CASE STUDY
Foreign Exchange Operations
Global Treasury Support Services - GTSS®
State Street wanted to make their foreign exchange transaction confirmations available online to their customers. The foreign exchange transaction confirmations were done over the phone and paper copies were mailed to clients. Since the number of transactions done by clients in institutional settings were very large, this places a tremendous burden on the back office operations. Investigations of transactions were another area where a lot of manual intervention was required and lot of man hours were spent in ensuring that settlement was done effectively so that related transactions do not fail for clients.
We examined the entire back office process and the systems in use by the operations department to track and settle these transactions. The GTSS system was designed as a simple web based information reporting application. Keeping that in mind, allowed the design of the system to be simplified. The front end web based system was designed and built as a completely independent system was much easier that than trying to web enable some of the bank’s operational systems.
The front end system was the client’s view of GTSS and it pulled in information from different bank systems. This prevented the need for the customers to understand any of the internal systems in the bank for the processing these transactions. Being a separate system, allowed this system to be designed and built very quickly and it could be tested without impacting any of the operational systems in the bank which required much higher level of security and testing.
The front end system was fed by information extracts from multiple operational systems on the back end. Instead of building live interfaces to these operational systems, the extracts delinked the front end system and insulated the back end systems from external connectivity. This simplified the design and development of the interfaces reducing costs and time to market significantly. These back end linkages could be streamlined into live links to the operational systems later once the product had gained sufficient market support and bank could decide if they want to invest in that further.
The system was a huge success because the clients could now achieve straight through processing beginning with the inception of the transaction to trading it via FX Connect and then matching them with electronic confirmations via GTSS. This significantly reduced the number of man hours spent at the bank’s clients supporting the volume of transactions. This allowed the bank customers to support higher transaction volumes without increase in operations staff adding value to their bottom line.
Once the product was successful, the bank invested further in developing live links to the operational systems to offer better timeliness of information reporting of the transaction cycle completion. Another feature was added into the system to actually affirm confirmations received by the clients. This made the operational process more robust and also allowed the bank to comply with certain regulations.
