Citi and Ant International have teamed up to create an artificial intelligence-enhanced risk management solution for forex (FX) aimed at helping businesses with e-commerce. Their first application is in the aviation sector. Airlines testing the solution have found it helpful in reducing costs associated with fixed FX rate hedging for online ticket sales, as mentioned in their recent announcement.
This innovative solution incorporates ANT International’s Falcon Time-Series Transformer (TST) model, which utilizes AI to improve cash flow and forex exposure forecasting. This, in turn, helps in minimizing hedging costs.
By integrating this model with Citi’s fixed FX rate solution, companies that operate online in various currencies can streamline their Forex risk management processes. This covers over 70 currencies and is being utilized by airlines as well as businesses in the e-commerce sector.
The combined solutions enable businesses to secure FX rates over specified periods. This brings greater predictability to budgeting, pricing, and profitability, which is something companies have been looking for.
This new solution is expected to be accessible to Citi’s clients. Sam Hewson, Citi’s global head of Forex Sales, highlighted the potential of this solution, expressing that it leverages advanced technology to facilitate broader market applications.
Kelvin Lee, general manager of Platform Technology at Ant International, noted that this marks the first time the company has worked on developing solutions with banking partners based on the Falcon TST model. Both companies anticipate broadening the application of this solution across more sectors.
Lee also mentioned that pilot airline customers have already seen a 30% reduction in hedge costs, showcasing the effectiveness of AI-driven FX hedges.
Executives at Citi have indicated that the organization is focused on a long-term strategy aimed at simplifying legacy systems while investing in next-gen capabilities. CEO Jane Fraser commented on the rapid pace of innovation, admitting uncertainty about how banks will adapt and modernize in response.
