Integrating necessary data and solutions for corporate treasurers

Corporates have a variety of options to choose from when approaching data integration. Ensuring uniformity and accuracy across systems is essential to efficiency and business success, and an ideal system allows for internal processes to be streamlined. There are clear benefits to an integrated solution, whether it’s out of the box or in-house, designed for your specific organization.

However, every option brings its own complications and pitfalls to consider. It’s important to weigh all eventualities when deciding which is right for you.

Unexpected challenges

When deciding on and introducing a new data integration tool within a firm’s existing systems, challenges can arise. Companies are often taken with the idea of accomplishing everything in one platform. However, this focus on a single solution can result in the organization settling – either forgoing desired functionality that doesn’t exist or adopting manual processes that could potentially be automated.

Using one platform doesn’t always make things simpler. A company may have a single system, but they’re giving up the opportunity to be using the best solution across each function – an opportunity they could grasp with multiple options.

Ultimately, the initial desire to have an all-encompassing or bespoke solution, built and tailored to a company’s specific needs, can actually result in increased cost and headaches across the board.

A commonsense solution

It’s essential for a firm’s data to work seamlessly within third-party systems to maximize the efficiency of any processes such as FX, hedge accounting or transfer pricing. Integrating necessary data with a trusted provider not only provides depth of experience, but also flexibility to meet whatever market changes arise.

Recently, a large, international mining company and Bloomberg client, decided to build an in-house solution that would work with their existing treasury management system with the promise of being able to save costs by reducing reliance on third party vendors.

But as they soon learned, the process of on-boarding a service and the technical and IT challenges presented to integrate the platforms had the potential to erase those theoretical savings, or even risk additional cost if the new system couldn’t mesh as hoped. The time commitment for setup alone lasted the better part of a year.

However, by relying on their working relationship with the specialists’ team at Bloomberg, the client was still able to unlock the value of their existing technology working together with Bloomberg’s volatility data to feed their existing platform. Too much had been invested and they had passed the point of no return, so even though they proceeded with building the valuations calculator in house, Bloomberg knew the client’s business well enough to ease the transition and supply the proper data required to feed their new system processes.

In the long run, as this client learned, utilizing an existing platform that provides flexibility and easily integrates the data and solutions you need can be better, even if more expensive on paper.

Bloomberg workflow and application specialists’ teams have experience doing this and are used to working with clients to make sure they have the solutions right for them, whether that means Bloomberg or other vendors.

3 questions for integrating FX

As companies adapt electronic FX trading, testing a range of new technologies, and gradually adapting them to the new tools and components increasingly becomes part of their standard work practices. Since every organization has different processes, requirements, and technology architecture, there is no “one size fits all” automated trading solution. No matter how a team is automating today, it’s essential to shape a vision and goals for seamless, intuitive future automation by making best possible use of the tools available.

The first step in customizing an automation solution is to understand the necessary requirements, factoring in current process, which elements need to be automated, and pain points and how they could potentially be alleviated. When considering automation, it’s important to address the following questions:

What is the most important factor making the organization consider FX automation?

This answer varies from firm to firm as some are looking to scale their business model through technology, while others want to find consistency in Best Execution, reduce operational and compliance risk, or satisfy the precise timings required by their trading style.

How is the need to execute a trade triggered?

FX trade execution can originate in a variety of ways, each of which has implications for an automated process. For example, a trade can originate organically in conversation with a client, be initiated by models, either manually or autonomously, or automatically calculated by a process, such as end of day hedging.

How does the trade need to be managed?

In some scenarios it is sufficient to let automation get the best price from a list of dealers from the process that triggered the need to trade. In more advanced cases, the model that triggers the need to trade cannot be easily decoupled from the management of the trade. The trader should be aware of all the quotes from dealers and then decide to trade.

It is likely that the answers to the above questions will evolve with time. It is therefore important to use solutions that not only satisfy current needs, but ones that are flexible and can grow as business needs and technology evolve.