Heather McLean
Heather McLean

Strategic Insight: Outsourcing & Analytics for more efficient FX brokerage operations

Heather McLean explores why FX brokers should consider outsourcing many of their back office functions and in what ways outsourced analytical procedures can be applied to a brokers risk, compliance and trading activities to facilitate more efficient business operations.

First Published: e-Forex Magazine 42 / Retail e-FX Provider / January, 2011

In today’s trading environment, broker dealers of all kinds have equipped their front offices with advanced technology to facilitate more efficient trade execution. However, few firms have upgraded their middle and back office technology, says Sam Mele, founder and managing director at Firm58.  He claims many brokers are still relying on spreadsheets and legacy systems that cannot easily scale, are prone to error, and ultimately consume the gains acquired from front office advances. “Outsourcing middle and back office functions provides brokers with the ability to quickly and cost effectively protect revenues in addition to providing greater business intelligence.  “Electronic trading today is far more complex since the introduction of electronic communication networks (ECNs), with trades often broken up into many parts across multiple venues,” continues Mele. “Manually calculating rates, rebates, and other fees is time consuming and cumbersome. If done in a...continued

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