Struggling with FX Settlement: A Global Challenge for U.S.-Based Corporates

In today’s fast-moving global economy, speed and accessibility have become two of the most critical factors in Foreign Exchange (FX) settlement. Traditional FX settlement often takes two business days (T+2) or longer to settle after the trade execution date. Waiting for settlement can create working capital shortages and cash flow bottlenecks. For businesses operating in competitive industries or managing high volumes of transactions, the ability to move money quickly, efficiently, and across borders is essential to maintaining smooth operations and strong financial health. Extended FX settlements can bring friction to supply chains, payroll processing, and international operations, ultimately impacting business growth.

As a truly global financial institution with an extensive international network, HSBC is uniquely positioned to deliver unmatched access to transactional FX products across markets worldwide. Its infrastructure spans continents, offering clients seamless, efficient FX settlement capabilities that many regionally focused providers cannot match. HSBC’s innovative suite of FX solutions leverages its global footprint to simplify settlement, streamline cross-border payments, and significantly reduce settlement times for U.S.-based corporates.

Corporates with international operations often encounter distinct challenges when managing FX settlement, from importing raw materials to handling overseas payrolls or repatriating global profits. HSBC’s global reach, combined with deep local market expertise, provides clients with a competitive advantage by accessing liquidity sooner, reducing inefficiencies and costs. This global accessibility ensures businesses can operate more effectively, navigate international markets with confidence, and maintain consistent treasury performance.

To address these challenges, HSBC offers a fully integrated suite of payment products optimized to deliver speed, efficiency, and reliability to support U.S.-based corporates with global operations, ensuring that FX transactions settle faster and corporate operations remain uninterrupted.

A mid-sized U.S. based technology firm with operations in Europe and Asia struggled with FX settlement. Payments to international suppliers often took 2–3 days to settle, creating cash flow challenges and straining supplier relationships. Additionally, manual processes for managing FX transactions slowed down operations and increased the risk of errors.

The Challenge:

Slow FX Settlement: The company’s FX transactions often took 2 days or longer to settle. The time lag made it difficult to manage cash flow efficiently, disrupting its international supply chain.

Increased exposure to FX rate fluctuations: Without real-time rate access, the company struggled to lock in favorable FX rates, leaving them more exposed to unpredictable currency fluctuations. This made it challenging to forecast costs and budget accurately.

High Administrative Burden: Managing FX transactions required multiple manual processes and coordination with various banking partners. Treasury staff spent hours reconciling transactions and monitoring payments across different regions.

Strained Supplier Relationships: Due to inconsistent FX settlement times, international suppliers faced payment delays, leading to frustration and additional costs. Some suppliers started requesting prepayments or imposing late fees.

High Transaction Costs: The reliance on multiple banks for settlement of FX transactions resulted in hidden fees, poor exchange rates, and unnecessary intermediary charges that eroded the company’s bottom line.

The Transformation:

To address these inefficiencies, the company adopted HSBC’s HSBCnet, GetRate, Global Wallet, and Global Disbursements solutions, transforming its FX transaction process:

T+0 and T+1 FX Settlement: By leveraging HSBC’s faster FX settlement options, the company settles most payments on the same day, or next business day improving their supplier relationships.

Real-Time FX Rate Access: Through GetRate on HSBCnet, the company gained instant access to competitive FX rates, allowing them to secure better pricing and reduce cost associated with currency fluctuations.

Access to Global FX Research: The company stays on top of the global market with real-time insights and research via HSBC Currency Zone, which tracks and charts foreign exchange rates.

Automated Bulk Payments: The treasury team streamlined mass FX payments using Global Disbursements, leveraging in country local payment processing rails, expedited payments and reduced intermediary fees.

Multi-Currency Flexibility: With HSBC Global Wallet, the company can hold and pay in multiple currencies from a single account, eliminating unnecessary conversion fees and reducing reliance on multiple banks.

The Success:

By switching to HSBC’s FX solutions, the company achieved the following:

• Over 50% Faster FX Settlement: Payments that previously took 2–3 days are now settling on a same day or next day basis, greatly improving supplier relationships and cash flow predictability.
• Reduced FX Costs by 20%: Access to real-time FX rates and elimination of intermediary bank fees lowered transaction costs.
• Operational Efficiency Gains: Treasury staff reduced FX-related administrative work by 35%, allowing them to focus on strategic financial planning.
• Improved Supplier Trust & Payment Terms: Prompt FX settlement led to better supplier terms, including extended payment periods and lower fees for early payments.
• More Accurate Budgeting: Instant rate access provided greater transparency on FX expenses, making financial forecasting more reliable.

Why Speed Matters to Clients

By prioritizing faster FX settlement, HSBC empowers corporates to focus on what truly matters—growth, innovation, and strengthening global partnerships.

In an increasingly interconnected world, HSBC’s global reach and FX expertise empowers businesses to stay ahead of market demands, reduce operational friction, and unlock new opportunities in international markets.

To learn how your business can leverage our dynamic international footprint to streamline your cross-border payments, we invite you to visit our International Payments web site or contact your HSBC representative.