Citi and Ant International have announced a pilot program to utilize Ant International's Falcon Time-Series Transformer (TST) Model to deliver an enhanced foreign exchange (FX) risk management solution for their customers. This innovative solution aims to help airlines mitigate the risks associated with currency fluctuations by securing FX rates for a defined period, thereby providing greater predictability in budgeting, pricing, and profitability.
The Falcon TST Model, a transformer architecture-based big data model with nearly 2 billion parameters, integrates the latest time series forecasting algorithms to predict future data points. By learning complex patterns from large historical datasets, the model helps businesses improve the efficiency and accuracy of their cash flow and FX exposure forecasts. This enables them to reduce hedging and overall FX costs.
In a pilot program with a top Asian airline, the combined solution of Ant International's Falcon TST Model and Citi's Fixed FX Rates solution has already demonstrated significant cost savings, achieving a 30% reduction in FX hedging costs. The solution's AI-enabled forecasting capability has achieved an accuracy rate of over 90% in Ant International's own use cases, and it is expected to help the airline industry reduce its overall FX hedging costs as forecast accuracy continues to improve.
Citi's Fixed FX Rates solution supports over 70 currencies and is widely used by clients across various sectors, including airlines, travel, and e-commerce. By leveraging this solution with Ant International's Falcon TST Model, Citi aims to provide its clients with a more efficient and accurate FX risk management tool.
The partnership between Citi and Ant International highlights the growing importance of AI-powered solutions in the financial sector, particularly in managing FX risks. As the airline industry continues to grow, this innovative solution is expected to play a crucial role in helping businesses navigate the complexities of currency fluctuations and improve their financial planning.
