"Citi and Ant International are planning to implement an AI-driven forecasting solution to strengthen foreign exchange risk management for their airline clients."
Ant International and Citi Collaborate to Offer Enhanced FX Risk Management Solution for the Airline Industry
Ant International and Citi have joined forces to deliver an innovative FX risk management solution designed specifically for the airline industry. This collaboration leverages Ant International's Falcon Time-Series Transformer (TST) Model and Citi's Fixed FX Rates, offering a powerful tool for airlines to manage their foreign exchange risks more effectively.
Ant International's Falcon TST Model is an advanced AI-powered time series forecasting tool. Based on transformer architecture, the model boasts over 2 billion parameters and is capable of learning complex patterns from extensive historical FX data. This enables it to predict future FX exposures with over 90% accuracy, significantly improving cash flow and FX exposure forecasts.
Citi's Fixed FX Rates, an award-winning solution, locks in FX rates for defined periods across 70+ currencies. By integrating this with Ant International's Falcon TST Model, the combined offering allows airlines to manage FX risk more precisely and securely, providing greater budget and pricing predictability in e-commerce channels.
In practical terms, the solution helps airlines sell tickets globally while mitigating currency fluctuation risks more efficiently. One pilot airline customer reportedly saw a 30% reduction in hedging costs through improved FX rate forecasting and optimized use of Citi's Fixed FX Rates program, translating into meaningful cost savings on their online ticket sales FX exposure.
This joint solution offers the airline industry:
- Highly accurate FX exposure forecasting with AI-driven time series analysis (Falcon TST).
- Simplified and secure FX rate locking for online multi-currency sales (Citi’s Fixed FX Rates).
- Reduced overall FX hedging costs, demonstrated by a 30% saving in an initial airline pilot.
- Improved budgeting and pricing predictability, critical in a margin-sensitive sector.
This enhanced FX risk management approach addresses the historically costly and imprecise traditional hedging methods by enabling data-driven, AI-powered decision making that optimizes FX cost efficiency for airlines operating across global markets.
Kelvin Li, General Manager of Platform Tech at Ant International, stated that this is the first industry-tailored solution developed from their Falcon TST Model with a bank partner to serve their customers. Sam Hewson, Global Head of FX Sales at Citi, expressed that the solution leverages best-in-class technology capabilities in the broader ecosystem to accelerate go-to-market use cases.
The airline industry is an initial use case for the solution, but it is not specified if it will be the only industry targeted. Ant International and Citi are piloting a collaboration to deliver this enhanced FX risk management solution for their customers.
This collaboration marks an important milestone in Ant International's journey to leverage AI for FX management. The combined solution, consisting of Ant International's Falcon TST Model and Citi's Fixed FX Rates solution, has successfully completed FX transactions for a leading carrier in Asia, demonstrating its potential to revolutionize the way businesses manage their FX risks.
[1] Ant International Press Release: Ant International and Citi Collaborate to Develop Enhanced FX Risk Management Solution for the Airline Industry [2] Citi Press Release: Citi Launches Enhanced FX Risk Management Solution in Collaboration with Ant International [3] Ant International Case Study: Airline Hedging Cost Savings with Ant International's Falcon TST Model and Citi's Fixed FX Rates [4] Citi Whitepaper: Leveraging AI for FX Management: A Case Study on the Ant International and Citi Collaboration
- The collaboration between Ant International and Citi employs AI-powered time series analysis (Falcon TST) and secure FX rate locking (Citi’s Fixed FX Rates) to offer a technology-driven solution, aiming to optimize FX cost efficiency for the airline industry.
- This enhanced FX risk management approach, fueled by big data and artificial intelligence, addresses the historically costly and imprecise traditional hedging methods, revolutionizing the way businesses, beyond just airlines, manage their FX risks.
- The synergy of Ant International's technology capabilities and Citi's expertise in finance will continue to drive innovation in the realm of risk management, exploring possibilities to extend the impact on more industries in the future.
