Case Study: Money Market
Instimatch Global is an award-winning digital marketplace for trading cash deposits across multiple geographies, sectors, and currencies, offering unparalleled market depth. Its digital Network enables a global community of institutional borrowers and lenders to directly engage with each other and execute on their liquidity needs – all within a convenient and easy to use Platform.
Webmob Software Solutions leveraged cutting-edge technologies to transform the visions of the Instimatch team into reality.
The Case study outlines the approach of the Webmob team towards digitalising Money Market.
Introduction to Instimatch
Instimatch’s promise to provide an unmatched enhancement in the financial domain is backed by its achievements. As of the third quarter of 2020, Instimatch has more than 110 clients spanning across 16 countries.
Traditional Money Market
The money market is the term given to the short term unsecured trading of massive volumes between institutions or traders. The money market can also be represented by trade between a bank and a government or corporate. It is one of the most essential parts of the current financial system.
Steady cash flow is imperative for unabated operations of any business. Therefore, the precedence of Money Market leading to short-term debts can not be stressed enough. But the current financial system has considerable drawbacks.
The traditional money market used to happen over a number of phone calls which took several hours. This process was enhanced by the inclusion of the Internet. The negotiations are now also completed over the emails or chats which still consumes a hefty amount of time along with questionable security. Considering the grave need for instant loans in the money market, banks or organisations do not have the luxury to spend this much time on finalizing a short-term loan.
Nowadays, the institutional money market is a major global market that has so far remained largely technology-free, while enormous technological progress has been made in other areas of financial markets.
If we consider a scenario of a bank which is in a dire need for funds, the most essential factor involved will be how quickly can it acquire those funds. Therefore, speed and accuracy are the core pillars of a successful money market. If a bank needs a short-term loan of high volume it is obvious that it needs an instant response. But, as a large sum is involved, the network needs to have the utmost trust between the parties and a flawless system for regulation and compliance.
The advent of the Internet undoubtedly accelerated the process of fund transfers and connects distant traders but is it enough? With the growing needs of the market and the inception of revolutionary technologies, innovation is always on the brink. Similarly, in the current financial model especially in the money market, innovation by the incorporation of the latest technologies is defining new horizons in terms of speed, accuracy, and trust.
According to the Moody’s reports: Non Financial Companies Cash Pile in Europe is equal to 1000 billion or 1 trillion. Furthermore, according to an ECB study from 2015, the current money market is inefficient or at least only partially efficient.
Some other statistics, at the time of writing, are also worthy of being mentioned here such as:
- The ECB reports daily volumes of EUR 120 billion
- The BOE reports daily volumes of GBP 60 bn
- It is also interesting to notice that, according to the ECB study, 45% of all transactions take place within the same country and 35% are still happening on the phone
An updated report can be viewed here.
We followed two different approaches to ensure this.
From the technical aspect, the encapsulation of the business logic in the code was easily achieved through a combination of cutting edge frameworks. At the core, MEAN stack technologies built the foundation mainly due to the additional security provided by Google’s Angular. We also employed advanced data analytics to provide real-time data analysis for the clients.
As a key feature of the platform, we developed chat functionality wherein the agreement on trade can be done in the chat window. We leveraged advanced concepts to ensure efficiency and enhanced security for chat functionality.
One of the features that we strive for is the addition of smart contracts. The inclusion of smart contracts creates a standardised way, eradicating the complete chance of conflict.
From a business perspective, we gave the highest priority to the user experience. The simplicity of the application and advanced user interface became an integral part in defining the extent of adoption of a digital Money Market. This also includes powerful visualisations providing at-a-glance understanding.
The clients can place bids and offers on the platform. According to the parameters of these bids and offers, the process initiates between two parties. The chat functionality also played a crucial role by allowing counterparties to interact and mutually agree with the terms beforehand so that they can proceed to a successful trade. A lender can lend money easily through the chat without spending a second thought on security and finality.
We enabled the platform to tap into the powers of digitalization. From a hefty process based on calls and emails, we gave a new perception to the end-users. Using chat to lend money or placing bids and offers on the platform and leveraging smart contracts to smartly execute the process, we promise unmatched speed through our application.
The ability of the platform to maintain secured records and track each interaction between the borrowers and lenders led to exceptional auditability.
Trust & Transparency
The lack of visibility in the traditional Money Market has always posed a challenge to corporations around the globe. Our solution helps in eradicating this barrier and creates an ecosystem of trust through complete transparency.
Each milestone of the journey went through rigorous testing. Apart from employing the best practices for the security of the application, we adopted a comprehensive approach towards the security covering each aspect of the platform.
From lending over a chat to placing bids, banks and other corporations are provisioned with a highly efficient platform that they can count on. We believe in constant evaluation and upgrades to achieve optimization which is why we take regular feedback from the clients. These feedbacks undergo a hefty process where they are discussed in detail and implemented if found useful.
A digital Money Market spanned across the globe is what we achieved through this application. Identifying the barriers of creating a larger cluster of borrowers and lenders, we have added multiple currencies. This eradicates the restriction of reach. The inclusion of these currencies is finalized after analysing the most favourable regions that possess significant opportunities to inculcate the application at a scale.