Digital transformation of FX banking: Meeting the evolving needs of Corporate and Institutional clients.

Over the past year, the pandemic has dramatically altered the way Multinationals, corporates, SMEs and institutional investors consider their foreign exchange exposure. With the return of volatility, they had to accelerate the pace at which they were implementing new ways of managing such exposure.
Some practices had already started to evolve pre-pandemic especially in the cross-border payment space where innovative Fintechs had been offering not only aggressive FX rates but also convenient ways of trading.
However the first few months of lockdowns induced cash crunch exposed the need for Corporates and Institutional clients to access more sophisticated trading workflows.

These customers were a stable and reliable source of profitability for Tier 2, Tier 3 and Regional banks with a corporate and institutional distribution franchise. COVID has further accelerated the electronification of not only human interaction but also of trading.

Faced with increasing demands from their corporate and institutional clients the Banks have to react. Clients demand an experience similar to the one they enjoy in their daily consumer lives. smarTrade omni-channels distribution solution provides Banks with a unique comprehensive set of capabilities to help them deliver the best possible client experience.

What are the critical components of a framework for Banks to deliver a superior experience to Corporate and Institutional clients? We believe that the following 5 components are essential:

  • 1. Easy to use onboarding and segmenting tool,
  • 2. Advanced workflow tailored per client segment
  • 3. Dynamic sales margining,
  • 4. Risk Management
  • 5. Integration to other Banking services

Let’s explore each of these in turns as what’s required and how they can be deployed practically.

1. Easy to use onboarding and segmenting tool

Any eFX sales person at a bank will share with you horror stories of the time it takes to onboard a new client to its platform. Once compliance and regulatory requirements have been cleared, comes the Credit assessment and the technological onboarding. That last mile has to be as smooth and painless as possible.
Today’s Corporate treasurer and institutional traders want to start trading with their Banks within minutes as we have all gotten used to sign up for a new digital bank account.
smartTrade integrated end to end solution makes such onboarding simple whilst the integration with the rest of the bank software solution is facilitated by our numerous APIs. We are now investing in making the onboarding even simpler through self-service tools and step-by-step assistants.

2. Advanced Tailored workflow per client segment

Needless to say that a Multinational treasurer does not require the same types of instruments and associated workflow than an asset manager trader. Banks have to offer a different set of options and screens to each client segment. Whilst a Treasurer wants to have access to SSPs’, flexi-forward, take up and fixing orders, a Buy-Side trader will be more interested in pre & post-trade allocation and algorithmic execution.
smartTrade unmatched breadth and depth of workflows combined with granular permissioning allows for fine tuning of the Banks’ client experience while trading through its SDP, ECN’s or MBPs.

3. Dynamic margining

Although User experience is important to the Banks’ client, more central to attracting them to do repeat business is to provide them with the best price no matter the market conditions or the type of transaction to be executed. Real-time margins adjustments based on client trading history, patterns and overall profitability gives the Banks an edge to capture this volume.

4. Risk Management

Recent months have proven to be quite volatile in the Foreign exchange market generating sustained demands from corporate and institutional clients. However such demand did not come without risks to the Banks.
smartTrade advanced risk capabilities empower the Banks to adjust their core pricing its associated management processes to perfectly align with its risk appetite.

5. Integration with other Banking services

As Banks are forced to further automate and reduce their costs, we see new offers emerging such as FX trading being integrated in the banks more traditional financial solution such as lending, payments and cash/treasury management. Banks have operated in silos but these are now being redrawn, our customer are making smartTrade LFX teh single source of FX Rates across their services. These references rates support innovative cross-border payments or automatic hedging of corporates exposure.

Delivering a superior client experience is critical to the success of Banks in the coming months and years. As Banks further digitise their services they need to adopt an agile and flexible technological stack that will adapt as they grow, launch new products and services.
smartTrade comprehensive end-to-end eFX Trading solution not only gives Banks the breadth and depth of functionality required to maximise their profit from trading but also the peace of mind of a fully managed, secured, scalable and resilient technology