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Corporates endured FX impacts of US$32.21bn in Q4 2022 - Industry roundup: 22 May

Corporates endured FX impacts of US$32.21bn in Q4 2022

Corporates experienced US$32.21bn in total FX impacts to earnings from currency volatility in Q4 2022, according to Kyriba’s latest Currency Impact Report. The quarterly report, which details the impacts of FX exposures among 1,200 multinational companies based in North America and Europe with at least 15% of their revenue coming from overseas, found firms reported US$30.22bn in FX-related headwinds and US$1.99bn in tailwinds.

“Rising interest rates and continued FX volatility are putting treasurers and CFOs in a very tenuous position,” commented Andy Gage, SVP of FX Solutions and Advisory Services at Kyriba. “Corporate treasury teams are realising they don’t have good visibility to what their company’s true exposures are, which costs billions in losses to their earnings and cash flow. It is crucial for CFOs and Treasurers to improve FX risk management practices to protect cash flow and liquidity in today’s striking economic environment.”

The report also found that publicly traded North American companies reported US$28.94bn in headwinds, up 84% year-over-year (YoY). These firms also reported US$0.59bn in tailwinds, up US$0.33m from Q3 2022.

The average earnings per share (EPS) impact reported by publicly traded North American companies in Q4 2022 was US$0.05, up US$0.01 YoY. These companies also indicated the euro (EUR) as the most impactful currency, with 33.3% of companies referencing it as impacting revenues; the Canadian dollar (CAD) was second at 26.7%, and the Japanese yen (JPY) was third with 20% of North American companies identifying it as impactful. The dollar was cited as one of the most impactful currencies by publicly traded European companies on earnings calls.

The top five industries that experienced the most significant impact from currencies in North America were (in ranked order): professional services, biotech and pharmaceuticals, machinery, trading and distribution, chemicals, health equipment and supplies.


Lenovo partners with Demica on distributor finance

Demica has partnered with Lenovo’s channel solution and service team to co-develop and enhance the distributor finance platform, allowing Lenovo to provide extended services to its distributors. Moving forward, the Demica platform will allow Lenovo to retire its existing technology platform and extend its range of services to its distributors.

Demica and Lenovo’s channel solution and service team have worked together since 2019 after Lenovo brought the activity in-house and launched a trade receivables securitisation, one of the most significant launches that has ever been signed. Lenovo appointed Demica to report on the transaction covering 31 markets globally and in 14 currencies.

“The decision to appoint Demica as a platform provider to Lenovo’s channel solution and service team reaffirms the importance of distributor finance as a tool to drive growth and optimise terms for Lenovo and its channel partners,” said Christoph Heitjans, Executive Director and GM of Lenovo’s Channel Solution and Service Team. “The Demica platform represents the future of supply chain finance for banks and fintech as the market transitions from legacy technology to flexible, modern cloud-based solutions.”


Teradata and FICO partner to reduce fraud, improve business outcomes

Teradata and FICO, the analytics software provider, have announced they plan to bring to market integrated advanced analytic solutions for real-time payments fraud, insurance claims, and supply chain optimisation. Bringing data, analytics and insights together in one environment streamlines the development of solutions for use cases across industries, speeding time-to-delivery and making them available for joint customers sooner. The resulting solutions are part of a new global relationship between the two companies and are expected to deliver reduced costs, improved profits, increased risk mitigation and greater customer satisfaction for Teradata and FICO customers.

While FICO fraud solutions protect more than 2.6 billion payment cards worldwide, this type of protection is not available for other payment products. To address this gap, FICO and Teradata have designed a fraud solution for real-time payments that will help mitigate the increasing scams and payments fraud in retail banking accounts. The solution will bring together FICO’s Falcon Fraud Manager, with its consortium data and neural network models, and Teradata’s capabilities in enterprise-scale AI predictive and prescriptive analytics. This is expected to provide a holistic view of a banking customer’s transactional and payment activity. When combined with FICO decision management, it will provide fraud prevention for P2P, B2C, ACH and other payment transactions.

The partnership is also looking at improving outcomes for complex medical claims. Predicting and managing healthcare expenditures is a top strategic priority for property and casualty, major medical, and public (government) insurance programmes. Despite industry progress in specific, targeted areas - such as opioid addiction or kidney failure - an approach for containing total cost across any condition still eludes industry leaders. FICO and Teradata have designed a decision automation solution to accelerate the inclusion of patient insights into the operations of claims adjusters, case managers, and special investigations units. The result of using AI in this solution to quickly segment and then identify pathways to care (based on procedures and diagnoses) can lower the financial burden while producing superior medical outcomes for the patient.

The pair also plan on enhancing supply chain efficiency and increasing resilience. Once an almost invisible societal benefit, global supply chains are increasingly under scrutiny as they continue to experience strain under the unrelenting pressure to deliver. From food to medicine to transportation and technology, fragile supply chains must navigate this volatile environment.

FICO’s advanced mathematical optimisation coupled with Teradata’s multidimensional scaling has the potential to enable organisations to build capabilities to model, optimise and simulate different scenarios that affect their supply chains and then deploy the most efficient options. At the heart of this capability is an optimisation modelling and solver platform based on FICO Xpress Insight, which allows operation researchers, data scientists, analysts, and business managers to collaborate on supply chain solutions that facilitate efficient, effective and time-sensitive decision-making. This can lead to improved efficiency across the plan, source, make, deliver, and return, increasing an organisation’s resilience with rapid identification and mitigation of risks and improve long-term customer satisfaction.

The joint solutions from Teradata and FICO are targeted for availability in Q3 2023, across multi-cloud and hybrid environments globally.


Ripple launches platform to develop CBDCs and stablecoins

With more than 90% of countries exploring, developing and implementing Central Bank Digital Currencies (CBDCs) as a way to increase financial inclusion and lower the cost and risk of domestic and cross-border payment processes, Ripple has announced its CBDC Platform, a frictionless end-to-end solution for central banks, governments, and financial institutions to issue their own central bank digital currency. 

Using the same blockchain technology used on the XRP Ledger (XRPL), the platform is designed to allow its users to holistically manage and customise the entire life cycle of fiat-based central bank digital currency, transaction and distribution. 

The Ripple CBDC Platform enables central banks and governments to bring the next level of digitisation to their financial services while promoting access to millions of people around the world who are unbanked. 

Developed to address multiple use cases including wholesale and retail CBDCs on a private ledger or issuing a stablecoin, the platform offers its customers: 

Ledger technology - While still powered by the XRP Ledger, Ripple’s CBDC Platform is built on a new private ledger underpinned by the XRPL’s core energy-efficient technology. 

Issuer - Enabling issuers (such as central banks, monetary authorities or commercial banks) to manage the full life cycle of their fiat based digital currency, from minting and distribution all the way to redemption and destruction, all in a highly secure manner taking advantage of the XRP Ledger’s built-in multi-signing capabilities.

Operator - This allows financial institutions who are holding significant amounts of the digital currency to manage and participate in inter-institutional settlement and distribution functions.

End user wallets - Users of digital currencies such as corporate and retail end users will be able to hold their digital currencies securely and be able to pay and receive payment for goods and services in the same way other payment and banking apps provide this today, including for offline transactions and non-smartphone use cases. 


GTreasury secures investment from Hg to accelerate growth 

GTreasury, a treasury, payments, and risk management software provider, has announced it has secured a majority investment from Hg, an investor in global software and services companies. As part of the transaction, the GTreasury management team and former majority owner, Mainsail Partners, will continue as investors in the business.

Based in Chicago, Illinois, GTreasury provides treasury management systems (TMS) for organisations worldwide. The firm’s SaaS solutions assist treasury departments to manage liquidity needs, payment execution, bank relationships, FX hedging, and auditing and compliance requirements. GTreasury provides practitioners with real-time insight and access into their global liquidity needs, serving over 700 customers across 30 industries in over 160 countries.

Terms of the transaction have not been disclosed. Hg was advised by William Blair & Company, Skadden & Arps, Slate Meagher & Flom LLP, EY and McKinsey. GTreasury and Mainsail were advised by Guggenheim Securities and Wilson Sonsini.

“This is a great moment for the team at GTreasury as it will support further product development and geographic expansion, helping us to continue innovating and bringing new products and features to an ever-growing customer base,” said Renaat Ver Eecke, CEO of GTreasury. “Hg’s global software specialisation and deep knowledge in this area will help accelerate this strategy significantly.”


ACI Worldwide adds Swift Go to cross-border, real-time payment services

ACI Worldwide has added Swift Go to its Enterprise Payments Platform. Swift Go is a new standard in low-value international payments, enabling consumers and SMEs to send simple, fast and transparent cross-border payments straight from their bank account, combining Swift gpi with domestic real-time payments infrastructure where possible.

ACI, a global, accredited partner of Swift for more than 30 years, is offering the new capabilities to enable banks to take full advantage of today’s new real-time, cross-border payment opportunities.

“Seamless and instant cross-border payments, whether high or low value, are increasingly becoming the norm for our customers,” commented Craig Ramsey, Head of Real-Time Payments at ACI Worldwide. “Leveraging Swift Go will enable banks to improve the customer experience and stay competitive in the growing cross-border payments market.”

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