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 aims to reduce the pre-trade lifecycle to seconds from hours, minimising the operational burden and manual intervention that can be prevalent in emerging-market custody FX. By establishing API connectivity from Deutsche Bank’s core systems into the client’s applications the solution enables the real-time processing of FX requests linked to the underlying custody transactions from its own customers.

The solution provides automated responses back to clients on the FX requests approval via rule-based processing. Chatbots were also deployed to enable instantaneous communication between SES and its client in order to eliminate any market friction. This innovative solution saw many benefits being delivered, including the ability for real-time FX request approvals, real-time cash balance checks to ensure there are sufficient balances for FX execution, automated routing of unapproved FX requests for immediate remediation by the global custodian bank as well as quicker market execution and client pricing.

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.

More examples on how Deutsche Bank is using digital solutions to revolutionise post trade securities services can be found here.