The following is a transcription of our CEO, Anders Bakke’s, recent webinar: How to protect your business from overpaying on FX transactions.

My name is Anders Nicolai Bakke, I’m a serial entrepreneur who’s been in the capital market for a long time and is now proud to be the CEO of Just Technologies. My team and I founded Just Financial during the acquisition of our first capital technology platform back in 2017. We wanted to start another business to solve treasury related problems for companies dealing in the FX market.

In this webinar, we’re going to be covering the following: 

  • What discriminatory pricing practices are in corporate FX
  • How to use market data and analytics to level the playing field
  • How to get started with our flagship product, FX Analytics

I hope you enjoy it and hope to be able to answer some of your questions at the end.

Understanding the FX market

I want to first talk about how over-the-counter financial markets are opaque and often hard to manoeuvre for non-financial institutions, such as private companies. 

What we’ve found at Just is that, in any market where you don’t have access to high-quality data, you are at a considerable disadvantage compared to those who do. In the FX space, counterparties are the ones who have access to the true market rates and they have found ways to monetise that disparity.

This is a systemic problem within the market: companies are losing value during FX trades and that value is instead flowing into the profit pools of the banks.

So how did this systemic problem manifest? Well, let’s take a look at the FX market and its discriminatory pricing practices:

  • The FX market is the largest financial market in the world, with over $7 trillion traded every day, between nations, large banks, companies, etc. It can therefore be intimidating for treasurers, CFOs, and financial managers to properly navigate it.
  • Trades are conducted bilaterally, meaning that there is no central price clearing. With no regulated prices, this gives way to entities that are looking for as large a profit as possible and don’t consider the fairness of the trades they make with others. 
  • The average business never gets the true market data. You get what your bank or FX provider decides to show you, which leaves the FX market obscure and unknowable.

The FX market is very efficient as long as you’re on ‘the inside.’ Whether you’re on the inside is determined by how sophisticated you are, how many counterparties and data sets you have access to, and the understanding you have of the FX space. 

If you do have access to the right data and counterparties, then you can do your own price discovery and see if you’re getting a fair deal on your FX trades. If you don’t have access to this information and your FX provider knows this, then you’re probably being taken advantage of.

Businesses (especially those who aren’t directly related to FX) usually only have access to the prices they see from around one to three banks. This is an issue because the fewer counterparties and rates you see, the less you have to compare. It doesn’t help that the rate banks show you is not the real market rate — it’s a rate that’s marked up both from the SPOT component and credit component.

Because FX contracts are entered bilaterally (either peer-to-peer or principal-to-principal), banks themselves admit that it is easy for them to make a profit. 

Suggested reading: To understand more about whether your business’s FX rates and margins are fair, take a look at our article.

How margins are structured in the FX market

Now that we understand the issue at hand, we can look at how margins are structured in the FX market.

Let’s say a large European bank wants to acquire $1 million from the interbank market. They would go to another large European bank and conduct the same kind of currency trade that everyone would imagine. The typical fees they’d pay for this acquisition would be somewhere between $2-10 per million. 

That $10 per million includes:

  • The liquidity cost
  • The system cost
  • The overhead
  • The risk (including the physical delivery of the currency)

So the bank pays that $10, and then turns around to find that one of their largest clients (say in the top 1% of flow) also wants to buy $1 million. In this case, the bank knows that this powerful company has the ability to ask 10-15 banks for a quote as they’re probably on an auction platform, or they have a Bloomberg terminal. Given the potential competition, the bank knows that it’s in their best interest to win the deal as quickly as possible, so they mark up the trade to just $50 per million. If the client accepts that fee, then during that entire process the bank has made a decent profit: they themselves paid $10 to acquire the currency from one of the other banks, and then went on to sell that amount for $50, therefore giving them $40 to pocket.

But what about the other 99% of their clients who aren’t as large or savvy in the FX market? What about the average importer and exporter? What about companies who just need to trade $1 million in a vanilla trading pair rather than hundreds of millions? 

Unfortunately, these large banks know that the average company does not have access to enough counterparties to properly take part in FX auctions. They can therefore charge these companies whatever margin they wish.

After many years of analysis, Just has determined that the average margin that banks give to businesses is between $200 - $20,000 per million. Compared to the average $10 that banks charge between themselves, we find this to be pretty insane! 

There is so much value-leakage from the corporate space that goes straight to the banks and it is for this key reason that we decided to launch our business.

Why FX knowledge is important

We’ve been in the market for a while now and what we’ve seen across our 100+ clients is how easy it is to approach banks for a real conversation on margins — as long as those businesses are armed with data.

Why is this information important to you as a corporate treasurer or CFO?

  • The FX fees you pay are not visible anywhere. Unless you’ve done a thorough investigative job, you’re probably leaking significant value every time you execute a trade, and you won’t know it until too late. 
  • Arming yourself with data will help reduce margins, cut costs, and improve the relationship with your bank. Companies are understandably concerned about what will happen when they present data. Will my bank treat me badly? Will there be any adverse effects? What we’ve actually found is that the relationship between a company and its bank improves the more transparency you introduce into the relationship.
  • Companies that have a structured approach to FX management see opportunities for improvement. Knowledge about the market increases visibility, control, and enables optimisations. Companies who use data become much more efficient at managing their daily FX as well as their hedging programs. 

The solution

This is not a piece about selling a product — it’s about exploring a systemic problem within the market. And the solution to this problem is actually quite simple.

In order to protect yourself from overpaying, you need market data.

In most cases just having access to non-tradable rates from Google or Yahoo Finance is not good enough. You need a systemic approach that allows you to see your historical exposure, volume, and current hedges so that you can build a case from which you can sit down with your bank. 

For this purpose, Just Technologies has built an end-to-end digital product that can be launched straight from your browser, with no integration or implementation needed: FX Analytics

Companies use FX Analytics to:

  • Benchmark rates in real-time. We stream live market data so that companies can effectively build their own Bloomberg-like dashboard - without the price attached to it!
  • Perform historical analysis to understand what margins banks have been using over time.
  • Achieve an optimal relationship with their bank(s) by gaining insight into their trade costs. 

What we’ve seen from a lot of the companies who use market data, is that they can reduce their margin by up to 25x. This brings in an average ROI of 8-15x compared to what they pay for a subscription with a market terminal.

So there are a lot of benefits of using FX Analytics: you can save, you can improve the relationship with your bank, you can adopt a more systematic approach, and generally have a much more efficient day-to-day FX operation.

Case study

Before we wrap up and do the Q&A, I want to share a case study of ours.

They are a Norwegian retail company who trade around €400 million a year and use short-dated FX contracts. When they started out with Just, they were paying an average of €2000 per million traded – that meant that they were paying €800,000 a year to execute simple transactions! And this was without the bank providing any additional services.

With our data and support, however, they were able to reduce their average margin to just €170 per million traded. This led to a reduction of €730,000 in FX fees almost overnight. 

This is a pretty standard reference case that we see with clients who come to Just. By providing data and showing your bank that you’re paying attention to the inner FX market, you can also achieve these results.


So that was a brief introduction to the opaqueness of the corporate FX market. I’m now happy to take a couple of questions in the remaining time we have left.

How can we know that the savings are not just a one-time thing?

That’s a good question, and there are two dimensions to that answer.

The main saving will happen once in the first year: 

1) You upload your historical trades.

2) We guide you through how to use the historical baseline to establish a new level of reduction with your bank. 

3) You upload another trade and see the new savings. This is the main cost efficiency that you’ll extract.

The second dimension to this, however, is the monitoring of that margin for future trades. Yes, you can achieve a significant cost reduction, but it’s important to keep on using the product to upload trades on a regular interval to make the banks aware that you’re monitoring. Otherwise, I guarantee that they’ll skew you back up to an unfair price. 

In addition to that, yes, cost is the main value proposition that we sell on, but there are other dimensions that we sell on too: the added control, added governance, and the added systemic approach you get for your FX policy.

How do banks typically push back on benchmark data?

This is something a lot of our clients are curious about!

When you’ve sent the complete analysis to your bank, we normally try to coach you and give a ballpark target amount to aim for in the negotiation. 

The way we recommend companies deal with this data is to never become angry or confrontational. Instead, let the bank know that you’ve got this data, you’ve noticed these margins, and that you’re curious as to why the margins have been marked up in that way. Normally when you frame it like this, the bank feels as though the mask has come off and everything has been revealed, so they will normally encourage a conversation around savings themselves. Remember that they don’t want to lose you as a customer.

In the event that you need to go deep and talk about the specific data within your report, we’re always here to support you – we’ve never not been successful with a client who wants to achieve a better result with Just. 

Thank you so much for listening in (or reading this write-up), I look forward to onboarding you with Just soon.

Want to see how FX Analytics can transform your FX strategy? Book a free demo today.