by Greg Edwards, Global Head of Transactional FX, and Gareth Lloyd-Williams, Head of UK Corporate Sales, HSBC
Managing foreign exchange (FX) risk is a priority for every international treasury function, helped by a range of solutions which have emerged in recent years to increase risk transparency and enhance operational efficiency. However, by leveraging innovative FX solutions, treasurers can also facilitate new commercial activities and create competitive advantage, whilst managing risk and cost.
Early stages of the FX innovation journey
Foreign exchange (FX) management has been an area in which innovation has flourished over the past decade or so, but this has largely been targeted at automating and increasing transparency of FX transactions between treasurers and their banks. This includes the evolution of bilateral dealing platforms (e.g., HSBC evolve) offered by banks, and independent, multibank trading platforms. By leveraging these platforms, treasurers can seek competitive quotes on a wide variety of currency pairs and product lines from multiple counterparties, transact online and transfer deal and quote information to the treasury management system (TMS).