07.23.2018

Instimatch Global Targets €114bn Daily Unsecured Borrowing

07.23.2018
Shanny Basar

Instimatch Global is aiming to digitise the institutional unsecured money market lending market which the European Central Bank said has an estimated turnover of €114bn ($134bn) per day.

Daniel Sandmeier, chief executive of Instimatch Global, told Markets Media: “Unsecured lending is one of the last areas that has not been digitised and is still mainly voice traded on a bilateral basis.”

The firm has estimated that half of institutional money market trading is bilateral and just over one third, 35%, is voice broked.  The ECB said in a report in May that daily average borrowing turnover increased to €114bn in the second reporting period this year, up from €112 bn in the previous period.

Sandmeier was named chief executive of the Swiss fintech company this month:

He was previously a senior Credit Suisse executive and also a former president of the Swiss Structured Products Association.

In addition to Sandmeier’s appointment, Michael Schmidt become executive chairman of Instimatch Global. Schmidt was a co-founder of Algomi, the bond market intelligence fintech, after  a career in senior fixed income roles at Deutsche Bank and UBS.

Schmidt said in a statement: “Instimatch Global delivers an alternative that provides better access to markets and pricing across borders, not just within them, and I believe my background will be helpful in stimulating large institutions to make the leap to a more digitized approach.”

Sandmeier added: “We will soon be announcing a senior hire who is well known in the Swiss fintech world.”

Instimatch Global was founded in 2016 and Sandmeier said the platform was launched a year ago. The cloud-based network connects borrowers with lenders electronically providing more efficient access, better pricing and the ability to diversify counterparty risk and and there are 30 counterparties trading.

Clients can trade money market funds and promissory notes with a maturity ranging from overnight to two years in euros, US dollars and Swiss Francs. The firm charges half a basis point on each leg of a  trade, which is half of the typical fee from a broker according to Sandmeier.

“In 12 months we aim to have more than 100 counterparties from different sectors trading across regions,” he said.

Sandmeier and Schmidt will focus on growing the client base from bank treasury departments to corporate treasurers, pension funds and insurers. The firm also wants to expand geographically. Instimatch currently operates in Switzerland, Holland and Germany and is getting a foothold in the UK.

“The next stage would be to expand into the secured market but collateralised transactions are more complex, require more documentation and central clearing,” added Sandmeier. “We are reviewing whether blockchain could be used for new offerings. Blockchain could also be used for intraday unsecured transactions.”

 

 

Related articles

  1. This opens the door for the delivery of the first live intraday repo market.

  2. Financial institutions can shorten the lifecycle of blockchain projects to just a few weeks.

  3. FINRA membership marks further momentum in WisdomTree Securities' digital strategy.

  4. Blockchain technology can be compatible with the existing federal securities law framework. 

  5. The Australian exchange apologised for the disruption experienced in relation to project.