Digital innovation is slowly transforming corporate FX trading 

Companies worldwide have an opportunity to save money and reduce risk through a transformation of their FX desks, according to Coalition Greenwich. A highly efficient and effective corporate FX desk can improve a company’s liquidity management and currency hedging, while also supporting other key objectives of the treasurer. However, many companies continue to view FX as just an ancillary part of their relationship with their corporate banking partners.

“In an age of digital innovation companies who are not giving FX the attention it deserves could be leaving real benefits and money on the table,” said Stephen Bruel, Senior Analyst in the Market Structure & Technology group at Coalition Greenwich and co-author of ‘Corporate FX Trading - The Value of Relationships and Execution Quality’.

One reason corporates have been slow to upgrade their FX trading platforms is that many companies continue to view FX as just one component of their broader relationships with banks. When deciding where to allocate FX trade flows, companies often consider their broader relationship, considering banks’ complementary services like lending in addition to the quality of FX service provided by counterparties. In fact, global corporates say they allocate almost half (48%) of their total FX trading business to counterparties on the basis of lending and cash management.

Today, however, corporate treasury departments have access to digital tools like transaction cost analysis (TCA) to measure the results of individual trades and the performance of the trading desk overall, as well as increasingly sophisticated algorithmic trading strategies that are adopted by asset managers and other FX market participants.

“Corporates globally should be increasing the focus and resources devoted to FX,” says Bruel. “They should be encouraging their desks to adopt more advanced tools - the more electronic the trading, the better the data available to analyse execution quality and optimise results.”

 

ABN Amro goes live with CBA’s trade finance transaction monitoring software

Norwegian software vendor Commercial Banking Applications AS (CBA) has confirmed that ABN Amro Bank has gone live using the Transaction Due Diligence (TDD) functionality available within CBA’s IBAS GBF - Global Banking Factory solution. 

The ABN Amro Bank team worked closely with CBA to develop the TDD capability, which the bank is now actively using across its global trade finance operations to monitor transactions and flag suspicious activity. The solution enables the bank to detect any unusual behaviour immediately, helping to combat financial crime and ensure full compliance with national and international regulation.

In IBAS, banks have the flexibility to design and optimise the due diligence structure and associated rules for themselves - covering both local and international regulatory requirements. In ABN Amro’s case this helps ensure they meet Dutch regulatory requirements, together with all relevant international regulations in order to mitigate against fraud and suspicious activity and meet the requirements of all internal and external auditors.

The go-live of IBAS TDD builds on the partnership between CBA and ABN Amro Bank following the signing of a five-year agreement between the two organisations in 2023. Both parties are committed to continue collaborating and innovating in the automation and digitisation of trade finance processes.

 

Emirates NBD and BeZero Carbon look to boost customer confidence in carbon markets

Emirates NBD has announced a partnership with BeZero Carbon, a global carbon ratings agency, to conduct enhanced due diligence on the projects it makes available to customers seeking to offset residual emissions voluntarily.

The partnership supports the bank’s commitment to providing best quality solutions for clients even in niche and developing areas such as voluntary carbon markets. The bank will have access to hundreds of independent and science-based risk assessments of carbon projects around the globe, which it hopes will build customer confidence and trust in the quality of investments.

At a time when the integrity of offsetting actions and the quality of underlying projects is more important than ever, Emirates NBD says it has taken steps to ensure that its customers have the opportunity to identify and procure high-quality credits globally, leveraging their local partners’ expertise and resources.

“Assessing the various solutions offered in the market can be challenging due to a lack of transparency in the marketplace,” said Vijay Bains, Chief Sustainability Officer and Group Head of ESG at Emirates NBD. “Our new partnership enables customers to fulfil their sustainable investment objectives by ensuring that every solution offered has been vetted and verified.”

 

BBK partners with DP World Trade Finance to boost Middle East trade

Bahraini financial institution BBK has partnered with DP World Trade Finance, the trade finance business unit of DP World, Dubai. This strategic collaboration aims to maximise BBK’s global presence in Bahrain, Kuwait, UAE, India and Turkey, to offer trade finance solutions to businesses globally.

A statement issued by the bank says that the partnership is set to utilise BBK’s banking solutions alongside DP World Trade Finance’s ability to provide transparency and visibility on any underlying transaction that uses DP World’s ecosystem and logistics network, offering seamless financial solutions and operational efficiencies for businesses across the region.

The partnership outlines a framework for cooperation, focusing on integrating logistics and financial services to support businesses in optimising their supply chain operations. This partnership is expected to drive growth, improve operational efficiency, and provide comprehensive support to businesses navigating the complexities of regional and global trade.

“Partnering with BBK aligns with our mission to bridge the ever-increasing trade finance gap, which inhibits growth of business around the world,” said Sinan Ozcan, Senior Executive Officer and Board member of DP World Trade Finance. “The partnership will help BBK leverage DP World’s end-to-end supply chain capabilities to get visibility and transparency on the underlying trade.”

 

Council of digital wallets forms to accelerate cross-border payments interoperability

TerraPay, a global money movement company, has announced a collaboration with five other wallet operators to establish the “Wallet Interoperability Council.” The council aims to leverage TerraPay’s technology to facilitate interconnection and interoperability in cross-border transactions.

Together, these operators serve millions of wallet users in regions such as Bangladesh, Colombia, Kenya, Senegal, Tanzania, and Uganda. The founding members of this council include Airtel, bKash, MPESA, Nequi, and Sama Money.

The council aims to facilitate merchant payments, international remittances, and other use cases in cross-border transactions by interconnecting their diverse platforms, advancing global wallet interoperability. While wallets have predominantly served as local payment solutions, there is a clear demand for expansion into the global arena, and TerraPay technology aims to facilitate this expansion.

This open collaboration will bring together the expertise and resources to develop the conditions that ensures secure, efficient, and cost-effective cross-border wallet transactions for payments and money movement. TerraPay enables this initiative, providing both the technology infrastructure and handling clearing and settlement processes.