Société Générale (SG) executed its first FX trade over a mobile phone using Wireless Application Protocol (WAP) technology during the Forex 2000 conference in Paris last month. SG has been working with Cognotec on the development of a remote FX dealing service.
WAP is the emerging global standard for the delivery of wireless information services on digital mobile phones and other wireless devices.
The new facility allows individual banks to offer their clients real-time executable foreign exchange transactions via their mobile phones. To transact a deal over a mobile, the customer dials into the bank’s service, enters his ID and password, clicks if he wants to buy or sell, and selects the currency, amount, period (spot, forward or broken date) and requests a price. Within seconds, a ‘live’ price is returned and upon acceptance, a deal number comes back with a list of details, including the deal rate and value date. After the trade is executed, details can be automatically transmitted to any bank back office system, using the Ticket Output Feed (TOFF).
Cognotec has been developing the service over the last six months, and have been piloting the WAP service with SG who will continue live trials for several months, before it fully rolls out the service by the end of the year.
“We are particularly pleased to have been able to work with a bank of the standing of SG on this project given their world-wide presence in the FX market. “This already works better than we expected,” says Brian Maccaba, Cognotec’s chairman. “We are testing the technology with a small number of selected customers, and are now able to safely do live deals.”
Security over a mobile phone is admittedly not equivalent to what is currently available on Cognotec’s e-commerce platform, which has 128-bit encryption with full digital certification. But Maccaba says mobile technology is no less secure than dealing with clients over the telephone, and is only a short way away from replacing the PC.
“If a customer calls his bank dealer, how does the trader know it’s his customer on the other line? He recognises his voice – but what about when that trader is off the desk and another trader takes the call? This is actually better than dealing over the phone, because customers use an ID and password in order to deal. And because they can see exactly what they’re doing, errors are eliminated – and errors lead to costs,” adds Albert Maasland, global head of marketing for Cognotec.
“Online systems at banks have password control and scrambling – the same is available on GSM,” says Maccaba. “With WAP, you have access control, privacy of data and proof of security.”
The lack of global standardisation is one of the drawbacks of using WAP for trading globally, but Maccaba believes that within 12-18 months, technology will be so good on mobile phones, that customers will soon be able to trade out of their pocket wherever they are in the world.
“This extends the reach of Cognotec’s Internet-based dealing services by adding a new way to access them. It is no longer necessary for individuals to be at their desk to trade foreign exchange,” adds Paul Fox, chief technology officer at Cognotec.