Electronic Data Systems Corp. has inked a deal, worth at least $700 million, to provide electronic brokerage support services to Electronic Broking Services.

London-based Electronic Broking is the largest interbank dealer of spot foreign exchange transactions.

Plano, Tex.-based EDS is to install network connections and provide technical support for Electronic Broking's foreign exchange network, which is used by 644 bank branches in 22 countries.

"We were impressed by the professionalism and the methodologies that EDS used to manage their business," said Peter Bartko, chairman of Electronic Broking Services, whose network each day handles more than 25,000 transactions worth about $75 billion.

"The industry has come to count on the EBS being there. We have to ensure that our customers are up 100% of the time," said Mr. Bartko.

Launched in September 1993, Electronic Broking handles an estimated 35% of foreign exchange trades in Europe and more than 50% in Asia.

Electronic Broking is owned equally by subsidiaries of 13 major commercial and investment banks and Minex Corp. of Japan.

"The contract is a testament to EDS' consulting skill as much as anything else," said Mark Wolfenberger, an analyst with Deutsche Morgan Grenfell in New York.

"The broking business has tended to be very heavy in fixed cost-a tremendous opportunity for margin improvement. I think businesses are looking more to companies who can say, 'This is what the market is looking like and we can help you get there,' " rather than simply handling an outsourced task.

EDS, with approximately 100,000 employees and customers in 42 counties, reported revenues of $14.4 billion in 1996. It won the contract over Digital Equipment Corp., the incumbent, and International Business Machines Corp.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.