The first step is to determine the current spreads charged by their banks in basis points. To accomplish this Blades needs historical transaction information including the debit and credit currency amounts, the date and time of each transaction and the time zone applied by the bank. The time zone is important since bank records may reflect something other than the local time of the transaction. For example, many bank systems in the US are set to the Eastern time zone or to the UTC regardless of local time.
To determine the banks current spread, Blades prefers six months of historical data, but we can work with less if collecting the data is an onerous task. This data should be readily available from the bank’s records, but it is often difficult to persuade the bank to comply. We consider extreme reluctance on their part as a red flag. The data should include all transactions including those smaller transactions that might be done through a bank’s treasury/cash management systems. Experience has shown that those deals are usually done at very high margins and may represent a substantial cost.
Blades International reviews all transactions in relation to the inter-bank FX market at the time of the deal using data provided by Bloomberg Financial Services. We will then provide a detailed report of the pricing matrices applied by your banks. If your banks spreads, given the ABC Company’s volumes are fair in our eyes, we will say so. And there is no charge by Blades International.
If the banks spreads are too high, we will help the ABC Company negotiate spreads that are appropriate to your volume. We will also provide suggestions as to the most cost-effective means to achieve these reduced spreads. Once the reduced spreads are agreed and in force by your banks, Blades International will review your transactions monthly to determine the savings the ABC Company has achieved. Blades international will charge a monthly fee equal to a percentage, usually 33%, of these savings during the following calendar year. The ABC Company will pay nothing unless Blades has achieved a cash savings for the company.
Foreign Exchange Rate Integrity® Audit
Following the first year, Blades provides a service called Foreign Exchange Rate Integrity® Audit. This program ensures that there is no back-sliding by the bank. Blades International charges a minimal amount for this service based on the number of transactions.
Let's Do This!
Simply share your FX rate data, including the time, date, rates, currencies and volumes. We will provide you with free indications of your markups. Please do NOT send confidential account or payee information.