Standard Bank's Five-Pronged Technological Interface Reduces Clients’ Foreign Exchange Risk
Rapid changes in the world of technology have given rise to platforms that facilitate access to liquidity through advanced electronic trade execution. According to Standard Bank, Africa’s biggest lender by assets and earnings, this has dramatically altered the way in which traders achieve more standardised foreign exchange prices as fast as possible.
The global foreign exchange market has grown from approximately $3 trillion in average global trading per day five years ago, to approximately $5 trillion in daily trade today.
Standard Bank has implemented a five-pronged technological interface to equip itself to manage and reduce clients’ risk in the ever-fluctuating foreign exchange market.
“It’s imperative to have a deep understanding of the inherent risk around our clients’ businesses as well as what they need to mitigate risks,” said Richard de Roos, Head of Foreign Exchange at Standard Bank. “The best way to achieve that is through participation in all levels of the foreign exchange value chain.”
Electronic offerings need to be integrated into trade flows; settlement of imports and exports and how clients want to receive their currency conversion, which is usually the ultimate process in an exchange of goods or services. In Africa, some of the core capability of technologies that relate to market depth, speed of execution, liquidity and electronic delivery are continually developing.
Standard Bank’s eMarketTrader, a cross-asset electronic trading platform, brings together market intelligence and research, real-time pricing, trade execution and post-trade services through a single web-based platform.
The system allows foreign exchange rates for 64 currencies and is integrated into Standard Bank’s five-pronged approach to managing risk that includes system aggregation; algorithmic risk management tools; client value analysers; a rates engine and price adaptation facility to reduce client risk in the market.
“Our standing as a truly global African bank with a large footprint across the continent allows us to integrate international best practice into our technological platforms and to adapt them for the needs of the African market,” said de Roos. “Allowing transparent price discovery that is reflective of the underlying market and the efficiency of electronic trading on a single dealer platform coupled with our in-country solutions across the continent make for the best client interaction with the market.”
The idea behind the system is to serve every client segment from large buy side institutions to small corporate clients with trade flow financing and foreign exchange needs.
At the other end of the spectrum are individuals who, due to the rapid growth of e-commerce platforms such as Amazon.com, iTunes and eBay, have made consumers an increasingly powerful force in the foreign exchange market.
“The consumer is becoming an increasingly important player in the technological age,” de Roos said. “Success in African currency remains being able to access liquidity without impacting the market and single dealer platforms are the ideal infrastructure to facilitate this.”
Platforms need to be dynamic enough to accommodate changing regulatory landscapes across the continent, navigate the lack of liquidity in certain markets, as well as being relevant for the typical behaviour of participants in a particular market.
Such systems also need to enhance the operational efficiency within a client’s organisation by adapting to the manner in which they execute their foreign exchange transactions.
“In Africa, clients value quality service above all else,” concluded de Roos. “This is where Standard Bank’s reach and depth of service in the continent’s foreign exchange market can really make a difference to their business.”
SAS: Improving the British Army’s decision making with data
SAS’ long-standing relationship with the British Army is built on mutual respect and grounded by a reciprocal understanding of each others’ capabilities, strengths, and weaknesses. Roderick Crawford, VP and Country GM for SAS UKI, states that the company’s thorough grasp of the defence sector makes it an ideal partner for the Army as it undergoes its own digital transformation.
“Major General Jon Cole told us that he wanted to enable better, faster decision-making in order to improve operational efficiency,” he explains. Therefore, SAS’ task was to help the British Army realise the “significant potential” of data through the use of artificial intelligence (AI) to automate tasks and conduct complex analysis.
In 2020, the Army invested in the SAS ‘Viya platform’ as an overture to embarking on its new digital roadmap. The goal was to deliver a new way of working that enabled agility, flexibility, faster deployment, and reduced risk and cost: “SAS put a commercial framework in place to free the Army of limits in terms of their access to our tech capabilities.”
Doing so was important not just in terms of facilitating faster innovation but also, in Crawford’s words, to “connect the unconnected.” This means structuring data in a simultaneously secure and accessible manner for all skill levels, from analysts to data engineers and military commanders. The result is that analytics and decision-making that drives innovation and increases collaboration.
Crawford also highlights the importance of the SAS platform’s open nature, “General Cole was very clear that the Army wanted a way to work with other data and analytics tools such as Python. We allow them to do that, but with improved governance and faster delivery capabilities.”
SAS realises that collaboration is at the heart of a strong partnership and has been closely developing a long-term roadmap with the Army. “Although we're separate organisations, we come together to work effectively as one,” says Crawford. “Companies usually find it very easy to partner with SAS because we're a very open, honest, and people-based business by nature.”
With digital technology itself changing with great regularity, it’s safe to imagine that SAS’ own relationship with the Army will become even closer and more diverse. As SAS assists it in enhancing its operational readiness and providing its commanders with a secure view of key data points, Crawford is certain that the company will have a continually valuable role to play.
“As warfare moves into what we might call ‘the grey-zone’, the need to understand, decide, and act on complex information streams and diverse sources has never been more important. AI, computer vision and natural language processing are technologies that we hope to exploit over the next three to five years in conjunction with the Army.”
Fundamentally, data analytics is a tool for gaining valuable insights and expediting the delivery of outcomes. The goal of the two parties’ partnership, concludes Crawford, will be to reach the point where both access to data and decision-making can be performed qualitatively and in real-time.
“SAS is absolutely delighted to have this relationship with the British Army, and across the MOD. It’s a great privilege to be part of the armed forces covenant.”