FEATURE
Relationship e-trading:
A new force entering the
world of corporate FX?
that the global economic downturn has reshaped the
traditional corporate FX landscape in that it decreased
the number of bank counterparties that could
form a lending syndicate to corporates and put risk
management firmly in the spotlight. “Corporates are
relying on fewer banks, especially the ones they have
credit relationships with,” he says.
As a full-service FX provider, he adds, CIBC focuses
on a strong dual channel approach, leveraging the
strengths of each. Spiropoulos says: “Electronic
trading offers price transparency, STP for payments
and transfers, and minimisation of errors for both the
client and the bank’s back-office. Using the e-channel
for those activities provides more time to focus on
higher value, two-way dialogue that is essential for
managing risks and hedging opportunities as well asBy Frances Maguire
strengthening the overall client relationship.”
Banks and corporates have long relied upon
Challenges facing corporatesstrong relationships in FX where pricing and
services are built around the size and type of the Depending on the size of the corporation, the nature of
order flow. However, while the growing use of their hedging needs and trade frequency, Spiropoulos
electronic over voice trading for vanilla trans- says that corporations face a number of challenges.
actions has freed up banking staff to focus on These range from identifying foreign exchange risks,
the higher value, more complex deals and the to complicated internal trading approval processes,
automation brought by straight through process- to complying with detailed reporting requirements.
ing have lowered costs and brought greater Some clients have the additional task of managing these
efficiency, it means there is less daily contact. requirements using older IT systems.
“In addition, establishing processes and getting them-commerce may have freed up banks to focus
approved can take time for clients trying to set upon more complex deals and product innovation
an electronic trading agreement,” says Spiropoulos.E but they still need to manage these relationships
“Understanding these challenges and working closelyto ensure they understand and meet the needs of their
with clients to streamline their operations is essentialcorporate customers.
in saving them time and money. In most cases,
one of the first questions that the clients ask isTakis Spiropoulos, managing director and head of the
what services we offer for managing their risk.”e-Solutions Group, at CIBC World Markets, says
|42 april 2010 e -FOREX
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