Technology has changed the way we do just about everything. From booking airline tickets, to getting mortgages – advances over the last 20 years have made it possible to manage even the most complex tasks in a few clicks. The same is true for corporations, but despite the advancements in technology, actively managing FX for corporates has remained mostly a manual process. With its new generation execution platform, HSBC has made the most of technology advances to help corporate clients take the complexity out of their day-to-day operations.
Taking FX execution to the next level
“What we learned from our clients is that they want to have as much control and transparency as possible over every aspect of their liquidity management,” says Lee Butler, Global Head of FX eDistribution for HSBC. “That includes hedging FX exposure”. HSBC Evolve is the bank’s secure, end-to-end platform designed to seamlessly integrate execution and exposure management with post-trade services. The result is more control over FX execution throughout the entire trade lifecycle. From pre- to post-trade, HSBC Evolve provides automated processes that help save time and money, and increase transparency to help minimise FX exposure risk.
Using HSBC Evolve, treasurers log on to execute spot, forward, swaps, NDFs and many more products in over 1,500 currency pairs. “This includes 13 restricted currencies,” says Mr Butler. “Our clients have told us that the breadth of this restricted markets offering is rarely available via self-serve platforms like HSBC Evolve”. In addition to this, the ability to execute Time Options and Drawdowns via the platform further adds to how HSBC Evolve is making life easier for corporates.
With HSBC Evolve, all transactions are fed directly into a post-trade portal. This means users have immediate access to confirmations and information for every FX transaction executed through HSBC regardless of the channel – whether through HSBC Evolve, by phone or through a multi-dealer platform. “Everything is designed to help our clients’ get a clear picture of their exposures and hedge them on a faster, easier and smarter interface,” says Mr Butler. Previously these confirmations were dealt with manually, and for any records that didn’t match a query must be submitted to the bank’s operations team to verify the correction transaction. This time-consuming and cumbersome process can lead to errors with financial implications.
Greater day-to-day efficiency, smarter tools
“Our clients tell us that FX takes up more time proportionately than other more important work,” explains Mr Butler. That’s why HSBC Evolve was designed to help treasurers with cash management, even if they have operations in multiple geographies. "Because transactions can be executed across multiple balance sheets and currencies, including restricted currencies, HSBC Evolve allows group treasurers to manage their entire group’s FX. This not only adds efficiency, but also saves time and reduces costs." It makes it easy for a central treasury that’s based in London, for example, with centres in New York and Singapore, to conduct trades in all currencies from any location and still get one consolidated view.
Because transactions can be executed across multiple balance sheets and currencies, including restricted currencies, HSBC Evolve allows group treasurers to manage their entire group’s FX. This not only adds efficiency, but also saves time and reduces costs
HSBC Evolve also allows corporates that require multiple settlement instructions to choose the ones they want to use for each transaction. “They can even change settlement instructions on their own if they need to,” says Mr Butler. “And future releases will include the ability to self-serve and create new settlement instructions and make payments to a third party”.
For more complex operations, HSBC Evolve gives clients access to a host of FX capabilities, including a robust suite of execution algorithms. “Let’s say you have GBP100 million you want to execute between 4 pm and 5 pm. Rather than doing a large risk transfer trade with a big market footprint, or spending an hour doing lots of small trades, you can let HSBC’s algos do the work for you”. With a range of strategies to match your specific needs, the algo will determine the optimal clip sizes, speed of execution, and more. You’re free to work on other, higher value tasks, while the algo takes care of your FX hedging for you.
A digital transformation tailored to clients
“Before we even started development, we collected feedback from clients about what they wanted in an FX execution platform,” Mr Butler says. “As a result, we had a good starting point – but the key for us is to keep moving forward and continue listening to what our clients need and want”. This includes hosting focus groups and webinars to show clients what’s in development and get their feedback on key functionality. And, of course, the bank is always looking for ideas on what further developments might make their lives easier, and offers the chance to pilot new features - “We work closely with clients who want to be early adopters to tell us what works for them and what doesn’t.”
In addition to this, with HSBC being a leader in major currencies and emerging markets liquidity, corporates are able to leverage off a unique access to HSBC’s liquidity network. This global footprint tied in with a diverse product range creates the perfect platform to enhance efficiency and control into treasurers operations.
"No one really knows where technology will go, which is why HSBC Evolve was developed to do just that – evolve. Ultimately our approach is to deliver more than an execution platform and to achieve digital transformation that will support our clients on various aspects such as payments, trades, research and more," concludes Mr Butler.
No one really knows where technology will go, which is why HSBC Evolve was developed to do just that – evolve. Ultimately our approach is to deliver more than an execution platform and to achieve digital transformation that will support our clients on various aspects such as payments, trades, research and more
HSBC Evolve, which has been live for two years, has recently been awarded the best eFX Platform for Corporates by FX Week. There are currently over 6,800 HSBC clients actively using the platform for their day-to-day FX hedging needs.
|A single point-of-access to pre-trade pricing, execution and post-trade activities|
|Spot, forward, swap, non-deliverable forward, time option forwards, multi-deal execution capabilities and more|
|Access to 1,500 currency pairs, including 13 restricted currencies|
|A suite of algorithmic services for intelligent execution strategies|
|Instant bookings and confirmations|
For Professional Clients and Eligible Counterparties only.