Björn, in Euromoney's annual
ranking, Handelsbanken Capital Markets was the highest climber
among the world's largest foreign exchange trading banks. Is the
level of your investment in FX trading being matched by a similar
one in developing your e-commerce services?
e-Forex Interview : With Bjorn Lundvall, Vice President, Head of e-commerce markets at
Handelsbanken Capital Markets.
Bjorn LundvallVice President, Head of e-commerce markets at Handelsbanken Capital
Yes, the development of our e-commerce platform is one of the key
factors for us in order to be able to move our position forward in
the market. We are putting a lot of effort in development both of
our own platform, MarketOn-Line as well as the integration of
multi-bank systems. It is also important to remember that the
corporate customers are looking at your e-commerce offering as a
whole. This means that the FX-trading service is just one part of
what the customers require. Other electronic cash-management
services are at least as important. We are therefore putting a lot
of focus into developing other services within the cash-management
and payments area, as well as development of our settlement and
How pivotal a role is e-commerce now
playing in the acquisition and retention of your clients?
e-commerce is today an absolute must both in the acquisition of new
clients and in our effort to enhance services for our existing
customers. e-commerce has become a part of the basic services.
Do you still see some reluctance from
some clients in adopting electronic FX and if so, why is that and
what efforts are you making to overcome their concerns?
Yes, there is still some reluctance to adopt electronic trading
from some customers but as a percentage of our total customer base,
they are rapidly decreasing. It is absolutely necessary that you in
the role of a sales-person put yourself in the situation of the
customer and make a lot of effort explaining the benefits the
services will give the customer. It is also very important to point
out to the customer that the tools will give the sales-person more
time in his advisory role rather than the opposite. Also, customer
concerns about security issues must not be taken lightly.
Many banks are now reporting
significantly increased e-volumes. Are you experiencing this and if
so, are certain types of client fueling the demand?
Yes, we also see increasing e-volumes at Handelsbanken. All types
of clients contribute to the increase. The customers are growing in
numbers, and we also see that the users are becoming more mature
and show more confidence in e-trading in general. There are more
deals being done, but also the average volume is increasing for
Your own e-commerce portal, MarketOn-Line
is part of Handelsbanken's online corporate services and can be
used as an independent service. What sort of flexibility and
functionality does it offer clients?
MarketOn-Line provides the customer with a flexible tool for
FX-trading and deposits. It is designed to fit the needs of a wide
range of customers, from small to large clients. Apart from
real-time, automatic deal-execution it also offers streaming market
rates and a real-time interface to the customers TMS systems. We
have no minimum amount requirement in the system and it is also
fully flexible when it comes to broken dates and amounts which make
it easy for the customer to hedge their flows down to the last
cent. MarketOn-Line also contains a flexible limit-order system,
that gives the customers the possibility to manage both take-profit
and stop-loss orders online.
In what way has electronic trading
changed the role of your FX sales people?
Electronic trading is taking away the manual intervention in
plain-vanilla deal processing. This development has started to
transform the role of the sales person from deal executioner to
financial adviser. A deeper knowledge of the
clientâ€™s core business and of the structure of
their balance-sheet is required in order to be able to present
him/her with the proper business-proposals. Our customers require a
broader competence from our sales-people. Good knowledge of the
FX-market is simply not enough. They tend to see FX-trading as an
integrate part of their cash-management process. This means that
the FX-sales person now also will have to know something about
payment-solutions, cash-pooling, zero balancing etc. The
Sarbanes-Oxley Act and IAS has put operational risk and working
capital management very much in focus with our customers.
You have a very strong research offering.
How important is providing good advisory and research services
going to be, as a means of adding value to e-trading
The quality of our research gives us a competitive advantage. It is
very hard to differentiate from our competitors with the
functionality in the system. Any new features are easily copied.
And I don't think it is a coincidence that the look and feel of
many e-FX systems is basically the same. The customers prefer a
certain layout. With quality research we can build confidence in
What areas are you currently focusing on
to enhance your existing FX e-commerce offerings?
Developing the functions in MarketOn-Line as well as always seeking
to meet the customers need to trade, regardless of platform. One
area that I want to single out is to improve our limit-order
functionalities. Bringing order-management out to our customers is
one of our key developments right now.
You've introduced an additional Internet
service called FX Transaction Confirmation. Who is this product
aimed at and what prompted its development?
This service is designed for corporate customers who prefer to
settle their deals directly with us, rather than using a settlement
system like FX-Match. This system replaces the confirmations that
we previously sent out via mail. The customer has the possibility
to view their confirmation over the Internet and also to sign the
confirmations electronically. The service also contains a
search-engine where the customer can look at their outstanding
deals with the bank, for instance the maturity structure of their
Handelsbanken is a liquidity provider to
several multi-bank portals who continue to sign up customers in
increasing numbers. Looking ahead, do you expect to see
consolidation amongst these and other eFX providers and how would
that change your own eFX strategy?
We are already trying to limit our engagement as a liquidity
provider to as few portals as possible. However, we have to be
represented where our customers prefers to meet us. I definitely
think that we will see a consolidation among the multi-bank
portals. The increased usage of e-FX systems has made the market
more transparent and the difference in pricing between the
liquidity providers is almost gone. This means that the FX-portals
will have to provide the buy-side with other services such as
settlement services and straight-through processing. I still think
that our single-bank platform will be an attractive choice for our
customers. Not only because we can provide the customers with
settlement services and systems integration, but also because we
can provide a broader cash-management service over the Internet.
And by the end of the day, when the electronic offerings are
becoming more alike, relationship will matter.
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