RE-ENGINEERING TRADING AND TREASURY OPERATIONS IN INTERNATIONAL FINANCIAL SERVICES

Abstract

Maximizing business value of investments in hardware, software and telecommunications technologies that occur in the trading and treasury operations of an international bank requires senior management to evaluate the extent to which the technology infrastructure enables the bank to perform a number of key functions. These include: formulating effective trading strategies, pricing financial instruments accurately and rapidly, being able to respond to changing market conditions, processing transactions cost-effectively, resolving inquiries quickly, and moving to support emerging corporate treasury products. After a decade of rapid growth in investment levels, senior managers now emphasize refining, rationalizing and integrating trading and treasury technology architectures to support improved global financial risk management, better capital utilization, and higher transaction volumes. This chapter examines how senior managers can accomplish these goals by re-engineering pre-trade, trade execution and post-trade business processes. It presents a framework that utilizes basic concepts from management science and microeconomics to illustrate the variety of impacts that re-engineering can have on improving firm revenues and controlling or reducing costs. It also presents a series of managerial recommendations based on the framework.