Head of eFX Sales SA at Absa CIB
How eFX brings FX into the future
The historic COVID-19 outbreak caused massive disruptions across all businesses, and foreign exchange (FX) trades were not immune to its impacts. But by using 21st-century technologies and leveraging electronic FX executions, corporates were able to more easily manage the heightened volatility through the crisis.
“eFX brings a company’s forex trading into the 21st century,” says Aphile Molefe, Head of eFX Sales SA at Absa CIB. “It allows clients to self-service, with our system giving them live FX rates and a secure single point of access, 24/7.” Those digital enhancements showed their value during the upheavals of COVID-19.
COVID-19’s double blow
COVID affected our FX clients in two main ways,” says Molefe. “On one hand the forex market became increasingly volatile as the economic situation became more unpredictable. The rand spiked and crashed, and clients needed to keep a close eye on that, because for some the forex rate is a real risk to their business. If it’s poorly managed, FX volatility could wipe out their profits or impact their ability to be a going concern.”
Molefe says that the second aspect was the shift to a remote working environment. “When the hard lockdown came in March, although many of our clients did have printers or scanners in their home offices, in order to make payments they still had to print and scan documents – sometimes multiple times. Working from home exposed the inefficiencies in processes, and clients asked for digital capabilities to replace those manual processes. We had a solution in Absa Access.”
Although digital technologies came into their own during 2020’s COVID-19 lockdown, eFX is not new to Absa. “The bank has had these capabilities for about a decade already,” says Molefe. “Over the years eFX has really taken off, quickly going from a nice-to-have to a business requirement. It’s certainly the easiest way to trade FX.”
Arguably the biggest selling point of eFX is that it removes many of the pain points of traditional FX trading. The old system of voice trading (where a client would make a phone call to execute a trade) only operates during working hours. That’s no good in a world that’s always on.
As anybody who runs an international business will know, the middle of the night in Johannesburg is the middle of the day in Australia, or the early evening in the United States. “A lot of things are happening in the world at 3am South African time,” says Molefe. “A president might post a tweet or something else might happen to impact the market. The ability to manage your FX anytime is a key value proposition of eFX. That 24-hour ability to trade means you can deal with volatility and manage your forex a lot better.”
Working from home has been a major adjustment for business across all industries, as the line between work and life has become blurred. During the COVID-19 crisis, when all but the most essential services workers were required to work from home, the need for simplified, digitalised paperwork became more important than ever.
“Here our TRI (Transfer Inwards) channel was very useful for exporters or businesses that receive money cross-border,” says Molefe. “They didn’t have to print anything out. They were able to complete the form and redeem their funds online. When we started letting clients know about Absa Access during the peak of the COVID crisis, many of them became really excited. It’s exactly what they needed at that time.”
The shift to working from home also highlighted an urgent need for quicker and easier banking solutions. “FX is not just about trading; there’s also the settlement process, which can be admin-intensive,” says Molefe. “In this new environment people need a solution that allows them to spend less time doing banking admin and more time taking care of important things, like making lunch and helping the kids with their schoolwork.”
Safe and secure
eFX is underpinned by robust cybersecurity tools like multifactor authentication with biometrics, one-time pins or client-certificate authentication. Absa Access uses all of these. “Let’s say I’ve hacked your computer,” says Molefe. “I would now also have to hack your phone and steal your credentials, and even then I still wouldn’t be able to access your account because I don’t have your physical device for your biometrics.”
These security features enable a single point of access, where users can use one username and one password to access their various online banking services, including eFX. “It seems like a small thing, but clients really appreciate it,” says Molefe.
That, in turn, enables the next layer of convenience: mobile access. It’s the natural next step in the eFX revolution, and one that gives users the ability to view live FX rates and manage orders at any time, from anywhere.
Or, as Molefe puts it: “Now you don’t have to lug your laptop around anymore. Just take out your phone, open the app using your biometrics, see the rates, and place and manage your orders. That’s a real differentiator.”