Cost Containment in Foreign Exchange

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Unlike most supplier relationships, FX pricing is rarely fixed or clearly disclosed. Providers often embed their margin within the exchange rate itself, making it difficult to identify the true cost of each transaction.

Common challenges we uncover include:

• Variable spreads applied opportunistically from trade to trade
• Pricing that moves independently of the underlying mid‑market rate
• Inconsistent margins across currencies, entities, or transaction sizes
• Hidden revenue mechanisms beyond the spot rate, such as forward points, carry costs, and settlement fees

The result is that many businesses believe they are receiving competitive pricing, while in reality paying materially different FX costs for identical transactions.

Our FX cost containment process begins with absolute clarity.

Uncovering Your True FX Spread

We analyse historical FX transactions over a defined period (typically 3, 6, or 12 months) and benchmark each trade against the prevailing mid‑market rate at the time of execution. This allows us to:

• Identify the effective spread applied on each transaction
• Highlight inconsistencies across providers, currencies, and timing
• Quantify the total FX cost embedded within your historical activity

For many organisations, this is the first time FX has been analysed with the same rigour applied to other cost categories.

Once the true cost base is established, we move from diagnosis to implementation.

Rather than chasing headline rates or timing‑based quotes, we help businesses transition to a fixed, pre‑agreed spread over the mid‑market rate.This delivers:

• Cost containment: FX becomes a known, controlled input rather than a variable expense
• Consistency: The same pricing methodology applies across all transactions
• Fair benchmarking: Performance is measured objectively against the mid‑market rate
• Budget certainty: FX costs can be forecast and monitored accurately

By locking in an improved spread structure, businesses eliminate opportunistic pricing and remove ambiguity from FX procurement.

True FX cost containment extends beyond the headline spot rate. 

As part of our review, we also assess:

• Forward contracts: Interest rate differentials and forward point calculations
• Swap and roll costs: Transparency of carry and margin application
• Payment and settlement fees: Including intermediary bank charges and unnecessary transaction costs
• Liquidity and credit terms: Deposit requirements that unnecessarily restrict cashflow

By addressing FX holistically, we ensure cost containment is applied across every stage of the currency process — not just at execution.

Our role is advisory and independent. We do not replace your finance team or disrupt core operations. 

Instead, we work alongside your existing structure to:

• Deliver clear, evidence‑based cost analysis
• Identify savings without compromising execution quality
• Implement improved pricing through trusted, FCA‑regulated providers
• Create long‑term frameworks for ongoing FX cost governance

The outcome is not short‑term savings driven by tactical trades, but structural cost containment embedded into how FX is managed going forward.

When using the service of Currenexis, this gives your business:

• Full transparency of FX costs relative to the mid‑market rate
• Independent insight into how FX providers price and profit
• Fixed, improved spread structures that contain cost over time
• Reduced volatility in FX expenses without increasing market risk
• A disciplined, repeatable approach to FX cost control

FX does not need to remain opaque, unpredictable, or margin‑eroding. With the right insight and structure, it becomes a managed cost — not a hidden one.