Svante Hedin, global head of electronic markets at SEB Merchant Bank, explains to Galen Stops, deputy editor of Profit & Loss, how technology is changing the role of the regional banks.
Hedin says that the evolution of the regional or super-regional banks is being driven by a number of factors, one of which is technology.
“It’s an enabler for some of the banks that at some point were dominant players in their particular currencies and then as the years have gone past they have perhaps under-invested and not quite kept up with the overall progress of technology and effectively get swallowed up by some of the larger guys,” he says.
But he adds that as e-commerce trading, pricing and distribution technology becomes increasing commoditised that these regional players will be able to regain their foothold in their local markets.
“They still have relationships with end clients, they still have the flow or flow potential, and with the types of solutions coming into the market it will enable a lot of these guys to become more relevant as principal risk takers running books in these currencies. And this is a trend that I think we will see in all parts of the world,” comments Hedin.
He also sees some other broad areas where technology still has the ability to significantly improve banks’ FX offerings. For example, he claims that many proprietary bank portals are too focused on selling the products and services that the bank offers, rather than focusing on what the clients actually need.
Hedin says that while this is true in the institutional space, the problem is even more acute for corporates who are looking for bank offerings that fully integrate into their workflow and provide a seamless and automated service.
“There’s loads to do there,” he concludes.
In addition, Hedin highlights post-trade systems and workflows as another area where improved bank technology could make a real difference to firms trading FX.
Watch the full video here: