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He says: “e-FX engines have been developed to provide “biased” pricing using their internal inventory and therefore price discovery is more around matching a suitable interest. In addition, the prime brokerage businesses of banks allow clients to post their own interest as market makers and in doing so the bank can act as a direct agent matching two opposing client interests or even matching a counterparty bank with a client of theirs.” Te combination of axed pricing, precision pricing and being able to act as a direct agent, rather than a risk manager, has therefore added significant variety in price discovery and some might argue has fragmented the market and created the ability for brief arbitrage opportunities that last microseconds.


More time for human interaction Stamos Fokianos


“Electronic platforms provide a significant amount of research, data and charts but the human


interaction helps to apply this general information to the individual client plans.”


trading space. Tis resizing and window detachment is extended to charting; charts are adapted easily to the period the client is observing and overlaid by additional curves, such as different period moving averages. Research is also customisable to provide the amount of information that each client requires; this can vary from single line headlines that can be expanded to the full article, to a much bigger space continuously occupied by in-depth analysis.


“We are continuously enhancing our products based on a number of factors, primarily taking into account client feedback. In doing so, we have to balance functionality with security. Tere are several considerations around institutional business being transacted using mobile applications and, as a consequence, potentially off premises, and to that extend we are always sensitive to conducting our business in a properly regulated way in order to protect the integrity of the submitted transactions,” he adds.


Fokianos believes acquiring e-FX market-share is significantly more complicated today. As mentioned before, the client experience is not limited to just pricing, but it also extends to many other elements including customer support. Te bid/offer spread, although very narrow, is not a key point of competition since it is the same by all the main players.


92 | october 2011 e-FOREX


Fokianos also adds that e-FX is primarily designed to facilitate the transactional process so that more time can be invested in advisory services. Te bank sales person has significantly more quality time to help clients achieve their business goals by digesting and interpreting through expert analysis a number of different market events in a global interconnected marketplace. “Electronic platforms provide a significant amount of research, data and charts but the human interaction helps to apply this general information to the individual client plans,” says Fokianos.


He believes that customisation is and will always be a key differentiator in the provision of e-FX platforms, although he adds there is a need to balance customisation and economies of scale. He says: “Te life-cycle of a product is significantly shorter than what it used to be and it is not enough to spend money to overcome the initial barriers to entry. Once entrenched in the e-FX business, which is essential to support the overall modern global FX business, there is a need to continuously improve the infrastructure, the applications, the look-and-feel and the risk management of the executed transactions.”


Tis means needing to innovate in order to create temporary monopolies that attract a premium price, before they get copied and commoditised. According to Fokianos, the costs to build and then run this business are significant and may help explain why lower volume products have not yet found their way on the web the same way that cash FX has. He believes that, like every business that requires scale in order to be successful, e-FX needs to keep up with new client demands but deliver those at a cost that makes the transaction a win-win for both parties, something that sounds fairly straight-forward but that is certain to drive the next round of innovation in single bank platforms.


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