Axis Bank Deploys Derivatives System
By Tabrez Khan
Mumbai, Jul 16, 2008

Axis Bank has implemented a new derivatives system -- Summit FT by global financial applications provider -- Misys. The system will provide the bank with the ability to structure derivative products in real time, reduce time to market, and give a single view of the entire transaction to the customer.

According to Prabhakar Saxena, general manager (India) of Misys, "A lot of banks are providing derivative products on a back to back basis. But these are plain vanilla products, which are uniform in nature. Summit FT will help Axis to structure its derivative products differently and offer its customers products that are different from the run-of-the-mill derivatives. Thus, it can charge a premium for its dynamic services."

The bank hopes to leverage the ability to rationalize its currently dispersed functions to provide a single view of every transaction to customers. Derivative transactions can expose the bank to three broad categories of risks: counterparty credit risk, market risk, and operational risk. With derivatives and structured products operations currently served by a range of third party vendor solutions, spreadsheets, and customer built platforms, the bank is predicting that rationalizing systems across front, middle, and back office operations will provide significant competitive advantage.

"Apart from helping the bank to create new derivative products without having to resort to developers each time, it also helps from a regulatory compliance standpoint," said Saxena. The RBI favors transparent online systems that can track every transaction and report it exactly as it is. Currently spreadsheets are being used to record information, which leaves room for misreporting, errors etc. An automated system will remove this anomaly and improve compliance to a great extent.

The Summit FT product was evaluated against products by competitors Murex and Calypso before it was finally adopted by Axis Bank, according to Misys.


Related Links:

UTI Bank Chooses Pyxis Solution