Finland’s second largest commercial bank, Leonia Bank, has taken Bank One Corporation’s Global Trading Operations (GTO) to process FX transactions. The system will be rolled out in the first quarter of 2000.
Leonia, which recently announced a merger of equals with Finnish Insurers Sampo, says it is forming the first “full-service” financial group in Finland. The decision to outsource back office functions supports the bank’s overall corporate strategy, says an official.
“It is our strategy to achieve operational efficiencies and provide high quality support to our clients,” says Jussi Osola, executive vice president and head of treasury and trading at Leonia Bank. “During the last two years we have significantly streamlined our organisation and processes. A natural progression for us was to purchase processing services from an outside vendor, who could offer us the opportunity to significantly improve our straight-through processing ratio, and achieve economies of scale.”
GTO’s services will allow Leonia to migrate from a fixed pricing structure to variable costing, calculated on a per transaction basis. In addition, Leonia will realise greater efficiencies by eliminating the need to maintain resources for peak trading activity during periods when trading volume is low. Leonia anticipates a 60% increase in straight-through processing.