Global Execution – Part 1

Global Execution, Vontobel’s client trading department, is a system-relevant area and must remain functional at all times – a particular challenge during the pandemic and the war in Ukraine.

The Global Execution department is part of Transaction Banking at Vontobel. The Global Execution team is responsible for the execution of all transactions in all asset classes, both for Wealth Management at Vontobel and for all Transaction Banking clients. The team operates in a highly dynamic environment.

Regulatory changes, technological advances, and market events keep the traders on their toes. The COVID-19 pandemic of the past two years, as well as more recent events such as the war in Ukraine, have shown how important it is to continue trading even in extreme situations. The Global Execution team works particularly closely with the Trading Platform Development team to continually optimize the trading infrastructure and processes.

Global Execution – the Big Picture

Every day, tens of thousands of transactions are executed on Global Execution’s trading platform – and that number is growing. On any given day, the number of transactions can be much higher if events result in strong price fluctuations. In January 2022, we experienced a trading day with a volume of CHF 1.4 billion – the second-highest volume ever recorded.

— Fabienne Béguin, you head the Global Execution team. How would you describe your team’s core tasks?

The Global Execution team is made up of 15 employees, most of whom have been with the company for many years and many of whom have more than 20 years of trading experience. For B2B, private, and institutional clients, all securities and currencies are traded and executed on the Transaction Banking platforms. The trading platform is flexible and can be tailored to each client’s needs. Clients benefit from an intelligent smart order router, which is defined based on best execution, as well as low latencies to the stock exchanges. In Switzerland, the Vontobel servers are “co-located” (next door) at the SIX computing center, so the distances are extremely short.

At the same time, we always act in accordance with best execution and always achieve the best possible results for our clients. Vontobel is a member of Europe’s most important stock exchanges. Our clients also benefit from our direct access to these exchanges in the form of low fees and commissions. There are no additional costs, because we do not have to involve a third-party bank in the execution of the transaction.

— It’s important to maintain exchange trading at all times, which can be extremely challenging during a pandemic. How has your team responded?

It’s true – my team must be able to act at all times. Even in March 2020, when we all went into lockdown, we were able to continue trading and executing transactions across all asset classes at all times. To make sure that this remained the case, at that time, we split up the Global Execution team over three locations practically overnight. Thanks to the exceptional efforts of our IT and relocation team, as well as the enormous flexibility of our traders, we were quickly able to move into the new desks at the new locations. Furthermore, for a few traders, we set up complete at-home trading desks. Some of them converted half the house in order to install the many monitors and the telephone exchange – equipment that is needed for trading.

— The start of the pandemic in March 2020 and the invasion of Ukraine in February 2022 were hectic times on financial markets – almost panics.

Yes, this transition took place at a time of exceptionally high trading volumes, when the pandemic shook up the stock markets in March 2020. In February 2022, sanctions resulted in new measures being implemented every day while we also experienced record-breaking trading volume. These unpredictable price fluctuations and the scope of the losses on the markets triggered a panic among clients. Traders can quickly sense this nervousness. It’s important to stay focused and keep a cool head. On peak days, we fielded up to 1,200 phone calls a day. That can get a trader’s heart rate up.

— How many orders and transactions is that per year?

Last year, we had 11.6 million orders that resulted in 2.44 million trading transactions worth CHF 179 billion. Alongside trading and execution, some of our traders make more than 200 phone calls a day. We process up to 50,000 orders on our platforms every day. Up to 1,500 of these orders are processed manually – complex and large orders, as well as orders that require special market expertise from the traders.

— Are orders still placed by phone?

The telephone channel is mainly used for future and options business. Otherwise, all securities orders are placed and traded electronically. In the last two years, we were also able to bring future and options orders onto an electronic trading platform. Today, external clients and the Structured Solutions & Treasury unit are already placing orders electronically. The next step will be switching Wealth Management over to an electronic platform.

— Technology is playing an increasingly large role in trading. What does that mean for your team?

Looking back on the last two years, we have traded and executed a record volume via our Transaction Banking execution platform. The overall volume has steadily increased in recent years; however, our team has not grown. This is all thanks to increased efficiency made possible by technology.

We benefit from the organizational proximity to the platform developers. The Trading Product Development team is part of Transaction Banking, just like us. The daily exchange between the traders and developers results in an optimal interaction between humans and machines. The traders’ intuition complements the algorithm.

In recent years, we have continually improved our execution quality compared to the benchmark. In Transaction Banking, we also have the necessary expertise to respond to the individual needs of our clients at all times. We use our own analytics platform to monitor our service quality and the degree of automation of our processes, and we work continuously on improvements.

— Have the requirements for a trader changed?

The complexity of trading infrastructure has increased enormously. The requirements that a trader needs to go into trading have developed significantly in recent years. Today, they need more technical knowledge and data analysis skills. I am convinced that there are still many people who are enthusiastic about trading. Trading is a fascinating and dynamic environment where you can learn something new every day. Every day, they face new challenges and are in dialogue with customers, brokers, or stock exchanges.

— Trading happens 24/7. Does your team work in shifts?

We have a night desk that is staffed until 10 p.m. That’s when the US stock exchanges close. In addition, we also have to maintain trading on Swiss holidays when the other exchanges are trading.