
How easy is MFX Compass to integrate into legacy systems?
We have a very limited number of touch points to make integration with legacy systems as simple as possible.
We are effectively reusing their existing system and dropping in a component for rate formation, risk management and generating analytics. All the downstream processes are driven out of their existing components. That is why it is so easy to integrate.
What type if any of ongoing support to offer institutional clients?
It is very much about ongoing support. We don’t just install software and systems and walk away. It’s about a partnership to help clients monetize and evolve their business, working with them to operate the technology to its best effect.
What are the biggest advantages to MFX Compass?
It comes down to this. If you want to go to the next stage in running your eFX business, with MFX Compass your time to market is a fraction of what it would be to self-create. You have a product that has been proven to work and is cost effective. There is no capital expenditure on the part of the bank. It’s quick to implement with lower risk.
With regulation a hugely important factor on the banking landscape it makes it more critical for the banks to have a product like MFX Compass. It is auditable, you can confirm in the architecture there is no possibility that orders are being front run. So in some respects MFX Compass makes it easier to meet regulation concerns, thereby increasing the demand for Compass.
What’s next for MahiFX?
We have always preferred to do a limited number of things really well. We are focused on FX trading technology innovation fine-tuned to the specific relative needs of the retail and institutional sectors.
For our retail MahiFX and MetaTrader4 offering we are continuously deploying enhanced platform features and capabilities. To respond to the diverse needs of our clients we are in the midst of a translation project which will see the website rolled out in Chinese, Japanese and Russian, followed by other languages in response to our growing global base of traders.
And for MFX Compass it’s a very exciting phase with significant interest from the banking sector and numerous deployments in process.