Best Bank Awards: BNP Paribas

When BNP Paribas set out to overhaul its foreign exchange franchise several years ago, the bank wanted to build a suite of quality FX services with the focal point centring on the user experience of its clients.

While BNPP was well known at the time for its comprehensive suite of FX algorithmic execution, it wanted to build a full-suite FX franchise with a principal business on a par with its agency offering, and certainly analogous with the best in the industry.

“We have changed the FX business within BNP Paribas from a product point of view to one that is focused on client experience,” says Francisco Oliveira, global head of FX, local markets & commodities at BNPP.

“Clients have a choice, not only about different providers but different instruments. When clients choose BNPP, they don’t choose a product, they choose the relationship that we can offer and FX is an important part of it,” he adds.

BNPP was voted Best bank for FX in the eurozone at the 2019 FX Week Best Bank Awards.

In 2018, as part of this relationship building, BNPP decided to merge its G10 and FX emerging markets (EM) desks in a bid to improve the prices offered to its clients, and, more importantly, to provide them with a single point of contact for all their FX transactions and, consequently, a better user experience.

[From] a liquidity and execution point of view, the lines are blurred for clients, especially on the deliverable spot desk

Francisco Oliveira, BNP Paribas

“Most banks still have an artificial segregation between G10 and emerging markets desks,” says Oliveira. “But, [from] a liquidity and execution point of view, the lines are blurred for clients, especially on the deliverable spot desk.”

He says the investment in revamping its IT infrastructure, management tools and client interfaces on the agency and principal businesses, and the retraining of its sales force has paid off: “Now clients don’t feel like they’re speaking to two different teams. EMFX is part of FX.”

Quality and change

Clients also appreciate the quality of BNPP’s principal business as risk-transfer prices converge with those of algorithmic execution, he adds.

More recently, however, it is the bank’s strategic advisory FX services that have been in particular demand as market participants continue to grapple with persistently low volatility and a tight trading range in the euro. As a result, deal contingency-type solutions have come to the fore as demand for hedging solutions is on the wane.

More change is in the offing. Oliveira says BNPP is “committed to working with its clients to incorporate sustainability into foreign exchange”. While discussions remain on the drawing board, the challenge remains fundamental: how, for example, can a market participant’s commitment to sustainable parameters provide it with a better price on the forward curve?

Clearly, responsible corporates and institutional investors would like to see their commitment to sustainable goals recognised in the prices they receive in the market, he says, but how that can be incorporated widely in FX will remain at the heart of debate for some time.

While Oliveira “strongly believes [that] Europeans are much more committed to sustainability than the other time zones”, the solution for the FX market cannot be a pure European play “as the biggest institutional investors are predominantly based in the US [and] there cannot be a solution if the US asset managers do not embrace it as well”.

The full list of winners of the 2019 FX Week Best Banks Awards