FEATURE
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the diversity of the location of those clients so that we have had to adapt our technology to be more global. To do this, we try to have similar technology tools that can adapt to the different types of pricing and hedging methodology so that we use the same pricing engines, the same credit monitoring and the same connectivity tools across the globe for all clients, enabling the front end service to be adapted to their individual needs. So from a client point of view it is highly customised, but from a system point of view, from the bank’s perspective, is it more industrialised.”
Malrait adds that SocGen’s strategy, in terms of its e-commerce offering, has been to provide the same service across all platforms so as to give the choice to the user to define the way they want to work with the bank. He says: “Some clients are quite happy to trade on our single bank platform and some are looking for more of a multi-bank and multi-service offering, while others are mainly interested in API connectivity, so that we have three different ways to connect to clients.”
While the API connection is offered to hedge funds and algorithmic traders enabling them to benchmark SocGen’s pricing, the Societe Generale Alpha FX web- based trading platform is available for institutional clients and large corporates, and SGFX trades for smaller corporates.
Increasing STP
For Malrait, it is true that the main risk in trading is manual intervention, both on the client side and the bank’s perspective, so increasing straight through processing has been a major focus using full integration to not only improve productivity but costs. “Te demand we see from our clients is either for pure end to end connectivity which sends the trade directly to their risk management back office system or for API connectivity where the trade is electronically transmitted to reduce the number of errors and increase integration with the client’s own technology,” he says. It is to the extent that straight through processing has become the norm.
Malrait says that while there has been great demand from hedge funds trading equities looking to hedge FX risk, customers still tend to be quite specialised in terms of how they are trading different asset classes. It is by understanding the client’s activity that Malrait believes it is crucial in enabling the bank to monitor and react to changing market conditions and
64 | april 2011 e-FOREX
to provide better services for all currency pairs and instruments. “For example, we monitor in real time to ensure we are offering the most competitive quote for each currency pair for each client and are constantly addressing our pricing methodology to remain competitive,” he adds.
According to Malrait, the small corporate client is looking to their banks to provide the technology needed to enable straight through processing, while larger institutions and hedge funds have larger technology budgets are looking for liquidity providers to provide aggregation and algorithmic executions, which are expensive for them to deploy.
He says: “Smaller corporates are looking to us for guidance on the best choice for them. Asset managers are also looking to us to be able reduce their errors and improve processing costs. High frequency traders are looking for a win-win situation between the bank and their own strategy, to try to ensure the connectivity is
Stephane Malrait
“Te demand we see from our clients is either for pure end to end connectivity which sends the
trade directly to their risk management back office system or for API connectivity..”
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