FX Risk: It’s Not Just About the Exchange Rates

18-06-2020 | treasuryXL | XE |

Let’s face it: for individuals and businesses alike, exchange rates are one of the most important factors of international money transfer. Having a favorable exchange rate can make a significant difference in how much money you need to provide in your payments, and knowing that you’ll always get a good rate can make a difference in your day-to-day transactions as well as your long-term strategic planning.

However, in the world of FX and FX risk management, one common mistake we see is businesses solely looking at the rates they can get from their FX providers, and failing to look past the rate to other determining factors. But what are these factors, and what should businesses really be looking for in their FX providers?

Why shouldn’t you only look at the rates?

To clarify: we aren’t saying that you shouldn’t look at the rates offered by potential providers. They just aren’t the only thing that will affect your business’s exposure to currency risk.

FX providers don’t just help you make currency exchanges. They offer a wide range of other products and services to help organizations manage their international payments as well as manage their FX risk, and having a narrow focus on the exchange rates can prevent you from seeing the bigger picture and understanding how the FX provider can help your business as a whole.

Think about all of the ways in which your business engages with international currencies, and look at all of your potential FX risk exposures. They don’t all have to do with the exchange rates, right? The right provider for your organization will have product offerings that address your organization’s specific needs.

It’s also important to assess potential providers with a discerning eye, and with the mantra, “If something seems too good to be true, it probably is.” If a provider offers fantastic rates that noticeably stand out from the rates offered by the competition, carefully consider why that might be. Are they able to offer these fantastic rates at the cost of offering other essential products and services to their clients? Don’t be afraid to ask the detailed questions.

Rate comparisons can also be misleading. The foreign exchange markets are constantly moving, and it’s not uncommon for the rates to change multiple times per day. Unless you’re comparing rates at one precise moment, it’s possible that you don’t have a completely accurate comparison between the two. A rate that looks stronger now might not be that way in a few hours.

As a final note, keep in mind that one service that many foreign exchange providers offer is watching the rates for you. If there is a particular rate that your business wants for its transactions, look into providers with a “rate alert” option so you won’t spend all of your time being preoccupied by checking for the best rate.

What else should you look for?

So now that we’ve established that rates aren’t the only offering you should look for, you’re probably wondering what else you should be looking for. Ultimately, that depends on your foreign exchange risk and what your business is looking for.

Once you’ve created your FX risk management policy, consider what your organization can’t do alone. That’s where your foreign exchange provider can help you. Some of the features you might want to look for include:

  • Specialized services for your sector or business operations
  • Support services to aid when something goes wrong
  • Comprehensive online services that can be accessed anywhere, any time of day
  • Transparency and clear communication
  • Services that can simplify complex business processes
  • Fast transaction speeds

Don’t be afraid to shop around for the right foreign exchange provider. If you want the best solutions for your business, it might take some time before you find the provider that has the expertise and products to address your risks.



Get in touch with XE.com

About XE.com

XE can help safeguard your profit margins and improve cashflow through quantifying the FX risk you face and implementing unique strategies to mitigate it. XE Business Solutions provides a comprehensive range of currency services and products to help businesses access competitive rates with greater control.

Deciding when to make an international payment and at what rate can be critical. XE Business Solutions work with businesses to protect bottom-line from exchange rate fluctuations, while the currency experts and risk management specialists act as eyes and ears in the market to protect your profits from the world’s volatile currency markets.

Your company money is safe with XE, their NASDAQ listed parent company, Euronet Worldwide Inc., has a multibillion-dollar market capitalization, and an investment grade credit rating. With offices in the UK, Canada, Europe, APAC and North America they have a truly global coverage.

Are you curious to know more about XE?
Maurits Houthoff, senior business development manager at XE.com, is always in for a cup of coffee, mail or call to provide you detailed information.



Visit XE.com

Visit XE partner page




Virtual Coffee Sessions for NL and BE: Managing Payments in a Remote Reality

| 16-06-2020 | TIS |

Are you tired of talking about “remote working” and the “new normal”? Everyone is keen and ready to get back into the office. But it will never be the same than before. Due to the current situation, special prerequisites need to be taken in order to make sure to meet the health standards but on the other hand creating a situation where people can work together onsite to contribute to business success.

Virtual event

TIS organizes a special virtual event, one that is dedicated to treasurers and financial professionals and moderated by TIS experts. Alongside TIS they will also have two of their customers with them who will also be open to questions and discussion. With the virtual coffee session they connect people in order to find out what the best way of going back to normal can be. They will also talk about a very important topic: Cash Visibility. TIS will highlight how important visibility is to manage payments in these days.

Receive a present

In order to give you a great start into the day and a great virtual experience we will deliver you a little TIS coffee present. Just insert your full delivery address in the registration form and something good will be delivered right in time for the virtual session.

Date, time and registration

Virtual Coffee Session for the Netherlands

Date: Tue, Jun 23, 2020

Timing: 09:00 AM – 10:00 AM CEST

Register here


Virtual Coffee Session for Belgium

Date: Wed, Jun 24, 2020

Timing: 09:00 AM – 10:00 AM CEST

Register here


Please note, the use of the webcam is mandatory.




Trade Finance and Compliance | How to properly assess risks

| 15-06-2020 | Ger van Rosmalen | treasuryXL

“As a result of the stricter regulations, the financial sector has been forced to hire large numbers of people. Then, in practice, after intensive investigation on every report, it appears that more than 99% of the cases are false alarms! This results in frustrating and mind-numbing work for highly skilled workers.”  Now the combination of Trade Finance and Compliance / AML (Anti Money Laundering) has been my focus for some time. I was always assuming that Compliance / AML supports the business (customers / products), but because of the stricter regulations, I think the business appears to be supportive of Compliance / AML.

This blog is in Dutch language.

Als je kijkt naar Trade Finance dan zie je dat de definitie vanuit de toezichthouder(s) en de vooraanstaande Wolfsberg Group een breed begrip is. Onder standaard Trade Finance Producten worden verstaan:

  • Documentair Betalingsverkeer: zoals Letters of Credit en Documentaire Incasso’s. Bij deze standaard producten wordt gewerkt met handelsdocumenten zoals facturen, vervoersdocumenten, verzekeringsdocumenten en oorsprongsdocumenten. Door banken wordt gecontroleerd of deze in overeenstemming zijn met de onderliggende handelstransactie. Daarnaast zijn deze producten onderworpen aan internationale regelgeving uitgevaardigd door de ICC Internationale Kamer van Koophandel. Deze regels samen met de gebruikelijke internationale bancaire praktijk hebben ervoor gezorgd dat de banken de “financial crime“ risico’s beter kunnen controleren.
  • Open Account: betalingen; het overgrote deel van de wereldhandel wordt afgewikkeld op “open account” waarbij er een simpele betaling plaatsvindt via het bancaire betalingssysteem voor geleverde goederen of diensten. Hier is de betrokkenheid van de banken ten opzichte van de onder punt 1 genoemde producten gelimiteerd tot de afhandeling van een zogenoemde “clean payment” en is men zich niet altijd bewust van de onderliggende transactie. Banken kunnen hier slechts de standaard AML en sanctie screening op de betaling uitvoeren.

Onder “financial crime” risico wordt verstaan o.a. witwassen, fraude, belasting ontduiking, omkoping, corruptie en terrorismefinanciering. De algemene perceptie is dat Trade Finance door de toezichthouders wordt gezien als een hoog risico. Maar in hoeverre klopt dit? Ten aanzien van “Open Account” betalingen is dit in veel gevallen juist en ben ik van mening dat we juist alert moeten zijn op het hoog risico bij “Open Account” betalingen. Echter in de gesprekken die ik had met de toezichthouder werd “Documentair Betalingsverkeer” juist gekwalificeerd als een normaal risico.

Het verschil zit hem voornamelijk in de mogelijkheden om bij documentair betalingsverkeer veel meer controles te kunnen uitvoeren”, wat bij “open account” betalingen niet het geval is. Veel van de genoemde risico’s bij Trade Finance om illegale verplaatsing van gelden te maskeren zijn bij “open account” zeer hoog. Denk hierbij aan: over-facturering, onder-facturering, meerdere facturen, te weinig verscheept, teveel verscheept, opzettelijke verduistering van het type goederen en spookverschepingen.

Al deze bovengenoemde aspecten worden bij “Documentair Betalingsverkeer” veel eerder gesignaleerd omdat de fysieke handelsdocumenten uitgebreid door de banken worden gecontroleerd. In de eerder genoemde gesprekken met de toezichthouder merk ik een grote nuancering. Waar de toezichthouder spreekt over “richtlijnen” worden deze bij Compliance afdelingen vaak vertaald in eisen en regels. Banken zeggen te voldoen aan de regels (of waren het richtlijnen?) van de toezichthouder en vaak ook The Wolfsberg Group principles.
Wat is The Wolfsberg Group? Zie hieronder de beschrijving die ik op hun website heb gevonden:

“The Wolfsberg Group is an association of thirteen global banks which aims to develop frameworks and guidance for the management of financial crime risks, particularly with respect to Know Your Customer, Anti-Money Laundering and Counter Terrorist Financing policies”.

Saillant detail: Het verbaast mij dan weer wel dat een simpele Googlecheck snel laat zien dat alle van de 13 genoemde banken boetes hebben gekregen voor het niet naleven van hun eigen “principles”.

Duizenden mensen zijn inmiddels aangenomen om 99% nutteloze checks te doen omdat we wel graag die 1% duistere praktijken boven water willen halen. Daar zijn niet alleen de banken de dupe van maar ook het grootste deel van het bedrijfsleven wat te goeder trouw zijn transacties wil afwikkelen. Belangrijk is dan ook dat bij Trade Finance transacties altijd een importeur of exporteur betrokken is, die relatie is van een bank. Het is essentieel dat de bank de ondernemer én zijn onderneming én activiteiten goed begrijpt! Toezichthouders verwachten van de banken dat zij de kennis van handelstransacties kunnen vertalen naar risico’s. Een gevolg kan zijn dat banken een intensiever contact onderhouden met klanten en er meer informatie-uitwisseling zal moeten plaatsvinden. Daarnaast is het van belang dat de beoordeling van risico’s wordt gedaan aan de hand van objectieve criteria en de persoonlijke mening van beoordelaars niet de boventoon mag voeren. Dit is onethisch en onprofessioneel.

Twee voorbeelden uit de praktijk ter verduidelijking

  1. Heel jammer dat een bank een Letter of Credit transactie van een ondernemer met een Afrikaans land niet wilde faciliteren alleen op basis van het feit dat ze amper te eten hebben in dat land!
  2. Of dat de export van gebruikte vrachtauto’s naar een politiek stabiel land ook op Letter of Credit basis niet werd goedgekeurd met als reden dat deze voertuigen zouden kunnen worden omgebouwd tot militair voertuig. Dit werd slechts gebaseerd op een persoonlijke veronderstelling en getuigt bovendien van gebrek aan kennis van zaken. Temeer ook omdat de betreffende exporteur zelf gebruik maakt van een geavanceerd Compliance/AML/Sanctie systeem vergelijkbaar met wat de banken zelf ook gebruiken en zelfs goede contacten heeft met het FIU ( Financial Intelligence Unit Nederland) inzake verdachte transacties.

Dat niet alles door systemen wordt afgevangen mag dit voorbeeld duidelijk maken waarbij een Nederlandse exporteur een “Open Account” betaling ontvangt van een Duits Ingenieursbureau en zonder “red flags” op de rekening wordt geboekt. Achteraf bleek dat de betaling weliswaar uit Duitsland kwam maar dat de goederen direct naar een (dubieuze) Scheepswerf in Rusland werden getransporteerd. Het grootste risico zie ik altijd nog bij de “open account” betalingen. En door vooral in gesprek te blijven met relaties, aandacht voor de klant, weten wat er speelt en gezond verstand laten prevaleren samen met geavanceerde (Compliance/AML/Sanctie) systemen die ongebruikelijke transacties zichtbaar maken zou Compliance in mijn ogen weer ondersteunend moeten worden aan de business (klanten en producten) en niet andersom.


Ook ondernemers doen er goed aan om hun eigen verantwoordelijkheid te nemen en te beseffen, dat men niet meer wegkomt met een simpele Googlecheck en wat financiële data om een relatie met een nieuwe afnemer of leverancier aan te gaan. Het is voor een bank een geruststelling als de relatie aantoont dat zij zorgvuldig te werk gaat en gebruik maakt van ook voor het MKB beschikbare Compliance/AML/Sanctie software. Toegang tot deze informatie voordat je een handtekening onder een contract zet helpt niet alleen van financiële risico’s te beperken maar beschermt ook de reputatie van de ondernemer.

De internationale handel is zeker in deze uitdagende coronatijd gebaat bij een optimaal samenspel tussen de toezichthouder met duidelijke heldere richtlijnen, banken die deze vertalen naar werkbare procedures en ondernemers die de noodzaak van extra controles begrijpen en daarnaar handelen. Zo kunnen we samen ondernemend Nederland nog beter stimuleren in dat waar we van oudsher goed in zijn, succesvol handel drijven in binnen én buitenland.



Ger van Rosmalen

Trade Finance Specialist



7 Experts on Activating Liquidity – a Guide to Leveraging Technology to Generate New Growth

| 11-6-2020 | treasuryXL | Kyriba |

Managing liquidity has never been easy, but new technologies are making it easier. With ease comes speed, accuracy and efficiency, enabling treasury to more effectively see, move and protect cash and generate increased business value. However, activating liquidity while navigating volatile markets can be difficult. So how does treasury leverage technology to activate liquidity and generate new growth, and what does it gain by doing so?

‘7 Experts on Activating Liquidity’ is a Mighty Guide, sponsored by leading global cloud treasury and finance solution provider Kyriba.  In this guide the question of how to leverage technology to optimise treasury and finance, extend visibility and controls, and maximise enterprise value is explored by asking seven treasury management experts from different industries the following questions:

  1. How does expanding the scope of treasury to be inclusive of cash, risk, payments and working capital increase enterprise value?
  2. How do you most effectively manage FX risk exposure, and why is it important to do that?
  3. What are the advantages of centralizing and standardizing global payment processes through a single system?
  4. What are the advantages of centralizing the management of free cash flow and liquidity in your organization?
  5. What level of integration is necessary to get a true, real-time view of cash and liquidity, and how would that real-time data enhance decision making and performance?

Their insights are collected in the five chapters of this eBook. In reading them, David Rogelberg, Editor, was struck by how different the challenges are for each of the expert’s business, and how they all benefit from greater visibility into cash, payments, risk and working capital.

CFOs have a tough balancing act – trying to pursue strategic growth initiatives while minding the right level of risk. And recent global events have exacerbated this challenge. The answer to solving this problem lies in Active Liquidity – an approach to treasury and finance that elevates the impact of liquidity to generate new market value, even in volatile markets.

Kyriba is excited to sponsor this eBook, in which seven treasury leaders lend their expertise to the concept of Active Liquidity and the key pieces that it encompasses – optimizing cash, payments and risk to generate business value.  Activating Liquidity puts organizations on a path to new value creation, enabling them to:

  • Expand the abilities of treasury and finance, using liquidity as a lever to build value
  • Extend visibility and controls to see, move, protect and grow cash
  • Transform data into intelligence and drive action to maximize enterprise value

This Mighty Guide aims to provide a holistic view and credible advice by exploring, comparing and contrasting a variety of viewpoints from top experts.  The insights given by these treasury executives will give a deep understanding of the benefits of Active Liquidity and how insight into global cash, liquidity and exposure can help execute treasury strategies more easily and efficiently.

Request and download free e-book:

Kyriba is a proud sponsor of this Mighty Guide.  Kyriba empowers CFOs and their teams to transform how they activate liquidity as a dynamic, real-time vehicle for growth and value creation, while also protecting against financial risk. Kyriba’s pioneering Active Liquidity Network connects internal applications for treasury, risk, payments and working capital, with vital external sources such as banks, ERPs, trading platforms, market data providers, and other financial institutions. Based on a secure, highly scalable SaaS platform that leverages artificial and business intelligence on an API-enabled architecture, Kyriba enables thousands of companies worldwide to maximize growth opportunities, protect against loss from fraud and financial risk, and reduce costs through advanced automation. Kyriba is headquartered in San Diego, with offices in The Netherlands, London, Paris, New York, Tokyo, Dubai and other major locations.

For more information, visit www.kyriba.com.

Do You Know Your Business’s Foreign Exchange Risks?

11-06-2020 | treasuryXL | XE |

Every business that deals with international currency has foreign exchange risk, but every organization will face a different set of issues and risk factors, depending on their operations.

The first step to building a strong FX risk management program and reducing your organization’s foreign exchange risk is knowing:

  • What your exposures are,
  • Where they come from, and
  • How they can impact your business.

Many businesses around the world drastically underestimate their foreign exchange risk level, and are unaware of many of their greatest exposures. In this next installment of our series on FX risk management for businesses, we want to take you through the steps of assessing and determining your business’s foreign exchange risks. From there, you’ll be primed to take the next step of formulating your risk management strategy.

Where does foreign exchange risk come from?

There are many ways currency market exposure and foreign exchange risk can present themselves to your organization.

Some of the most common causes of foreign exchange risk include:

  • Importing. Does your business import any products or materials from overseas? If fluctuations in the market cause the value of your country’s currency to drop, then your organization’s importing costs could see a drastic increase.
  • Exporting. On the other hand, if your business sells goods and services to other countries, think about what market volatility could do for your prices. If your country’s currency increases in value, your business might not be as competitive in your market.
  • Balance sheet risk. If your organization has any subsidiaries or entities overseas that take care of some day-to-day operations, the value of their operations could change when the currency exchange rates do.

These are just a few examples of common causes of foreign exchange risk. Your business’s specific foreign exchange risk exposures will depend on what you do in your day-to-day operations and how you handle international currencies.

How do you know if your business has foreign exchange risk?

Identifying potential sources of risk is the first step. Once you’ve examined how your business deals with international currencies and whether your operations have any risk factors, you’ll need to assess the size of the risk and its potential impact.

There are three areas you’ll want to focus on:

  • Potential volatility. The markets are constantly moving, but global exchange rates can only move so far. Consider what could realistically happen and how that would affect your business, in order to get a better idea of your true exposure.
  • Net impact. Volatility could have a negative effect on your business, but your business could also see an increase in revenue from certain market fluctuations. Don’t just consider one element of the risk: look at the bigger picture.
  • Time. How far ahead have you planned? And on the other hand, how far ahead can you realistically plan while still making accurate, useful assessments?

How can you combat foreign exchange risk?

If some of these questions are making you feel overwhelmed, don’t worry. You’re not the only one who feels this way. Many businesses of all sizes around the world have found that they don’t have the expertise, time, or resources to fully assess their currency risk exposure and create a comprehensive risk management strategy that can fully address their risk profile.

foreign exchange specialist can give your organization the expert guidance that it needs to create a plan to combat your foreign exchange risk and minimize the impact of market motion. At Xe, we’ve spent more than 25 years in the global currency markets. We understand foreign exchange risk, and we want to help you and your business do the same.

Over 13,000 businesses each year lean on us for expert guidance and support in assessing and combating foreign exchange risk. Are you ready to manage your risk Visit our Business page for more information about our offerings and to take the first steps in enhancing your organization’s foreign exchange risk management.


Get in touch with XE.com

About XE.com

XE can help safeguard your profit margins and improve cashflow through quantifying the FX risk you face and implementing unique strategies to mitigate it. XE Business Solutions provides a comprehensive range of currency services and products to help businesses access competitive rates with greater control.

Deciding when to make an international payment and at what rate can be critical. XE Business Solutions work with businesses to protect bottom-line from exchange rate fluctuations, while the currency experts and risk management specialists act as eyes and ears in the market to protect your profits from the world’s volatile currency markets.

Your company money is safe with XE, their NASDAQ listed parent company, Euronet Worldwide Inc., has a multibillion-dollar market capitalization, and an investment grade credit rating. With offices in the UK, Canada, Europe, APAC and North America they have a truly global coverage.

Are you curious to know more about XE?
Maurits Houthoff, senior business development manager at XE.com, is always in for a cup of coffee, mail or call to provide you detailed information.



Visit XE.com

Visit XE partner page







| 10-6-2020 | treasuryXL | OpusCapita |

In these unprecedented times, OpusCapita want to bring the treasury community together with a complimentary 3-day online event.

The Vital Lifeline for Senior Treasury and Finance Professionals in an Era of Crisis.

In these times of uncertainty, and with recession looming, gaining visibility and control of actual (vs forecasted) cash flow and working capital has never been more important. To this end, the OpusCapita “Cash Management and Business Resilience Week” will provide you with a vital lifeline and timely knowledge exchange platform for you to directly engage and learn from other senior treasury and finance professionals as you work to develop and implement your response strategies.

The “Cash Management and Business Resilience Week” will be streamed live over 3 days in easily digestible blocks to ensure maximised impact, flexibility and engagement but with minimum disruption to your busy schedules in these hectic and uncertain times. All content will also be recorded to enable on-demand viewing at your convenience.

Tailored content will be delivered by some of Europe’s leading names in treasury and finance in different formats from interviews, break-out sessions and panel discussions to enable conversation and takeaways.

Exclusive to senior–level corporate treasury and finance professionals, the virtual series is specifically designed with our community in mind. From live-streams featuring Europe’s leading names to an array of networking opportunities, our platform provides all the perks of a live event in the comfort of your own home, all completely for free.


When? June 23-25

For more information about the speakers, programme and free registration click here.

About OpusCapita

OpusCapita is the provider of the number one cash management software with over 800 customers across more than 100 countries. Our secure, cloud-based solution enables Treasury and Finance professionals to harmonize global processes and policies, centralize treasury and finance operations and reduce complexity. We simplify the management of all cash flows and liquidity and automate the processing of both payments and collections. All of this ensures full visibility to your cash while reducing the risk of fraud.

Visit OpusCapita

Visit Partner Page

Read Customer Success Stories

What does experience in Treasury get you?

10-06-2020 | Niki van Zanten

In the wonderful world of Treasury there is an easy and digestible answer for most things, but to cover the full context requires general elaboration. In other words, there are always main points but fine-tuning is equally important and the devil is in the details.

Keeping this in mind, let’s get right into attempting to answer the headline question of this blog and unravel what experience can mean for you in financial risk management with the following points

  • The answer before the analysis
  • The right analysis and additional validation
  • Speed when needed and a reserved approach 
  • An actual opinion
  • Leadership in crisis
  • Holistic approach to Finance and ability to see what’s really going on

The answer before the analysis

At school you have the smart kids who have the answer for tough questions (lets say for conversation sake a math equation which looks like this 3(1-2x)=-9, where question is what x is*) and get there by taking the necessary steps** to come to the correct answer. This is what you are taught and it leads to the desired result. Then, there is a second group who shout out the right answer immediately but skipped all the steps involved. The teacher will disapprove of this behavior as it’s not how you are taught to handle a mathematical problem. Also not all kids can be taught to handle problems this way. If experience were to be molded into these group of kids, it would perhaps be one who can answer the question immediately and then explain this steps in retrospect. In financial markets this combination is very valuable as going for the process can be cumbersome and hard to explain, unless you see what will happen at the beginning.

The right analysis and the right questions

Imagine you walk into a wine shop and ask for a bottle of wine to combine with a mouth watering turbot with lobster Bearnaise sauce. The wine shop owner recommends a Montrachet**, asking no further question. You ask him, why this wine? He answers the following; because it is a thick buttery wine thus perfectly combining with the richness of Bearnaise. Also this happens to be an excellent year from an equally exceptional producer. You end up buying the bottle to return home and taste a thirteen in a dozen overpriced bottle of wine which does reasonable well with the food but has no element of surprise or the fascination one might expect.

A few question from the wine shop owner like, what kind of wine do you appreciate a lot and what do you like about it or how much is your budget would help you on the way. The best question from your side is potential, did you ever try it? If it turns out he didn’t try it and is still trying to sell it to you he has a close resemblance to a very typical sales person in the financial sector. In other words, experience enables people to ask the right question as well as create a value and advice instead of value add for the selling party only.

Speed when needed or a reserved approach

Typically, it is assumed that decision making in financial markets and Risk management requires speed. In most cases, this is correct, providing you understand of the exposure for which your are hedging as well as the derivative you are using. Put in a simple example, when hedging a 5 year INR loan, experience will tell you to do some extra due diligence on the accuracy of the underlying exposure for the simple reason that the consequences can be significant if things go wrong. Immediately, you will also realize a 5 year tenor on INR is either not liquid or the credit component is priced in at a hefty charge replacing your FX risk with an interest risk on the roll over. If you do not execute with speed, you could be exposed to the spot risk; if you execute to fast, you might hedge something not required or with a derivative which doesn’t do the job as intended. A seasoned advisor will be the best of both worlds.

An actual opinion

Experience creates a backbone as well as a level of comfort to believe what you are saying. Consequently, this boils down to the question; Why is someone trying to sell something to me? Because you need it or because they need you to make their PL? This goes into the discussion on whether an advisor has an intrinsic or extrinsic motivation. In my view, experience is not a guarantee on where motivation comes from, but it had a lot more time to positively develop. You will hear what you are better of hearing than what you want to hear. On top of that, the advise will be more holistic as it takes a while to get all the bits and pieces of treasury together, let alone how it fits across departments in a company.

Leadership in crisis 

Argentina 2018. Hefty devaluation on the currency as well as very steep and volatile interest rates combined with liquidity issues, not to forget the social and economic disaster hitting many citizens. Situations like this, attract senior management attention like Winnie the Pooh spotting a jar of honey. One might be inclined to leave the ”when to hedge or not” decision to senior management or have endless meetings discussing business mitigation. Each crisis has different triggers as well as solutions. A seasoned crisis manager does add direct value in not only identifying root cause of what’s going on, whether financial instruments actually provide relief or are a black hole of money and in putting together the right and moreover realistic guidance for the business. I am aware of the fact that people do not like hearing bad news, but not listening to it usually brings problems back on steroids. 

Holistic approach

This is a tough one. Most people will agree, the big picture is the best one to follow, but its very common across corporates to religiously hedge PL exposures. Even in cases where there are conflicts, like the cash flow at company level being different sign than the PL FX exposure, often a bogus hedge is implemented. A holistic approach and good target setting, helps you pick the strategy with the overall best results and experience.


These are just a few considerations on why experience can provide added value in (FX) risk management beyond the well know assumption that it provides a way to do more in less time and is a great way to also transfer knowledge down to the younger workforce.

Hope this gives some food for thought and many fruitful discussions.


* multiply by 3 giving 3-6X=—9 and then deducting 3 on each side reducing equation to -6X=-12 revealing the answer.

** Montrachet is one of the words most sought after white wines. Also happy to discuss wine but that’s a different beast and business proposition.


Niki van Zanten

FX specialist


Vrije Universiteit offers Summer Course Fundamentals of Treasury Management

| 09-06-2020 | VU Amsterdam |

Through this link we will inform inform you about the Summer Course Fundamentals of Treasury Management.

The definitive course details are being completed shortly.

You can reach out directly to the VU via pgo.treasury@vu.nl for more information.



How SMEs should select a BAAS platform?

| 08-06-2020 | Carlo de Meijer | treasuryXL

In my last blog BAAS and SMEs: New Opportunities I explained what Blockchain-as-a-Service is, where it could be used for and what the benefits are for SMEs. But another question is: how should SMEs select BAAS providers and their offerings. What are the various issues they should look at to get the most out of it. In other words: how should SMEs deal with this?

Why many SMEs move to BAAS?

But first, why this growing interest by SMEs for Blockchain-as-a-Service (BAAS)? There are various reasons for that. Such a the promised benefits in terms of efficiency, simplicity, transparency, speed, costs etc.

BAAS has some interesting use cases ranging from smart contracts, document origin tracking, resource sharing, single window, contract execution and spend rationalisation.

And BAAS could be used in various business activities like food safety tracking, international transactions, retailer industry, supply chain management, and trading.

What issues for SMEs to consider?

But before a company decides to start integrating BAAS services in their existing infrastructure it is important for them to consider a number of key issues. They should ask themselves a number of key questions.

Such as, does the company really need BAAS (or blockchain)? If so, for what purposes? And what are the specific (basic) requirements to look for at the “ideal” BAAS provider? What other factors to be considered? And finally, which BAAS provider offers the right and best type of solutions for the company?

Do you need BAAS or Not?

One of the first questions a company should ask themselves is do they really need BAAS. Whether or not BAAS matters to a company will depend on a number of issues.

Does the company already works efficiently from a cost and processing point of view? There may be hurdles in the company in the form of managing varied database, browsers, firewalls, application servers, and hardware, that could make it very difficult to integrate BAAS offerings into the legacy network of the company.

And does the company have the team skills that are comfortable and confident (or not) in using BAAS? Do they already use (one or more) cloud providers? And if so, do they have enough experience with these. This question is especially relevant because BAAS offerings are evolving quickly.

Other questions that may determine all or not choosing BAAS will be the tools available, choice of operating systems, ease of use, and pricing, thus costs.

So many things to think about, investigate and discuss.

Some broad guidelines for Selecting a BAAS Partner

Given the lack of readily available guidelines and best practices a lot of discussions and evaluations are needed into the process of selecting a BAAS provider or solution. Here are some broad guidelines a company should consider.

BAAS provider experience
First of all the company should ask themselves has the BAAS provider prior experience in setting up blockchain infrastructure? A company should ensure that the BAAS provider has proven experience in developing and deploying Blockchain technology. Companies should be ensured that the implementer department of the BAAS provider has professional staff that could easily attain the complex solutions for the enterprises. Companies should also ensure that the BAAS provider disposes of a good developer community, thereby guaranteeing “excellent output”.

BAAS provider’s commitment
There is also the question of BAAS provider’s commitment? Delivering quality is of great importance when choosing the right BAAS provider. A company should therefore probe their commitment to quality, process and standards of BAAS offerings.

Security assurance
Another critical issue that a company should investigate is can the BAAS provider deliver security assurance? In the first place they hey should ensure that –  for privacy and security reasons – BAAS offerings are built on permissioned blockchains. Given the variety of security issues ranging from application level to server level, it is important to look for potential gaps in security assurance in the proposed BAAS implementation plan.

Seamless deploying
A company should also look if the BAAS provider has enough experience in deploying. A company should evaluate the BAAS provider’s experience in deploying cloud-based solutions for operating systems similar to that of their organization. SMEs should  thereby look for BAAS providers that offer quick and economic deployment, testing, staging, and good production line. Companies also need to ensure that the new Blockchain infrastructure integrates seamlessly with their legacy systems.

A company should make sure that the proposed BAAS systems and processes are user-friendly and easily to adopt. After all, they look for  a system that their employees do not find difficult to use or navigate.

BAAS innovation
SMEs should also ask how innovative BAAS providers are. As BAAS solutions may vary from provider to provider, innovations might be a real trigger in case of any blockchain deployment. Innovations in the BAAS marketplace can create a more different type of BAAS architecture for a company’s organization.

Cost control
But also in terms of costing control the company should be aware of the real costs. Can a company be assured that they just pay for the value proposition delivered by the BAAS provider? Companies should therefore carefully analyse the pricing options and post-deployment support options and modalities. They should investigate if there are hidden costs linked to the BAAS contract.

Other features of BAAS offerings to look at

But next to these issues there are other basic features of BAAS offerings a company should look for. These include, amongst others, things such as offering good backend or backup solutions, quickly add up new additions to the platform, offer technical support in case of self-deployment etc.

Need for backend services
One key issue that should be investigated thoroughly by SMEs is how BAAS could deliver a company’s unique need for backend services such as integration of popular features and mainstream technologies. A BAAS provider should at least provide some key deliveries including data security, process control, costing control and integration. These backend services should support a wide range of applications without changing the legacy network, often characterised by multiple layers of the data sources, processes and workflows.

Companies should also know  the ins and outs of the blockchain platform in order to avoid risks. This asks for adopting proper monitoring and managing tools to manage the BAAS solution network effectively. For security reasons it should be made sure that the application data and user data “should stay within the boundaries of the platform” .

There are also a number of process control requirements for the application. SMEs should be guaranteed that the new BAAS environment needs to keep maintaining the original performance all the time. Some performance checking tools could let companies know how much capable their blockchain solution really is. It also needs to have protection mechanism from hackers, controlling data flow, computer resources, active monitoring tools etc.

Smart contract offering
When considering BAAS a company should make sure that the BAAS provider offers the smart contract integration with the deployment. As you have read in my former blog smart contracts are an important part of any BAAS solution. These allow the companies to electronically measure and encode all terms of the contract so there can be no dispute. Though they are not (yet) legal contracts, they allow the enforcement of an agreement between parties under pre-agreed rules, but also enforces the penalties in case of any rule breaking situation.

Access management
And there is the issue of who and who may not have access to certain information within the organisation. Companies should look for identity based consensus solutions as all the enterprise will operate with known identities. Not everyone in the company should have access to internal securitised information.

It is therefore also important to look for secure Identity and Access framework integration with the BAAS solution. It will enable companies to control the user access from critical information in the organisation, helping the administrator to regulate and control access all over the network.

Flexible deployment
And there is the issue of flexibility in deploying BAAS solutions. BAAS providers should offer versatility when it comes to BAAS frameworks. This asks for the availability of a variety of toolsets for companies. Companies need to have a choice in case of choosing the perfect framework. They should choose a BAAS operator that offers optimal support.

What else to consider?

A final, and may be the best way to select a BAAS architecture is the existing customer ecosystem. In many cases BAAS companies that can offer the most advanced and trouble-free BAAS have a large customer base. So, a BAAS provider with good and positive customer base could be a sign of good quality services.

After having answered all these many questions a company may (or may not) be able to select their favourite BAAS provider. On Google you may find various oversight lists of BAAS providers with many ins and outs.

Enjoy your BAAS journey!


Carlo de Meijer

Economist and researcher





How to Build a FX Risk Management Policy for Your Business

04-06-2020 | treasuryXL | XE |

If you’ve been keeping up with our blog over the past few weeks, then you should be all caught up on foreign exchange risk. You know that your organization likely has some degree of FX risk, that you should make it a priority to assess your risk level and exposures, and that foregoing FX risk management is one of the most costly mistakes your business could make.

This brings us to our next point: crafting a foreign exchange risk management policy. Having a policy in place is one of the most important steps your organization can take to address foreign exchange risk and volatility in the global currency markets. But if you don’t have a policy in place, or you don’t think your current policy addresses the full scope of your organization’s FX risk, it’s time for an upgrade.

Not sure what to do or where to start? Let us take you through the steps of developing your organization’s foreign exchange risk management policy.

Why do you need a foreign exchange risk management policy?

Here’s the simple answer. If your organization doesn’t have a policy in place to deal with foreign exchange risk, you’ll only be able to respond to situations after they’ve already happened. Instead of acting to reduce your FX risk exposure, you’ll only be able to react to damage that’s already been done.

The markets are constantly moving, and volatility can have a real impact on your business’s bottom line without any warning. Without an FX risk management plan, you’ll only be able to jump into action once the damage has been done, and some of your initial response time will likely be taken up by strategizing over how to properly respond. In that time, the impacts to your business could easily increase.

A comprehensive FX risk management plan will not only give your organization a plan to jump into action in the event that market volatility has an impact on your business, but will also include long-term, ongoing measures to manage currency risk in your business’s day-to-day operations, even in times of muted volatility. By taking steps to reduce your risk exposures now, you can minimize the effects of volatility in the future.

What should your policy cover?

There’s no singular answer to this question, because there’s no such thing as a one-size-fits-all foreign exchange risk management policy. Every policy is different, because an effective policy will address your organization’s FX risks, based on your day-to-day operations and exposures.

There are, however, a few basic elements that every policy should make a point to include.

  • How much foreign exchange risk your business can handle, and over what time periods.
  • The tools your company will use to mitigate said risks.
  • Who in the business is authorized to make decisions about FX risk.
  • A robust process to manage currency risk on an ongoing basis (rather than ad hoc reactions).
  • Long-term strategic planning decisions (as opposed to just day-by-day developments).
  • Measures and action items that can be shared with a group of people, so FX risk management does not fall solely on one key person.

Once the policy has been created, it’s also important that you have a process in place to share it with the company at large, in order for the company to be able to apply risk reduction measures at all times (even if a key decision-maker is out sick or leaves the company).

How often should you update your policy?

At the very least, you should revisit your FX risk management plans once a year. But it might not be a bad idea to reassess more frequently, particularly if your business undergoes changes that could impact its foreign exchange risk.

The following changes would be good opportunities to readjust your FX risk management strategy:

  • An increase or decrease in exposure to particular overseas markets
  • Exposure to new overseas markets or currencies
  • Changes in the outlook for relevant currency markets.

How to get started

If you aren’t sure how to create or develop a risk management policy, we encourage you to discuss this with a foreign exchange specialist. A knowledgeable specialist can assess your FX risk, discuss your options, and help you to formulate the risk management policy that your organization needs for its specific risk profile.

For over 25 years, Xe has been a knowledgeable authority in the global currency markets. They understand foreign exchange risk, they help over 13,000 businesses each year with their foreign exchange and risk management needs.

Get in touch with XE.com

About XE.com

XE can help safeguard your profit margins and improve cashflow through quantifying the FX risk you face and implementing unique strategies to mitigate it. XE Business Solutions provides a comprehensive range of currency services and products to help businesses access competitive rates with greater control.

Deciding when to make an international payment and at what rate can be critical. XE Business Solutions work with businesses to protect bottom-line from exchange rate fluctuations, while the currency experts and risk management specialists act as eyes and ears in the market to protect your profits from the world’s volatile currency markets.

Your company money is safe with XE, their NASDAQ listed parent company, Euronet Worldwide Inc., has a multibillion-dollar market capitalization, and an investment grade credit rating. With offices in the UK, Canada, Europe, APAC and North America they have a truly global coverage.

Are you curious to know more about XE?
Maurits Houthoff, senior business development manager at XE.com, is always in for a cup of coffee, mail or call to provide you detailed information.



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