FX moves from back office to boardroom

Trade-policy uncertainty, geopolitical uncertainty, supply-chain reconfiguration, higher-for-longer interest rates and different tariff policies across the major economies are changing where companies manufacture, where they source, how they invoice and how much it costs to hedge. HSBC's Markets Pulse survey of 1,300 global clients in the first quarter of this year found CFOs and treasurers concentrating on cost efficiency, digital transformation and balance-sheet optimisation, with trade tensions, AI valuations and inflation stickiness the most-cited concerns¹.

Against that backdrop, Benihasim starts with some fundamentals as to how corporate treasurers might see currency risk. "Focus first on visibility and discipline and define the scope of risks to be hedged carefully," he says. The best-positioned firms have early, accurate sight of their exposures, are reassessing hedge ratios and tenors in light of today's cost of carry and are stress testing for possible policy changes rather than leaning on historical volatility or market forecasts. They separate structural exposures from transactional noise, so effort and risk budget go to where they matter most. And they automate wherever they can: "Manual exposure capture and fragmented processes have themselves become a source of risk."

FX market structure has changed as fast as the macro backdrop. Fifteen years ago, the defining shift was electronification. Today, Benihasim argues, the focus has moved to workflow structuring and front-to-back automation, with a much stronger transaction banking and connectivity dimension. Adjacent markets are pushing the same way: T+1 settlement is compressing timelines and raising the premium on funding and driving shorter settlement cycles, while real-time treasury is lifting expectations around immediacy, transparency and interoperability.

That changes what a liquidity provider is really being asked to deliver. "Value is no longer created simply by showing a tight top-of-book price," he says. "It is created through the consistency and depth of liquidity, intelligent internalisation and recycling of flow, execution quality, and the analytics and workflow tools that help clients make better decisions before and after the trade. The real test is not just whether you can price, but whether you can deliver scalable, resilient and measurable liquidity across the full workflow, including in stressed market conditions."

The commercial stakes can be higher than many corporate boards assume. FX affects production costs and therefore the competitiveness of pricing to end clients; it is a meaningful factor in companies missing earnings expectations; and for passive asset managers it can contribute as much as 20% of tracking error. Clients are accordingly asking for more than execution: automation, ERP and treasury connectivity, transparent execution measurement, and joined-up solutions across FX, payments and liquidity. "Treasury is becoming more strategic, more data-led and more accountable for contributing to resilience and enterprise performance, rather than simply processing risk after the fact," says Benihasim.

Institutional clients are solving for something else. Banks focus on balance-sheet efficiency, funding, distribution and risk transfer; asset managers on execution quality, transparency, tracking error and governance; hedge funds on speed, flexibility, liquidity access, financing efficiency and minimal information leakage. What they share, Benihasim says, is a concern for the quality of access and the quality of outcomes - and confidence that their provider can perform in difficult markets, not just calm ones. "The differentiation increasingly comes from being able to combine global reach, technology, analytics and judgment in a way that is relevant to the client's use case,” he adds.

HSBC's breadth - from retail to one of the world's largest corporate franchises, with depth in emerging markets and the West-East corridors - matters because clients do not want separate conversations for FX, payments, liquidity, trade and financing. "They want one joined-up relationship that understands the commercial flows behind the risk." Benihasim highlights.

Being data-led, in practice, means spotting issues before they reach the P&L. "Often the real problem is not that a client lacks hedging tools; it is that treasury sees the exposure too late, or that the process of identifying, approving and executing the hedge is too manual and too slow for the pace of the underlying business," says Benihasim. Automated exposure capture, rules-based hedging workflows and scenario analytics close that timing gap - and, once decision mechanics are defined, allow HSBC to offer fully automated execution that is time- and cost-efficient and policy-compliant.

None of this makes human judgment redundant. "The future is not human versus machine; it is automation for scale and consistency, combined with human judgment where complexity and strategic advice matter most." Nor does it make resilience optional. Multi-hub pricing, robust failover and a clear escalation framework separate platform that look resilient in calm markets from those that are. "Real resilience is proven in stressed conditions, not marketed in stable ones."

Looking three years out, Benihasim expects the leading FX franchises to be more automated, more API-enabled, more integrated into treasury and payment workflows, and differentiated by resilience, analytics and consistency rather than headline spread. For a CFO or treasurer, the first steps are simple. Map exposures properly, entity by entity and currency by currency, and more frequently than most organisations do today. Review the hedging policy against the current rate and volatility backdrop. Identify the manual bottlenecks in exposure capture, execution and reporting. Test whether better connectivity or automation could remove that friction. And run a genuine resilience review: if the main route to market is disrupted, what happens next?

"In many organisations, the gap is not that they are unhedged," he says. "It is that they are often late, reactive or overly manual. The treasuries that will get more from their FX programme are the ones that can move from a fragmented, spreadsheet-heavy model to one that is policy-driven, automated and measurable."