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Datasoft Introduces FxOffice BalanceCheck

by Rahim Harji on


Open Banking has already taken root as a regulatory mandate in some countries, and the global regulatory community will inevitably catch up. Open Banking generally refers to banking customers' ability to authorize third parties, such as their FX or cross-border payment provider, to access and collect exact pieces of data from their financial accounts. In practice, FX and global payment firms can then leverage this data to enrich their service offering.

Enhance the Client Onboarding Experience with Open Banking

Digital Onboarding and KYC technology have proved their value to the overall customer experience for Datasoft FxOffice clients. Augmenting Open Banking to this will accelerate the onboarding process and provide a more robust KYC and fraud mitigation framework. With FxOffice BalanceCheck, new customers being onboarded can instantly verify their identity by linking to their bank account and then immediately begin transacting.

Improved Credit Risk Management for FX Firms

Open Banking also transforms the credit risk Corporate FX firms have historically lived with when processing pre-authorized debits (PADs) or ACH debits. In the past, FX firms relied on self-disclosure or historical data from credit agencies to make credit decisions. Specifically related to PADs or ACH debits, Corporate FX firms are vulnerable to non-sufficient funds (NSF) or recourse risks. It often takes 1-3 days for NSF notifications to be communicated, but to meet customer expectations, FX firms preemptively process the settlement to the end beneficiary. This reactive 'wait-and-see' approach carries material risk potential and possible losses. The threat multiplies during recessionary periods or adverse market conditions.

Verify Bank Balances in Real-time

Using FxOffice BalanceCheck, FX firms can ensure that the customer has sufficient funds before executing the FX deal or processing the PAD/debit. The process is real-time and seamless to both the customer and the back-office. With a reliable, real-time balance check, the credit risk to the FX firm is significantly lowered.

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