CitiFX Publication - From Crisis Management to Business Recovery

1. Legacy technology infrastructure; 2. Data processing demands; and more recently; and 3. A tentative approach towards adopting cloud-based systems due to alleged cyber-security risks With the abrupt pivot towards working from home, remote access infrastructures were unable to scale quickly to meet the surge in concurrent usage, resulting in impaired productivity but more concerningly, the dearth of timely information for decision-making purposes. Similarly, desktop-native FX dealing platforms place business users at the behest of the quality of their remote access infrastructures. When faced with volatile markets, gaining timely access to market liquidity could outweigh previously held decisions in favour of desktop-native solutions. To mitigate the risks associated with network latency, businesses should critically evaluate their information systems and FX dealing platforms through the lens of timeliness of access. Admittedly, solving for this, especially within the domain of Enterprise Resource Planning (ERP) systems and Treasury Management Systems (TMS), is not a simple ‘lift-and-shift’ and neither would it make commercial sense to unravel corporate systems that are possibly interconnected to other systems within the business technology ecosystem. The quick and arguably elegant solution to this would be to employ the use of a back-up solution that serves as a mirror site to primary data sources. For some organisations, this has manifested in web-based solutions that offer a light version of their primary data source that captures key summaries of their FX exposures that would enable nimble decision-making. In thinking about FX dealing platforms, businesses should also critically assess the need for memory-intensive applications. In many observations, memory-intensive platforms are the result of legacy layers of code, which are often difficult to unravel. With the immense focus on digitalisation in recent years however, investments made in FX dealing platforms have seen a convincing pivot towards web-based and memory-light solutions. With access to sound alternatives, businesses should re-evaluate their incumbent providers and consider if they offer sufficiently flexible and timely system access. A helpful parallel to draw would be enterprise email platforms where web-based and third-party hosted solutions are increasingly favoured over self-hosted options. The former offers omni-device access and is asset-light while the latter is often difficult to scale and are only accessible via corporate environments. Key Takeaway: Business software must be compatible with the demands of remote working arrangements and in the realm of FX risk management, timely access to data and market liquidity are key priorities. End-to-end solutions that digitalise processes across multiple corporate functions have shown to be more effective from a business continuity perspective. Medium-Term Response: Business Optimisation Guidepost 2: Outsource Non-Critical FX Processes The extent of COVID-19’s impact on businesses remains an unknown and expense pressures are likely to confront business managers should the pandemic play out longer than originally anticipated. With the previous economic troughs, workforce reduction was deployed as a swift measure at alleviating expense pressures but in recent years, we have seen human resource strategies evolve in ways that would meet expense management goals, without necessitating a reduction in employee strength. We have observed the following themes: 3 5 Foreign Exchange Guideposts for Corporates in a time of COVID-19