Assure Hedge Unveils Embedded Hedging Platform
Posted by Colin Lambert. Last updated: April 27, 2022
FX fintech Assure Hedge has launched OpenHedge, an embedded hedging solution for corporates, SMEs and individuals.
The company says the new platform addresses what it terms the “currency protection gap” caused by “complexity, access and cost”, claiming these are the result of “not many institutions offer hedging products, owing to cost and regulation”; hedging services being typically presented in “highly technical language”; and the “prohibitively expensive” costs for SMEs and individuals to cover their exposure.
To address issue, Assure Hedge says OpenHedge solves the problem of access, because hedging is proactively offered through a channel partner the customer is already using, such as when they are making a purchase. Embedded hedging also solves the problem of complexity, it continues, because a simple solution is offered to a simple challenge, like guaranteeing how much a company will pay for a service in three months’ time. Lastly, the firm says, embedded hedging solves the cost problem. Since the service is fully digitised, all of the analogue administrative costs and distribution costs are removed, reducing the cost to the end customer, it explains.
The platform is built on three pillars; hedging-as-a-service; embedded credit; and banking-as-a-service.
“Embedding hedging into everyday activities is the key to addressing the currency protection gap,” says Barry McCarthy, founder and head of embedded hedging at Assure Hedge. “The reason is that we need to reach the people who are not hedging today and we need to present a simplified solution to their currency exposure at the time that exposure arises. Without that, hedging will remain the privilege of only very large companies with treasury teams and corporate bankers.”
Tony Connelly, CEO and founder of Accounts IQ, a cloud accounting software firm which has entered into a partnership with Assure Hedge, adds, “AccountsIQ users have operations across over 80 countries so they deal in multiple currency transactions constantly and have exposure to FX rate fluctuations. By integrating with OpenHedge we can allow our customers to dynamically hedge their currency exposures based on actual transactions in AccountsIQ – at the best rates possible. By using OpenHedge hedged rates over the course of the financial year, CFOs get certainty by locking in their budgeted rates for the year so they can focus on the trading results of their businesses rather than the gains/losses generated by currency fluctuations in the markets where they trade.”