Best Private Bank – FX Advisory
BNP Paribas Wealth Management
2020 was a unique year, which required us to completely overhaul our coverage model to ensure that we served our clients in the ways that mattered most to them.
The depth of our analyses, our investments in real-time technology, the scaling of our advisory services, all meant that we were able to keep our clients as the focus of our FX offering.
We are particularly proud of pushing the envelope on innovation and on client-driven solutions.
The COVID-19 induced volatility in markets was particularly pronounced in foreign exchange markets. As a result of the pandemic, a completely new paradigm emerged for FX business. The most important variable for clients became: how quickly and how often they were reached.
In the face of the pandemic, BNP Paribas reacted quickly to completely overhaul the client coverage in its FX advisory service. The bank expanded the client list for its foreign exchange Direct Access Service by nearly 50% so that all active clients had a dedicated advisor. This ensured that each client’s portfolio and their capital usage were monitored on a real-time basis. It meant too that clients had advisors who understood their individual foreign exchange needs and sensitivities, and immediately alerted them to take advantage of a distorted market’s many black swan events.
These measures helped increase the volume of transactions by nearly 20,000 YoY, with revenues from foreign exchange increasing by 36%.
What made BNP Paribas stand above its peers was an impressive advisory service that identified one-of-a-kind market opportunities for clients, allowing them to profit from unique anomalies in the FX market. They were also able to use the FX market to help balance client’s broader investment portfolios.
The team closely tracked distorted cross-market linkages to advise clients on taking advantage of basis swaps to optimise their balance sheets without taking on an additional currency risk. For clients with worries about overheating equity markets, BNP Paribas analysed implied volatility and correlations across asset classes to trigger the cheapest hedges in the foreign exchange market.
Close tracking and analysis of volatility plays meant that the BNP Paribas team was able to source unique short-lived opportunities for clients. As an example, the team advised clients to take advantage of higher volatility ahead of the US elections by selling short tenor options. These options paid out as much as 6% per annum but knocked out within a day, leaving clients with no obligation.
Importantly, BNP Paribas made sure that all clients were able to receive timely advice and quick turn-around times by training more than 200 relationship managers and assistants in foreign exchange so they could act as touch points for clients. This was particularly crucial during the pandemic, when volatility peaked.
Taking this holistic approach to client service further, BNP Paribas invested in click and trade tools to allow relationship management teams to directly execute and hedge foreign exchange trades on the go and without having to call the in-house foreign exchange trading desk for trade execution.
For this impressive ability to keep the customer at the core of its focus during the pandemic, all the while scaling up the ability of relationship managers combined with advanced execution tools for quick turnaround times, BNP Paribas Wealth Management wins Asian Private Banker’s Best Private Bank — FX Advisory award.