(22 November 2024 – Global) In today’s interconnected financial ecosystem, corporate treasurers and banking service providers rely heavily on accurate foreign exchange (FX) forecasts to navigate global markets.
But beyond algorithms and market models, a crucial, often underappreciated input lies in the voice of the customer (VoC)—the insights, expectations, and priorities of the very clients banks aim to serve. Understanding customer needs not only enhances forecast precision but also strengthens long-term relationships and competitive positioning.
The Currency Forecasts that Got It Right
Let’s take a closer look at recent FX forecasts as a case in point. Predictions made in September 2024 for early December for currencies like the Australian dollar (AUD/USD at 0.642), the euro (EUR/USD at 1.127), and the Singapore dollar (SGD/USD at 0.758) demonstrate remarkable accuracy against today’s rates. This alignment highlights a sophisticated understanding of macroeconomic conditions and market behaviour. But here’s the twist: these successes aren’t solely the result of analytics. They also reflect how corporate treasurers have a very real vested interest in getting these forecasts right, it’s not only a company’s finances on the line but a corporate treasurer’s job and career.
For example, when treasury teams flagged concerns about potential volatility in emerging market currencies like the Brazilian real (BRL/USD at 0.160), their insights spurred a deeper analysis of global commodity trends and interest rate differentials. Similarly, corporate feedback from Asia about supply chain disruptions prompted a more cautious outlook for the renminbi (RMB/USD at 0.120).
Your clients are on the ground, grappling with real-world challenges that often evade even the most sophisticated models. Listening to their concerns gives you the competitive edge.
The ROI of Customer-Centric Insights
Beyond informing forecasts, VoC data also drives strategic decisions. Banks that actively engage clients in discussions about FX strategies often uncover emerging trends before they materialise. This agility allows service providers to develop tailored solutions, whether it’s creating hedging instruments for volatile markets like Brazil or providing advisory services to firms trading in euros or yen (JPY/USD forecasted at 0.006).
Furthermore, customers value banks that genuinely listen. A study by Bain & Company revealed that banks with strong customer engagement not only retain clients longer but also grow their share of wallet – key metrics for profitability in B2B financial services.
The Bottom Line
Accurate FX forecasting is no longer just about “getting the numbers right”, although many fall short of doing even that. It’s about fostering trust, delivering value, and co-creating strategies with customers. By listening to the voice of the customer and blending it with market expertise, banks can not only anticipate currency movements but also strengthen their partnerships in an ever-evolving financial landscape.
As the East & Partners September 2024 forecasts illustrate, the value of customer insights isn’t theoretical—it’s practical, measurable, and indispensable. After all, in the fast-moving world of FX, the clearest signals often come from those living it firsthand.