Tuesday, January 19, 2010

Finance + IT = Me (For Now :P)

At the office this afternoon, a vendor was trying to ask for clarification on the difference between committed and non committed Foreign Exchange (FX) deals.

Here's the dilemma.

The vendor is a specialist in IT and system, while we, are specialists in Finance.

We used to live completely different lives in our past lives, speak different languages that are not interpretable to each other.

However, thanks to the paperless era, (almost) all of the manual operations the financiers learned in school are now obsolete. Like it or not, we have to adopt technology to facilitate our trades. Hence the beginning of our very complicated relationship.

It was an arranged marriage of some sort.

A marriage that produces issues after issues -a result of mixed marriage between I.T. and finance.


I should know, because my current job requires me to support financial operations riding on these systems. And I remembered how them vendors had to repeat and explain everything to me over and over (and over again) as I remained clueless, eyes blinking repetitiously.

"Deamons!" they'd say.
"Devils in the system. No wonder it's so difficult to understand!" I would joke.

Slowly but surely, I begin to understand how the system is designed and structured to facilitate trades. While us financiers know our desired financial outcomes, these desired outcomes need to be matched against the system's capability - and it's a journey of discovery all together.

Coming back to the story. The conversation went as follows:

"Are committed FX deals a forecast or a real amount?"

"You enter into a deal today to pay X amount at T time. It's a forecast because T is in the future, but it is also the real amount because X has been agreed and contracted upon. Like it or not, we have to pay X at time T."

"If you know that X is the real figure, why don't you key in X as the real figure at time T. What is the purpose of forecasting an exact figure before time T?"

One after another tried to make the poor vendor understand the difference between a real amount and a committed amount, realized and non-realized transactions - but to no avail. There was a short silence, and then came one voice.

"It's like when you proposed to a woman. You already commit yourself to marry her, but you are not married to her until the big day arrives."

Not surprisingly, the whole room was filled with laughter. Blessed are those who can simultaneously humor us and explain things in layman terms!

The factors influencing a commitment....well, that's a different story altogether ;)


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Miss Aida said...

LOL.. That's a good analogy. Layman's terms are harder than they look. :)

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--being Maneesa-- said...

hi there!
i came across ur blog from PD and i really enjoy reading ur entry.
Somehow that is what some of us (different skills and different background) talk and try to explain each other requirement.

And the joke..hehehe it really explain it well :)

kaykaygal said...


I still dont geddit.

Thats why I cant survive commerce even if I tried. These money things and terms susah sgt la how about we earn and spend it already haha. (and maybe save a little bit)

A-Jay said...

Hey Maneesa welcome to my blog :))

rusy : hehehe...i would want to explain to u but u'd prolly hate commerce FOREVER after that hahahha

Saidatul Maria said...

babe... just found out your blog... and this post make me wonder who are the poor vendor...hehehe..