Citi and Ant International Launch AI-Powered FX Risk Management Tool

Citi, Ant International pilot AI-powered FX tool for clients to help cut hedging costs

SINGAPORE, July 18 (Reuters) - Citigroup (C.N), opens new tab and Singapore-based financial technology firm Ant International have launched a pilot program using artificial intelligence to help clients better manage foreign exchange risk, the companies said on Friday. The program combines Citi's Fixed FX Rates solution, which is widely used by the banks' clients in sectors such as e-commerce, with Ant International's Falcon Time-Series Transformer model, an AI forecasting tool that helps businesses reduce hedging FX costs, according to a joint statement. The pilot program, developed initially for aviation clients, has already been used in live transactions with a major Asian airline able to reduce cost in its fixed FX hedging for online ticket sales, the companies said. "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," Kelvin Li, general manager of Platform Tech at Ant International, said. "We are excited to expand the solution with Citi to serve more businesses and industries," he added. Ant International is an affiliate of China's fin tech giant Ant Group, founded by billionaire Jack Ma. It provides global digital payment, digitisation and financial technology and has operations across Asia, Europe, the Middle East and Latin America. The launch came six months after Citi began rolling out new AI tools to be used by employees in eight countries, providing such access to 140,000 employees globally. Large banks have been using AI tools in more targeted ways. Morgan Stanley (MS.N), opens new tab has a chatbot that helps financial advisors in interactions with clients, and Bank of America's virtual assistant Erica focuses on day-to-day transactions of retail clients. Reporting by Yantoultra Ngui in Singapore and Selena Li in Hong Kong; Editing by Shri Navaratnam Our Standards: The Thomson Reuters Trust Principles., opens new tab

Citi and Ant International pilot AI-enabled forecasting solution to enhance FX risk management

This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author. Developed with aviation clients as an initial use case, the solution aims to offer greater payment solutions for the airline industry, which processes billions of payment transactions annually. With airline travel set to continue growing, the joint solution combines Ant International's experience with airline payments and Citi's robust FX solutions to help the bank's clients manage their FX costs more efficiently. Ant International's Falcon TST Model is a transformer architecture-based big data model with close to 2 billion parameters. By integrating the latest time series forecasting algorithms, the TST Model predicts future data points by learning complex patterns from large historical data sets using AI technology, the model helps businesses improve the efficiency and accuracy of their cashflow and FX exposure forecasts, allowing them to reduce hedging and overall FX costs. By pairing the Falcon TST Model with Citi's Fixed FX Rates solution, an award-winning solution that simplifies the FX risk management process for businesses selling online in multiple currencies, the combined solution helps businesses mitigate the risks associated with currency fluctuations by securing FX rates for a defined period. FX rates are locked-in and agreed upon, giving businesses greater predictability in budgeting, pricing and profitability. Citi's Fixed FX Rates solution supports over 70 currencies and is widely used by clients in various sectors including Airlines, Travel and e-Commerce. With Ant International's AI-enabled forecasting capability, businesses may utilise Citi's enhanced solution to improve the accuracy of their sales and FX exposure forecasts. Ant International has already achieved an accuracy rate of more than 90% in the company's own use cases and expects the solution to help the airline industry reduce its overall FX hedging costs as forecast accuracy continues to improve. By combining Ant International's Falcon TST model with Citi's Fixed FX Rates solution, Citi has successfully completed FX transactions for one of the leading carriers in Asia, reducing the carrier's FX hedging costs in initial live transactions. Sam Hewson, Global Head of FX Sales at Citi, said: "We are constantly evolving our products and solutions to support new use cases built on our clients' priorities. Citi's Fixed FX Rates solution supports some of the world's largest e-Commerce and Travel names and this innovative 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: "This is the first industry-tailored solution developed from our Falcon TST Model with a bank partner to serve their customers. It's an important milestone in our journey to leverage AI for FX management for our businesses, partners, and also merchants. 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. We are excited to expand the solution with Citi to serve more businesses and industries."

Citi and Ant International Pilot AI-Enhanced FX Risk Management Solution | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. 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.