Case Study — An Interview with Richard de Roos, Standard Bank
Reprinted from FX Week, May 13 2013 v.24 n.19
Case Study — Interview with Richard de Roos, Standard Bank (PDF)
Richard de Roos, head of FX at Standard Bank, talks to Miriam Siers about the South African bank’s new single-dealer platform and the challenges of predicting currency trends in sub-Saharan Africa.
It has been a busy year for Standard Bank in the electronic foreign exchange space. The South African bank relaunched its single-dealer platform (SDP) earlier this year, using technology provided by Caplin Systems, to cover FX and precious metals across spot, forwards, swaps and orders (https://www.fxweek.com/2238993). And that initiative came just over a year after the bank signed with TraderTools to install its liquidity management platform for FX liquidity aggregation.
Richard de Roos is head of foreign exchange at Standard Bank in Johannesburg. He believes the bank’s base in South Africa gives it a unique footprint in the African emerging markets, enabling it to offer interesting and diverse liquidity through its platform. “We have a franchise in Africa that is always etched in a different way,” he says.
FX Week: How is the foreign exchange team structured at Standard Bank?
Richard de Roos (RdR): Our business has five pillars. The first pillar is the trading of spot and forwards. I’ve got a team of people on the trading side focusing on the South African rand, and the G-10 spot and forward business runs globally. The second pillar is sales, which is split into various segments including corporates, business banking, banks and buy-side clients. That is overlaid with a team of coverage FX specialists who focus on working FX from origination opportunities. We’ve got a pillar focused mainly on electronic commerce and FX participation on the bank’s SDP, as well as ensuring we are able to distribute FX on the most appropriate multi-dealer platforms for clients. Another pillar is currency options, which really focuses on the trading of the options book as well as the structuring of non-spot and forwards solutions for clients. The last pillar is operational.
FX Week: How is your new platform faring, five months after launch?
RdR: The new version of our SDP enables us to add best-of-breed front-end technology from Caplin, as well as giving us the ability to add on a basket of asset classes, coupled with research. It is pulling all the bits and pieces of what used to be our SDP into a more multi-asset-class platform. The launch has generated quite a lot of excitement around the market.
FX Week: Your bank is one of many focusing on developing or revamping its SDP at the moment. How is yours any different?
RdR: It is a given that you need to deliver best functionality and lowest latency. People often ask what our liquidity differentiator is. That is where Standard Bank has a unique footprint – we deliver a different form of liquidity out of the emerging markets. And we couple that with an ability to deliver other relative local market currencies in their own time zones.
FX Week: Do you have any plans for further development of the platform?
RdR: We are doing a lot of work in our franchise business around downstream payments of FX deals and we are doing a lot of work in our retail business. The way the world is going now, banks are typically looking for FX opportunities at every touch point they have within the bank. We are starting to skim every opportunity or device a client touches within the group that has the ability to do FX, whether that is an automatic teller machine for the foreign traveller, a retail client banking on the internet, or a large buy-side hedge fund looking to trade on 360T.
FX Week: How will Standard Bank tackle new regulations that mandate certain over-the-counter products be traded on swap execution facilities?
RdR: We have got a team of people working full-time on making sure we remain abreast of requirements, depending on the category of the segment of the market we are operating within. That process of decision-making is ongoing.
FX Week: What are the challenges of FX dealing in sub-Saharan Africa? RdR: The biggest challenge at the moment is the ability to find and define definite trends for the market. People are often left at a loss for words in terms of what is influencing and moving the market. Currency markets are fickle. People have had to adapt to new rule changes where currencies are moving in both directions, and the influencers of currencies are no longer just domestic issues but the global stage.
FX Week: What is the bank’s strategy in FX over the next 12 months? RdR: To participate as aggressively as we can in the entire market, making use of our liquidity differentiator, and ensuring we adopt a zero-slippage approach to any FX opportunity originated within our reach.
