Citi and Ant International Pilot AI-Enhanced FX Risk Management Solution

Citi and Ant International are piloting a jointly developed, artificial intelligence-enhanced foreign exchange (FX) risk management solution designed for use by businesses that sell through eCommerce channels.

The initial use case for the solution is the aviation industry, and an airline that is testing it has seen a cost reduction in its fixed FX rates hedging program for online ticket sales, according to a Friday (July 18) press release.

The solution includes Ant International’s Falcon Time-Series Transformer (TST) model, which uses AI to help businesses enhance the efficiency and accuracy of their cash flow and FX exposure forecasts and reduce their hedging and overall FX costs, according to the release.

This model is paired with Citi’s Fixed FX Rates solution, which helps businesses selling online in multiple currencies simplify their FX risk management process, supports more than 70 currencies, and is used in the airline, travel, eCommerce and other sectors, per the release.

The new, combined solution enables businesses to secure FX rates for a defined period, giving them greater predictability in budgeting, pricing and profitability, the release said.

The solution will be made available to Citi clients, according to the release.

Sam Hewson, global head of FX sales at Citi, said in the release that this solution “sees us leveraging best-in-class technology capabilities in the broader ecosystem to accelerate go-to-market use cases.”

Kelvin Li, general manager of platform tech at Ant International, said in the release that this is the first time the company has worked with a bank partner to develop an industry-tailored solution from the Falcon TST Model and that the two companies expect to expand the solution to more businesses and industries.

“The 30% hedging cost savings Ant International has achieved for the pilot airline customer shows the cost efficiency that can be achieved with AI-enabled FX hedging,” Li said.

Citi executives said during an April earnings call that the organization is executing on a long-term vision that includes shedding legacy complexity and investing in next-generation capabilities.

“I’m not sure any bank ever finishes with modernization because the pace of innovation is so fast,” Citi CEO Jane Fraser said during the call.