BNY Mellon, Deutsche Bank Collaborate to Revolutionize Custody FX for Restricted EM Currencies

Rhea-AI Summary

BNY Mellon and Deutsche Bank have launched a new API-enabled foreign-exchange solution aimed at enhancing confirmation times for restricted emerging-market currency trades. The solution, currently operational in Korea with plans for other currencies like the Indonesian Rupiah and Indian Rupee, reduces the pre-trade lifecycle from hours to seconds. This innovation is expected to lessen operational burdens and improve workflow transparency. Both banks emphasize their commitment to providing faster and more efficient services to clients in the evolving FX market.

Positive

• The new API-enabled FX solution significantly reduces pre-trade lifecycle from hours to seconds, improving operational efficiency.
• The solution enhances workflow transparency and is currently operational in Korea, with plans to expand to other currencies.
• It leverages existing technology to minimize price slippage for clients, indicating potential cost savings.

Negative

• None.

HONG KONG, July 7, 2020 /PRNewswire/ -- BNY Mellon and Deutsche Bank have jointly developed a new API-enabled foreign-exchange (FX) solution that can dramatically improve confirmation times for restricted emerging-market currency trades.

The digital solution, initially being applied to custody FX transactions in Korean Won, aims to reduce the pre-trade lifecycle to seconds from hours, minimizing the operational burden and manual intervention that can be prevalent in emerging-market custody FX.

The solution is already live in Korea, with the Indonesian Rupiah and the Indian Rupee targeted next. Subsequently, it will be progressively rolled out to a broad range of restricted currencies, which are linked to investors' underlying equity or fixed-income transactions.

Leveraging existing bots between the two banks for instantaneous communication to help eliminate market frictions, the solution can also bring trade remediation closer to the time of execution. The resulting benefits can also reduce price slippage for clients between the FX leg of a transaction and the equity or fixed-income security trade. 

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).

"We are constantly looking at ways to introduce cutting-edge technology for the benefit of our clients. With this partnership, 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," said Jason Vitale, Global Head of FX at BNY Mellon.

"This is a milestone in solving a long-standing challenge in emerging markets, with broad application for the industry and our clients. This demonstrates our commitment to market leading execution, at a time when investor participation and focus on costs in these markets are increasing.  The collaboration between the two organizations leverages our strengths and expertise in emerging markets, custodial FX, as well as digital work-flow and innovation," said David Lynne, APAC Head of Fixed Income & Currencies, and Corporate Bank, at Deutsche Bank.

For further information, please contact:

Deutsche Bank AG
Media Relations
Karène Dufour
Phone: +852 2203 7846
E-mail: karene.dufour@db.com

BNY Mellon
Media Relations
Peter Madigan
Phone: +1 212 815 2308
Email: peter.madigan@bnymellon.com

About Deutsche Bank
Deutsche Bank provides commercial and investment banking, retail banking, transaction banking and asset and wealth management products and services to corporations, governments, institutional investors, small and medium-sized businesses, and private individuals. Deutsche Bank is Germany's leading bank, with a strong position in Europe and a significant presence in the Americas and Asia Pacific.

About BNY Mellon
BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries. As of March 31, 2020, BNY Mellon had $35.2 trillion in assets under custody and/or administration, and $1.8 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com. Follow us on Twitter @BNYMellon or visit our newsroom at www.bnymellon.com/newsroom for the latest company news.

This press release has been approved and/or communicated by Deutsche Bank AG or by its subsidiaries and/or affiliates ("DB"). Deutsche Bank AG is authorized under German Banking Law (competent authority: BaFin - Federal Financial Supervisory Authority) and by the Prudential Regulation Authority and subject to limited regulation by the Financial Conduct Authority and Prudential Regulation Authority. Details about the extent of our authorization and regulation by the Prudential Regulation Authority, and regulation by the Financial Conduct Authority are available from us on request. Securities and investment banking activities in the United States are performed by Deutsche Bank Securities Inc., member NYSE, NASD and SIPC, and its broker-dealer affiliates. Lending and other commercial banking activities in the United States are performed by Deutsche Bank AG, and its banking affiliates. Copyright (C) 2020 Deutsche Bank AG

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SOURCE BNY Mellon

FAQ

What is the new FX solution developed by BNY Mellon and Deutsche Bank?

The new FX solution is an API-enabled system designed to streamline confirmation times for restricted emerging-market currency trades.

When was the FX solution launched by BNY Mellon and Deutsche Bank?

The FX solution was launched on July 7, 2020.

Which currencies are initially targeted by the new FX solution?

The initial currency targeted is the Korean Won, with plans for the Indonesian Rupiah and Indian Rupee next.

How does the new FX solution benefit clients?

It reduces pre-trade lifecycle to seconds, lessening operational burdens and minimizing price slippage between trades.

What is the significance of the collaboration between BNY Mellon and Deutsche Bank?

The collaboration addresses long-standing challenges in emerging markets, enabling enhanced execution and workflow efficiency.