- Ant International’s proprietary Falcon Time-Series Transformer (TST) Model forecasted Capital A’s sales and FX exposures to manage FX costs more efficiently
- Enhanced FX strategy reduced Capital A’s FX hedging costs by up to 40%
Capital A has partnered with Ant International to optimise treasury operations and enhance customer experience for its airline business, AirAsia. By leveraging Ant International’s proprietary Falcon Time-Series Transformer (TST) Model, Capital A was able to better manage AirAsia’s cash flows across multiple currencies and in turn, offer more stable, competitive pricing to its customers.
This was enabled by Falcon, which enhanced AirAsia’s FX risk management and reduced its hedging costs by up to 40%, allowing the airline to pass the cost savings on to customers through more competitive FX rates. The integration also resulted in a more future-proof and scalable treasury management solution for AirAsia, with 90% accuracy in forecasting the company’s cashflow and FX exposure on an hourly, daily and weekly basis.
This integration marks the first industry-tailored solution that Ant International has developed from Falcon. Following the launch in April, Ant applied the large data model to various treasury management scenarios to design solutions for specialised industries, such as airlines. The model was trained on 2 billion parameters, including 80 million parameters of travel-related data, such as open-sourced data from OTAs and air carriers. This enabled Ant to launch an AI FX offering catered to the airline industry.
The solution was then integrated with Capital A’s corporate banking partner’s fixed FX rate infrastructure to complete transactions for AirAsia. Ant International estimates that in time, the enhanced solution could help the broader airline industry reduce its overall FX costs by as much as 60% for selected currency pairs.
Aireen Omar, Group Chief Executive Officer, BigPay, said: “As a group, we serve over 70 million travellers yearly, 35 million AirAsia Rewards members and our fintech arm, BigPay has over 1.6 million carded users. Through our partnership with Ant International, we are able to reduce the hedging cost by 40%. This helps us immensely as Capital A processes massive multicurrency volumes every day and this platform updates FX rates twice daily and provides great margin management capability.
Kelvin Li, General Manager of Platform Tech at Ant International, said: “Our partnership with Capital A marks the first commercial deployment of Falcon, an important milestone in our journey to transform treasury and FX management for businesses. The results demonstrate how innovation, technology and institutional-grade execution solve real-world FX challenges and reshape cross-border payments. We look forward to serving more businesses and industries as we continue to build on our enterprise embedded finance solutions.”
According to a report from McKinsey1, the airline industry processes about 2.9 billion payment transactions annually, valued at $1 trillion. Despite the scale of payment processing the sector is involved in, there is a lack of tailored solutions from the payments industry that enable airlines to lower its associated payment costs. Airlines spend over $20 billion annually on payment-related expenses, accounting for 3% of the industry’s total revenue.
With airline travel set to continue growing to 5.2 billion passengers this year as estimated by IATA, Capital A and Ant International recognise the need for enhanced solutions that will allow the industry to improve their FX risk management and lower costs, by leveraging AI. Both sides will continue to explore more efficient and transparent global fund management solutions via Ant International’s Bettr Treasury Platform.
