The triennial survey, conducted every three years, starting April 1989, is a global central bank survey of foreign exchange and derivatives market activity coordinated by the BIS on behalf of the Markets Committee and the Committee on the Global Financial System.

The objective of the survey is to provide the most comprehensive and internationally consistent information on the size and structure of global foreign exchange markets, allowing policymakers and market participants to better monitor patterns of activity in the global financial system. The exercise also serves as a benchmark for the semiannual OTC derivatives market statistics, which are limited to banks and dealers in the most important financial centres.

The Full Text of the reports (pdf format)  are 1989, 1992, 1995, 1998, 2001, 2004, 2007, 2010 (prelim report)

This survey has been modified since April 1995 to include OTC interest rate derivatives. Previous triennial surveys have used the expression “traditional foreign exchange markets” to refer to spot transactions, outright forwards and foreign exchange swaps. This expression excludes currency swaps and currency options, which are under OTC instruments. Beginning with the 2010 survey, the expression “global foreign exchange markets” will include all five foreign exchange instruments. Turnover on global foreign exchange markets and in interest rate derivatives is analysed in Tables 1 to 5 and in Tables 6 to 9, respectively.

In April this year (2010), 53 central banks and monetary authorities participated in the eighth Triennial Central Bank Survey of Foreign Exchange and Derivatives Market Activity (“the triennial survey”).   Coordinated by the BIS, participating institutions collect data from some 1,300 reporting dealers on turnover in foreign exchange instruments and OTC interest rate derivatives. The prelimnary report was published in September 2010 and final detailed report was published in December 2010.

The headline figures from the April 2010 survey are the following:

1. Turnover on the Global foreign exchange market

• Global foreign exchange market turnover was 20% higher in April 2010 than in April 2007, with average daily turnover of $4.0 trillion compared to $3.3 trillion.
• The increase was driven by the 48% growth in turnover of spot transactions, which represent 37% of foreign exchange market turnover. Spot turnover rose to $1.5 trillion in April 2010 from $1.0 trillion in April 2007.
• The increase in turnover of other foreign exchange instruments was more modest at 7%, with average daily turnover of $2.5 trillion in April 2010. Turnover in outright forwards and currency swaps grew strongly. Turnover in foreign exchange swaps was flat relative to the previous survey, while trading in currency options decreased.
• As regards counterparties, the higher global foreign exchange market turnover is associated with the increased trading activity of “other financial institutions” – a category that includes non-reporting banks, hedge funds, pension funds, mutual funds, insurance companies and central banks, among others. Turnover by this category grew by 42%, increasing to $1.9 trillion in April 2010 from $1.3 trillion in April 2007. For the first time, activity of reporting dealers with other financial institutions surpassed inter-dealer transactions (ie transactions between reporting dealers).
• Foreign exchange market activity became more global, with cross-border transactions representing 65% of trading activity in April 2010, the highest share ever
• The percentage share of the US dollar has continued its slow decline witnessed since the April 2001 survey, while the euro and the Japanese yen gained relative to April 2007. Among the 10 most actively traded currencies, the Australian and Canadian dollars both increased market share, while the pound sterling and the Swiss franc lost ground. The market share of emerging market currencies increased, with the biggest gains for the Turkish lira and the Korean won.
• The relative ranking of foreign exchange trading centres has changed slightly from the previous survey. Banks located in the United Kingdom accounted for 36.7%, against 34.6% in 2007, of all foreign exchange market turnover, followed by the United States (18%), Japan (6%), Singapore (5%), Switzerland (5%), Hong Kong SAR (5%) and Australia (4%).

2. Turnover in OTC interest rate derivatives

• Activity in OTC interest rate derivatives grew by 24%, with average daily turnover of $2.1 trillion in April 2010. Almost all of the increase relative to the last survey was due to the growth of forward rate agreements (FRAs), which increased by 132% to reach $601 billion.

On 16-Nov-2010, BIS released the latest statistics on positions in the global over-the-counter (OTC) derivatives market at end-June 2010. These comprise the preliminary results of the second part of the Triennial Central Bank Survey of Foreign Exchange and Derivatives Market Activity as well as the regular semiannual OTC derivatives statistics.

Amounts outstanding and gross market values at end-June 2010

• Growth in the positions of OTC foreign exchange instruments was moderate at 9%, compared with an increase of 83% in notional amounts outstanding of currency instruments in the 2004-07 period.
• In contrast, market values of these instruments almost doubled against a backdrop of increased financial market volatility during mid-April and early June 2010.
• Trading activity with other financial institutions also drove the increase in the global foreign exchange positions. Their share (45%) surpassed transactions with reporting dealers (36%) for the first time in 2010.

—————-

—————-

More detailed results on developments in the foreign exchange and OTC derivatives markets and comprehensive explanatory notes describing the coverage of and terms used to present the statistics are included in the separate statistical release of the data. Explanatory notes follow statistical tables.

The results of 2010 AFP Treasury Benchmarking survey (3rd annual), conducted by Association for Finance Professionals (AFP), IBM & Deutsche Bank, were released during the AFP 2010 conference held at San Antonio. More than 500 companies around the world responded to the survey.

AFP Treasury Benchmarking Program’s mission is to provide benchmarking data for financial professionals so they can compare the performance of their organizations’ treasury operations against those of comparable organizations. It provides financial professionals with the data needed to identify best practices and to improve treasury processes within their organizations

The objectives of this year’s survey were to:

• Determine performance levels achieved by participants
• Define world-class (80th percentile) benchmark targets
• Analyze performance levels by peer group
• Provide a basis of comparison to help companies identify performance gaps and evaluate opportunities for improvement.

Last year’s survey emphasized technological differentiators, this year’s survey emphasizes human capital, especially the training, professional development, advanced degrees and credentials that are linked to the best treasury departments.

KEY FINDINGS

• Companies that provide their treasury and finance staff an average of four to six days training performed better than their peers
• Besides earning $65,000 per FTE compared to $80,000 per average treasury FTE, each benchmark treasury employee does the work of two and sometimes four treasury staffers
• Larger companies have higher costs than smaller treasuries per full-time employee, but the larger companies have fewer FTEs
• smaller treasury organizations have higher system costs and more FTEs
• cycle times for various treasury functions do not vary much between larger and small organizations.
• the gap between median and benchmark performance is widening, with the top 20 percent of treasury departments getting better and more efficient in cycle times.

METRICS

• SPEED
  

  Item	Typical	80th percentile
  Developing a short-term cash flow forecast	4 hrs	2 hrs
  Concentrating cash & establishing the daily position	2 hrs	1 hr
  Producing a treasury accounting entry	1 hr	0.5 hr
  Resolving bank-account discrepancies	3 days	1 day

• COST

Item	Typical	80th percentile
Treasury function operation cost per $1,000 of annual revenue	$0.71	$0.28
Treasury operation spend per $1,000 of annual revenue for organisations with annual revenues between $6 billion and $10 billion	$0.22	$0.10
Treasury operation spend per $1,000 of annual revenue for smaller organizations with annual revenues between $100 million and $499 million	$1.79	$0.83
spend on systems per $1,000 of annual revenue	$0.0408	$0.0119

• STAFFING
  

  Item	Typical	80th percentile
  full-time equivalents (FTEs) for every $1 billion in annual revenue	3.9	1.6

QUOTES from the surveyors

• Marilyn Spearing, Global Head of Trade Finance and Cash Management Corporates, Global Transaction Banking, Deutsche Bank, said, “The global benchmarking survey results allow our clients to offer ‘best in class’ treasury and cash management services by comparing their treasury organizations to those of their peers. This year’s results reveal the importance of human capital. Deutsche Bank continues to invest in the strength of its talent and seeks employees who exemplify a ‘passion to perform.’ These individuals drive excellence, contributing to the overall success of clients as well as the Bank.“
• Thomas Hunt, AFP‘s director of treasury services. said “Since treasury departments are responsible for keeping enough funds on hand to meet their organizations’ operating needs, improvements in treasury department performance can influence the health of an organization. In this survey, we wanted to identify and understand the traits that differentiate the top performing corporate treasuries.“
• Robert Eimers, IBM Global Business Services, said “When we drill into the responses to this year’s treasury benchmarking survey and compare those to prior surveys, the findings reveal a widening gap between aspirational goals and actual capabilities and a widening disparity between top performing organizations and average performing organizations.“

Citi Institutional Clients Group (ICG) CIO, Steve Randich, says,  “It used to be that you would add hardware or tweak the software to get improvements in throughput. Now it is much more the case where hardware accelerators – either on the network or in the actual chip technology- are going to become the means to stay ahead of the volume curve.” in an article published by WatersTechnology.

Highlights of the article published by WatersTechnology.

• What drew him to Citi was its “globality” and breadth of products
• Gone from being a middle-of-the-road IT organization to being, in many cases, best-in-class
• First major move was to build the technology organization from a product standpoint as opposed to Citi’s traditional regional and local country focus. It was a significant political change since people have to take their direction & leadership from product heads in New York and London.
• Considers the most important part of  job  is to be make sure of having right leadership team and the right talent in the organization,
• Change the  order-taking mentality.
• Regulations have significant impacts on the IT agenda.
• The new major focus is the need to remain efficient “front-to-back“
• Ability to convert marginal cost of converting a trade to close to zero is a requirement for survival
• to ensure that the firm is serving the clients with a common front-end platform (across asset classes)
• wants to focus more closely on middle-market clients in emerging markets.
• The next big thing is hardware Accelerators

About Steve Randich

Work

• 2005 till date CIO, Citi, ICG
• 2001 – 2005 CIO, NASDAQ (EVP of Ops & Tech, responsible for all aspects of NASDAQ’s technology, including applications development and technology infrastructure, as well as NASDAQ’s Market Operations)
• 2000 – 2001 CTO, NASDAQ
• 1996 – 2000 EVP & CIO, Chicago Stock Exchange, responsible for all technology, trading-floor and back-office operations, and business product planning and development.
• 1989 – 1996 Managing Principal at IBM Global Services
• 1984 – 1989 Manager at KPMG.

Education

• 1980 – 1984 B.S. in Computer Science from Northern Illinois University
• 1990 – 1994 M.B.A. with concentration in Finance from the Univ of Chicago, Graduate School of Business

Note : Accuracy of the above information is not guaranteed. However, information is gathered/researched from publicly available and reliable sources.

The “father of Software Quality”, Watts Humphrey expired on Thu 28-OCT-2010.

When Watts Humphrey arrived at the Carnegie Mellon Software Engineering Institute (SEI) in 1986, he made what he called an “outrageous commitment to change the world of software engineering.” During his tenure at the SEI, he established the Software Process Program, led development of the Software Capability Maturity Model, and introduced the Software Process Assessment and Software Capability Evaluation methods. These later became the basis for the development of the Capability Maturity Model Integration (CMMI), a framework of software engineering best practices that has been adopted by thousands or organizations throughout the world.

Citi’s various technology divisions, including but not limited to Citicorp Overseas Software Limited (COSL), CiITIL, Citibank Asia Pacific Technology, were some of the pioneers to have adopted SEI-CMM.

CMM has also become the basis for various Maturity Models including the Payment Maturity Model (PMM) a work-in-progress model introduced at SIBOS 2010 last week.

The World Payments Report 2010 produced by Cap Gemini, The Royal Bank of Scotland and EFMA (European Financial Management and Marketing Association) explores the global payments market and the key challenges presented by the evolving payments landscape. It draws on 13 executive interviews with 11 major banks (including ABN Amro, BNP Paribas, Citi), and 2 clearing houses to balance global. regional and local points of view. This year’s report covers the following countries: Australia, Austria, Belgium, Brazil, Canada, China, Denmark, Finland, France, Germany, Greece, Hong Kong, India, Ireland, Italy, Japan, Luxembourg, Mexico, the Netherlands, Poland, Portugal, Russia, Saudi Arabia, Singapore, Slovenia, South Africa, South Korea, Spain, Sweden, Turkey, the Ukraine, the U.K. and the U.S.

Now in its sixth year, , the report describes how banks will need to consider their options carefully for optimising their payments businesses, as the transformation of the payments value chain is accelerating. It then focuses on how banks will need to employ an intense parallel strategy, comprising revenue-focussed and cost-focussed initiatives, leverage sourcing strategies and consider mechanisms such as Payments Hubs to make these parallel strategies feasible and allow banks to achieve more with less.

The report is divided into 3 main sections

1. World Non-Cash Payments Markets and Trends
2. Payments-Related Regulatory Update
3. The Transformation of the Payments Value Chain Is Accelerating

It has a case study on Paypal. PayPal has established itself as a global payments processor, facilitating €51.3 billion in total payments volume (TPV) in 2009 and making it the world’s largest online Payments Service Provider (PSP). In 2009, PayPal accounted for almost 6% of all global online payment transactions (and 7.5% of online payments in the U.S.), capturing a significant share of revenues that could have gone to the banking industry. Along with its international expansion, the proportion of revenues derived solely from eBay has declined as a percentage of total revenues—to 42% at the end of 2009. In 2009, PayPal revenues were around €1.89 billion, nearly one-third of which was derived from U.S. sellers and nearly 40% from cross-border transactions.

Key findings

• Global payment volumes  continued to grow, despite the financial crisis.
• Globally, use of non-cash payment instruments continued to grow and  cards remain the preferred non-cash payment instrument (accounting for  more than 40% in most markets  and 58 % globally). Rate of growth was faster in developing economies.
• Alternative payment service providers (PSPs) have made significant strides in m-payments and e-payments, even though they still account for a small percentage of total worldwide transaction volumes.
• Cash-in-circulation in the Eurozone maintained a steady growth of about 11% per year since 2002, representing a significant cost for global economies
• Several developments have taken place in last year towards SEPA and PSD in Europe
• Regulatory pressures continue to affect the payments industry worldwide
• New technology and competition are making the payments universe more complex and expansive and, together with the effects of the economic crisis, new regulatory initiatives are acting as catalysts to the further evolution of the industry

You can download the report from

• Cap Gemini site (requires login)
• RBS Sibos website (pdf)
• EFMA (Only members can download. Requires login)

The report presentation and roadshows will be held at the following locations on the dates

• Vienna, Thursday 4 November
• Stockholm, Monday 15 November
• London, Wednesday 17 November
• Frankfurt, Monday 22 November
• Utrecht, Wednesday 1 December
• Brussels, Thursday 2 December

Citi Global Transaction Services (GTS) today announced the launch of an industry initiative  – The Multi-Bank Global Trade Program. Leveraging its global footprint, this initiative affords Citi an opportunity to address market challenges in partnership with other Trade banks while garnering benefits for clients.

The Multi-Bank Global Trade Program,  pioneered by Citi, seeks to establish an origination and funding platform for Trade banks with complementary market positions, thereby creating a diversified, granular pool of funded Trade assets. With this collaboration, participating banks would realize the benefits of asset de-recognition, credit relief and lower funding costs, which are difficult to achieve through a stand-alone market execution.

Emmeline Wexer, Global Head of  Trade Asset Advisory,  Citi GTS said “Each bank may rationalize its participation differently, such as a greater need for capital relief vs. funding and liquidity. However, collaboration among the participating banks, sharing a common goal of creating the most efficient funding platform to support the financing of global trade flows, is ultimately the most important ingredient to achieve success”

John Ahearn, Global Head of Trade, Citi GTS said, “This Multi-Bank Global Trade Program is another way that Citi is supporting the Global Trade market and providing ways Trade banks can grow their trade finance portfolio in an efficient and effective way.”

Global Transaction Services (GTS), a division of Citigroup’s Institutional Clients Group, offers integrated cash management, trade, and securities and fund services to multinational corporations, financial institutions and public sector organizations around the world. With a network that spans more than 100 countries, Citigroup’s GTS supports over 65,000 clients. As of the third quarter of 2010, it held on average $340 billion in liability balances and $12.4 trillion in assets under custody.

On 25-Oct-2010, Visa Inc, in its press release announced that its opening World’s Leading Payments Network to Independent Developers. Authorize.Net Developer Center Enhanced to Facilitate Creation of Innovative Electronic Payments Applications.

The Developer Center builds on Authorize.Net’s existing platform, which Visa acquired as part of the purchase of CyberSource earlier this year. Developers will have at their fingertips the resources needed for rapid development and deployment of payment applications that extend the value and power of electronic payments for consumers, merchants and financial institutions. These can be created to run on a variety of devices, from PCs to smartphones, and could support applications including eCommerce transactions, mobile transactions, person-to-person payments and payments at the physical point of sale. The Developer Center acts as a central community with tools and advice that developers at any level can use to readily connect through CyberSource to VisaNet along with other payments networks, and will be available free of charge.

“Visa has developed many innovative network-based payment products and services. But when you combine the power of our network, the resources of the Developer Center and the creativity of software developers, there’s no limit to the innovations that can emerge,” said Jim McCarthy, Global Head of Product for Visa. “Good ideas come from a variety of sources. We believe that opening our network to the developer community is critical to fueling innovation and driving one of Visa’s central goals, extending the benefits of digital payments to anyone, anywhere, using any device.”

Paypal everages on developers. It has dedicated developer community Paypalx Developer Network and is currently holding a conference Paypalx Innovate 2010 Developer Conference.

SWIFT is currently holding SIBOS 2010. SWIFT Swift CEO Lázaro Campos has launched the banking co-operative’s annual Sibos conference by calling for more innovation from bankers and technologists.

“Making innovation mainstream is a significant shift. Our innovation team has been going for three years and we have not even started yet so that is why we need your help.” , Campos said.

SWIFT has its own Developer Resource Center. But its restricted and is not freely available  for independent developers. Will it take the bold step of opening it up at SIBOS 2010 or will the Innotribe announce The Long Now?

Payments Maturity Model (PMM), a work in progress modeled after the Capability Maturity (CMM/CMMI), was introduced at the first Day SIBOS 2010 session titled Introducing an Important Industry Tool – The Payments Maturity Model.

Five stages are identified in the PMM:

1. Reliable;
2. Scalable;
3. Efficient;
4. Responsive; and
5. Agile.

This new model assesses a bank’s current position and determines next steps in that bank’s evolution towards an agile payments environment.

The PMM provides direction on the order and types of activities required to progress to the next stage, and assists with creating the business case to invest in that.

The speakers of this event were

• Michael Anderson, Senior Vice President, Union Bank
• Nancy Atkinson, Senior Analyst, Aite Group
• Louis Blatt, Chief Product Officer, ACI Worldwide
• Leo Lipis, Founder & Chief Executive, Lipis & Lipis GmbH

While researching on this topic, I also found a whitepaper titled Payments Maturity Model by Andy Mayer, Sep 2008 [pdf] which introduced the concept developed by Dovetail through years of experience of working with banks on their payment systems.

This model defines 5 maturity levels

1. Fragmented payments
2. Payment Silos
3. MIS managed Silos
4. Payment Hubs
5. Universal payments

This model takes into account the following key constituencies in a bank payment’s operation

• Sales
• Product Management
• Operations
• Technology

It will interesting to see who will own the registration or trademark for PMM.