For a compelling example of collaboration that transcends borders and traditional boundaries in financial markets, one only need look at the relationship between banking major HSBC and fintech pioneer Saxo.
Saxo began its journey in 1992 in Denmark with a bold mission to make the global financial markets accessible for more people. That started initially with the launch in 1998 of one of the first online trading platforms in Europe, providing professional-grade tools and seamless access to global financial markets for investors worldwide.
Fast forward to today and Saxo is a major fintech force globally, with presence spanning the major financial hubs of Singapore, London, Amsterdam, Hong Kong, Zurich, Dubai and Tokyo.
Its latest achievements are also impressive. Saxo hit 1m clients globally this year and crossed $100bn in client assets. It received an investment grade rating from S&P Global Ratings and was named a systemically important financial institution by the Danish Financial Supervisory Authority.
In the region, a key partner in every step of that growth journey has been HSBC, with which Saxo has been banking for 15 years in Asia and for much longer globally.
“We have had a great relationship with HSBC since we started here in Singapore and as our banker across all of our subsidiaries in Asia,” says Adam Reynolds, CEO for Asia Pacific at Saxo. “The main need we have is to look after our clients. We’re a broker, not a deposit-taking institution, so we have to hold the money in a trust account. Looking after client money is, of course, something that HSBC does very well, they are well regarded and highly trusted.”
That is just one feature of their relationship. HSBC has proved a valuable partner for numerous other parts of Saxo’s business.
For starters, the digital collaboration between HSBC and Saxo “has been terrific”, Reynolds says, with HSBC having been at the forefront of developing instant funding solutions that work within Saxo’s platform.
The bank also serves as Saxo’s prime broker, custodian and liquidity provider. This latter relationship is a two-way street, with Saxo also providing some of its platform infrastructure to HSBC for its clients as well, says Reynolds.
Our breadth of solutions allows us to support our clients from an end-to-end perspective
Guan Sim Ng, Head of FIG for Southeast Asia at HSBC
Guan Sim Ng, Head of FIG for Southeast Asia at HSBC, notes that HSBC’s relationship with Saxo began in cash management. HSBC worked with Saxo to set up and optimise its cash management process to ease cross-border payments and facilitate Saxo’s day-to-day operations, as well as providing it with much-needed liquidity to expand in Asia.
Since then, Ng says that HSBC’s relationship with Saxo has “truly evolved from transactional to strategic, focusing on helping Saxo meet its long-term ambitions”.
This has involved working closely with the Saxo team to understand their needs and pain points and finding solutions to support them better. It has also meant being trusted partners in good times and bad.
“Our breadth of solutions allows us to support our clients from an end-to-end perspective,” adds Ng. “Focusing on the client experience, we supported Saxo to digitise its payments journey with various solutions including eGIRO. Through our leading securities services proposition in Asia, we go beyond transactions to provide deeper support for Saxo in meeting its custody needs across Singapore, Hong Kong and Malaysia.”
A lot of the Asia tie-up between the two forces happens through Saxo’s regional hub in Singapore, where it set up its office in 2006.
The decision to choose Singapore as the Asia Pacific hub was driven by similarities between the way the southeast Asian city-state is positioned when compared to Saxo’s home market of Denmark.
“Singapore is very similar to Denmark in a lot of ways, even though we are separated by thousands of miles,” reckons Reynolds. “Singapore is a small maritime country; it has a government that’s focused on developing the financing sector; and a lot of the government utilities that have been developed to help us become more digital are similar to what they are in Denmark.”
Our on-the-ground presence in Asia supported Saxo in navigating local market dynamics around regulation and cross-border matters
Saxo has, of course, also been diversifying within Asia. The firm has offices in Hong Kong, Sydney, Tokyo and Shanghai and intends to continue growing its reach in these markets.
Branching out may prove beneficial in the longer run given how competitive the brokerage industry has become over the past few years, particularly in Singapore. But Saxo’s business has stayed resilient given its niche.
Reynolds explains that Saxo is more of a premium brand focused on high net worth and mass affluent clients rather than mass-market customers. It also targets more experienced and sophisticated traders who are looking for ways to trade everything from commodities and foreign exchange to futures and options.
As a result, Saxo has a broad suite of products to cater effectively to its clients – and has often turned to HSBC to help it effectively grow its business.
“Our on-the-ground presence in Asia supported Saxo in navigating local market dynamics around regulation and cross-border matters, and our vast network can truly connect them to capital flows through our network across Asia, helping Saxo to scale,” says Ng.