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integral part of controlling risk. Real time reporting<br />
and controls for clearing are a fundamental part of the<br />
equation.<br />
By offering clients multiple ways of managing their<br />
trades, confirming their risk and margin is an integral<br />
part of the RBSM strategy. Staying aware of trends<br />
and being involved with market structure initiatives<br />
helps RBS to stay sharp and focused so we can pass<br />
that benefit to our customers. Our customers value<br />
an advisory service about how changes in market<br />
structure can affect them and what they should <strong>com</strong>e<br />
to expect from their bank relationships.<br />
Prime brokerage services have also been included in<br />
RBSMarketplace. What key functionality does your<br />
Smartprime module offer to clients and how do you<br />
see the FX prime brokerage model evolving, postcrisis?<br />
Having a PB (or multiple PBs<br />
in the new world order) is a<br />
vital relationship service<br />
providing access to liquidity<br />
and risk management and<br />
increasingly to services like<br />
OTC clearing. This<br />
relationship has to go beyond<br />
standard services like trade giveup<br />
and extend into areas of<br />
added value such as legal,<br />
credit, technology, back office<br />
services and direct sales services<br />
and execution. Most<br />
importantly providing a packaged approach to these<br />
services helps customers to grow their own business,<br />
the ability to expand to other asset classes while using<br />
capital efficiently by optimising margin across their<br />
portfolios. RBS SmartPrime is just one tool that<br />
helps with the hassle of building or buying an<br />
execution platform to access ECN and RBS bank<br />
liquidity while also aiding in traditionally time<br />
consuming processes like rolling positions.<br />
RBS has always had a very innovative and successful<br />
electronic FX option franchise. Do you expect to see<br />
the use of FX options continue to grow amongst<br />
currency traders and investors and in what ways are<br />
you looking to further automate FX options trading?<br />
Absolutely. It is a major focus for the risk<br />
management and sales businesses at RBS as well as for<br />
Electronic Markets. Earlier this year, our FX spot and<br />
RBS - leading the way with integrated electronic FX solutions<br />
Currency Options businesses merged under the<br />
leadership of Mark Barnes on the trading side and<br />
Chris Leuschke on the sales side. This new<br />
organisational structure is enabling us to take a more<br />
strategic approach to all elements of FX and treat<br />
them as an asset class from a risk management<br />
perspective while providing a more integrated solution<br />
based service to our client which will obviously<br />
extend to our provision of FX services via RBSM.<br />
Over the <strong>com</strong>ing months, what work will your e<strong>com</strong>merce<br />
teams be doing to further enhance<br />
RBSMarketplace to move it even closer towards the<br />
<strong>com</strong>plete one-stop shop?<br />
We will be focused on product coverage, workflow<br />
and the integrated provision of services to ensure our<br />
products continue to be best in class but accessible in<br />
a multi-product environment that considers the entire<br />
trade lifecycle and the changing<br />
market environment.<br />
Like many large financial<br />
institutions, RBS has been<br />
dealing with difficult business<br />
issues arising from the global<br />
financial crisis of last year.<br />
Looking to the future, how<br />
<strong>com</strong>mitted is the bank to<br />
continue making the necessary<br />
investment required to maintain<br />
and further develop your world<br />
class suite of e-<strong>com</strong>merce<br />
solutions?<br />
Its been said before but <strong>com</strong>panies that are successful<br />
treat their investment in Electronic Markets as a<br />
strategic asset and not a liability or cost that needs to<br />
be assessed constantly based on market moods or<br />
modes. Sure there is always an element of cost:<br />
benefit analysis but you have to look at it on a holistic<br />
basis, rather than on a stand alone one – it is a core<br />
part of the franchise business and not a business in its<br />
own right. One thing is clear - the market will<br />
continue to evolve and those who optimise their<br />
spend in ways that leverage the existing talent will be<br />
the ones who will gain market share, be<strong>com</strong>e more<br />
profitable, have better client relationships and in<br />
general succeed.<br />
As we said before, it’s not an optional business if you<br />
are a top liquidity provider. It is an integral part of the<br />
approach to risk management and customer work flow.<br />
january 2010 e-FOREX | 91
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