Goldman Sachs, AccessFintech partner to offer easier derivatives settlement

November 9, 2020.
Goldman Sachs Chairman and CEO David Solomon testifies before the House Financial Services Committee during a hearing in Washington, D.C. (AP Photo/Patrick Semansky, File)

Goldman Sachs Chairman and CEO David Solomon testifies before the House Financial Services Committee during a hearing in Washington, D.C. (AP Photo/Patrick Semansky, File)

AccessFintech, a startup that specializes in supply chain management for financial firms and is backed by several major banks, said Monday that it is teaming up with investor to offer a service meant to make the cash settlement of derivatives more convenient.

The company said the new service is the byproduct of work that it and Goldman Sachs did with an unnamed “Tier I buy-side client,” adding it is an embedded process that “allows for the real-time supervision and scrutiny of expected cash payments associated with derivatives trading.”

Touting what it calls a “zero-touch” approach, AccessFintech said that its service will help parties engage in faster settlement processes with fewer hang-ups.

“Working with AccessFintech has enabled a zero-touch process through real-time settlement data sharing, systemic matching and a shared digital workflow,” the company said. “Buy-side and brokers both benefit from zero-touch processes, however, where breaks are identified, real-time dispute workflow and collaboration tools streamline the resolution process. This transformation enables joint focus on value-add activities; reducing repetitive manual processes and the need for outreach via email or phone to gather the latest status.”

The service will start with specializing in equity total return swaps and interest rate coupons and cross-currency swaps, AccessFintech said, adding that it plans to venture into over-the-counter derivatives such as exchange traded equity and contract for differences.

Goldman is also backing a “Cash Payments Working Group” tasked with forming standards to cover deployment of the service, AccessFintech, which was founded in 2015 and is based in Tel Aviv, said.

AccessFintech, in making its case for the service, asserted that the buy side of derivatives trading has been hampered with settlement disputes.

“Previously, derivative settlement processing has been operationally inefficient for buy-side clients and their brokers, with disputes often captured without sufficient time to resolve,” the company said. “Now, the ability to have a zero-touch settlement payment process with a digital workflow for collaborative dispute resolution, enables significant benefits.”

The unveiling of the services comes more than a month after AccessFintech said it secured a Series B funding round worth $20 million, which was led by venture capital fund Dawn Capital and included Deutsche Bank as a new investor. Goldman, along with JPMorgan Chase and Citigroup, contributed more capital as existing investors, AccessFintech said at the time, noting that it has raised $37 million overall since 2018.

The service with Goldman comes in addition to a partnership that the company disclosed in September with JPMorgan for speeding up payment transfers such as dividends and cash movement transfers.

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