Electronic Trading in Servicing Clients … Will it Work in the Philippine Setting?

Abstract

Technology has hastened the development of the Philippine banking industry. Electronic banking activities have become widespread as seen in transactions done through automated teller machines, telephone, or the Internet. This electronic service has also been taken into foreign exchange (FX) trading. With the improved efficiency with the professional market, technology is also being considered as a better channel in dealing with clients.

The study looked into the probability of electronic trading replacing traditional training in service clients in the Philippine setting. It examined the extent of implementation of electronic trading, barriers in communication about electronic trading, acceptance by the Bangko Sentral ng Pilipinas (BSP), and technology utilization of clients. It involved 18 respondents from 3 providers of electronic trading and 6 recipients of the service. Tools in gathering data included a questionnaire, interviews with a few respondents, and records and documents.

Finding in the study revealed that electronic trading is seen as a faster mode of business which would translate to positive effects on the economy. However, implementation of electronic trading was limited to a few clients due to factors such as client understanding and suitability, business volume, compatibility to internal system, and regulatory requirements. There was also client resistance to shift from traditional trading to electronic trading owing to concerns about errors, security breaches, system failure, confirmation of deals, and inability to distribute business.

There was hesitation in totally letting go of traditional mean of business in favor of modern ones. Clients needed to be more familiar and more comfortable with electronic banking activities. A lot of explanation and guidance are necessary for them to take on this system. As such, electronic trading is not expected to be immediately utilized by all clients.

Recommendations included a complete and detailed description of the system, as well as the risks involved. There should also be continued product support and search for ways to improve the system. There should be constant communication with the clients regarding security issues, resolution of problems and errors, contingency measures, and business and technological developments.