FX Benchmarking: Why most treasury teams are flying blind (and how to fix it)

Love it or hate it, FX markets are embedded in global business workflows. But what started as straightforward currency exchange has become a complex web of hidden costs, opaque pricing, and execution quality that's impossible to measure. Until now.

As Pierre Anderson, Co-Founder, Bracket, explains: "It's not that providers and banks are deliberately trying to overcharge you. It's just that traditional FX execution wasn't designed for transparency. And without independent benchmarking, you're essentially trading blind."

Here's why benchmarking your FX trades isn't just helpful, it's essential.

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The Problem Isn't Just Poor Rates. It's More Structural

Everyone knows FX markets can be opaque and move fast. But the real issue facing treasury teams goes deeper than just "are we getting a good rate?".

The problem is that most companies have no way to know whether their £2 million EUR/GBP forward was priced fairly, executed at the right time, or even recorded correctly across multiple systems.

We've seen teams discover they were consistently paying 15-20 basis points more than market rates, costs that were invisible until they started benchmarking. One corporate found a £4.7 million swing in monthly valuations when they compared their bank's marks against independent pricing.

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What FX Benchmarking Actually Does

FX benchmarking compares your actual trade rates against independent market data at the exact time of execution. It's the difference between trusting your provider's word and having the data to back up every decision. The benefits are real:

Transparency: You see exactly what you paid versus what you should have paid, trade by trade.

Cost Control: Hidden spreads and execution delays become visible, so you can address them directly with your providers.

Better Negotiations: Armed with data, you can challenge pricing and secure better terms.

Audit Confidence: Independent evidence of execution quality supports compliance and internal reporting.

Strategic Insight: Over time, patterns emerge that help you refine timing, counterparty selection, and trade sizing.

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Why Most Benchmarking Falls Short

Traditional FX benchmarking relies on daily snapshot rates like WM/Reuters. Of course, this approach has its place, but FX is a real-time market. A lot can happen between the 4 PM fix and when your trade actually executed.

Many treasury teams still rely on basic comparisons, checking their rate against yesterday's close or using generic market averages. The problem with this approach is that it ignores trade size, market conditions, and timing. A £10k spot trade and a £10 million forward aren't comparable, yet many tools treat them the same way.

What's clear is that treasury teams need benchmarking that reflects the actual complexity of their trading activity.

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How Modern Benchmarking Actually Works

Effective FX benchmarking analyses every trade individually, using institutional market data to determine what the fair rate should have been at that exact moment. Here's what separates comprehensive benchmarking from basic rate checking for Treasury teams:

Trade-by-trade analysis: Each transaction is evaluated against live market conditions at the time of execution.

Context-aware comparisons: Trade size, volatility, and liquidity conditions are factored into fair value calculations.

Real execution costs: The analysis reveals not just spread costs but execution timing and market impact.

Actionable insights: Patterns across currencies, counterparties, and trade types become clear.

Audit-ready documentation: Every comparison is documented with independent data sources.

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The Bracket Difference

Bracket's FX Benchmarker takes a different approach. Rather than requiring complex integrations or expensive consulting, it provides instant, trade-by-trade analysis using institutional market data.

Upload your trade logs, get immediate insights. No IT projects, no lengthy implementations. Just transparency.

As Anderson notes: "We built this because we've seen how difficult it can be for treasury teams to get straight answers about their FX execution. The data exists, it just hasn't been accessible to corporates until now."

The platform accounts for real-world constraints: trade size, market volatility, liquidity conditions. Because comparing a £100k spot trade to interbank mid-rates isn't useful, you need context-aware benchmarking that reflects actual market conditions.

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Time to Stop Trading Blind

If you're managing FX exposure without independent benchmarking, you're essentially flying blind. Market conditions change by the second, and execution quality can vary dramatically between providers, currencies, and even times of day.

The question isn't whether you should be benchmarking your FX trades. It's whether you can afford not to.

Ready to see what your FX trades actually cost? Our benchmarking tool analyses your recent trades and shows exactly where value is being lost, often revealing savings opportunities that more than justify the analysis. Sign up for free today and start seeing the true cost of your FX.