Derivative Path, Baton launch FX platform for regional banks

By Aarav Garg

Derivative Path and Baton Systems have formed a strategic partnership to deliver an integrated foreign exchange payments and nostro management platform for regional and mid-market banks.

The collaboration has aimed to help banks expand FX and multi-currency services beyond traditional correspondent banking models, where institutions often rely on a single provider for pricing, liquidity access and payment execution. While widely used, that model can limit flexibility as transaction volumes rise and client expectations evolve.

The combined platform has enabled banks to adopt a hybrid approach. Institutions can retain correspondent banking relationships for some currencies while directly managing selected nostro accounts and accessing multiple liquidity providers for core markets. This has offered greater pricing choice, improved liquidity control and reduced dependence on a single counterparty.

The solution covers the full FX lifecycle, from trade execution to settlement and reconciliation. Banks can also provide commercial clients with multi-currency accounts while gaining real-time visibility over balances and intraday positions.

“Regional banks with established FX programs know what the next level looks like, but most technology solutions either underserve them or require an enterprise build that takes years,” said Zack Nagelberg, Co-Founder and President of Derivative Path. “What we have built with Baton gives these institutions the operational control they need to grow their FX business on their terms.”

By combining Derivative Path’s liquidity provider connectivity with Baton’s operational control tools, the platform has brought payments, liquidity and risk management into one framework. It has supported direct nostro management, real-time balance monitoring and coordinated operations across currencies.

“For years, the infrastructure required to manage FX settlement and nostro operations at scale has been refined within the largest global institutions,” said Arjun Jayaram, Founder and CEO of Baton Systems. “By partnering with Derivative Path we’re making that same level of control, visibility, and operational rigour accessible to regional banks in a way that is practical to implement – enabling these institutions to take direct control of their FX business, service their core customers and compete more effectively, without the cost, complexity, and timelines, associated with building out those capabilities themselves.”

The partnership reflects growing demand among mid-sized banks for more scalable FX capabilities, tighter liquidity management and greater control over cross-border payment operations.