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Jobs are reported to be at risk in a shake-up of foreign exchange trading system software firm Cognotec's operations in Dublin, where management says it is likely that "some" redundancies will be made. Cognotec plans to finalise details of the restructuring in the middle of next week. London is the leading foreign exchange market centre in the world and Irish technology company Cognotec is one of Europe's leading FX platform suppliers. The foreign exchange market is growing rapidly and current daily trading volume of more than $2,000 billion, is forecast to reach $3,000 billion in 2010. In July 2006, Finfacts spoke to Cognotec founder and Chief Executive Briain Maccaba on the FX industry and plans for the company. Briain Maccaba, who worked as an economist at the Confederation of Irish Industry in the 1980's, founded Cognotec in 1991. The firm had about 140 of its 200 strong payroll based in Dublin in mid-2006, according to Maccaba. In August, the firm hired an extra 25 staff and September it hired a new Dublin based top-level team including a deputy chief executive and head of sales and marketing. The company had revenues of $28.1 million in 2005 and made a profit of $3.7 million. It expected revenues of over $40 million in 2006. It has operations in Dublin, London, New York, Tokyo and Singapore. Cognotec said that online dealing has meant trading volumes have migrated to the bigger global players much more quickly than anticipated. Greenwich Associates found that Citigroup, UBS and Deutsche Bank together earn 30% of the total revenues from the top 30 banks globally. In addition, Cognotec experienced online trading volumes increase by 128% over the last year. As a result, formulating a customer-lead technical strategy for the dealing operation has emerged as a priority for many banks. Every trading institution is now forced to decide where, and at what cost, it can reach its customers. The number of foreign exchange distribution channels is rising. Along with multi-bank platform FXall other initiatives have emerged, such as HotspotFXi and Currenex's sell-side play. For a number of smaller enterprises 'White Labeling' - where a leading market-making bank distributes its technology to a smaller bank downstream which then brands the product as its own - can offer an answer. Cognotec said that large dealing operations which haven't yet formulated a white label strategy need to do so quickly - this is a market that will be saturated quickly as the pressure on smaller institutions increases. In May 2006, Cognotec announced the launch of its new, next generation solutions platform, Cognotec RealStreamTM. Based on new, leading-edge technology, the first phase of Cognotec RealStream presents Cognotec RealStream-Margin, an integrated web-based solution designed for banks looking to target the increasing growth in flows originating from investors actively trading FX as an asset class. Cognotec said that it was is targeting the top 100 banks in the world, which it has divided into three categories. Contracts with so-called ‘tier one’ banks can be worth more than $20 million over three years, tier two deals are worth about $10 million and tier three are worth up to $5 million. Briain Maccaba told Finfacts that the company will have revenues of $100 million before contemplating an IPO.
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