The regulatory framework for the use of RMB is changing fast and provides increased opportunities, while many currencies in emerging markets are more restricted. In both cases, the local footprint and expertise of banking players are crucial.
If a company does not have a bank account in a particular currency, or if the currency is non-tradable, BNP Paribas can help avoid financial, operational and regulatory complexity. For example, it may debit the payer’s account in a tradable currency such as USD or EUR and pay the beneficiary in the relevant local currency based on an agreed rate of exchange. This helps avoid a proliferation of local currency accounts, eliminates trapped cash and simplifies the operating of currency risk management.
BNP Paribas, however, requires that the bank's payment processing and FX platforms are fully integrated –a key asset when dealing with foreign currency payments, particularly those involving complex currencies. As a result, flows are less fragmented and it's easier to implement cash pooling solutions, in strict compliance with local regulations.
No scope for error
In the case of FX settlement, particularly for spot deals, there is no scope for delayed notification of incorrect or incomplete payment instructions that could result in missing value dates and failure to receive the corresponding foreign currency amount.
Corporate treasurers rely on their banks to achieve a high level of straight-through-processing for payments of all types, including those that have different settlement instructions. But only banking players with considerable processing capacity for international payments can provide the level of security, resilience, transparency and efficiency that is required. Electronic banking tools like Connexis, host-to-host or SWIFT-based solutions can provide the visibility that global organisations need, while ensuring successful payments based on maximum automation.