While Forex hedging used to be an advanced financial strategy by global corporations, modern FinTech providers have enabled all types of companies with global exposure to mitigate and even nullify the risk of currency fluctuations. With multi-currency accounts, business debit cards and advanced currency hedging options such as forward contracts and limit orders, companies of all sizes are now able to easily set up thorough hedging strategies and improve their cashflow management.

What is a multi-currency account?

A multi-currency account allows users to hold and manage multiple currencies on a single account to avoid foreign exchange rate fluctuations by holding the desired currencies directly. This is particularly beneficial for international transactions, as users can make and receive payments in different currencies without the need for immediate conversion, thereby avoiding unfavourable FX rates.

If the multi-currency account offers hedging options, users are even able to engage in forward contracts, which are agreements to buy or sell a currency at a predetermined rate on a future date. These contracts allow users to lock in exchange rates and protect against currency volatility.

Even better: Some providers offer access to local payment schemes, which means that companies all over the world can use networks such as SEPA for the Eurozone or ACH for the US-market instead of the costly SWIFT network. Therefore, by choosing the right FinTech provider, companies now have much more options to reduce the risks and costs associated with global trade.

Advantages of a multi-currency account with hedging functions

New FinTech providers offer advanced currency hedging functions, which even traditional banks can’t compete with in terms of accessibility and useability.

Intuitiv self-serving hedging options

This feature allows users to independently manage their currency risks online. With just a few clicks, users can enter into forward contracts to lock in exchange rates for future transactions. These tools are available 24/7, providing a flexible and convenient way to manage financial risks. However, it is important to note that not all FinTech providers offer these advanced hedging options. Companies should carefully research their provider to ensure that all necessary features and services are available.

Transparent FX margins and forward points

Self-serving options and transparency go hand in hand. A certain level of transparency ensures that users can see exactly what they are being charged for forward contracts with respective currency pairs and value dates. Modern FinTech providers offer a clear and straightforward interface that enables account holders to make informed decisions about their transactions and hedging strategies.

Flexible forward contracts

Flexible forward contracts offer the possibility to adjust value dates with just a few clicks, providing greater control over their financial planning. If needed, account holders can easily change the settlement dates of their contracts or conduct partial drawdowns to utilise only a portion of the contract value at a time. This flexibility ensures that users can tailor their hedging strategies to their specific needs.

No minimum hedging requirements

Unlike traditional financial institutions that often impose high entry barriers, multi-currency accounts with no minimum hedging thresholds even allow SMEs to manage their currency risks effectively without the need for large capital commitments. By offering flexible and user-friendly currency hedging options, these accounts empower SMEs to adopt sophisticated financial strategies that were previously reserved for larger corporations only.

Improved cashflow management

Some multi-currency accounts integrate with accounting software and automate tasks such as transaction recording, currency conversion, and financial reporting. This reduces the administrative burden and minimises manual errors. By leveraging cash management automation, businesses can optimise their cashflow management, enhance efficiency, and digitise their processes instead of manual financial administration.

Swiss FinTech provider amnis offers multi-currency accounts with advanced hedging options

amnis is a Swiss Fintech provider that offers access to a financial ecosystem, which includes all the features needed to decrease costs and risks associated with currency fluctuation. The multi-currency account with optional business debit cards holds over 40 foreign currencies and even offers interest balance cashback payments on idle funds.

With amnis’ intuitive interface, companies can actively hedge against fluctuations of major currency pairs through forward contracts. Moreover, companies no longer need the costly SWIFT network, as they gain access to payment networks in the UK, US, CH and EU for free local payments and collections, no matter where they are located.

The Starter package is already available at 0 EUR and provides access to the entire ecosystem.