Brad Bailey, an electronic trading and market structure specialist at financial advisory firm Celent, agrees that there are still substantial opportunities to cut FX costs for most small and mid-sized institutions, particularly those with sporadic foreign-exchange requirements.
“Responsibility for FX within smaller corporates tends to fall into the treasury department, which is often not set up with the proper technology, data and trading documentation,” he says. “Access to pricing, aggregation, FX platforms and multiple counterparties is tough for smaller corporates, as they often see FX as an operational process rather than trying to achieve best pricing.”
However, Bailey suggests the situation is improving as fintechs integrate more FX tools into cloud-based treasury systems and provide better tools for corporate trading and hedging, and as institutional technology providers increasingly consider the needs of corporates.