Ute Herzog Senior Consultant with BearingPoint
Ute Herzog Senior Consultant with BearingPoint

Money and Forex Trading

The results of a recent study of German corporate attitudes towards multi-bank platforms are summarised by Ute Hertzog

First Published: e-Forex Magazine 15 / e-FX Industry Report / July, 2004

A previous study

The starting point of the study at the end of 2001, was the question regarding the use of multi-bank platforms for forex trading at German companies. Treasurers from 33 corporates were interviewed regarding their approach to the use of the Internet and their experiences with multi-bank marketplaces. In this context the interviewees mentioned the marketplace operators Atriax, Currenex, 360T and FXall. At the time, only 12% of the respondents traded via the Internet. One third planned to start online trading in 2002 and 76% of all treasurers indicated that they wanted to trade via a multi-bank platform in the future.

The 2003 study

As a continuation of this study we contacted all participants again in August 2003 regarding the current situation in their companies. The result shows that in the meantime only 27% of the companies questioned trade via multi-bank platforms.
Money and Forex Trading
Positive aspects

Companies already trading via the Internet emphasize the following advantages:

• Many quotes at a glance - Faster decisions - Improved comparability of bank partners among themselves

• Integration and improvement of trading processes between subsidiaries and the treasury center via internal use of trading platform

• Straight through processing realized through connection to the treasury management system
-Acceleration of processing
-Improvement of risk management

• Multi-bank platforms provide extensive reporting functionalities e.g.
-Documentation of quotes
-Evaluation via banks

Since the spring of 2002 the multi-bank platform Atriax is no longer active, so that the multi-bank trading of 27% of those corporates questioned is distributed as following:
Money and Forex Trading
Reasons delaying the use of multi-bank platforms

The statements are partially based on different time horizons – some companies are currently in the process of selecting a multi-bank platform, others have put this topic aside for various reasons:

• Other projects have priority
-Switch to a new treasury system
-Integration work
-Restructuring

• Too few own transactions

• Not all desired bank partners are available on one platform

• Use of a single-bank connection is sufficient

Conclusion

The acceptance of Internet trading has increased overall. Fears that the so-called human factor will lose ground were not confirmed by most of the treasurers interviewed. Rather, the companies mentioned the goal of the greatest possible realization of a straight through processing in trading – internally with subsidiaries/branches as well as externally with banks. This plays an important role in the decision to use a multi-bank platform.