FX house of the year, Singapore – OCBC Bank

Sophisticated FX option strategies secure OCBC Bank the FX house of the year award for Singapore

OCBC Bank’s multi-product knowledge and sophisticated FX option strategies proved a win with clients during a year marked by Covid‑19 pandemic fatigue and declining volatility.

Volatility is tapering off this year, but OCBC has found innovative ways to generate extra yield for customers that see FX not just as a transactional requirement, but as an investment class. Wee Wei Min, global head of sales and structuring in global treasury at OCBC, credits the bank’s variety of FX-linked investment products, ranging from dual currencies investments to FX-linked structured deposits.

Wee says: “We align customers’ investments and operational requirements by offering investment currency pairs that match their underlying needs. Going forward, we are exploring allowing them to self-serve when entering into FX investments products.”

OCBC has kept up to speed with changes to working practices as a result of ongoing lockdowns by beefing up its trading platforms with its recently launched digital solution, FX Online. This integrates its online banking system, OCBC Velocity, to address customers’ end-to-end needs from FX booking to payment delivery. Similarly, institutional customers can trade through various multibank trading venues including Bloomberg’s FXGO, 360T and FXAll. 

“The system addresses customers’ pain points around FX risk management and provides access to round-the-clock FX facilities,” explains Wee. “Hence, customers are able to book FX despite the ongoing restrictions imposed as a result of the Covid-19 pandemic. Our team is able to operate at optimal capacity regardless of location and can provide ample coverage for various functions where required. 

“With the growth of financial technology firms, automated trading systems are no longer the exclusive remit of large multinational corporations. In line with the trend, our experienced digital solutions team has developed application programming interface capabilities to cater to the growing needs of such customers. Going forward, we will continue to upgrade and incorporate more FX solutions on the platform.”

A milestone for the Singapore market is the transition away from tainted Libor to alternative benchmark rates. OCBC has shown itself to be a key player in overseeing Singapore’s transition to the Singapore overnight rate average (Sora); it was the first in the market to transact a Singapore dollar (SGD) Sora interest rate swap and is actively doing more deals to build the SGD yield curve out to 10 years. 

“We were also one of the first Singapore banks in London to transact a Sonia swap,” adds Wee. 

Looking ahead, the FX team is working on new products as part of OCBC’s environmental, social and governance commitment. OCBC was the first bank in Singapore to execute a sustainability-linked interest rate swap with a corporate customer, which offers lower rates in return for meeting sustainability targets. Its next line of products aims to help customers remove FX and interest rate fluctuations, as well as hit sustainability goals. 

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