What is Transaction Process Outsourcing (TPO)?
Transaction Process Outsourcing (TPO) is a concept devised by Myforexeye to bring Treasury front office services to corporate and HNI clients in India. The service helps corporate limit transaction costs in the forex markets by bringing transparency at affordable cost.
Who are your competitors providing similar services?
We haven't heard of any company selling similar services in India. We are the pioneer to have launched this revolutionary service.
What are the benefits of Transaction Process Outsourcing?
TPO has many benefits -
a) It helps corporate freeze their forex transaction costs while dealing in foreign exchange markets
b) It helps corporates engage with forex professionals to keep an eye on their transactions and
c) Reduce the cost of operating your own treasury by outsourcing it to a third party. Hire a Treasury Manager starting from Rs.2500/month. Wow!!
d) Seamless deal inputting through Myforexeye Mobile App.
How do we ascertain the benefits our company will accrue from this service?
Myforexeye has built in following features to make it easy for users to arrive at the value of service -
a) User can start with using the RateAudit feature which allows checking of 3 historical transactions over last 90 days. The difference, if any, can be minimized by availing TPO services.
b) Generate report of savings from Myforexeye App
c) Listen to Voice Recording Machine to ascertain the savings
Do we need to change our bank to avail this services?
We don't advocate client's to change their banks. We believe bank is a partner in their business in different form and shape. Currently, we service 310 clients Pan India who bank with 44 banks. We have been able to convince clients and banks to process transactions once client mandate is shared with the bank and us. Mandate is a letter of authority in favour of Dealers at Myforexeye to cover transactions on behalf of clients.
We know there are differences in the exchange rates quoted by the bank. We have tried to persuade the bank many times but they don’t listen to us.
Why would they listen to you?
That is good news for you. We are happy to note that you have taken cognisance of the fact that bank has charged you over and above what was agreed. The dealers at Myforexeye have been successfully convincing banks on the prevailing inter-bank, Cash/Tom rates. Though in some cases it may take us 2-3 transaction to bring the bank at par to our costs and requirements. Dealers at Myforexeye need a supportive and understanding client to quickly normalize the operations.
Do you have a RBI approval to undertake this business?
We are a corporate entity which is not governed by Reserve Bank of India (RBI). Nevertheless, RBI guidelines doesn’t restrict any third party intervention in forex dealings. They only want the transaction (cash flow) to be routed through a Authorized Dealer (AD). We have been successfully concluding transactions for 290 companies since May 2014.
In case we outsource this activity to Myforexeye, will it affect our relationship with the bank?
We are extremely sensitive of the fact that Client relationship with the bank is prime. At all times we ensure that all our interactions with the bank are professional, cordial and smooth. We have ensured all interactions with the banks are done on a recorded line to safeguard interests of our clients and dealers. We have zero-tolerance for non-compliance on this front.
What is a dealing room? How is Myforexeye dealing room different from that of a bank?
A dealing room is a place where financial transactions are undertaken on real-time. The room is equipped with all systems to assist dealers to undertake transactions in a secure and timely manner. When we say secure, it means, all transactions are audio and video recorded.
How securely transactions are handled by Myforexeye dealers?
The dealing room has a restricted entry and only dealers appointed by Myforexeye can enter that premises. The systems are secured and encrypted to protect client information. Further, we don’t seek ask for information which is privy to clients and their businesses. Only information sought is Amount, Currency, Nature of Transaction (Export/Import), Type of Transaction (Cash/Tom/Spot/Forward) and the bank.
Can Myforexeye time the market during the day to capture day's high/low for our transactions?
Yes, we can time the market through the guidance we receive from the client or Advisory desk. It is important for customers to understand that we can't be right all the time but we shall make best effort to cover transactions appropriately
What if my bank doesn't allow us to outsource this service?
It is not in the interest of the bank to allow Corporates to outsource this service. It has a direct bearing on their profitability. A large portion of any banks profitability comes from Treasury operations. The important point to note here is why do they discourage intermediaries? They do have intermediaries for loans, liabilities, retail loans like Home, Personal, Vehicle etc. The simple and obvious answer is this intermediary is working to save client cost. Had Myforexeye approached the bank the other way round we would have received a warm welcome.
We would like to avail free trial service to ascertain the benefits? What is the policy on Free Trial?
Myforexeye acknowledge the fact that this is a new concept and most of the prospective clients are hearing about it for the first time. To demonstrate the benefits we provide One Free Trial to clients. We also guarantee to show them a difference in the market rates and rates quoted by banks.
What is the documentation required to avail this service?
The documentation is very basic and easy. We have a service level agreement to be signed by the client and us which has all the Do's and Don'ts of this service. Further, the bank would require client to furnish letter of authority, indemnity etc to allow access to their dealing room.
What is a bank margin? How does bank ascertain bank margin for a particular client?
Bank Margin is the commission which the bank charges over inter-bank rates. In most of the sanction, it is not mentioned by the bank. The treasury decides on case to case basis. The bank does an analysis of the relationship to arrive at the margin to be charged from a particular client.
Can Myforexeye negotiate a better bank margin fixed by the bank?
No, we don't undertake task to negotiate bank margin with banks on behalf of clients. We provide basic advisory on the range of bank margin basis the turnover and industry.
Does RBI has any control over these rates?
No, RBI doesn’t have any control over the rates quoted by banks. The rates in forex markets are quoted Over-the-counter (OTC) and volatility is very high. Also, the marketable lot in the inter-bank market is $250k below which banks covers their position by aggregating. Clients needs to put in place systems to watch the volatility and real-time rates to control cost leakages.
How transparent is TPO services from Myforexeye?
All client orders and subsequent cover with banks are taken over recorded lines. The deal confirmation comes with the exact time of the transaction covered with the bank. A client can request for the voice recordings for some of the transactions randomly to keep a check. The IT team at Myforexeye is working on providing complete information on the transaction on our website through a User ID and Password for each client.
What if disruptions are caused by bank to let Myforexeye book rates with them on behalf of clients?
The bank covers transactions with people mentioned in the Board Resolution (BR for Companies) and Letter of Authority (Sole Proprietor/Partnership Firms). It is the prerogative of client to assign this responsibility on the person. Most SME Corporates doesn't have the know-how of the forex market operations. In case, they decide to hire treasury professional, the costs are too high. Thus, Myforexeye provides a cost-effective outsourcing model.
Does Myforexeye have any references of clients availing these services?
The references are shared subject to client permission. At all times, we keep client transactions private and confidential. A prospective client can ask the Relationship Manager at Myforexeye to provide industry/location based references. Additionally, we keep updating Client Testimonial section of our website to share opinions and feedback.
We have got a screen provided by bank which flashes online rates. What is the value proposition in such cases for clients?
Yes, technology is the answer for the future. Many MNC and Private sector banks are offering transaction portals and Live screens to their clients to improve efficiency and reduce costs. While we conduct trial transactions for clients having Online rates from banks, we have shown them the difference in the rates. The back-end of all such screens is administered by banks and is prone to tweaking. We have 4 such clients who have shifted from Screen based transaction portals to manual coverage by Myforexeye dealers.
What can cause a time delay in covering transactions with the bank and how does it affect clients?
Myforexeye has created additional capacity in the dealing room to conclude transactions in a timely manner. As soon as we receive a transaction, dealers contact the bank officials for rate covering. It usually takes not more than 3 minutes to cover a particular transactions. Yes we admit that while on boarding a new client, it takes 2-3 transactions to smoothen the operations. It is important to bring bank officials in the know-how of the change of operations.
How does Myforexeye manage their relationship with the banks with whom they cover client transactions?
Myforexeye works for its clients. Our relationship with the bank is Limited to the extent of covering transactions. We keep an eye on all client transactions to limit any leakages in rate offered by banks.
Why should clients trust Myforexeye with their transactions?
TPO is a revolutionary service which can reduce costs up to 2% on each transactions. We have shown maximum difference of Rs.2.50 per Dollar on rates offered by banks. This difference increases in case of forward contracts and cross-currency transactions. We are working hard to service 2500 clients by March 2018 covering transactions worth USD 6 billion for our clients.
What all client segments does Myforexeye service?
Myforexeye covers the entire spectrum of corporate clients in India. Our smallest client is a garment exporter in Gurgaon with an annual turnover of USD 80,000. We saved Rs.2 per dollar on USD 35000 remittance. On the other extreme, we cover transactions for clients with annual forex volumes of USD 350 mn. Our sales discussions are on with clients with over USD 1 billion wallet size.