Vincent Lauwick G global head of FX e-Commerce at SG
Vincent Lauwick G global head of FX e-Commerce at SG

with Vincent Lauwick Global head of FX e-commerce at SG

First Published: e-Forex Magazine 10 / e-Forex Interview / April, 2003

Vincent, SG is seen as one of the pioneers of electronic trading having had long experience with the French Minitel. Your Forex and Treasury team has been particularly active over the last few years in developing a whole range of new e-products. Can you talk us through these developments?

After our positive experience that began with Minitel 10 years ago and then our monobank website 5 years ago, our clients started asking us more and more for a multi-bank services platform. While not willing to give up on their strong relationships with the sales people, our clients believed that, thanks to a multi-bank platform, they would be more productive gaining time in dealing and booking their standard FX transactions. We listened to their demands and the result is Centradia. Centradia’s mission is to provide clients with the most comprehensive, reliable and easy-to-use online system for treasury and money market management that can be tailored to individual requirements. This is achieved by customising the service in response to our customers’ needs, taking advantage of the banks’ local market knowledge and relationships and the latest technology. In short, Centradia’s aim is to provide our customers with unparalleled access to information, liquidity, choice and best price, at the click of one button. Thanks to our previous strong IT experience we felt “technologically ready” to go ahead with the launch of Centradia.

Can you briefly describe SG’s role in Centradia?

SG’s role is threefold. We are one of the 4 founding members and current shareholders of the company, based in the UK. Our second role is to bring liquidity for all the FX and money markets, dealt over the platform which includes FX spots, forwards and swaps (including uneven swaps) in more than 100 currency pairs, as well as loans and deposits. We also use the primary fixed income feature. Lastly, contrary to other multi-bank web sites, Centradia’s marketing and sales is not done by Centradia per se, but, for SG clients, it is managed by the SG FX sales people along with a dedicated e-sales force. This was key to maintaining the trusted relationship between clients and sales.

As clients get more sophisticated using web-based products and services, it becomes more challenging for service providers to respond in innovative ways to their needs. How has SG approached this challenge and how is the new FX e-Commerce environment changing your relationship with clients?

For the last few years, our relationship with our clients has been moving towards providing them with more FX hedging solutions to meet their needs. As such, clients were looking for an easy tool to deal their plain-vanilla FX deals, the ones you have to do every day but take up time. Moreover, since the beginnings of our eFX history, the e-business team has been a part of the global FX team meaning that SG FX and money market sales teams brought and keep bringing us new requests from clients for on-line services. This led us to develop step-by-step our web-based services. The target is not necessarily to be innovative, but to offer an adapted solution to increasing demand from clients.

Competition and technological advances are leading to ever increasing eFX product development. What do you think are the key factors that clients need to consider when choosing an online dealing service provider?

Clients want security, price transparency, user-friendly service, native-language trading, speedy access to the market, immediate and multi-bank pricing, multi-products, multi-services such as pre-trading, trading and post trading. Clients also need to be sure that the platform is here to stay and will survive difficult market conditions. Centradia combines all of this in one website www.centradia.com

Client connectivity with both front and back office systems is seen as essential not just for the progress of eFX but also for leveraging the full efficiencies of STP. How is SG assisting clients to achieve the benefits of STP?

STP was one of the main topics of e-business talk last year, however, as mentioned, we are reactive to individual client needs and we prefer to personalise our services for each request. Our core clientele tends to go through a step-by-step process. They started last year to appreciate the full range of services offered by Centradia. The pre-trade functionality with the huge research documents database and the search engine also became very successful in the current market conditions. The unique pricing tool offers the possibility for all our clients to gain access to four liquidity prices simultaneously. Last but not least, the post-trade menu allows clients to download all the details of their deals on to their computer. After using the site for 6 to 12 months, clients want more and better straight-through-processing services, which means the site is constantly improving. Thanks to an excellent organisation between the IT teams of Centradia and SG, we are starting to answer each and every client need. Again, the client is driving our technology development.

As functionality becomes more of a commodity, it’s going to be harder to differentiate between platforms. Centradia has made the multi-products functionality the top priority in your offering, perhaps more so than some other web sites. Why is this and do you see it as a key selling point?

Currently, Centradia offers three core services: FX and money market transactions, which are automatically quoted and traded by the banks such as SG or on a Request-For-Quote basis, and primary fixed income. The first two segments being the most successful. Such multi-product functionality provides clients with a wider offer. We have seen some financial institutions that were active with us in money markets alone becoming more active counterparts on FX products overall after their subscription to Centradia. We realise the cross-selling benefits of this platform.

SG is a member of Centradia, which offers local access to the global treasury market. Some believe that the global trading platforms may be missing the nuances and opportunities of local markets. Do you agree?

I quite agree. However, one of the key differentiating factors of Centradia is its multi-lingual capabilities of which there are six so far: English, French, Italian, German, Spanish and Portuguese. Of course, everybody in the financial market can speak English, but the comfort is much greater for many of our clients to use a web site in their native language. Moreover, Centradia combines all the advantages of mono-bank platforms and multi-bank platforms. On the one hand, SG clients can access four liquidity prices at the same time on various products, including those where SG is not particularly aggressive, but could offer its clients an improved price from another bank. Clients also have access to the comprehensive research of all the partner banks, which is the main service clients want from multi-bank portals. On the other hand, in addition to the multi-lingual service, the client needs only one credit line with SG to deal with this liquidity pool which constitutes the main advantage of a mono-bank website with more liquidity.

Some banks and portals are currently targeting their online FX services at one specific client sector, for example, corporates or the institutional market. Does SG have a particular buy-side focus for Centradia?

At the time of the launch of Centradia, our focus was specifically aimed at the corporate market were the partnership banks had a strong presence. This client segment was in search of a multi-bank platform, in their domestic language, while maintaining a strong direct relationship with sales people. This segment remains core, but since mid 2002, we realised that financial institutions and investors were also using the service and pleased by its offer. For example, an asset manager can manage his fund portfolio simultaneously. Centradia has proven to be a tool that meets the need of all market segments – corporates, asset managers and financial institutions.

Looking to the future, what do you see as the major issues that still need to be tackled to improve the widespread adoption of eFX solutions?Over the last few years, we have been confronted with one major issue: client connectivity. The e-FX business will be a success story when the majority of clients see the full value of Internet in relation to their time organization. Too often, we hear clients telling us it is quicker to get a price over the phone than to connect their modem… Fortunately, this year, I think we’ll see modems flying out of windows to be replaced by more sophisticated equipment enabling faster connections. Subsequently, this will enable clients to take full advantage of an integrated STP from the pre-trade functionality to the post-trade one.