BNP Paribas and NatWest are rolling out a new credit allocation tool developed by CobaltFX.

‘Dynamic Credit’ aims to streamline credit allocation for FX transactions between banks and improve access to liquidity.

Adopting the software will reportedly also help the banks manage credit exposures and address overly manual processes.

CobaltFX founder Andrew Coyne said reducing risks through simplification and streamlining of credit disbursement will be paramount as the FX industry addresses some of its current challenges.

The move signals a rising trend for financial institutions wanting to improve the distribution of credit for FX trades, said the FinTech.

“Industry-wide, we see that banks are adopting innovative techniques to manage credit exposures for FX trades and maintain market stability through digitalisation,” said Joe Nash, digital COO for foreign exchange, rates and commodities, BNP Paribas. “By providing a standardised and digitised approach, and aggregating IT infrastructure across multiple venues, Dynamic Credit gives banks unprecedented control to navigate fast-moving FX markets and proactively manage credit exposure.”

BNP and NatWest were among nine banks that recently invested $45 million in a carbon credit trading platform which allows companies to acquire carbon credits as they look to meet net-zero emissions goals.

The news follows the UK government’s announcement that it is reducing its stake in NatWest with a £1.2 billion sale of the bank’s stock.

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