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FX cost optimization and spread analysis

FX cost optimization is an independent review of what your company pays to convert currencies, with each trade measured against mid-market at execution. CFOs and treasurers with cross-border flows hire FIRMA Advisory to see the true spread. The outcome is lower, documented FX cost and an execution policy that keeps it there.

When companies bring us in

Companies bring us in when FX volumes are material but nobody can say what the company pays per trade. These situations come up most often.

  • International payments are converted by the bank automatically, at a rate nobody negotiated.
  • FX trades go to one bank by default, without a competing quote.
  • Treasury sees the all-in rate on each confirmation but not the margin inside it.
  • Volumes have grown since pricing was agreed, and the margin has not moved.
  • Forward contracts are rolled without anyone checking the pricing of the points.
  • A private equity owner asks for FX cost as a line in the value creation plan.

What we deliver

You receive a measured FX cost baseline, a counterpart strategy and a written execution policy. The table shows each deliverable and when it arrives.

DeliverableWhat it containsTypical timing
FX cost baselineAll-in cost per trade in basis points against mid-market, by currency pair, bank and product.End of phase 1
Payment FX reviewPayments the bank converted automatically, the rates applied and the cost hidden inside them.End of phase 1
Spread analysisMargins compared across banks, trade sizes and times of day, with the avoidable cost priced.End of phase 2
Counterpart and platform strategyHow many banks quote, the role of each, and whether a multi-bank platform fits.End of phase 2
FX execution policyWho trades, how quotes are taken, approval limits and reporting, ready for approval.Phase 3

How an engagement runs

Engagements follow four phases, from trade data to monitored pricing. The quality of trade data sets the pace at the start.

  1. Trade data and baseline, weeks 1 to 3. We collect trade confirmations and payment records with timestamps. Each trade is compared with the mid-market rate at the moment of execution.
  2. Spread analysis and strategy, weeks 3 to 5. Margins are analyzed by bank, currency pair, size and product. We then design the counterpart structure and the execution rules.
  3. Negotiation and policy, weeks 5 to 8. We support the pricing conversations with each bank and finalize the execution policy. Where a platform fits, we help select and onboard it.
  4. Monitoring, weeks 8 to 12. New pricing is measured on live trades for an agreed period. Treasury receives a simple monthly report that keeps the gains in place.

What changes for the client

The result is measured in basis points against mid-market, on your own trades. We report these outcome types and never estimate savings the trade data cannot support.

  • All-in FX cost in basis points, by currency pair and bank, before and after.
  • Share of FX volume executed against competing quotes.
  • Automatic payment conversions moved to negotiated rates.
  • Number of counterparties quoting, and the role each one plays.
  • Forward pricing checked against market points at every roll.
  • A documented execution policy approved by the CFO or the board.

Why an independent former banker

FX margins are set by the bank, client by client, and the client rarely sees them. Federico Lleonart covered FX within cash management relationships at J.P. Morgan and Barclays, so the review starts from how the desk prices you.

How do bank FX desks tier corporate margins?

Desks set margin tiers per client, based on volume, ticket size and the total value of the relationship. Clients with credit lines and broad wallets usually sit in better tiers.

Small tickets and payment conversions sit in the widest tiers. Many companies pay those rates on most of their volume without knowing it.

Why is the spread invisible on most confirmations?

A confirmation shows one all-in rate, with the margin already inside it. Without the mid-market rate for the same second, there is nothing to compare it with.

Payment conversions are even less visible. The rate is applied inside the payment, often with no separate confirmation at all.

How do you measure all-in FX cost against mid-market?

We match each trade timestamp with an independent mid-market rate and express the difference in basis points. Forwards are split into market forward points and the margin added on top.

The result is a cost per trade that finance can recalculate and track over time.

How does a multi-bank or platform execution policy work?

A policy defines who can trade, how many quotes are needed and above which size. It also sets timing rules, limits and reporting.

Multi-bank platforms let several banks compete on each trade and keep an audit trail. They suit some volumes and not others, and we say so plainly.

FIRMA Advisory does not execute trades, hold client funds or take commissions from banks or platforms. The FX consultant who measures your cost has no stake in which counterparty wins.

For consulting firms and private equity teams

Consulting firms bring us in when FX cost or execution sits inside a wider finance transformation or cost program. Private equity teams use the same FX baseline across portfolio companies, and our partner model shows how we work with your team.

Frequently asked questions

These are the questions treasurers and CFOs ask before an FX cost review. Each answer is direct.

What trade data do you need?

We need trade confirmations or a trade log with timestamps, currency pairs, amounts, rates and counterparties. For payment conversions, payment records showing the debited and credited amounts are enough. A full year of data gives the clearest picture, but we can start with less and extend the analysis later.

How much does an FX cost review cost?

Pricing depends on trade volume, the number of banks and whether a platform selection is in scope. Many clients start with a fixed scope diagnostic that measures the baseline, then continue into negotiation and policy as a project. Where it fits, part of the fee can be linked to measured savings. See engagement models and fees.

How long does it take?

A typical FX cost engagement runs 8 to 12 weeks, with the measured baseline delivered first. Platform onboarding, when included, can extend the timeline. Banks and platform providers run their own setup and documentation processes, and those set part of the pace.

Is the work remote or on site?

Most of the work is remote, because it runs on trade data and calls with treasury. Meetings with bank FX desks can be held by video or in person. On site workshops with the treasury team can be added where they help. Travel is billed at cost and approved in advance.

Which currencies, regions and languages do you cover?

We work with companies in the United States, Europe and Latin America, across major and emerging market currencies. Federico Lleonart works in English, Spanish, Portuguese, Italian and French. Negotiations with local banks in those languages are handled directly, without an intermediary.

Is our trade data kept confidential?

Yes. Trade data, pricing and bank correspondence are used only for your engagement. They are never shared with banks, platforms or other clients without your approval. Client names and results are not published without explicit consent. Data can be exchanged through your own secure data room.
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Related insight: What your FX spread really costs shows how to measure it against mid-market.

Engage

Measure what you pay for FX.

Book a short call with an FX consultant who has seen corporate pricing from the bank side. We will outline what a review of your trades would show.

Book a 30 minute call [email protected]