Playbook – How banks can enter the foreign exchange market and grow revenue
Foreign exchange (FX) remains a critical avenue for growth among financial institutions. In a recent webinar from American Banker and Finzly, experts from Synovus and First Citizens Bank shared their experiences and strategies for expanding FX services. The discussion provided insights on how education, partnerships, and technology can unlock new revenue opportunities in FX.
The Need for Education and Early Engagement
David Grimaldi, FX Sales Consultant at Synovus, emphasized the need for education for FX growth. Educating bankers about FX is essential to navigating the complexities of FX transactions. As regional banks transition to serving a variety of clients, they must maintain key values.
For example, the importance of understanding payment systems, associated fees and the intricacies of FX is crucial. Focusing on education and early engagement extends to internal teams as well, ensuring everyone is well-equipped to handle the demands of the FX market.
Partnerships and Technological Advancements
Both Synovus and First Citizens have leveraged partnerships to enhance their offerings. Aaron Zynczak, SVP and Senior Director of International Banking at First Citizens Bank, discussed how their collaboration with Finzly was instrumental in building a retail platform. First Citizens’ journey included a lengthy approvals process, resource allocation and technology setup, but the investment has paid handsomely for FCB and their clients.
At Synovus, Grimaldi highlighted the balance between maintaining independence and strengthening corresponding bank relationships. The integration of Finzly’s portal for multicurrency accounts has opened new levels of service and avenues for revenue generation. This is particularly the case with faster payments, which is a growing demand among clients. The use of technology enhances service offerings while also positioning the bank to better meet client needs.
Customer-Centric Approaches
Understanding and responding to customer needs is at the core of successful FX growth. Zynczak pointed out that retail clients are often focused on simply ensuring payments are completed rather than the transaction speed. Grimaldi added that addressing common client concerns, such as fees and auto conversions, is essential for building trust and satisfaction.
Balancing Challenges and Opportunities
Expanding FX services presents unique challenges, particularly in talent acquisition and process efficiency. Grimaldi noted the difficulty in finding qualified talent with an FX background, which is crucial for managing the complexities of foreign exchange transactions that may involve multiple banks. Delays in payments due to these complexities can lead to client dissatisfaction. Experienced personnel are invaluable and can quickly address issues, streamlining processes and strengthening corresponding bank relationships.
However, these challenges also present opportunities. Zynczak advocates for starting with personnel from teams that support an FX solution. Then, he would implement training based on demonstrated success which can lead to a more sustainable expansion. This strategy aligns with a broader industry trend toward mindful growth, where institutions focus on delivering value while carefully managing resources.
The experiences of Synovus and First Citizens underscore the importance of education, strategic partnerships and technological advancements in driving FX growth. By focusing on these key areas, banks can navigate the complexities of the foreign exchange market, meet evolving customer expectations and position themselves for revenue growth and long-term success. As these institutions continue to adapt to the challenges and opportunities in the forex market, their insights offer valuable guidance for others in the industry looking to expand their FX services.
