Standards and their role in eFX

The existence of a standard description of data and workflow is simply not enough to make it successful argues Mathew Kuppe. The broad adoption of a standard is a measure of its success. He examines a variety of common standard protocols

The fragmentation of upstream IT architectures evidenced by the large variety of commercial solutions and proprietary developments, has repeatedly been blamed for preventing the anticipated fast adoption of eFX. This is no surprise, particularly since STP – the primary catalyst for the substantial cost and risk reductions of the new technology – is dependent on the capability of modular IT infrastructure components to exchange data. Since trading FX and a growing range of other OTC instruments online is obviously here to stay, future system integration and interoperability for full STP would be greatly facilitated by an industry-wide standard data format. But how far are we from this?Development of STPSTP is not new and has been a driver of process reorganisation in the financial industry for the past two decades. At first, it only revolved around the internal processes of the banks. With a number of point-to-point integrations, banks managed to integrate their credit...continued