Agency Treasury Services

Agency Treasury Services

Corporate treasury outsourcing has been around since the late 1980s and has, until Bastion Currency Management (BCM) modified it for SMEs by breaking it down to its component parts, been used chiefly by multinationals.

The primary financial risks that treasury is usually responsible for can be categorized as such:

  • 1) Liquidity risk (i.e. availability of funds)
  • 2) Price risk (i.e. foreign exchange, commodity, etc. price risk)
  • 3) Credit risk (i.e. financial loss)
  • 4) Operational risk (i.e. treasury processes, payments, etc.)

More specifically, Agency Treasury Services traditionally focus on certain subsets of the above primary financial risks. Multinationals would often outsource two or more of the following areas to experts rather than retain in-house:

  • 1) Risk Management (foreign exchange risk management objectives and strategies, interest rate risk management, deal execution);
  • 2) Cash and Liquidity Management (cash forecasting, working capital management, and investing excess funds);
  • 3) Financing (debt, equity and investment management).
  • 4) Administration (the processing, reporting and management of transactions).

What treasury outsourcing is not!

We understand that SMEs can feel a loss of control in using a third party services provider, which is why all aspects of the service are well documented in a clear and concise manner, so that you understand exactly what each service provides and what it doesn't cover. A company's main financial management and strategic responsibilities are NOT outsourced. All stakeholders (e.g. owner, CFO, accountant) remain fully involved with all the high-level strategic and management responsibilities, and work with us to "best source" their foreign exchange requirements to sustainably realize value by focusing on core activities while we smartly manage non-core activities. Outsourcing only fails when it is viewed as a short-term, tactical solution rather than as a long-term strategic partnership.

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What are the benefits you will realize from partnering with us in a strategic FX outsourcing initiative?

  • Cost: installing a cost-effective, professional FX treasury with all necessary systems can be difficult. Most SMEs cannot justify the level of resources required to provide a best practice treasury operation. BCM's calculations put a no-frills, one person (entry-level) Treasury at $80,116.33/yr, a professional, one person (senior level) treasury similar to our set up at $297,806.66/yr vs BCM's average service fee of $18,000/yr. Unsurprisingly, retaining an expert level ATS is 15 times cheaper EVERY year as compared to internalizing!
  • Transparency: we work explicitly for you as your agent, and as such everything we do on your behalf is for your benefit and is disclosed to you through our robust reporting and unparalleled customer service.
  • Technology: outsourcing avoids the expensive investment in technology and infrastructure. There is also a significant cost and effort required to retain the technology resource expertise to maintain and operate the technology platform. The cost of the systems required often justify an outsourced solution as they can easily amount to >$100k/yr.
  • Flexibility: our expertise ensures your company will gain valuable flexibility in pricing competitiveness, your hedging strategy and your ability to react to the unknown with smoothness and confidence.
  • Resources: for SMEs, attracting and retaining expert, professional staff can be costly and problematic.
  • Focus: improved company focus by re-allocating internal resources to core activities.
  • Access to Market Knowledge: BCM, as an active market participant, is closer to the market meaning you benefit from us having a much clearer appreciation of pricing and the current trends.
  • Risk Reduction: markets, competition, government regulations, financial conditions and technologies all change extremely quickly, and outsourcing enables the sharing of these risks with us.
  • Operational Risk: many SMEs often have one person handling deal execution, payments & settlement, authorization and reporting, which leads to operational risk and potentially direct or indirect loss.
  • Controlled Environment: a highly controlled and disciplined environment used to execute, account for and settle FX deals.
  • Economies of Scale: instantly acquire a skill and expertise not available internally with access to world class capabilities and services, without the need to build from the bottom up and as such, little to no upfront costs.
  • Speed: quickly set up a foreign exchange operation when entering into international markets, and avoid large expenses to expand current capabilities.

At Bastion Currency Management we play to our strengths and experience by providing Small & Medium Enterprises (SME) to "best source" their foreign exchange needs to our Treasury FX Specialists.

Services Overview

We offer a comprehensive portfolio of Currency & Risk Management Services designed to meet the challenges businesses face with growing international trade.

Managed FX (agency service)

An agency treasury service where you "best source" your current, in-house currency operations to the expert administration of Bastion Currency Management. We work within your parameters (e.g. credit, margin requirements, timeframes, liquidity) to work your FX orders for best execution and order management seeking some exposure to specific currency factors to benefit from price movement without adding unrewarded risk.

Bespoke Hedging Solutions

To hedge or not to hedge is a dilemma many SMEs face, and this is made more demanding by having to weed out conflicted parties' advice and whether or not it is actually in your benefit. Take solace in knowing that we only work for you and your best interest in developing tailored risk management solutions. Our first step in answering the hedging question for you begins with first determining how a 1% exchange rate move affects your profit margins, which banks and brokers never ask! Simple question, not so simple answer.

FX Policy / TCA

An FX Policy is a documented process and procedures manual in regards to your FX operations. It lays out basic items, such as who is authorized to deal, to more complex matters like allowable FX products, and hedging strategies used (e.g. dynamic, layering). Transaction Cost Analysis (TCA) is an audit of your FX deals using independent FX prices. We compare the results with the agreed upon spread from your FX provider to determine hidden costs from the variance in rates.

Experience Significant Cost Savings with the Shared Use of Expert Human Resources

Bastion Currency Management leads the industry in third-party foreign exchange services. Our professional FXperts put the "Person" back in Personal; right where it should be!

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