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Technology Can Change the Result – One Player Can Make the Difference….. a game strategy for a combined treasury and trading offering.

[fa icon="calendar"] 03-Jul-2019 12:37:30 / by David Woolcock

treasury-trading-combined-WWC

The Women’s World Cup (WWC) has been in full swing and finally we entered the knock out phases after 36 games, 106 goals and plenty of technological controversy, 24 teams became 16 after many dramatic twists and turns. With the climax approaching this weekend, the semi-finals have so far followed suit. Like football, with a team’s coaches, goalkeeper, defence, midfield and strikers with a communicated strategy, a treasury has similar requirements of its technology. As the knockout stages progress we have again seen technology (VAR) continuing to make a difference in key games!

At Eurobase, our experience has shown that it is better to run your game strategy from a single dugout with a single view of the pertinent information from a common set of data. This is made possible by combining a Treasury Management System with a full trading solution (both voice & e) backed up by a Regulatory Reporting module. Additional modules such as ePayments strengthen the attack while inbuilt risk & compliance solutions strengthens your defence.  

Increasingly we are seeing banks focussing on the core goal of excellent client outcomes and back engineering to find a solution that delivers this aim. Notwithstanding the growth of electronic trading, voice execution is still a dominant channel for many banks. However, electronic processes now need to supplement this. With the correct technology deployed, a clear second-by-second audit trail can be generated with an e-confirmation of the trade available, which marries the trade to the digital voice recording. This can act as a dealing VAR capability should any aspect of the trade be disputed. Essential for the compliance function and first and second lines of defence! 

The teams competing on the pitch strive for excellence so recent regulatory and best practice changes have led a need to obtain excellent customer outcomes. Best Execution obligations require timestamps at all four stages of executing, or not, a deal. First, the process kicks off with a customer enquiry, and then a price is quoted (with pre-trade transparency when required) which the customer then accepts or declines. The trade is then confirmed and if required reported, or the unsuccessful quote is stored with all relevant details available. This is a much more fluid attack if orchestrated from a single solution. 

Just as the pundits on the commentary team analyse every move of the game so the use of techniques such as deploying independent benchmarks allow a post trade analysis. This is essential to monitor best execution obligations but also allows a useful replay being available to a customer who wishes to use techniques such as Transaction Cost Analysis (TCA). This can be deployed both pre-trade and post-trade, which is a useful tool to offer customers especially those using more complex strategies. 

For those customers who prefer to execute electronically an innovative single dealer platform is an essential addition to the team. This needs to suit the customer’s game plan, as each customer will have their own preference, based on the tactics they prefer. An ability to cater for Request for Quote, Executable Streaming Prices or automated trading allows you to score the goal of customer satisfaction. For those customers who are payment driven an ePayments module is another route towards victory. 

Enjoy the rest of the WWC and look out for our forthcoming Case Study, which covers how actual clients have benefited from increased operational efficiency with their customers trading. Covering the treasury front office through regulatory compliance and treasury management information from scalable cohesive componentised solutions with a broad range of optional functionality it will be an insight into the winning formula. Get the game plan, play the game and score those goals that other teams are netting! 

 

Topics: Banking, Treasury Trading Solutions

David Woolcock

Written by David Woolcock

David Woolcock is an independent consultant and Director, Business Consulting at Eurobase. In addition, David is Chair of the Committee for Professionalism at ACI – The Financial Markets Association as well as Vice-Chairing the ACI FX Committee. He is also a member of the Market Practitioners Group for the Bank of International Settlement's FXWG that wrote the FX Global Code.