Supporting corporate treasurers working from home

March 2020

Deutsche Bank’s FX platform capabilities are helping corporates facing exceptional challenges triggered by the global pandemic to ‘keep the lights on’ – from maintaining liquidity to enabling employees to work from home.

The speed and severity with which Covid-19 has moved from an illness centred in a Chinese province into a global pandemic has caught governments and businesses around the world off-guard. The massive macroeconomic shock is set to reverberate for many months.

In these strange and unprecedented times we are experiencing, Deutsche Bank stands ready to step into the breach to support its clients when the going gets tough.

To offer one of many examples; on the morning of Tuesday, March 17 the interbank FX market was suspended after the Central Bank of Philippines’ announcement earlier that day. This had an immediate impact on our customers and affected many important payment processes including salary and pension payments, repayment of loans, intercompany funding and merchant sales proceeds.

“We immediately looked at the payment orders that had been received overnight, reviewed with the local team our ability to settle them and then completed these payments,” reports Deutsche Bank’s David Cooper, head of transactional FX sales for Asia Pacific. “We took the decision to continue to accept payment orders, using a controlled process to review the flow on a daily basis with trading as DB’s own PHP liquidity would need to be used while the interbank market remained closed.”

Johnny Grimes, managing director, global head of liquidity product, Transactional FX and head of Corporate Bank Ireland at Deutsche Bank adds that communications went from Asia to the Bank’s global coverage team and their clients within hours of the Manila shutdown being announced. “A plan was also put in place to handle further clients transactions that we would expect to see going forward.

“Thankfully, the closure was brief and clients felt minimal impact as we had managed their flows incredibly well. Truly a global effort to manage what was a very difficult market infrastructure challenge.”

David Lynne, Deutsche Bank’s head of corporate bank and fixed income and currencies in Asia Pacific adds: “This swift response and our focus on business continuity has supported our customers during the Covid-19 pandemic.”

David Lynne"Our clients can attest to our ability to be there when it matters.”"
David Lynne, Deutsche Bank’s head of corporate bank and fixed income and currencies in Asia Pacific

Responding swiftly

Digital access to FX markets for individuals obliged to work from home has fast become a requirement for treasury teams in order to mitigate operational risk and remain agile in volatile markets. “The crisis proves our ability to facilitate working from home – or from other remote locations – for our clients in an efficient manner,” says Lynne.

Serene Chen, Deutsche Bank’s head of risk management solutions Asia Pacific reports that corporate clients are going through “extraordinarily stressful times” and coming up against a range of pain points. “The ability to get access to FX liquidity quickly and efficiently is essential for them,” she says. “Electronic tools that can give management clear oversight of the company’s positions via the Autobahn FX blotter are invaluable.”

In recent weeks, the bank has been approached by both existing and new corporate clients seeking assistance, reports Gordon Alexander, Deutsche Bank’s head of client access and flow execution for Asia Pacific and is using its position to develop ways to maintain operations in challenging conditions, such as supporting disrupted supply chains.

“Our Electronic FX platforms come into their own for any business that wants to maintain access to the market,” says Alexander. “App-based solutions such as Autobahn and FX4Cash have assisted remote working through their ease of access.

“Companies want to ensure their employees continue to be paid and we can facilitate hedging, payments and liquidity during a prolonged period in which our clients’ normal operations are shut down.”

A better solution

Among the corporates the bank has assisted is a major global energy and commodities trader and distributor of energy products. In Asia, until recently the company’s preference was to execute trades in Indonesian rupiah (IDR) and Malaysian ringgit (MYR) via email. This process was necessarily protracted, between quotes and confirmation and involving various teams from its business units.

Deutsche Bank reviewed these workflows with the client, which has led to the company starting MYR executions on Autobahn with plans to add IDR. The client is enjoying a better workflow and volumes are increasing.

“We can help clients with these fundamentals to keep their operations going during a period of crisis. This may be through executing currency hedges to manage risk, or ensuring payments are made to enable their business to operate.” adds Alexander.

“As our CEO Christian Sewing has said, we are here to help to make life easier for our clients, in ways that range from providing short-term overdraft facilities to helping their employees quickly adapt to working efficiently from home,” says Lynne.

He observes that the crisis highlights the value that the bank can deliver through an established branch network, experienced team members and providing continuity of service in these extraordinary conditions.

“Our clients can attest to our ability to be there when it matters,” Lynne adds. “Deutsche Bank can support their local activities and ensure that incoming payments from head office are promptly and efficiently processed. Recent weeks have already proved our ability to solve our clients’ problems and to maintain their key structural operations – and we’re here to continue to do so.”

Click here for further details on FX4Cash and here for details on Autobahn

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