The provision of straight-through processing is the chief priority of treasury professionals for improving the uptake of Internet-based trading, according to a new report by Reuters.
The Reuters survey questioned treasury professionals in the foreign exchange and money markets from over 45 UK and global financial institutions to ascertain the impact of electronic and Internet-based trading on the treasury sector.
Over 70 per cent of treasury professionals cite the provision of STP as a major priority for increasing adoption rates for Web-based trading. Respondents predict a revolution in the role of the trader due to increased electronic automation of trades over the next three years.
In addition to STP being a key driver, over a third envisage traders having more direct involvement in customer relationship management. This change of focus corresponds with concerns that customer relationships will suffer as a result of increased electronic trading automation, says the report. Thirty four per cent of respondents state loss of direct customer relationships as their biggest reservation for the sell side.
As electronic trading frees up time on the sell side, one in three predict the merging of front and middle office roles, as traders take on more responsibility for risk management.
According to the survey, corporate peer-to-peer trading is a reality in the mid to long term. Although the majority predict that it will not eventuate in the next two to three years, over 85 per cent believe it will be a certainty in the next five to 10 years.
The research also shows many organisations still face a number of immediate barriers to internal trade automation. More than two in three are hindered by either cost or time while one in five indicate that lack of in-house expertise is the main barrier.
Julie Holland, managing director, Reuters Treasury Services, comments: “This survey highlights the importance of STP for the uptake of both portals and proprietary internet-based trading. It is interesting that loss of direct customer relationships is still a reservation for the sell-side. Organisations need to seize the opportunity that automation brings to focus on more complex trades and deeper customer relationships.”