Derivative PathCollaborates with , a derivatives and risk management platform that serves financial institutions. Baton SystemsIt is a real-time risk, liquidity, collateral and payment issuance platform to deliver a fully integrated service. Foreign exchange payments nostro management solution for regional and mid-sized financial institutions.
Many regional and mid-sized banks are seeking to expand and strengthen their foreign exchange and multi-currency capabilities beyond the constraints of traditional correspondent banking models, which often rely on a single provider for pricing, liquidity access and payment processing. While this approach remains a practical way to deliver these services, it may limit flexibility and control over pricing, liquidity sourcing, payments and balance management and impact their ability to compete as foreign exchange volumes increase and customer expectations evolve. As a result, some firms are now trying to manage pricing for base currencies and access to their own nostro accounts directly, while continuing to rely on liquidity providers for broader coverage.
Derivative Road and Baton Systems integration is designed to support this change. It allows banks to operate a hybrid operating model by maintaining existing correspondent relationships for non-nostro currency activities, accessing multiple liquidity providers, and gaining end-to-end operational and liquidity control over the currencies and accounts they choose to manage directly. This expands pricing options, reduces reliance on a single provider, and creates a more flexible and controlled operating model, allowing institutions to scale their foreign exchange and multi-currency activities from the enterprise by building standalone infrastructure.
The solution allows banks to take direct control of foreign exchange and multi-currency transactions throughout the entire foreign exchange lifecycle, from execution to clearing and settlement. Banks can offer multi-currency accounts to business customers while also providing real-time visibility over nostro balances and intraday positions, greater flexibility in how foreign exchange is priced and delivered, and automatic payment control. This allows institutions to manage liquidity more precisely, respond better to customers and capture more value from their FX business. For institutions that have moved beyond single-dealer arrangements for major currencies, it provides an infrastructure that can be systematically scaled while maintaining correspondent and liquidity provider relationships that remain central to meeting the full range of customer needs.
Combining Derivative Path’s connectivity to multiple liquidity providers with Baton’s real-time operational control, the solution brings together liquidity access and end-to-end visibility in a single framework. This provides the infrastructure needed to support direct nostro management, real-time monitoring of balances and risks, and coordinating foreign exchange operations between currencies and counterparties.
Built on a cloud-based, API-first architecture, the platform also includes SWIFT connectivity, allowing banks to securely exchange payment instructions using their own BIC and track them in real-time via SWIFT gpi. This provides banks with greater visibility into payment status and control over execution without the need to build and maintain their own SWIFT integration or upgrade existing wired platforms; reduces implementation time, cost and complexity. Combined with real-time visibility across accounts and currencies, automatic reconciliation and configurable payment controls, the platform supports secure and efficient FX transactions at scale.
