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Foreign Exchange

UBS suffers embarrassing glitch

Word reaches me that UBS’s back office collapsed last Friday after the release of the US non-farm payrolls.

As a result, it is claimed that the bank maintained its wider spreads for several hours longer than normal after the data came out, as this was the only way it could slow down the ticket flow.


According to a bank spokesperson, activity at the front end was not compromised. “Following a large systems release, some customers may have noticed that we were slightly slower than normal in confirming some trades. Our overall settlements capability was not materially affected and we are working to ensure any issues are rectified as swiftly as possible. This has had no impact at all on our front-office pricing,” the spokesperson said.


Of course, UBS is not the only bank to have suffered a clag-up in its back office. The bank recently told me that one of its strengths is its robust infrastructure and that a “high level of automation is essential to efficiency”. With the back office becoming an increasingly important business differentiator, UBS will be keen to ensure its systems are reliable.

 

Part of the problem the banks have is that it is not easy to rip out legacy systems and some of them have struggled to cope with the explosion in ticket volumes.



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