John Lothian Interviews Derivative Path’s Matt Petrik on Revolutionizing Financial Markets Amidst Regulatory Changes and Technological Innovations

Matt Petrik of Derivative Path
John Lothian

John Lothian

Executive Chairman and CEO

John Lothian recently interviewed Matt Petrik of Derivative Path, who discussed his company’s foundation and evolution in response to regulations like the Volcker Rule and Dodd-Frank. Originating from a team with roots at Wells Fargo, Derivative Path has developed into a cloud-based platform that simplifies interest rate hedging, foreign exchange, and commodities trading for financial institutions, especially those with assets under $100 billion. The platform’s trade blotter integrates various market operations, enhancing visibility for both firms and their clients.

Petrik’s role focuses on expanding the platform’s payment and hedging capabilities, leveraging his 25 years of experience at Wells Fargo to incorporate payment flows into risk management strategies. He said the fragmentation and innovation in the international payments landscape, with developments like real-time payment networks are challenging traditional models. He said Derivative Path aims to navigate these changes by offering technologically advanced solutions for more efficient and transparent financial transactions.
Petrik said the international payment space is “becoming more fragmented over time, as opposed to coalescing under the Swift, sort of payment networks.” The disruption in the financial technology space is opening up opportunities for new players like Ripple and Broad.

He said there is a move away from wire transfers towards some other form of “just in time” settlement tool that uses the ISO 2022 standard. There are a lot of things happening, but no one way to proceed, Petrik said. Only a few of these new products will survive, he predicted.

Petrik also shared his views on trends in FX hedging, inflation and the impact of the coming elections around the world.

He also expressed some fascination about the impact the move to T+1 would have on the U.S. markets and whether it would give them an advantage over European or Asia markets.

Petrik said 2023 was a record year of revenue for Derivative Path, driven by market challenges occurring after the Silicon Valley Bank collapse.

What is most interesting to Petrik, he said, is that he is getting the chance to disrupt the market space he disrupted 20 years ago with the introduction of an API to stream prices, displacing static rate sheets.

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