May 21st, 2007, Singapore
Singapore - JP Morgan plans to go live with a structured deposit pricing and processing system by mid-June, to automate the roll-out of dual currency investment products.
The platform, called the FinIQ system, is in the final stages of user acceptance testing. It links the bank's option trading, delta hedging, money markets, private banking and accounting systems to create an automated system.
Will Shropshire, regional head of FX structuring and sales at JP Morgan in Singapore said rising demand for dual currency investment products led to a requirement for pricing and processing efficiencies generated by FinIQ.
He said the market for FX-linked investments started growing rapidly in 2001, when interest rates were generally low and equity investments were less appealing. Dual currency investments became popular because they allowed more portfolio diversity.
"We've been undertaking forex-linked investments for many years – the low correlation of FX to other asset classes provides portfolio diversification benefits. This platform enables us to achieve scale and deliver first-class products in a more efficient and controlled fashion through heightened use of straight-through processing," said Shropshire.
Specialization
While JP Morgan explored a variety of system options, both internally and externally, FinIQ's specialisation in structured deposits and strong track record stood out. The system is also in use by Standard Chartered in Asia and the Middle East (FX Week, September 4, 2006)
"FinIQ's implementation of FX-linked investment systems with other institutions demonstrates how appropriate their platform is. It's a vendor system that is tailored for this product.", said Shropshire.
Implementation of the system will initially be limited to Asia, but Shropshire said it is likely to play a large role in JP Morgan's global FX e-commerce strategy.
Source: FX Week