Paul Burgess, CEO of B2 RCP, said âWhilst a growing proportion of FX trades are transacted over the numerous electronic trading venues, a significant proportion of trades where a bank offers any sort of advice to its customers are still done over the telephone. The problem that banks face with voice trades is that in any voice conversation there are sometimes two different perceptions of what has been agreed. This can only be resolved by a formal confirmation process. There are a number of ways in which a trade can be confirmed including electronic messaging such as SWIFT, platforms such as MISYS and GTSS, Fax, email and web applications. There is no one process and no single standard way to confirm these trades. The situation is made more complex by the fact that voice trades often involve derivatives which may require long form confirmations. Many of these processes are labour intensive, have a very low STP rate and significantly add to the overall cost of settlement, as well as adding unnecessary operational risks associated with incorrectly settled and unconfirmed trades. It is estimated that the cost to settle a simple FX trade using a fax matched manually to the trade is of the order of $5 per trade. Both banks and their clients have been crying out for a solution that accommodates all current methods and allows evolution to a more efficient methodology.
B2 RCP were approached some time ago to come up with a single automated solution to the confirmation process covering all methods of confirming trades and all asset classes. The B2 RCP e-Confirmations service is this solution.
The B2 RCP e-Confirmations solution is delivered as a pay per use solution from B2âs financially regulated data hub in Luxembourg. For each voice trade executed with their clients, banks send a secure message to the data hub which contains the details of the trade and the way in which the customer will confirm it. B2 RCP e-Confirmations will then confirm the trade with the customer and send a confirmatory message back to the bank when the process is completed. If the trade is disputed it will be added to an exceptions queue which is managed by the bankâs confirmations team using the B2 RCP e-Confirmations Exception Gateway to resolve the dispute.
If the customer fails to confirm the trade in a specified time period, the B2 RCP e-Confirmations workflow engine will automatically trigger an escalation procedure to minimise the number of unconfirmed trades that have to be chased manually.
B2 RCP e-Confirmations can support confirmations by:
â¢ Web Portal
â¢ Automated and client-originated FAX
â¢ Automated and client-originated Email
â¢ Electronic Messaging to client treasury systems such as SAP
As the B2 RCP e-Confirmations service is provided on a pay per use basis rather than as an on-site installed solution, the level of investment required up-front to implement the system is comparatively low, being largely the cost of integrating the service with the bankâs back office systems. Thereafter the service is provided on a pay per trade basis which allows the bank to predict its on-going costs very accurately relative to the volume of business they are undertaking.
The banks that B2 is already dealing with are very impressed by the flexibility of the solution and by the fact that they only need to access one platform for all types of confirmation for any asset class.â
Phil Boland, CEO of the B2 Group commented âWe have built the service around our established 4th generation messaging hub, proven in the FX electronic confirmation and Funds trading markets, and established best of breed automated fax management technology, to deliver a comprehensive pay as you use solution for voice trade confirmations.â