Would precious metal traders use an online platform instead of an intermediary voice broker?
Precious metal derivatives have traditionally been arranged by a voice broker acting as an intermediary between traders to arrange deals. But a new generation of traders have become used to arranging deals using online platforms, which removes the need for a broker and reduces fees, whilst providing greater transparency.
We created the Limpid Markets platform, the first of its kind for precious metal derivatives, targeted at the London and Zurich over the counter (OTC) interbank markets for precious metal swaps, EFP and physical precious metal participants. The platform provides a price discovery and proposal mechanism without the need for an intermediary voice broker.
Limpid Markets wanted to get to market quickly and gain dominance before any competition could move. A risk to this strategy was that the initial idea of what a viable product needed to be was significant in scale. It also contained some unvalidated assumptions around what customers would need. By working with the client to identify the leanest route through the product and by early engagement with customers, we reduced the scope by approximately half and got to market far quicker.
By getting to market quickly, Limpid Markets was able to become the de facto platform for precious metal swaps and EFP. The customers are well established, high profile financial institutions who are members of the London Bullion Market Association (LBMA), accounting for more than 75% of all interbank market participants.
Over three years we partnered with Limpid Markets to launch and then accelerate their growth. Our arrangements involved one of our Co-founders, Kirsten, acting as interim CTO and an equity stake in the business in return for preferential rates and a long-term arrangement. When the time came, we helped recruit an internal team.
When I first came in to meet the team - we clicked. I was able to build a relationship with everyone which made it easy to give and receive feedback quickly, with the right person. I knew that I’d be delivered something fresh and new, something that wouldn’t date quickly.