Jill Collins Head of Product Design,  Sierra, Capital Markets & Investment Banking, SunGard.
Jill Collins Head of Product Design, Sierra, Capital Markets & Investment Banking, SunGard.

Increasing volumes in the back-office - the importance of Exception Management

As the FX market continues to grow in volume and in participants, it is becoming increasingly competitive on the trading side and much harder to derive the same level of profit as in the past. As a result, the financial world is facing pressure to decrease the cost of processing transactions. There has never been a more appropriate time to highlight the importance in ever higher volume back-offices of the need to streamline operations and maintain an efficient Exceptions Management process.

First Published: e-Forex Magazine 39 / Viewpoint / April, 2010

Failure to deal with an Exception can create huge costs. For example, incorrect settlement instructions can result in payments being sent to the wrong account or perhaps not being able to be sent at all. Not only does this kind of Exception have a direct financial impact, it also creates a reputational risk and may tarnish the relationship between a trading firm and its counterparty/customer.  The time that it takes for the back office to deal with the aftermath of such situations has a big upward impact on average transaction processing costs so it is important that Exceptions are not allowed to become systemic.Increasing trade volumes The advent of FX algorithms and electronic trading platforms have seen the volume of trades increase enormously although firms are still typically dealing with not many more counterparties/customers than before, making the reconciliations process all the more important. Counterparty/customer risk has also become a far more important area due to the number of large-scale...continued

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