It goes hand in hand with best execution, serving as an ongoing audit of FX practices. TCA was specifically created to highlight hidden costs and enables firms to understand how much they are being charged for the execution of their FX transactions. Lessons learned from asset managers and institutional investors mean that corporates are increasingly looking to third-party Transaction Cost Analysis (TCA) to quantify their FX costs and demonstrate strong governance to internal stakeholders and shareholders alike. With economic changes, such as further interest rate rises on the horizon, CFOs and treasurers need to prioritise optimising their FX risk management to deliver sustainable growth and protect their company’s bottom line. Managing risk is evidently a pain point for corporate treasurers in the search for best execution. These issues had a direct impact on many businesses profitability with HSBC’s latest corporate risk management survey finding that 57 percent of CFOs (rising to 77 percent in EMEA) saying they suffered lower earnings in the past two years due to significant unhedged FX exposure.
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