Fund managers concern for US election’s impact on FX markets 

North American fund managers are concerned about increased foreign exchange (FX) volatility, the impact of policy changes on currency values and unpredictable FX market movements because of the US election, according to a report from MillTechFX. As a result, 65% plan on increasing their hedge tenor, extending the period during which they are protected from volatility, and 34% intend to increase their hedge ratio, protecting a larger part of their exposure and business from volatility.

The report also revealed that North American fund managers are battling against the stronger dollar. Over four-fifths (83%) said their returns so far this year have been impacted by the strong dollar, while 81% said their operational costs had risen, 34% significantly. Nearly all (93%) are concerned about the impact of the stronger dollar on their exposure to foreign markets, while 46% were very concerned.

Factors such as the stronger dollar and increasing volatility have led 79% of North American fund managers to hedge their forecastable currency risk, up from 72% in 2023. The average hedge ratio is 55%, a rise from 50% last year, and the average hedge tenor is just over five months (5.41), up from 4.96 last year. This suggests that fund managers are hedging more of their FX risk and for longer to protect their returns, despite 80% stating that the cost of hedging had increased in the past year.

Other notable findings include a clear push for automation – 99% are exploring new technologies focusing on process automation (41%), while 31% are considering automating their entire FX workflows. A significant proportion of fund managers still use manual processes to manage FX operations, with 26% still instructing FX transactions over email and 24% still doing so over the phone.

They are also gearing up for T+1 settlement by increasing staffing (45%), enhancing communications with counterparties (43%) and upgrading IT systems (42%). Over three-quarters (78%) reported that the shift to T+1 increased operational costs. The principal operational FX challenge for fund managers is cost calculation (30%), as well as onboarding liquidity providers (28%) and securing credit lines (26%). FX counterparty credit was the key priority (36%), followed by uncollateralised hedging (29%).

The MillTechFX North American Fund Manager CFO FX Report 2024, the latest instalment of the firm’s global research series, surveyed 250 senior finance decision makers at North American fund managers to reveal their FX challenges, hedging strategies, their drive towards automation and how they plan on managing currency risk around the upcoming US election.

 

WorldFirst and Walmart develop streamlined process for e-commerce sellers in China

Digital payment and financial services platform WorldFirst has worked with Walmart to enable China-based e-commerce sellers to collect funds from Walmart Marketplace securely. This should accelerate global growth opportunities.

In a press release, WorldFirst said the new digital payment collection service will provide online sellers with security and compliance, low costs, and rapid store opening. Funds collected are directly deposited into the merchant’s World Account, providing businesses with streamlined access to cross-border payment and financial services to support their global expansion efforts.

Merchants will not face service charges and will have complete protection against exchange rate losses on collected payments. Additionally, fees for withdrawals and transfers are limited to a cap of 0.3%. And, through WorldFirst's Global Voyage Program, merchants can set up a store in around a day with no monthly fees.

 

Xerox selects SAP to transform enterprise architecture

Xerox Holdings has chosen multiple SAP solutions to transform its enterprise architecture as part of its multi-year Reinvention project. Reinvention involves Xerox aligning its resources to improve and stabilise its core print businesses, increase productivity and efficiency, and focus on its emerging digital services and IT services capabilities to improve business outcomes for its clients.

In choosing the RISE with SAP solution to move to the cloud, Xerox is embarking on the clean core approach to streamline operations across markets and business processes. By selecting SAP S/4HANA Cloud, Xerox expects to reduce IT costs, standardise global processes in connection with creating an international business services organisation and significantly simplify its application landscape, enabling the delivery of new business models in line with the changing demands of the industry.

Some other cloud solutions Xerox chose include SAP Business AI, the SAP Customer Experience portfolio, SAP Business Technology Platform (SAP BTP) and supply management solutions from SAP. Bringing several innovative cloud solutions together on SAP BTP provides Xerox with an integrated platform for finance, supply chain, and sales functions. This will allow the company to have real-time insights with live drill-downs to operational transactions, creating greater agility and flexibility to add new offerings while increasing automation, simplification and cost reduction throughout its operations. SAP Business AI will initially be deployed for business integrity screening, and additional use cases will be explored in the coming months to deliver further benefits for the business.

Xerox will also tap into digital supply chain solutions from SAP to optimise its supply chain and mitigate risks by improving inventory visibility across the nearly 145 countries it operates in, extending analytics across the business for better data-driven decision-making.

 

Treasury4 joins J.P. Morgan’s payments network

Treasury4 and J.P. Morgan have partnered to offer API-based connectivity for balance, transaction, and investment data through the former’s global cash management solution, Cash4. This provides secure, automated ingress of cash balances and transactions as well as investment holdings and transactions. With near real-time data integration, Cash4 is designed to simplify cash flow management, including reporting and forecasting.

J.P. Morgan’s API integrations with Treasury4 provide cash visibility and management, which should help treasury teams to make more data-informed decisions.

Treasury4 aims to create a single source of truth for treasury data, preventing anomalies and ensuring reliable decision-making. Cash4 provides advanced categorisation with a rules-based engine. It features a real-time direct statement of cash flows, including calculating cash flow metrics like cash from operations (CFO) and free cash flow (FCF). 

 

Ripple and DIFC Innovation Hub plan to accelerate Middle East blockchain adoption

Ripple has announced plans to partner with the DIFC Innovation Hub to accelerate innovation in blockchain and digital assets in the UAE. The partnership aims to connect the next generation of developers with the DIFC Innovation Hub, the largest innovation community in the region and home to more than 1,000 growth-stage tech firms, innovation companies, digital labs, venture capital firms, regulators and educational entities.

The partnership between Ripple and the DIFC Innovation Hub is designed to drive blockchain and crypto adoption among early-stage companies and scale-ups and introduce and position the technology with traditional large strategic institutions and their use cases.

The Ripple Middle East and Africa (MEA) regional office is located within the DIFC, which approved XRP for use within the Centre in November 2023. Since that date, licensed virtual asset firms within the DIFC can incorporate XRP into their virtual asset services.

 

Flywire acquires Invoiced to bolster global B2B payment network

Flywire Corporation has acquired Invoiced, a SaaS platform that is designed to enable B2B finance teams and CFOs to automate the critical order-to-cash process. The acquisition is expected to build on Flywire’s existing B2B payments business by enhancing the software suite it provides to its global clients and target segments. 

Flywire says it plans to expand on Invoiced’s track record of providing invoicing software to a diversified client base across industries and geographies and reinforces its commitment to powering software and payments to its target B2B segment, which Flywire estimates to be responsible for approximately US$10 trillion in global payment volume.

Invoiced’s SaaS platform helps B2B finance teams automate AR processes by managing invoices, communicating with payers, and reconciling payments to their Enterprise Resource Planning (ERP) systems. It does this through deep integrations with accounting systems and ERPs, including Oracle’s NetSuite, Sage Intacct, and Microsoft Business Dynamics. 

 

PNC Bank and LA Angels launch business leader recognition programme

PNC Bank and the Los Angeles Angels Major League Baseball franchise have launched Business Angels powered by PNC Bank, a multi-year partnership that recognises exemplary local business leaders who are making a positive impact across business, industry and community.

Through the Business Angels programme, honourees in the community will receive a marketing package for their business from the Los Angeles Angels. Assets include a luxury suite for a 2024 regular season game, on-air mentions on Angels Radio AM830, recognition on the Big A LED, a full-page advertisement in Angel Magazine, a chance to participate in an Angels pregame ceremony, and business networking opportunities throughout the programme.

“Business Angels are pillars of our local community, and we are happy to join the Los Angeles Angels in elevating these leaders who play a critical role in fuelling economic growth, job creation and innovation,” said Jarrod Ingle, PNC regional president of Orange County and Inland Empire.