By Ludovic Blanquet,  Chief Product officer, smartTrade
By Ludovic Blanquet, Chief Product officer, smartTrade

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:

  • Easy to use onboarding and segmenting tool,
  • Advanced workflow tailored per client segment,
  • Dynamic sales margining,
  • Risk Management,
  • Integration with other Banking services.
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Recent months have proven to be quite volatile in the Foreign Exchange market

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’s 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 workflow tailored 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’s 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 sales 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’s 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’s 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. 

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About smartTrade Technologies

smartTrade Technologies, pioneer of multi-asset electronic trading solutions, offers innovative technology allowing you to focus on your trading and grow your business while quickly adapting to changing market requirements. smartTrade provides agile end-to-end trading solutions supporting Foreign Exchange, Fixed Income, Equities, Derivatives (including Options), Cryptocurrencies and Money Markets.  Our solutions offer connectivity to over 130 liquidity providers, aggregation, smart order routing, order management, pricing, distribution, risk management and fully customizable HTML5 user interface. smartTrade works with a variety of clients ranging from banks, brokers and asset managers to corporate firms. LiquidityFX for Foreign Exchange and smartFI for Fixed Income are provided as a fully managed and hosted service, colocated in all the main marketplaces globally. smartAnalytics, our multi-asset Big Data analysis solution, allows the creation of historical or real time dashboards and reports to interact more effectively with markets and end customers. 

For more information, visit www.smart-trade.net