FX house of the year Singapore and FX house of the year Malaysia: OCBC Bank

As cross-border international trade and investments gather pace in Southeast Asia, OCBC empowers its clients with a suite of bespoke FX products and services to support its clients in the region

Located at the heart of one of the world’s busiest trade routes, the economies of Singapore and Malaysia rely heavily on export and import flows. Naturally, many economic actors in the two countries have substantial exposure to global FX markets.

China stands out in this respect. The economic giant has long been an important trading partner for both countries. And, as it actively seeks to rebuild its trade ties with countries in Southeast Asia following the disruptions caused by the Covid-19 pandemic, many of OCBC’s clients are taking advantage of the significant opportunities.

“We’ve seen an increase in trade flows between our clients in Singapore and Malaysia, firms in China and Chinese-based clients,” says Wee Wei Min, global head of sales and structuring at OCBC’s Global Markets division. “Similarly, we’ve seen a lot of renminbi flow into Singapore and Malaysia as trade from China increases and Chinese investments stream into Southeast Asia.”

2023 was particularly active. Renminbi flows with Singapore increased by 15%, a phenomenon OCBC expects will continue. Within the wider FX space, institutional clients nearly doubled their FX volumes in 2023, while private-wealth clients boosted their FX volumes by 20%. Overall FX volume growth in Malaysia was more modest, but FX option flows picked up significantly.

With such an active client base in the FX space, OCBC takes a pre-emptive approach to stay ahead of clients’ evolving needs. The bank closely monitors client activity and trends, and regularly engages with them to offer solutions that may help them evolve their operations.

Instead of focusing on one particular aspect of the banking relationship – such as FX – the bank looks at the whole range of services its clients may need, such as FX liquidity, hedging, financing and cashflow, among others.

“We adopt a very holistic approach when engaging with our clients,” explains Wei Min. “We keep close track of them as their global footprint changes. While FX is often the primary risk our clients face in international markets, we are very conscious they may also have financing needs and other requirements, which is why we engage with them across the whole spectrum of their banking needs.”

Client empowerment through education features largely in OCBC’s relationship with certain client segments, as some lack the knowledge and confidence to properly navigate the complex nature of the FX landscape. To this end, in 2023, the bank organised its inaugural three-day workshop in Malaysia to educate corporate clients about the dynamic world of FX options through an immersive learning experience of simulation games, realistic case studies and specially curated materials.

“OCBC’s workshop on FX options was a game-changer for us,” says Mogana Kumar, chief financial officer of a leading bespoke manufacturer of leather and fabric upholstered beds in Malaysia. “The education-based approach empowered us to navigate the complexities of FX options. Meanwhile, live simulation games and realistic case studies made it easy to grasp underlying concepts. The workshop’s focus on forging connections also allowed us to form lasting relationships with the OCBC team.”

 

Optimising empowerment through technology and innovation

Technology plays an increasingly important role in OCBC’s relationship with its clients. While clients can still trade with the bank via voice channels, OCBC is leveraging technology to simplify processes and deliver personalised solutions to provide them with a more efficient and transparent experience.

Many traditional FX workflows have largely been automated and electronified, which allows clients to focus on their core competencies and OCBC to provide them with additional tools to help manage their FX exposure.

In the past 12 months, OCBC extended access to its FX Online platform to all of its clients – including retail – thereby providing them access to real-time FX streaming rates for spot, forwards and options, and the platform is continually being adapted to customers’ requirements. To this end, the bank leverages artificial intelligence (AI) and machine learning tools to develop personalised FX alerts to inform its clients of opportunities and wider market updates. Clients have praised the usefulness of these tools in helping them formulate their in-house FX strategies. 

AI is particularly useful for mitigating the risks associated with offering FX trading 24/7 in a world where the market is only open on a 24-hour/5-days-a-week basis. With the aid of AI, the bank can identify customer trends, market movements and volumes, and use this information to push the best price to customers while efficiently managing risk.

The importance of business and trade ties with China is undeniable for OCBC’s clients. The firm facilitates these exchanges by providing its offshore clients with the ability to trade CNY FX spot and forwards through the China Foreign Exchange Trade System, and has joined the country’s clearing and settlement service for renminbi payments – the cross-border interbank payment system, known as Cips.

But, recognising that clients also trade further afield, the bank expanded its FX coverage to 17 new currencies in 2023, with the addition of the Polish zloty, Qatari rial, Moroccan dirham, Turkish lira, South African rand and Sri Lankan rupee, among others, bringing to 90 the number of currencies available to trade on the FX Online platform.

By leveraging its global footprint and by using an innovative blend of financial securities, OCBC has rolled out a solution that allows Malaysian clients to invest abroad with minimal FX exposure. Following the success of that solution, the bank extended a new offering to offshore clients wishing to invest in Malaysia with no currency risk.

 

OCBC Bank was named FX house of the year Singapore and FX house of the year Malaysia at the FX Markets Asia Awards 2024.

Sponsored content