11 February 2021

Quantifying “better” risk management conversations

Hedgebook helps banks, brokers and others have better FX risk management conversations with their clients using data from its SaaS solution. The result? A 20% increase in FX hedging activity in 12 months.

We are often asked; “Can you quantify “better” risk management conversations?”  To which the response is;  “How about a 20% increase in hedging activity in 12 months?”  This may seem quite an exact answer but it’s one of the real advantages of a SaaS solution.

Over time, usage data helps paint a picture of client engagement and the effectiveness of the software in contributing to achieving the goals it purports to. When we started building our bank and broker channel partner product in 2017, Hedgebook promised we would help these organisations have better risk management conversations with their clients by facilitating information sharing via a series of treasury reports and dynamic risk management tools.

Once the product – including the launch of Hedgebook’s Client Dashboard and FX Exposure Tool (link) – was in place we started measuring impact and the delivery of this promise.
While there is a qualitative element to the “better conversations,” proposition, we can quantify this through data analysis.

Better data

For example, we know clients of our channel partners are likely to log in to Hedgebook twice as many times a month and spend more time per session in the app, than our corporate clients. This is a direct result of both the channel partner and their client using the software as the single source of truth for understanding their risk profile and agreeing on the subsequent mitigation strategy.

Market volatility dictates more active management of hedging vs exposure. This can require the trader to explain the purpose and impact of complex instruments quickly and in simple terms. Clients using Hedgebook have been empowered to adopt more comprehensive risk management conversation strategies – measured by increased use of sophisticated FX instruments – through data visualisation tools such as the FX Exposure Tool.

Better risk management conversations

Sharing information with their bank or broker via Hedgebook’s platform has allowed corporates to be more proactive in managing their positions.

One user of Hedgebook says the software, “allows us to be more dynamic in the way we manage our risk positions. Hedgebook’s strategic decision-making tools play a key part and give us the ability to roll forward hedging outcomes.”  While another says: “the ease of sharing information means we can form a stronger partnership with the bank; the better they know your business, the more they can help you.”

Information sharing has certainly been enhanced between banks and brokers when they use Hedgebook together. Our data shows an average increase of 20% hedging activity after 12 months, delivering enhanced margins to the bank and better protection to the client.

As our client base grows and product offering continues to deliver we will keep quantifying our promise to help banks and brokers have better conversations with their clients.

Hedgebook has a mission to help businesses of all sizes make sense of treasury and FX risk, devise profit-protecting strategies and collaborate more effectively with their bank and broker via our market-leading SaaS platform.

Contact us here to find out how we can help your business.

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