At FairDealFX, our mission is to improve pricing transparency and assist our clients reduce the cost of their FX risk management program, all while improving your program’s outcomes. One part of implementing our mission is pointing out that the major Australian banks, which have significant market share, are often earning unreasonable levels of revenue from (your) FX transactions. With this context, you may think that our advice would be the first thing you should do is to move your FX business from your bank to an FX-payments only company. This isn’t the case, at all.
The reason? Relationships matter. Your bank should always be able to out-compete the FX specialists because they have a more comprehensive relationship with you. In other words, the bank makes money across a number of products you have with them so they can cross-subsidise and take a holistic view. Correspondingly, your relationship can be leveraged to improve your overall position.
Having said that, you need to know how much is being made from your business in order to ensure that the relationship is fair. Your bank is not going to put its hand up to tell you that it is making too much money from you.
FairDealFX can tell you precisely how much the bank is making from your FX risk management program. You should use this information to have an informed conversation with your bank about the value of your business to theirs. If you have been transacting your FX without the benefit of pricing data this conversation will definitely result in you lowering the cost of your FX risk management program. You don’t need to change providers to do so.