e-Forex-July-23-HighRes-SCREEN

Quest for the best: Exploring Singapore’s increasingly attractive e-FX trading ecosystem
STABLE REGULATION
HAS PLAYED A KEY ROLE
IN SINGAPORE’S RISE AS
AN FX REGIONAL HUB
“We’ve seen the growth of highly
flexible and user-friendly netting
strategies to minimise transaction
costs, optimise internal flows, and
reduce operational and settlement
risk,” he says,. Murray also points out
that the rules-based auto-execution
solutions for low-value trades and
products are commonly used.
“Treasurers can even combine the use
of automatic netting and execution
rules to implement a low, or in
some cases, no-touch workflow,”
he says. Finally, he points out that
the increasing use of algos in FX
(primarily TWAP) to achieve better
pricing outcomes points to the scope
of services tech can offer treasurers.
REGIONAL E-FX PERSPECTIVE
climate treasurers currently face. “The
unique regulatory environment in
APAC poses unique challenges. For
example, restrictions around onshore
currencies and how they can be traded
are obstacles that must be navigated.,”
he says.
So what role can technology play
in mitigating these risks and easing
workflows in corporate treasury?
ESTIMATING TREASURY
CHALLENGES AND MAPPING
NEEDS
Murray identifies a few Asia-specific
characteristics that need to be
addressed by the modern treasurer.
“Fragmented treasury structures are
common in Asia,” he says, “with
multiple entities and people dispersed
throughout the region, making
workflows complicated and often
manual.” As a result, controls and
oversight is challenging, and firms
have been moving towards centralising
functions.
Standardisation is one way of
mitigating this topic and puts firms
in a better position to deal with more
familiar situations. “Increasing volatility
in Asian currencies and interest rates
have impacted margins and cost of
capital,” Murray says. Technology
service providers have been rising to
the demands, he notes.
Solutions enabling price transparency
while streamlining workflows
are commonplace in the market.
Centralisation is a broad theme,
Murray notes. “Streamlining
workflows maximises both, time and
cost efficiencies whilst simultaneously
reducing operational risk,” he says.
“Freeing up treasury personnel’s time
to focus on more complex tasks by
helping corporates automate lowvalue
FX trades and manual processes,
is also a major focus area.”
More electronification implies
better access to data, and
unsurprisingly, offering solutions
around pricing outcomes, TCA, bank
panel performance, and liquidity
optimisation is in high demand. While
treasurers can access solutions that
meet these needs to varying degrees,
Murray points out that being aware of
what technology and automation can
achieve is critical.
“At 360T, corporates are our largest
consumers of algos in APAC,” he
notes.
MANAGING DATA AND SCREENING
SERVICE PROVIDERS
The increased use of technology
doesn’t come without some
complexity. For instance, electronic
systems are only as good as the
data they’re given. This makes data
management key. Murray says that
best-in-class firms are using data to
benchmark pricing pre, in-flight and
post trade, and rethinking visibility
between internal entities.
“Firms are implementing staged
workflows to segregate duties and
control visibility,” he says. “Using
compliance tools to monitor, identify,
and prevent breaches is also critical,
and is rapidly gaining in popularity.”
“Data management also makes
quantifying bank panel performance
and TCA simpler, and facilitates
transparency, liquidity optimisation
and the instant identification of
netting efficiencies too,” Murray
adds. “Treasurers can align
themselves with the idea of data
driving better pricing outcomes.”
36 JULY 2023 e-FOREX