Bank One has launched The One Net FX Trader, its Internet-based FX platform. FX Trader offers clients real-time execution and confirmations, a library of FX research and analytical tools, as well as a tool for revaluation of outstanding FX contracts at current market rates.
Peter Mesrobian, global head of FX for Bank One, says the bank has been using the platform internally for the past year, but began piloting it with external clients in April. FX Trader will officially launch on 16 October. The platform was developed internally, with the execution function based on software provided by Reuters’ Tibco Finance subsidiary.
Mesrobian says that over the past year, more than $2 billion worth of transactions have gone through FX Trader each month.
In terms of marketing, Mesrobian says the bank has spent the past few years shifting its resources away from trading and into areas such as sales and product development.
The execution service covers spot and forwards in all the tradable currencies. The execution function operates on a price request basis. Smaller trades are priced automatically off a rate generator, while larger transactions are routed to dealers for pricing.
The research function includes access to the bank’s economic and market research, including a calendar of daily economic releases, current market commentary and technical analysis. Other tools include a list of country holidays, a time zone clock and an expense calculator.
Mesrobian says that the revaluation tool is one of the highlights of the platform. Within the revaluation module, clients can perform revaluations of all outstanding transactions with any Bank One entity world-wide. In addition, clients can download Bank One’s closing rates to perform revaluations on contracts they may have with other counterparties.
The platform also has a link to The One Net Cross Border Payments, which allows clients to initiate wires ad drafts.
“We have built FX Trader such that any transaction, whether executed over the Internet or through traditional means, is available to be revalued on the reval tool,” he says, adding that it has been formatted to accommodate the new FAS 133 accounting rules for derivatives, which will be introduced from January.
“Online execution is going to be commoditised very quickly. Where we are trying to create value is in helping our clients streamline their own internal processes with services such as the revaluation and confirmation tools,” says Mesrobian. “Hopefully the consequence of creating value successfully will be increased dealing volume with Bank One.
With the launch of FX Trader, Bank One is releasing a new, dedicated Web site (www.bankone.com/fxtrader) that will provide online demonstrations of the service. A dedicated support team will be set up to operate 24-hours/day from launch.
The next release of FX Trader will include a confirmation tool that provides clients with a legally binding contract online for non-standard settlement instructions. Further enhancements will be driven by customer feedback.
“FX Trader meets the growing demand from customers to streamline the execution and processing of their FX requirements,” adds Mesrobian. “We have harnessed a great deal of internal transaction information previously inaccessible to our customers and packaged it to meet our customers’ risk management needs.”
New Legal Entity
Bank One is currently in the process of converting all its FX business to a single legal entity. Mesrobian says both interbank and the bank’s clients business will ultimately be transacted in the name of the Bank One NA legal entity.
Bank One’s activities in its Chicago, Detroit, Phoenix and Dallas offices, as well as the trading activities of subsidiary American National Bank, should be consolidated by year-end, followed by Toronto, Adelaide and London in Q1 2001. The remaining branches (Mexico, Tokyo, Seoul and Singapore) will shift over the course of next year, as regulatory issues are addressed.
Mesrobian says the legal entity consolidation is being undertaken to achieve cost efficiencies, but more importantly, to allow the bank to develop and deliver products more quickly. It will also allow the bank to locate traders anywhere in the world, who can trade on behalf of Bank One Chicago NA. He adds that the bank will set up additional sales offices following the successful opening of its Phoenix office this year. Internal use of the FX Trader platform has facilitated the legal entity consolidation. “Technology means we can put people anywhere in the world that we have a critical mass of customers,” he adds.