signed a new contract with Islandsbanki, Iceland's leading private bank.
The latest agreement represents a continuation of an eleven year supplier-customer relationship between the two organisations, and covers the supply of a broad spectrum of new Straight Through Processing (STP)products.
One of the main objectives of this latest contract for additional IBAS components is to further improve Islandsbanki's already impressive STP
automation, by involving STP more centrally in the bank's foreign exchange
trading activities. Products ordered by Islandsbanki include a Continuous
Linked Settlement (CLS) third party solution for FX Spots, Forwards & Swaps,
a new application for Forward Rate Agreements, components to further
strengthen the STP interface between IBAS and Islandsbanki's front office
system Kondor+, and an automatic approval system for FX Spots, Forwards &
The automatic approval components and additional interfaces ordered by
Islandsbanki build on the deal chain to enable complete STP (without human
intervention) to be achieved when the customer enters the deal via
Islandsbanki's customer front-end system. If the bank enters the deal on
behalf of the customer using its own front end system Kondor+, the STP chain
begins after input.
Islandsbanki expects that in this first phase, 85% to 90% of the forex and
money market deals will be STP. Apart from increased security, better
service and higher speed, the bank has estimated that pushing STP up to this
level will reduce the need for staff in this area of the back office by 35%
to 40% initially.
CBA's new automatic interfacing components to Islandsbanki's Kondor+ system
have given the bank a single front office solution that offers coverage of
most products through one system. This in turn is interfaced online with
one back office system - IBAS, which can automatically handle and process
all the aspects of a deal, including confirmation matching, all relevant
types of accounting, messaging and reconciliation. Although such an optimal
one to one relationship is rare in the industry, Islandsbanki is committed
to the investment to enable the bank to compete effectively and efficiently
in today's market.
Both Islandsbanki and CBA regard this latest contract as the continuation of
a successful and mutually beneficial partnership. Pall Kolka Isberg, General
Director, Project Management Office at Islandsbanki said, 'IBAS has earned
its place at the core of the bank; it has provided the best return on
investment and consistently provides the best results.'
STP Forum notes that, 'Only 14% of all institutions trading foreign exchange
actually "used" STP in 2002.' They go on to advise that 'complete STP - in
the sense of pushing a button and getting a trade executed, confirmed and
entered into the books - does not exist yet.' However, according to Pall
Kolka Isberg, 'with these new components from CBA, Islandsbanki is well on
its way to making complete STP a reality.'
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