BNY Mellon Debuts ‘Universal’ Foreign Exchange Platform

BNY Mellon has introduced a foreign exchange (FX) platform that lets clients execute transactions across portfolios.

Universal FX, announced Wednesday (Oct. 25), follows the bank’s earlier debut of its OneFX solutions suite.

“Today, the investment management industry often manages portfolios across several providers resulting in an inconsistent FX execution experience,” the company said in a news release.

With Universal FX, the release added, customers can manage their entire portfolio regardless of where they “custody prime broker or settle trades,” offering access to developed market and emerging market currency execution.

“Clients often have fragmented portfolios, causing friction, lack of transparency and inconsistency while accessing services across pricing, execution and post-trade,” BNY Mellon Head of Global Markets Trading Jason Vitale said in the release.

“With the launch of Universal FX and our existing OneFX product suite, our clients can now control and customize their portfolio in one place — gaining 360-degree insight, providing a seamless experience across the entire execution process.”

The launch comes as international merchants often find themselves grappling with outdated payments infrastructure and solutions that no longer suit their needs, as Pranav Sood, EMEA executive GM at payments firm Airwallex, told PYMNTS recently.

This situation has led to added cost pressures on businesses that are dealing with a mix of transactional costs, such as foreign exchange (FX) conversion fees, interchange and cross-border transaction fees as well as operational costs for things like reconciliation, compliance and regulatory requirements.

At one time, Sood said, the focus “was very much on top-line and how to drive growth and expansion. Fast forward to 2023 and we’re in a different environment where cost considerations are now top of the agenda.”

Without like-for-like settlements, merchants are forced to collect funds in a particular currency and convert it into a different settlement currency within their payment processing infrastructure, further complicating the process.

“You end up losing somewhere between 2% and 4% often per transaction in FX conversion fees,” said Sood.

Earlier this year, BNY Mellon teamed with Fiserv to offer financial institutions faster foreign exchange rate quotes.

“One of the main challenges for U.S. financial institutions looking to access real-time FX [foreign exchange] rate quotes for payments is that the costs associated with integrating to a banking partner can be prohibitive,” Isabel Schmidt, global co-head of payments at BNY Mellon, said at the time. “We are addressing this head-on through new integration which enables institutions to provide clients with streamlined, real-time FX rate quotes to facilitate cross-border payments.”

The partnership lets financial institutions (FIs) that use Fiserv’s foreign exchange services access BNY Mellon’s real-time FX rate quotes in more than 120 currencies without needing additional integration.