Several enhancements to Deutsche Bank’s FX4Cash platformhave broadened its functionality and increased its utility tocorporate clients, says Timothy Merrell, Co-Head of

FX4Cash at Deutsche Bank’s Global Transaction Banking.

In the aftermath of the recent turmoil in the financial marketsand the global economy, the focus for many corporate treasurersis very much on enhancing liquidity management and improvingworking capital efficiency. Indeed, should concerns surroundingfunding and access to credit markets return, these will be crucialfactors in determining how well corporates perform.One area where many corporates can make significant

improvements with relatively little effort or expense is in themanagement of cross-currency payments – both incoming andoutgoing. Payments of this type, especially where they arerepetitive and of relatively lower value, can present a number ofproblems for corporates and the financial institutions thathandle them. These include a lack of transparency surroundingthe application of foreign exchange rates, the burden ofmaintaining multiple accounts to pay beneficiaries in differentlocations and the number of bank interactions required tocomplete the transaction – something that stems from thecommon practice of treating its payment and foreign exchangeelements separately.Of course, despite the difficulties, payments of this type are

extremely common and are only expected to multiply as globalsourcing continues to grow in popularity and linkages betweenmarkets and regions proliferate. As well as funding andfacilitating trade, these transactions are often made to payoverseas workers’ remittances and make pensions payments. Yet,

Demand for FX4Cash– A Global Cross-CurrencyPayment Platform

as volumes grow, so will the challenges. Aside from issues of transparency and efficiency, much of the

payments infrastructure in use today is based on technologythat is now several decades old. Many institutions are unable toinvest sufficiently in new systems and as volumes grow, so doesthe risk of such systems failing – something that potentiallypresents a reputational risk for the institutions involved.

An integrated solutionDeveloping alternatives to the current way of dealing with suchcross-currency transactions has been on the transaction bankingagenda for some time. Indeed, Deutsche Bank has investedheavily in bringing to market a solution that overcomes many ofthe difficulties described above. Launched in late-2008, theFX4Cash platform addresses both the foreign exchange andpayment elements together in order to bring new levels oftransparency and efficiency to corporates making these types ofpayments.

As part of a broader effort to look at how bank structureaffects the provision of products and services to corporateclients, FX4Cash was developed as a joint venture between theGlobal Transaction Banking (GTB) and Global Markets (GM)areas of the bank. We are likely to see a great deal more co-operation of this type as synergies continue to be developedbetween these two closely-related areas. Drawing on GTB’spayments expertise and GM’s market-leading foreign exchangetrading platform, FX4Cash gives corporates fully transparent FXinformation at the point at which the rates are being applied –rather than treating this as a post-payment factor. As well asgiving corporates the confidence that they are getting the best

by Timothy Merrell, Co-Head, FX4Cash, Global Transaction Banking, Deutsche Bank

20 TMI | Issue 188

One area

where many

corporates can

make

significant

improvements

with relatively

little effort or

expense is in

the

management

of cross-

currency

payments.

TMI188 DB:Layout 1 24/09/2010 12:28 Page 20

TMI | Issue 188 21

insightinsight

FX rates available at any particular time,this timely provision of information isalso crucial to allowing corporates tomanage their cash and liquidity positionsmore efficiently – something that hasgrown in importance to many since thedrying up of credit markets during therecent financial crisis.

Since the launch of the FX4Cashplatform some 18 months ago, a numberof new releases and updates haveexpanded its functionality. For example,50 new currencies were recently added,meaning that users can now make andreceive payments to and from over 150different countries. This ability tomanage incoming – as well as outgoing –cross-currency payments is also a newfeature and the support with technicaland legal issues that the platformprovides can be crucial, especially whendealing with more exotic currencies inemerging and less developed markets.

Indeed, flexibility is one of thehallmarks of the FX4Cash platform.Compatible with a range of accesschannels – including SWIFT, Eurogiro andDeutsche Bank’s own proprietary systems– it is suitable for a range of applicationsin many different scenarios, as evidencedby the large numbers of corporates – in

have the necessary tools to negotiatewhatever hurdles the global economy maypresent them with in the coming monthsand years.

For further information, please contactTimothy Merrell, Co-Head of FX4Cash,Global Transaction Banking, DeutscheBank at timothy.merrell@db.com or visitwww.db.com/fx4cash

Timothy MerrellCo-Head, FX4Cash, GlobalTransaction Banking, Deutsche Bank

Tim Merrell is the business head for Deutsche Bank’s jointventure FX4Cash. In this role, he has global responsibilityfor expanding the FX cross-currency payment servicesacross the Global Transaction Bank and Global Marketscustomer base. Previously, he was Head of FI MarketsPayments for Financial Institutions, responsible fordeveloping and delivering strategic client solutions acrossUSD, EUR and multicurrency clearing.

In 2002, Tim joined Deutsche Bank. Before this he workedat ABN AMRO for five years, where he led the financialinstitutions payments and collections product groupcovering the US dollar and New York-based euro clearingservices. Tim has also worked for Chase Manhattan Bank inUS dollar product management.

Tim is a graduate of Syracuse University and has aMasters of Business Administration from Baruch College.

sectors as diverse as IT, legal and shipping– that have adopted the platform sinceits launch.

Platform usageWhile the focus of the platform hascertainly been on driving greatertransparency and efficiency in corporatecash management, FX4Cash can also beused by financial institutions to enhancetheir offerings to their own client base aswell as potentially opening up newrevenue streams. Consolidation amongproviders, the tough economic climate andharmonisation initiatives such as theSingle Euro Payments Area (SEPA) have ledto margins in payments processing comingunder increasing pressure and partneringwith an institution such as Deutsche Bankwill be an increasingly attractive optionfor many smaller providers.

While Deutsche Bank is experiencingthe same market conditions as its peers, asustained programme of internalinvestment – that began before the crisisstarted and is continuing – has allowedthe bank to continue to innovate. In thisrespect, FX4Cash represents one exampleof this continued innovation and formspart of broader efforts to ensure that bothcorporate and financial institution clients

20 TMI | Issue 188

Flexibility is

one of the

hallmarks

of the

FX4Cashplatform.

TMI188 DB:Layout 1 24/09/2010 12:28 Page 21