by Neill Penney, Head of FX Workflow, Thomson Reuters, with Priscilia Bouton Peignoux, Financial Markets Director and Cyril Merkel, Financial Risk Manager, Sanofi S.A.
In a globalised trade world, currency conversion is becoming a constant in almost any commercial exchange. It is not only a necessary step in the payment process but also a risk mitigation and hedging instrument for corporate treasurers, according to Aite’s 2015 report on business-to-business FX transactions. But with regulation and uncertainty in financial markets continuing to be a major catalyst for change and stress in FX markets, many corporate treasurers are finding it challenging to maintain optimal levels of liquidity and cash flow profiles for their companies. The need to automate FX for operational efficiency is no longer optional for treasurers, but obligatory.
In this feature, Neill Penney, Head of FX Workflow at Thomson Reuters, discusses some of the trends and developments in electronic dealing that benefit the treasury value chain beyond serving as a request for quotation (RFQ) platform. He is joined by Priscilia Bouton Peignoux, Financial Markets Director and Cyril Merkel, Financial Risk Manager of Sanofi S.A. who are long-standing users of FXall.
The value of online FX dealing has become widely recognised across the corporate treasury community, particularly through a bank-independent multi-bank portal. While historically, larger treasury functions with high transaction volumes have been most active in using electronic dealing portals, treasuries of all sizes are now implementing these solutions. At a basic level, it is far easier to obtain multiple quotes through a portal than when dealing by telephone, and to select and transact automatically at the best price. Dealers can then demonstrate best execution as quotes are stored on the transaction for bank performance analysis and reporting. Once the trade has been executed, post-trade processing can take place automatically, either using capabilities within the platform or by integrating seamlessly with treasury management systems (TMS) and treasury modules of enterprise resource planning (ERP) tools.