Forex - MoneyShow.com

“We invested quite a bit with our clients to improve
automated processes for risk allocation, sales margin
recognition and allocation, and on the fly risk
calculation and margin calling. The purpose is to allow
our clients to increase their market penetration and
aggressively pursue new clients in an environment with
substantially reduced TCO and operational risk.”
Eddé adds: “As a fundamental consequence, financial
institutions need also to demonstrate that they have a
fully reliable infrastructure able to process massive
volumes. Their infrastructure needs to be robust to
sustain extreme conditions, fast, to provide analysis in
real time and flexible, to implement at low cost evolving
methodologies as standards are shifting in this domain.”
In 2009, Murex leveraged the key features of its
technology to address trends identified over the past
year for banks and asset managers, which had to learn
to work in a more efficient way in a market which is
maturing fast and reinvent a different business model
adapted to new circumstances (less complex
structures, higher capital requirements, lower appetite
for heavy leveraging, etc).
Edde says: “MX.3’s trade modelling allows you to
process any product, whatever its financial complexity,
by considering it as a single processing object. MX.3’s
processing model also supports organisational
complexity, as it automatically mirrors and processes
any type of sales/ traders back-to-back, inter-entity, or
micro-hedge combinations.”
“We also invested quite a bit with our client to
improve automated processes for risk allocation,
margin recognition and allocation, and on the fly risk
calculation and margin calling. The purpose is to
allow our clients to increase their market penetration
and aggressively pursue clients in an environment with
substantially reduced TCO and operational risk.”
SaaS
Jiro Okochi, CEO and co-founder of derivative risk
management and hedge accounting solutions provider,
Reval, believes the tools and technologies have been
ahead of the marketplace and end-users are beginning
to finally take better advantage of what already exists.
“For example, Software-as-a-Service (SaaS) has been
available from the FX trading platforms like FXall and
360T and risk vendors like Reval have had thin-client
internet tools for post-trade FX management for
almost a decade,” he says. “This has enabled remote
business units and subsidiaries to enter their exposures
Tracking new developments in currency derivatives processing
Jiro Okochi
“SaaS offerings allow vendors to work more closely together
as well as the ability to use more user-friendly web services.”
for a consolidated view by central treasury for hedging.
Reval also offers scrubbed and integrated market data
that allows for independent pre-trade pricing.”
He says that the biggest choke points arise from
manual processes that are still relied upon, instead of
leveraging the existing technology. “There are still
companies that utilise FX trading platforms for price
discovery but end up still executing over-the-counter
with the dealers,” he adds.
According to Okochi, companies need to use and trust
the newer technologies, like web services, that allow
for more efficient maintenance of interfaces. “As there
is no one-stop service between FX execution,
matching, risk and accounting, there is no choice but
to rely on interfaces, and unfortunately end-users have
had bad experiences with interfaces due to different
technologies that lie on the client side. SaaS offerings
allow vendors to work more closely together as well as
the ability to use more user-friendly web services.”
Okochi says that, in theory, while higher volumes
should drive down processing costs, the current
economic environment is not conducive towards
allowing new entrants into the marketplace that can
increase competition. In addition, potential OTC
derivative reforms will probably drive costs higher for
end-users, either through margining or clearing or
other fees, and the jury is still out on what the
regulators will decide for FX derivatives.
january 2010 e-FOREX | 65