Warburg Dillon Read (WDR) has named Fabian Shey, a managing director based in London, as head of global e-commerce for the Treasury Products division. The first order of business for the dedicated e-commerce team is to examine new business processes to optimise ways of operating through this channel.
There are three core efforts within the e-commerce area, says Shey. “The first is the marketing effort of a value proposition to prospective intermediaries for partnerships; the second is our technology programme, which combines our internal efforts with outside vendor services; and the third element involves the production of high quality content over electronic channels, which is a key piece of the value we provide; we are able to process huge amounts of raw flow information into pre- and post-trade content for our clients and partners.”
For clients of WDR, the Treasury Products client access area within the www.wdr.com site offers productivity tools and content across the full breadth of WDR’s Treasury Products range, including money markets instruments, FX spot and forwards, swaps and options. It will have sophisticated analytical tools, calculators, research and strategic views, as well as a product education section that carries animated descriptions of instruments. A Web-based version of WDR’s FX Spectra, which was initially released on CD-Rom as a tool to create a risk profile for a variety of structured products, will also be available online.
Top-tier clients have already gained access to a unique chat service based on WDR’s Interchange Chat product. This “feature rich” product, developed by WDR, operates over the Internet and allows users to post documents and “URLs” as part of an information exchange between the bank and its clients and branches. “Interchange users are able to subscribe to multiple channels at the same time – so they switch between a channel on FX flows, Quantitative Advisory Services, or other topics – all on the same window. They can also have private, individual chats with our research staff or product specialists,” says Shey.
This service presently has about 75 external client sites online, each with multiple seats. The chat service is used for communication as well as for dealing. According to Simon Jagot, WDR’s managing director and global co-head of Treasury Products, nearly 100% of the clients that have the service installed, are already using it for dealing.
Customer take-up has been broad-based, says Jagot. “Corporates, leveraged funds and institutional investors, as well as our partnership banks, have all taken to the service. The more active players are getting the most value out of it, because they’re the ones who are in constant contact,” he adds.
Jagot says that despite the perception that clients are reluctant to trade over the Internet, WDR is executing deals with clients covering a wide range of instruments and deal sizes. Thousands of deals are executed daily within the branch network on a broadcasted basis. Broadcasted, dealable rates will be offered on other platforms in the near future.
The Java-based chat service, which now operates 24-hours a day, has been available in various forms internally since 1994, with a version of the online chat service first released a year ago. For WDR clients, the service has been successful at adding value to several elements of the trade process, from pre-trade idea generation, to trade execution, to post-trade trade management and confirmations, says Shey. On this basis, WDR plans to make it one of the service offerings to intermediaries via its tailored FX partnership programme.
Few banks can offer real end-to-end FX services on the back of scalable technology, notes Shey. “To be able to consistently broadcast a high number of dealable prices and process a high quantity of tickets is not easy, because of process limitations and technology limitations,” he says. “Eventually, only a few banks will be able to operate in the scale necessary to be profitable, banks must have the back-end business processes optimised to be able to broadcast dealable prices across the spectrum of treasury products in scale. The key to success in this business will base itself on partnerships and alliances between banks, where each partner brings her own core competency to the table.”
Indeed, the partnership initiative is taking an increasingly important role at WDR. In this initiative, the bank seeks to make accessible to its partners, mainly small-to-medium sized banks, a series of tailored services.
WDR first embarked upon the idea of partnerships about 18 months ago. “A small bank brings to the table its relationships with a particular client base, while we are the large scale producers. So through a partnership arrangement, we can provide the smaller bank with pre-trade services, wholesale prices, risk warehousing and post-trade value added services, while in return, we have access to a deal flow we wouldn’t normally service,” says Shey.
“The combination of these relationships and the Internet-based products are an important way of allowing banks to efficiently focus on core competencies across the whole organisation,” adds Jagot.
WDR has about a half-dozen of these partnerships and is in discussions with many more. As these types of partnerships increase, Jagot foresees the tier below the major market makers growing, as more and more banks will be able to focus on their competitive advantages.
As a part of its partnership programme, the bank is also in the process of rolling out a high-end suite of pre-trade, trade and post-trade tools, including a range of options education and analytic services, as well as options pricing and dealing capabilities for vanilla and exotic FX options.
Moving forward, it is inevitable that the roles of professionals will change. “E-commerce changes the sales dealer’s day to day job as price discovery and price broadcast become ubiquitous. So the sales dealer becomes a more highly skilled specialist, who can focus on adding value to the client with tailored solutions,” adds Jagot.