Banks and other financial institutions continue to modernize and invest in technologies that support a superior client user experience while automating their front-to-back manual processes. Additionally, for an organization to remain competitive, organizations must deploy real-time and connected solutions. Organizations that support the growing international foreign exchange (FX) market and strive to enhance their competitive advantage need to evaluate their capabilities and whether they can meet the ongoing demands of international business with their current technology solutions.
When evaluating a new FX trade and payments platform, there are some very important questions that both decision-makers and stakeholders should consider especially when working through the business case that often precedes an important investment decision. The following questions are shared with both FX operational and technology professionals and could be useful when trying to gain a better understanding of what value could be gained by purchasing a new application, and just as importantly, what could be lost by doing nothing.
What do we gain? What is the value associated with implementing a modern automated solution?
In today’s competitive marketplace, companies that implement technology-based solutions can set the pace for the competition. They get to market faster, with more innovative solutions, at a lower cost than their non-automated competitors. These organizations also enjoy many of the following benefits:
- Improved operational controls and better workflow management.
- Increased throughput capacity to support growth.
- Enhanced capability to offer new services to clients.
- Stable cost base with very low incremental costs as volumes grow.
- Positive impact on error rates.
- Real-time risk management tools including enhanced reporting capabilities.
- Powerful security access and audit functionality.
- Support for best practices procedures that adhere to your compliance and regulatory policies.
- Automated integration to other internal/external systems.
- Staying technology current.
- Higher employee retention rate.
What are the risks and what could be lost if we choose to do nothing? Could we remain competitive in the FX market with what we have in place (or don’t have) currently?
New research has shown that businesses that rely on manual processes, regardless of the level or quality of staff, have error incident rates that are far higher than those businesses that have deployed workflow automation solutions. Such incidents can expose the bank or the bank’s customers to financial loss, or even long-term reputational loss. Furthermore, additional studies indicate that those businesses that continue to rely on manual processes for their day-to-day operations are slower to react to changes in their markets than those businesses that employ automated solutions, thus putting them at an obvious competitive disadvantage.
What is our core competency and are we focused on it?
It is critical that an organization have a platform that allows the organization to focus on growing the FX business. This is your core competency, and having the ability to execute is critical. For example, having the ability to onboard new clients quickly or make timely application changes in conjunction with new regulatory requirements is imperative. Organizations that don’t have a modern FX application often report that they spend much of their time and resources just trying to “keep up” with the rapid pace of technology changes.
Can we grow the FX business while doing everything possible to reduce operational costs for our organization?
Operational costs can be reduced via workflow automation. A modern FX platform can help automate and streamline from the front office to back manual processes. For example, Singularity’s straight-through processing supports a bank’s internal operations from front to back. Once a banking customer’s FX transaction is complete, the application provides full confirmation and settlement functionality for all wires and transactions, in addition to counterparty and position limit checking. In addition, OFAC checking of all outgoing wires is automatic, and upon execution, the wire transaction flows immediately to the trader’s desktop, allowing them to either cover the transaction in the marketplace via a liquidity provider or fund the request out of an existing balance held by the bank.
Whether you are currently delivering international services or considering moving your business in that direction, you need to take a candid look at your organization’s processing capabilities. The considerations and questions shared above are a good start, and as you move forward, please reach out to us at SS&C should you have questions.
About SS&C Technologies, Inc.
SS&C’s Singularity delivers a market-leading solution for the trading and treasury operations of banks globally. In combination with its predecessor applications, time-proven with more than 25 years in use by some of the most demanding banking clients around the world, Singularity is a fully integrated solution supporting the entire range of treasury asset classes and functions.
