Point of Conversion Reporting System for Currency Exchange Transparency
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Solution Overview
Problem
The interbank foreign exchange market lacks transparency, leading to inefficiencies and hidden costs for currency exchange, as banks and market makers dictate currency values without clear disclosure of the differences between customer-dealt rates and market offset rates, making it difficult for individuals and companies to accurately account for foreign currency transactions.
Innovation Solution
A point of conversion (POC) reporting system that provides transparent and detailed records of currency exchange transactions, including customer-dealt rates, offset rates, and market costs, enabling users to track and account for foreign currency exchanges accurately, and revealing the market cost and fees associated with currency conversions.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Loss of information
If banks and market makers dictate currency values without transparent disclosure, then they maintain control over the interbank market, but customers cannot accurately account for exchange costs and hidden fees are concealed
Solution Approach 1:
The patent introduces a Point of Conversion (POC) reporting system that acts as an intermediary between the interbank market and customers. This system receives exchange rate data from multiple sources, processes it, and provides transparent reporting of the difference between customer-dealt rates and market offset rates, thereby mediating the information asymmetry without requiring customers to directly track complex market data
Solution Approach 2:
The POC report provides feedback to customers by disclosing the actual market cost and fees associated with currency conversions. The system continuously monitors and reports the difference between the rate at which customers exchange currency and the rate at which the Primary Market Maker offsets the trade, creating a feedback loop that enhances transparency
2Reliability
If detailed tracking of offset rates and market costs is implemented, then transparency and accountability are enhanced, but the system complexity and data processing requirements increase
Solution Approach 1:
The patent segments the currency exchange information into distinct components: customer-dealt rates, offset rates, market costs, and fees. The POC reporting system processes each component separately and provides detailed breakdowns in reports, allowing for accurate tracking while organizing complex data into manageable segments that can be independently verified
Solution Approach 2:
The system creates detailed copies of exchange transaction data in the form of POC reports. These reports contain comprehensive information including time stamps, deal dates, reference numbers, sell/buy amounts and currencies, offset booking rates, and calculated market costs. The copying process preserves all pertinent information without requiring the original complex market making systems to change
Data Source
AI summary
In one embodiment, one use of the disclosed method/system is for any multinational entity or individual performing currency exchanges is for business or personal use. This embodiment will greatly enhance the Transparency of the Cash Conversion Process at the ACTUAL POINT OF CONVERSION (POC), revealing dealt and offset pricings and TIME thereof thus providing the customer with a complete report of conversion as with any commodity conversion. With the POC method, the client will have a substantially complete accounting of the value of the funds conversion from one region's currency to another.