11 Apr 03: Deutsche, AIG, JP Morgan Chase Collaborate To Introduce Automation to FX Transactions

Three large foreign exchange banks have teamed up to automate the trading process for FX trades between banks and money brokers, using XML-based and other messaging technologies. Deutsche Bank, AIG Trading Group, and JPMorganChase have teamed up with software house Traiana Inc. to develop a new service aimed at automating and speeding up transactions, reducing operational costs for brokers, banks and their institutional clients.

The banks hope that the collaboration will improve upon and replace manual processes used by money brokers to ‘give up’ trades to FX banks. Using a new online service from Traiana, the effort allows the banks to integrate systems using a secure, shared, Internet-based service, eliminating manual processes which slow trade booking and introduce errors.

Institutional clients of the three firms will benefit from increased efficiency from straight-through-processing (STP) for all FX prime brokerage trades and real-time access to trade information. Prime brokers and money brokers using the service are able to lower costs, significantly reduce operational risk and increase service levels to clients.

Deutsche Bank, AIG Trading, and JPMorganChase will use the Traiana Harmony service to integrate their foreign exchange prime brokerage systems with each other’s FX trading systems, eliminating the need to re-key give up trades into a dealing system. Money brokers will be able to give up their trades via electronic messaging including XML, IBM MQSeries, or SWIFT over the Internet and secure private networks. A simple web give-up and monitoring interface is also provided for smaller or lower volume brokers.

Executing brokers who give up trades to the three banks can register at http://www.traiana.com/harmony to receive more information and begin the integration process. The three banks expect to be fully integrated in the second half of this year.

According to John Wareham, AIG Trading Group’s executive vice president and global head of foreign exchange and emerging markets, “AIG Trading Group is committed to providing superior service and products to our prime brokerage clients. By collaborating with JPMorganChase and Deutsche Bank, we enhance our e-Prime Brokerage solution. With Traiana, AIG provides connectivity technologies that offer superior trade processing capabilities and client service functionality. Clients benefit from simplicity and efficiency.”

“Deutsche Bank has led the industry in electronic FX prime brokerage as we have deployed a fully automated STP solution for handling client trade information,” said Andy Coyne, director, global liquidity services, at Deutsche Bank. “Integrating the executing brokers into our Traiana-based prime brokerage system was the next logical step. With the combination of a robust e-prime brokerage system, this collaboration and Traiana’s capabilities, we are better positioned to handle greater volume while maintaining our high level of client service.”

“JPMorganChase has made a significant commitment to our FX prime brokerage business, and this strategic initiative takes it one step further,” said David Puth, global head of foreign exchange & commodities, at JPMorganChase. “Our collaboration with Deutsche Bank and AIG Trading will improve service levels to our clients and create efficiency in our industry.”