The e-Forex Interview

e-Forex talks with Stina Ekberg, Head of e-FX Trading and Distribution at SEB Merchant Bank.

First Published: e-Forex Magazine 46 / e-Forex Interview / January, 2012

Stina, how long have you been working at SEB and what are your day to day responsibilities within the bank? 

I’ve been with SEB since 2001, where I started on the sales desk in London covering Financial Institutions in the UK. I am currently heading the global e-FX Trading and Distribution team which is covering e-sales and trading for the electronic flows as well as the product development for FX. My previous position was Head of Algo Trading.

Why do you like your job? 

It’s a privilege to have been able to take part in the transformation that FX has undergone during the last 10 years. The increased competition has forced us to constantly develop and re-think our business which is a challenge I just love! The atmosphere in our team is characterized by creativity and leadership which is a key for success. The fact that my team covers all aspects of e-FX from client relationships, cross sales, trading, prime brokerage, product development and support gives us the mandate to take fast decision and drive the business forward in a much faster pace which really is inspiring for me. 

Do you agree with some commentators that the role of e-FX has now moved beyond the basic transactional process and how is your team working to provide value added services which can help to differentiate SEB from many other leading FX trading platform providers? 

It is still a lot about transactions, keeping time and operational errors to a minimum, but over the years our client’s demands have changed towards more customised solutions. Whether it is combining execution with hedging programmes or with cash flow forecasting, we have adapted our platform to be flexible for different needs working closely with Advisory and Research. To meet our client’s requirements we are constantly expanding e-FX into other SEB venues where our clients are active.   

“Whether it is combining
execution with hedging programmes or with cash flow forecasting, we have adapted our platform to be flexible for 
different needs working close
with Advisory and Research.”
“Whether it is combining execution with hedging programmes or with cash flow forecasting, we have adapted our platform to be flexible for different needs working close with Advisory and Research.”

SEB has always been highly regarded for its top class FX Research. In what ways has the bank been enhancing its FX advisory and trade research products and utilising electronic channels to improve the way these services are delivered to clients? 

Our experience is that clients appreciate selectiveness. So nowadays you can of course customise your Trading Station interface when it comes to research, expanding your start page to move into different research areas. We complement the on-line delivery of research with a research distribution engine that sends only the specific information that the client has expressed an interest in receiving and in the format and frequency of their choice. Listening to and delivering what our clients want is the key to staying relevant.

As FX trading volumes continue to increase and new types of clients are entering the market, what steps has SEB been taking to broaden its suite of FX  e-commerce services to cater for the demands of a wider and more diverse customer base? 

SEB continuously develops its business to provide targeted FX services to clients in the Nordic region as in the global markets where our core clients are growing. By listening to our clients and meeting their requirements, our classic FX portal - Trading Station - has for several years also been accessible in our traditional Cash Management and Custody portals. Together they hold a dominant position in Nordic markets. The investments we continuously make in Algorithmic trading, FX Prime Brokerage and low latency trading environments are other examples of how we are broadening our offering to serve the global FX community. Our position as the leading e-bank in the Nordic region (Prospera) as well as no 1 global bank for Scandinavian currencies (FX Week) suggests that we are finding the right balance between innovation and stability.

We have recently been reporting on a surge in new FX algorithms being launched by leading FX banks who are aiming to give some of their clients a competitive edge. In what ways has SEB been working to integrate strategy, research and quant toolsets to develop algorithmic FX trading solutions and more advanced trade execution applications?  

Internally we are risk managing more and more of our volumes electronically, thus using all information to feed our algorithmic trading suite. Although this approach applies to most major markets, when it comes to Scandies the model to manage risk is quite different to more liquid currencies. Algorithmic execution products by nature work better in currencies with deeper liquidity so we have developed various hedging programmes according to the characteristics of each underlying market. 

Given the changing regulatory environment in FX, many banks have been developing new post trade processing. reporting and settlement solutions. What work has SEB been doing to re-engineer your back-office operations and help clients to address any future changes to their FX workflows that may arise? 

SEB actively participates where appropriate in regulatory dialogue and monitors the impact changes may have on our clients and how we serve them moving forward. SEB is already an FCM on many Exchanges and, as such are well positioned to provide whatever services our clients may require under an OTC Mandatory Clearing environment. 

How important is FX Prime Brokerage for SEB and in what ways have you been ramping up your FXPB services to offer improved automation and better integration with your e-FX platforms? 

Over the last years we have been investing in a fully automated Prime Brokerage (PB) platform which is integrated in our e-FX offering, leveraging technologies both ways. We find that we through our PB offering we have reduced the cost for transactions in many areas which down the line is beneficial for our clients. We sell PB on a global basis and take on high frequency trading 24 hours a day. The experience in running a collateralised FX business plus existing work flows will help us going forward with OTC Clearing. 

“…when it comes to Scandies the model to manage risk is quite different to that of more liquid currencies. Algorithmic execution products by nature work better in currencies with deeper liquidity so we have developed various hedging programmes according to the characteristics of each underlying market.”
“…when it comes to Scandies the model to manage risk is quite different to that of more liquid currencies. Algorithmic execution products by nature work better in currencies with deeper liquidity so we have developed various hedging programmes according to the characteristics of each underlying market.”

Scandinavian companies have always pioneered the use of mobile technologies. Do you expect to see the FX market make significantly more use of new digital media channels, including mobile and smart phone devices over the next few years and can we expect to see SEB playing a leading role and innovating in this field? 

In some of our client segments I believe that trend will become more significant. Amongst our core clients we currently use mobile technology as a complement and I’m convinced their trading pattern will change moving forward. SEB is already a part of the global bank community that is both driving and adapting to change. 

Despite heavy investment in their trading technology infrastructures and e-commerce services, most FX sell-side firms continue to stress the importance of traditional client relationships. What factors might place pressure on electronic FX trading platforms to become even more client focused and less product focused in the future? 

This is a topic that is always high up on our agenda internally. Long-term relationships are key for us which means that no matter how the clients access SEB we have a close relationship.  

To ensure our clients have the best possible service from us we cooperate closely among all our global sites. We are lucky enough to have a large and diversified sales force (100 FX sales staff in 15 offices around the world) and we find this ratio enables us to maintain excellent client relationships and focus when clients require a more bespoke execution capability.  

We recently opened up a new office in Hong Kong, increasing our current FX presence in the Asia region even further, complimenting our Beijing, Shanghai & Singapore centres and strengthening our footprint in Asia. As the market has changed with most of the volumes being executed electronically staying close in the relationship with clients has never been more important. 

The e-Forex Interview

Do you think clients should consider treating their investment in e-FX as a strategic asset and not just as an added cost and if so, what reasons would you give for making that case? 

e-FX truly makes an organisation’s transactions more transparent. By employing a well defined cash-flow structure or portfolio management structure, inefficiencies, weak spots or unhedged exposures can easily be identified and managed. To invest in electronic systems, all the way from back office to front office you become less dependent on specific persons and of course minimise time and operational risk involved in risk managing your FX exposure. e-FX is most definitely a strategic asset, both for buys-side and sell side firms, and when such an investment is well executed, it can transform a business. 

What feedback have your clients been giving you on where they would like the resources of SEB to be focused on future e-FX development in the near to medium term? 

For lower tier segments feedback is generally tighter relations into the middle office area, to assist with market evaluation and reporting. Other areas we will continue investing in is our Prime Brokerage offering, advanced order functionality as well as enhanced access to emerging markets.   

Looking ahead, how important do you think e-FX will be in helping SEB to grow its FX business and in what ways might the development and adaptation of your pricing and execution models help the bank to meet the rising expectations of your existing clients and also attract new ones?  

e-FX will continue to expand into new areas to meet client demand. The way the FX market has transformed has naturally changed the way we price and risk manage our liquidity. In our Scandinavian niche we are now combining the best of traditional execution strategies with new technology to ensure best pricing and consistency to our clients.  In the long term, SEB is focussed on leading our core markets and expanding in our growth regions by investing to out-serve our clients and consistently exceed their expectations; for FX Products in the Nordics and Nordic FX Products in the world, we aim to be the obvious choice. 

The e-Forex Interview