Over the past three years within all the tiers of the sell side community, there have been varying levels of investment in FX electronic trading, predominantly surrounding fundamental execution and pricing capabilities. These have continued to evolve and have been through cyclical investment programmes to leap-frog or keep pace with their competitors - only to be on par or ahead of the game for a brief period. These are driven by continuing client demands to provide additional services centred around the capabilities such as streaming executable rates (SER), direct connectivity through API integration, on-line FX Options, Algorithmic Trading, Outsourcing as well as eFX Order Management.

Priorities have been driven by client requirements and the competition, as well as the cost to develop and deploy functionality. The ability to maintain or increase flow has focused banks on SER and APIs. FX Options, Order management and Outsourcing are being heavily scrutinised for their return on investment and are often only marketed and utilised on a sporadic basis.

This business case for eFX Order management can be difficult to quantify. It is often seen as an ancillary service and not necessarily as an area where increased liquidity can be achieved. Admittedly, there are quantifiable savings that can be achieved by reducing losses caused by manual errors when re-keying orders taken by phone.

Historically Order Management solutions have focused on the trading desks need to manage orders on a global basis.

However these errors tend to be intermittent and may not necessarily be completely solved by an electronic offering. The case for additional electronic functionality is further complicated by the Sales view that the client needs advice and values the relationship, and with the Trading desks reluctance to add more flow to their auto execution flow that may already be complex to manage.

These are, however, not insurmountable issues. eFX Order management should be viewed as a natural extension of any existing electronic proprietary offering as well as a mechanism to provide a more efficient and effective trading process through auto-fills as well as greater efficiencies of full STP. Despite this, the take-up has been slow across the market.

Historically Order Management solutions have focused on the trading desks need to manage orders on a global basis. This entails accepting and capturing the order, monitoring its status and proximity to the market, filling orders and at regional close of business transferring orders over to the next region. This simple process suggests Order Management should have been one of the simpler capabilities to develop and implement; however, in reality it raise many business challenges and complex technology issues impacting the Client, Sales and Trading functions.

Key to determining where synergies and process improvements can be made is a detailed understanding of existing workflows. In the diagram below we have tried to show an outline of a typical manual order management process.