1. Tell us a bit about yourself / your co-founder

Hi, we are Brian from Ireland and Zbi from Poland, both living in London. Together we have worked for 20 years in banking and in building technology solutions for enterprise. Brian was a director for UBS in Treasury in Zürich and New York in liquidity management, and before that in Bank of Ireland. Zbi has built technology for enterprise and financial services companies, such as IHS Markit. Outside work, Brian and Zbi have a daughter each (6 months and 4 years old, respectively).

2. The Thesis  

Finteum is making it possible for bank teams to borrow and lend to each other for hours at a time, instead of overnight and longer (htttps://finteum.com). We have built a platform for interbank intraday lending, focusing on intraday FX swaps and intraday repo that settle very quickly and mature at a pre-defined time on the same day. We are an early-stage fintech startup with 17 people. We will be going live in July 2024 with intraday FX swaps. (Edit: see the announcement here). Primarily, we compete with workaround solutions that banks employ, such as withholding outgoing payments (known as throttling). We are based in London, which is the European hub for FX, and we also travel to meet prospective clients in Frankfurt, NYC and elsewhere. We enjoy explaining how they can save up to €40m per year using our solution.

3. What problem or opportunity do you address, and for which target customers?

The largest banks globally need to monitor their liquidity in real-time. This means they must ensure adequate intraday liquidity balances, not just at the end of each day. After the 2008 global financial crisis, regulators enforced this requirement to make the banking system more robust. Banks have two choices to meet this requirement: hold an excessive liquidity buffer, or improve their cash balances during the hours of large net outgoing payments, to mitigate the impact of these payments on their liquidity. The former choice creates a significant opportunity cost, tens of millions pounds per large bank. The latter choice is preferable, but banks do not have the right tools available to them. Banks can delay outgoing payments, but by doing so they pass the problem to their clients and counterparties, instead of solving it. Our solution is intraday interbank borrowing (intraday FX swaps and intraday repo), which enables banks with an excess to transfer liquidity to banks that have a shortage. Finteum has built a software system for bank treasury, FX and repo teams to negotiate and pre-agree intraday FX swaps and intraday repo transactions with each other, “the Finteum Platform”.

4. Who are your competitors and what is your USP?

Finteum primarily competes with internal workarounds that the banks employ to improve their intraday liquidity. However, Finteum is often compared with other trading platforms. In FX swaps Finteum is often compared with London Stock Exchange Group’s LSEG FX (formerly Refinitiv / Reuters), which has a popular platform for banks for FX swaps in tenors longer than intraday (overnight and longer), 360T (Deutsche Boerse’s platform), EBS (CME’s platform). In repo, Finteum is often compared with Tradeweb (majority owned by LSEG), BrokerTec (CME’s platform), Eurex (Deutsche Boerse’s repo platform), GLMX, among others.

Companies with existing intraday repo offerings include JPMorgan (Onyx), Broadridge (DLR), Eurex and Wematch. These initiatives have helped to validate the case for intraday transactions, but also differ from Finteum’s approach in some key ways. Currently, banks trading on JPMorgan’s Onyx intraday repo platform can only trade with JPMorgan, whereas Finteum is a bank-to-bank network. Additionally, with the Onyx platform, both the securities and the cash are tokenised, which is not required by the Finteum Platform.

Finteum’s USP is in the application of DLT to reduce the time needed for banks to execute interbank deals, decreasing risks involved and making regulatory reporting easier. Finteum also has a unique rule book that governs the behaviour of bank participants on the platform, which is specific to intraday markets.

5. What is your current stage and traction?

Finteum has signed an initial group of banks that are working towards go-live with the intraday FX swaps product in July 2024. These banks – UBS, NatWest and a third large bank, are already completing their integration work, to integrate the Finteum Platform into their other systems in the bank. Finteum has also engaged a group of banks that are starting to work towards go-live with the USD intraday repo product. Finteum hopes that intraday repo will be live by the end of 2024.

6. What are your plans for the next 6-18 months and how can our network help?

Our plans for the next 6-18 months are to go-live with both our intraday FX swaps and intraday repo products and to quickly grow the number of banks actively trading on the Finteum Platform. To support the growth, Finteum will make some hires in sales and tech.

7. What’s on your bookshelf or podcast app? Your favourite place for a coffee or a drink? 

For Brian, the Economist. There is a lot going on in geopolitics and in central banks and it’s important to stay informed. For Zbi, it’s “An Elegant Puzzle: Systems of Engineering Management” and “Ealing and Hanwell Past”.