Case Study: On-line FX Distribution Strategy
The client
A global commercial bank with particular strength in emerging market currencies.
The challenge
The bank had a number of innovative business ideas for the distribution of FX products via the internet including Standard online FX trading for corporate customers; An online multi-currency retail equity trading service; Cross-border B2B exchange for physical goods; Multi-bank FX portals such as Atriax, Currenex and FXALL. The bank wanted an IT infrastructure that would enable it to react quickly to new business opportunities, without needing major systems re-engineering.
The solution
The vision was to use one infrastructure to provide consistent streamed or quote-request prices and to execute and process trades, regardless of the route the customer used to get to the bank's FX trading systems. The architecture had to be capable of dealing with new initiatives and thus technical flexibility was an essential key to success.
In achieving this we developed a multi-tiered architecture including: Presentation layer - to allow connection to the service from any device the customer chose. Business process layer - to manage the processing of each transaction, routing it via the correct business engine components (e.g. streamed or quote-request prices) depending on its origin. Business engines layer - the core components that limit-checked, priced and executed deals. Connectivity layer - to enable STP to the bank's risk management and settlement systems. This achieved, we carried out a detailed analysis of a number of technology partners to find one with the ability to work with the bank to develop this multi-layer architecture. A key selection criterion was a demonstrable ability to use an acceptable combination of technologies, including XML, Java and multi-device channel management.
The Outcome
The project culminated in the completion of a full business case showing revenue projections, capital expenditure and ongoing expenditure for the service. This included a refined start-up model showing the initial and subsequent markets for the service and the entry plans for each market.