Going with the flow: Transactional FX options making treasury life easier in APAC

9 minute read

APAC remains one of the world's most dynamic trading regions, but cross-border payments are not always as seamless as corporates would like. Fragmented infrastructure, ongoing reliance on correspondent banking networks and varying regulatory requirements continue to create friction for treasury teams operating across multiple markets.

Treasurers are increasingly focused on removing those barriers while improving efficiency, visibility and cost control. According to Baris Kalay, Bank of America’s APAC Corporate Sales Head, each additional market entered by a multinational company “is a potential source of friction.” Treasury's responsibility to eliminate those inefficiencies “is still at the heart of what they do, both from an operational management and cross-border payments perspective.” 

Although real-time domestic payment systems have strengthened local payment capabilities across many APAC markets, the benefits have not always extended smoothly across borders. Treasury teams must also contend with highly regulated environments, physical documentation requirements and limited technology budgets. Phil Carmalt, Bank of America’s APAC Product Head, says the challenge in APAC “is always about how to become more efficient and effective with limited resources and limited IT budget.”

One way companies can reduce friction is by receiving and making payments in local currencies. “Receiving payments seamlessly in local currencies brings several important advantages, including the ability to price directly in local markets.,” says Kalay. By invoicing and collecting locally, companies can reduce FX costs and limit exposure to currency volatility. He adds, “It’s a simple but powerful benefit that helps protect margins.”

Local-currency capability can also improve supplier relationships. Serina Hourican, Bank of America’s APAC Head of Global Commercial Banking, notes that suppliers often prefer local-currency payments because receipts are easier to reconcile and provide greater certainty. “This can become a strong bargaining tool in terms of visibility over working capital, even providing some pricing flexibility,” she says.

To increase certainty further, transactional FX solutions can allow companies to lock exchange rates and reduce exposure to market fluctuations. Bank of America’s Guaranteed FX solution, for example, allows clients to secure rates for extended periods while also providing access to local currency in markets where availability may be more limited. These capabilities can support smoother execution and more predictable financial outcomes.

For lower-value transactions such as payroll, pensions and e-commerce payments, local currency can be especially important because recipients often prefer receiving funds in their domestic currency. This flexibility can help organisations expand into new markets and deepen relationships in existing ones.

Beyond reducing costs, transactional FX can improve forecasting, reconciliation and operational efficiency. Digital tools that reduce paper-based processes and streamline collections help accelerate cash flow and strengthen visibility into financial activity.

Kalay says, “Enhancing flow efficiency, flexibility and visibility is one of the key advantages of transactional FX.” The resulting operational improvements can enrich treasury data and increase treasury’s strategic contribution throughout the organisation.

Treasury's central role also allows it to coordinate FX activity across multiple business units. Hourican explains: “Other business units and functions within the organisation may have a range of exposures in certain currencies; treasury can collate related data and review it from a netting perspective.” With better visibility, treasury can determine when and how FX risk should be managed and potentially centralise activity to become “a more cost-effective or even profitable centre.”

Carmalt adds that treasury-led FX strategies can support growth by helping companies serve customers and suppliers in their preferred currencies. This can improve negotiations, lower costs and create new business opportunities. 

Digital innovation is playing an increasingly important role in transactional FX. APIs allow businesses to access current exchange-rate information and automatically update pricing at the point of payment, reducing the risk of pricing errors and improving the customer experience.

These capabilities are becoming particularly valuable as organisations establish Global Capability Centres (GCCs) that centralise financial activities such as cash management, liquidity, risk and planning. Kalay notes that GCCs are evolving “from pure service providers toward being strategic influencers,” while greater payment and billing activity increases the importance of intelligent transactional FX management.

Enhanced data access and API connectivity also support better cash reporting, liquidity monitoring and risk analytics. According to Carmalt, this visibility enables headquarters treasurers to make faster and better-informed decisions.

Artificial intelligence is further extending treasury capabilities. AI-powered forecasting tools help improve prediction accuracy, allowing organisations to make more informed FX decisions. AI is also strengthening fraud detection by identifying unusual payment behaviours, new beneficiaries or unfamiliar currencies while continuously learning from activity patterns.

The overarching objective remains clear: Greater visibility leads to greater control. Hourican says, “For treasurers, creating more integrated FX workflows across business units and uncovering new ways to centralise and standardise data has become mission-critical.”

She believes continued advances in payment infrastructure, digital currencies and transactional FX technology will increase transparency, improve settlement speed and reduce risk. Organisations that fail to adapt may find cross-border friction increasingly costly, while those that modernise their FX processes at the transaction level will gain greater certainty, visibility and control — and a distinct advantage over the competition.