THE growing access of Asian institutions to international markets has highlighted the need for updated systems to make global payments, replacing the use of telex and fax to make transactions. The surge in global business, particularly in the foreign exchange market, and the corresponding increase in the magnitude of dollar transactions flowing across borders heightens concern about the efficiency of fund movements. Central banks in Hong Kong and Singapore, the two major regional foreign exchange centres and focal points for regional trade flow, have recently focused on improving their payment systems. ''The enormous volatility in the equity, forex and derivatives markets means that central banks have to understand the risks involved in the payment systems,'' said Sean Verity, senior vice-president at Chase Manhattan for global payments and treasury services in the Asia-Pacific region. The big swings in these markets demanded ever-increasing attention to quick access of financial information on the part of system participants, he said. International payments are settled in a larger varieties of currencies than before. The former dominance of the US dollar as the primary treasury currency has gradually been eroded. ''In 1986, the US dollar represented 98 per cent of the counter currency transactions in forex trading and the figure dropped to 83 per cent in 1992,'' he said. In Asia, the old pattern was for Asian countries to trade with the Western world, which led primarily to US-dollar based transactions. The trend nowadays was for stronger intra-regional trade links that used Asian currencies, he said. ''Countries are naturally trading with other countries in the region, requiring new systems for moving money around,'' Mr Verity said. Furthermore, the gradual development of Asian capital markets was creating demand for payments made in Asian currencies. For instance, Malaysians are buying Indonesian government instruments and do not want to transact in US dollars. Mr Verity said that with their antiquated banking systems, Asian banks could no longer cope with the amount of business generated. As part of its Pan-Asian strategy, Chase Manhattan is planning to set up a global payment office in Hong Kong to complement offices in New York and London. Expected to be manned by about 15 staff, the office will focus on providing global payment services in a multi-currency, multi-product environment. Chase Manhattan global marketing executive Charles Mallis said the density of multinationals in Hong Kong was three to four times higher than in Singapore. ''This is a customer-driven business,'' he said. Common services a global payment bank provided included the physical movement of money and information, and short-term liquidity products. Institutions likely to use those products were large corporations, commercial and regional banks, foreign branches of other banks, government institutions and post office banks. Such institutions, riding on booming business, are demanding more from their bankers than in the past. ''They want to be offered the cheapest and quickest methods when making international financial transactions,'' Mr Verity said. In return, service providers would receive fees for the service, income on selling their treasury products, and if the market was inefficient, net interest caught up in the system.