Even before current market challenges, liquidity has been under pressure. Spiraling interest rates, quantitative tightening, and economic uncertainty mean that the days when banks have enjoyed a favorable funding environment are coming to an end. Indeed, even two years ago traders were citing liquidity as their single biggest challenge, ahead of factors including regulatory changes and best-execution requirements. There’s no silver bullet for the liquidity crisis. However, it is increasingly clear that by optimizing liquidity channels, financial institutions can avail themselves of the best opportunities and prices possible. 

Today, many firms continue to use manual voice- and chat-based processes to carry out a wide range of matching and negotiation functions including across inventory matching, price discovery, RFQs, disclosure vs. anonymity, directed interests, and dark and light liquidity sourcing. Using sequential, manual approaches, dealers must negotiate a multitude of bilateral trading relationships, which results in an inefficient proliferation of messages. Not only is this costly, but it slows down dealing workflows making it much more time-consuming for counterparties to settle on a price.

One quick win in the battle to improve access to liquidity would be for financial institutions to digitize these processes using specialist platforms such as Wematch. Digitization unlocks automation and smart marching and negotiation tools that can accelerate dealing workflows and make it easier for traders to match interests and negotiate. Significantly, digitization also means that dealers can conduct multiple workflows at once, driving impressive time savings.

Today, trades are all too often conducted in linear siloes with dealers calling contact after contact to find the right opportunity. Wematch enabled a marketplace-based approach, where liquidity is concentrated on one simple-to-use platform powered by smart algorithms that do the heavy lifting of matching and negotiation so dealers don’t have to. 

While this approach is useful for all asset classes, it has a particular resonance for the hard-to-borrow market, where borrowers and lenders can find it difficult to access liquidity electronically, particularly in the broker-to-broker flow. That’s why Wematch has developed a Hard-to-Borrow module, which provides an easy source of liquidity on a dark or lit basis. Leveraging smart negotiation protocols, Wematch enables borrowers and lenders to meet in one place and match interests faster, more efficiently, and with greater transparency than ever before. 

Get in touch to learn more about how Wematch can optimize your liquidity channels.

The views and opinions expressed are for informational and educational purposes only as of the time of the writing/production and may change at any time. The material may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections, forecasts, estimates of market returns, and proposed or expected portfolio composition. All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.