Challenge
The American Financial Exchange (AFX) is a self-regulated exchange for direct lending and borrowing for American banks and financial institutions that provides a transparent, centralized, and rules-based electronic platform. The exchange has a growing network of over 1,000 banks and financial institutions, specifically focusing on regional, midsize, community, and minority-owned banks – representing 25% of the U.S. banking sector’s total assets. This innovative exchange platform was built by Connamara and launched in 2015.
AFX, like many companies, needed a technology partner that could deliver a production-ready, secure exchange platform within constraints of time, budget, and specific requirements. But as an early-stage startup, AFX needed a firm whose design and implementation processes could adapt quickly as AFX learned more about its customers’ needs. AFX chose Connamara for its reputation for responsiveness and agility.
While AFX had a solid vision and strategy, the company required assistance devising an actionable “get-to-the-first-trade” plan to test the concept and design in the marketplace. Connamara’s twenty-five years of experience in capital markets software delivery and ten years of experience building customizable matching engines and exchange platforms made our company stand out during AFX’s vendor selection process.
Solution
AFX engaged Connamara to articulate the features and requirements the exchange platform would need to launch. AFX had two key strategic objectives:
- Establish an organized, centralized marketplace that enables efficient “price discovery” and “price transparency” of interbank lending rates while minimizing transaction costs for the member banks.
- Establish new interest rate benchmarks relevant to the unique needs of the small, medium, and regional banks across America.
Connamara’s team implemented the solution with custom-built components and existing Connamara proprietary software. Connamara Agile utilized test-driven development, automated testing, and continuous integration.
By consistently monitoring the team’s velocity and giving regular status updates, Connamara communicated a calculated, accurate release date for each milestone under development. Calculating and updating the completion dates upon each iteration provided the transparency and certainty AFX needed to design its marketing and customer onboarding campaigns before the exchange went live.
Result
In December 2015, after just nine months, the AFX Exchange Platform was successfully launched by AFX and CBOE Global Markets. And, with Connamara’s help, AFX debuted AMERIBOR, the world’s only credit-sensitive interest rate index based on real-time activity on a transparent market.
AFX’s growth was rapid, trading over $1 trillion since inception. And AMERIBOR has distinguished itself from LIBOR and SOFR as the only benchmark that reflects actual borrowing costs.
In 2023, AFX was acquired by 7RIDGE, a specialized growth equity firm that invests in transformative technologies for financial services to expand and accelerate its growth trajectory.
“I’ve been in the trading system business for 30+ years, and Connamara is by far the best software developer I have encountered in all these years. The quality of the coding is so good it does not need QA testing. The entire process was flawlessly and seamlessly executed with no adverse impact on the market. I appreciate your willingness to have your Team roll up your sleeves as well as their attention to detail and accuracy!”
Ed Berko, Managing Director, Chief Financial Officer, and Chief Operations Officer of AFX.
