Kooltra Launches Cloud-Based Back-Office Tool for FX Market

Kooltra has released the first solution on its cloud-based FXCore platform, which is aimed at accelerating entry into the market and automating workflows for brokers.

The back-office product is delivered via a software-as-a-service model. It is designed to alleviate some of the pain felt by smaller firms or new players looking to launch and scale an institutional-caliber offering, says the Toronto-based company’s founder and CEO, Adam Katz.

The infrastructure needed for post-trade functions, such as managing cash and statements, as well as regulatory reporting, are hard to build and support for new entrants, Katz says.

By acting as a “plug-and-play” system that connects to their internal trading system via the cloud, it aims to enable brokers to fast-track their FX businesses and circumvent expensive, multiple-year contracts for other back-office systems, he says. The module was beta tested with a handful of clients and they are now in the process of going to market.

“FX back offices can take anywhere from six months to two years to stand up,” Katz says. “Typically, if you go work with one of the trading platforms in the market, you have to do a whole new integration process each and every time. In our case, because we manage this through cloud solutions, as long as we’ve done that integration before, we [can] quickly enable that to be used by a new customer.”

This year, Kooltra has plans to release options and non-deliverable forward data on the platform. Next year, they aim to launch the full FXCore end-to-end offering, complete with compliance, dealing and settlement automation modules to support FX payments.

Making Connections

The FXCore platform was derived, Katz says, after he saw that while the front office has seen an influx of both innovations and vendors, resources for the middle- and back-offices were limited.

“I was trying to pull data out of my legacy back-office system, and it was always a nightmare,” says Katz of his time as the global head of systems architecture and FX trading options at broker-dealer Velocity Trade. “As an extreme, I got thrown a quote of $10,000 to add a column onto a spreadsheet and a six-month delivery window.”

From there, he came across Salesforce, the cloud-based customer relationship management platform. It’s compliant, secure and sustainable, he says, but it wasn’t entirely equipped to operate within capital markets. That’s when Katz partnered with Salesforce, building the Kooltra platform as a piece that fits on top, leveraging its existing tools and building their own FX-specific applications to allow brokers to quickly get up and running.

At the same time, FXCore seeks to provide better analytics support through Salesforce’s AI-powered Einstein Analytics platform, which allows users to build custom applications using its APIs and software development kits.

“Historically, for back-office vendors, your data is not really that accessible to you,” Katz says. “It’s locked and stored in the background. And in the age of data analytics, that’s kind of a no-no.” With functions from Salesforce and Einstein, customers can dig into and analyze their data however they choose, and then have it automatically synched to their spreadsheets, Outlook and other business applications.

“What we’re doing is, if you think about accounting systems moving from legacy to QuickBooks, is it’s really moving these complex applications into an easy-to-use-and-configure cloud application,” Katz says.