The two parties have jointly developed a new API-enabled foreign-exchange (FX) solution to improve confirmation times for restricted emerging-market currency trades.
The digital solution uses existing bots between the two banks for instantaneous communication, which help eliminate market frictions and bring trade remediation closer to the time of execution, while reducing price slippage for clients, as well as reducing operational burden and manual intervention, the partners explained in a press release.
«This is a milestone in solving a long-standing challenge in emerging markets, with broad application for the industry and our clients,» David Lynne, Deutsche Bank's APAC head of fixed income and currencies, and corporate bank, said about the collaboration.
The solution is currently being applied to custody FX transactions in Korean won, with the Indonesian rupiah and Indian rupee to follow. It will then be progressively rolled out to a broad range of restricted currencies, the announcement said.
Digital Innovation
Digital innovation in FX markets is accelerating in emerging markets, particularly in Asia, because securities denominated in those currencies are increasingly being included, or more heavily weighted, in emerging-market indices and exchange-traded funds (ETFs), the banks said about the genesis of the project.
«We are not only seizing an opportunity to alter back-office processing in restricted markets, but more importantly, we are providing front-office users with faster execution and enhanced workflow transparency,» Jason Vitale, global head of FX at BNY Mellon, said
