Colin Day Director of Product and Strategy, SunGard ePI
Colin Day Director of Product and Strategy, SunGard ePI

Exceptions processing in FX trading - automation is reducing costs

As financial institutions strive for STP it’s important to keep in mind that it cannot be achieved without straight-through exception processing (STEP). Colin Day investigates.

First Published: e-Forex Magazine 17 / Features / January, 2005

As financial institutions strive for STP in today’s environment of constricting settlement windows and increasing capital adequacy requirements, it is important to keep in mind that straight-through processing cannot be achieved without straight-through exception processing (STEP).SunGard ePI’s annual industry survey has revealed a reduction in the cost of exceptions year over year. In 2002, the survey revealed that exceptions were eating away 25% of trading profits. That number dropped by nearly 30% in 2003 to 18% of trading profits, and has continued its decline in 2004 to comprise 15% of trading profits. The good news is that exceptions costs are on a downward trend. But the fact that 23/4% of all FX & Payments transactions result in exceptions, the number quoted by survey respondents, and that those exceptions consume 15% of trading profits, makes a significant business case for automation.We can attribute the decline in exceptions costs to improved permeation of industry standards,...continued

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