The CFO's Guide to Choosing FX Providers: Banks vs Brokers vs Fintechs

If you're a CFO managing international payments through your bank, the amount you're overpaying depends entirely on your size - banks charge SMEs 2-3% while giving large corporates 0.1% for the exact same service. Yet the same SME could get 0.4% from a fintech in minutes. Or you can start with an FX broker with a tight spread and catch them overcharging a few months later.

This isn't about market dynamics; it's about providers exploiting your inertia. Add the cost of unhedged risk, and the real damage to your bottom line becomes clear. When comparing FX providers, whether banks vs FX brokers or Wise vs traditional FX, the landscape is deliberately opaque.

Banks vs FX Brokers vs Fintechs: The Hidden Truth About Your FX Costs

This comprehensive FX provider comparison guide reveals what each provider type really offers, their hidden agendas, and most importantly, how to choose an FX provider that matches your company's specific situation—whether you're running a £5M startup or a £500M enterprise.

FX Provider Comparison: The Five Types of FX Providers (Reality Check)

1. Banks: The Incumbent's Paradox

Best for: Large corporates (£500M+ turnover), companies needing credit facilities, complex structured products

The Reality: Even for £100M turnover businesses, banks offer surprisingly basic transactional services. You'll get access to a platform with competitive spreads, but that's where the value ends. Despite their resources, banks treat FX as a profit centre, subsidising other services—meaning you're the product.

Pros:

• Existing banking relationship simplifies operations
• Credit lines and facilities under one roof
• Regulatory comfort for risk-averse boards
• Platform access with reasonable spreads (if you're large enough)

Cons:

• Extreme pricing discrimination (SMEs pay 2-3%, corporates pay 0.1%)
• Generic, transactional service with no advisory
• Slow execution and outdated technology
• Relationship managers change frequently, losing context
• No bespoke risk management guidance (unless buying their expensive structured products)

Hidden Truth: "Banks use FX margins to subsidise 'free' business accounts—if you're an SME paying 2-3% spreads, you're funding your own 'free' banking through hidden FX costs. Those free accounts aren't free; they're FX-subsidised."

Red Flag: If they can't show you live rates online or quote you spreads in real-time, you're overpaying. If they're pushing structured products as "risk management," run.

2. FX Brokers: The Wild West

Best for: Price-sensitive businesses with simple spot/forward needs, traders comfortable managing their own risk

The Reality: The sector contains some legitimate players, but its reputation is deservedly tarnished by cowboys and sharks. While they'll beat bank pricing, many gladly sneak hidden fees on forwards or when leaving FX orders. Since their commission comes directly from your trading volume, the relationship is always about generating more trades, not managing your risk.

Pros:

• Competitive rates beating banks by 50-80% for SMEs
• Human relationships and phone execution
• Flexible and responsive service
• Market commentary (though often self-serving)

Cons:

• Aggressive sales culture with weekly "market opportunity" calls
• Execution-only with no real risk management tools
• Hidden fees especially on forwards and orders
• Commission-driven model misaligns incentives
• Most lack genuine FX risk expertise beyond basics
• Misuse market volatility as sales tactics

Hidden Truth: "Commission-driven model means they want you to trade more, not smarter. They're farming you for volume."

Red Flag: If they call about "market opportunities" weekly or send constant market volatility alerts urging action, they're treating you as a revenue source, not a client.

3. Fintechs (Wise/Airwallex vs Traditional FX): The Digital Disruptors

Best for: Small businesses (<£10M FX annually), payment-focused needs, cost-conscious startups

The Reality: When comparing Wise vs traditional FX providers, fintechs sell technology, not expertise. They've revolutionised payments with transparency and user experience, but if your growing business needs help managing cash flows or FX risks, their limitations become clear. Great for payments, dangerous for risk management.

Pros:

• Transparent, upfront pricing
• Excellent user experience and API integration
• Fast execution and settlement
• No sales pressure
• Perfect for straightforward payment needs

Cons:

• No hedging products or risk management tools
• Limited support for complex treasury needs
• Technology-first means no strategic guidance
• Leaves you completely exposed to FX volatility
• No help with cashflow planning or FX strategy

Hidden Truth: "Great for payments, but leaving you exposed on risk management. If FX volatility can impact your margins, you've outgrown them."

Red Flag: If you're starting to notice FX gains & losses appearing in your income statement, you need risk management, which demands expertise—and that means upgrading to other providers. Fintechs can't help you here.

4. Specialist Treasury Firms: The Consultants

Best for: Mid-to-large companies needing expertise, complex hedging strategies, and one-off treasury projects

The Reality: These firms may provide genuine expertise but at a steep price—typically starting at £10-50K per engagement, often reaching six figures for comprehensive projects. Their project-based model works for specific initiatives but becomes expensive and impractical for ongoing needs. When your business evolves, you'll need to re-engage them, creating discontinuity in your risk management. Crucially, if you're a small business trying to access consultants on the cheap, you'll get junior analysts delivering boilerplate advice, not the senior expertise you actually need.

Pros:

• Deep risk management expertise
• Strategy-first approach aligned with reducing risk
• Comprehensive treasury solutions
• Board-ready analysis and reporting
• Independent advice without execution pressure

Cons:

• High engagement costs (starting at £10-50K, often reaching six figures)
• Project-based model doesn't suit ongoing needs
• Overkill for simple requirements
• Requires significant management time
• Must re-engage when business evolves

Hidden Truth: "The only model truly aligned with reducing your risk, but the economics don't work for SMEs. Pay their minimum and get templated advice from juniors; pay properly and spend six figures. There's no middle ground."

Red Flag: If they don't start by understanding your business model, cash conversion cycle, and risk tolerance, they're just expensive brokers.

5. The Hybrid Model (HedgeFlows): Best FX Provider for SMEs

Best for: Growing SMEs (£5-100M turnover), businesses needing expertise without enterprise costs

The Reality: A new category has emerged as the best FX provider for SMEs, combining fintech efficiency with treasury expertise. Companies like HedgeFlows bring institutional-level risk management tools and knowledge to smaller businesses at accessible price points. This model solves the expertise gap without the £50K consulting fees.

Pros:

• Treasury expertise at SME-friendly prices
• Technology platform with human guidance
• Risk management focus without high minimums
• Competitive rates (fintech-level pricing)
• Scalable service that grows with your business
• Proactive risk management without aggressive sales

Cons:

• Newer model, less established than traditional providers
• May lack some complex products of banks
• Requires engagement with risk management process

Hidden Truth: "The only model bringing institutional-level FX risk management to SMEs—what large corporates have had for decades, now accessible to growing businesses."

Red Flag: Make sure they have actual treasury expertise, not just good technology. Ask about their team's background in risk management.

The Comparison Table: 10 Key Factors

How to Choose an FX Provider: The Decision Matrix

FX Provider for SME - Your Situation → Right Provider

<£1M FX annually → Wise/Revolut

• Why: Cost of hedging exceeds benefit
• Focus: Payment efficiency and cost
• Risk: Accept FX volatility as the cost of business

£1-10M FX, stable/predictable → FX Broker

• Why: Simple forwards are sufficient, price matters most
• Focus: Beat bank pricing, basic hedging
• Risk: Can manage with simple forward contracts

£5-100M FX, growing/complex → Hybrid Platform (HedgeFlows)

• Why: Need expertise without enterprise costs
• Focus: Risk management with competitive pricing
• Risk: FX volatility could materially impact margins

£50M+ FX, complex needs → Specialist Treasury

• Why: Complex requirements justify consulting fees
• Focus: Sophisticated strategies and structures
• Risk: Board-level risk management required

£500M+, multinational → Bank + Specialist

• Why: Credit needs plus expertise, pricing power
• Focus: Complex structures, multiple currencies
• Risk: Enterprise risk management is required

The Questions Every CFO Should Ask Providers

During Provider Evaluation, Ask:

• "Can I see your live rates right now?"
  • No live transparency = hidden margins
  • Banks often can't/won't show this for SMEs
• "How do you make money from my account?"
  • Vague answer = you're the product
  • Look for clear fee structures
• "What happens to my business when markets move 10% against me?"
  • No clear answer = no risk management
  • They should model the impact on your P&L
• "Who will manage my account in 12 months?"
  • High turnover = lost context and relationships
  • Especially problematic with banks
• "Show me a client similar to us—what hedging strategy did you implement?"
  • Generic answer = no real expertise
  • Case studies should be specific and relevant

Before Starting Your Search, Ask Yourself:

• "What percentage of my revenue/costs is FX-exposed?"
  • <5%: Payment efficiency matters most
  • 5-15%: Need basic hedging

  • 15%: Require comprehensive risk management

• "Are FX gains/losses appearing in my P&L?"
  • Yes: You need risk management now
  • No but growing: Plan for when you will

The Uncomfortable Truth About FX Providers

Every provider type has a business model that may conflict with your interests:

• Banks need FX profits from SMEs to subsidise large corporate services
• Brokers need you to trade more to earn commissions
• Fintechs need volume to justify low margins
• Specialists need large engagements to cover expertise costs
• Hybrids need to balance technology investment with service delivery

The key is choosing the conflict you can best manage given your situation.

Action Steps: Making the Switch

Week 1: Audit Current Situation

• Calculate total FX volumes and frequency
• Identify hidden costs in the current arrangement
• Document pain points and unmet needs

Week 2: Define Requirements

• Set risk management objectives
• Determine an acceptable margin for error
• List must-have vs nice-to-have features

Week 3: Compare Providers

• Request quotes from 2-3 providers per category
• Compare total cost (not just margins)
• Test platform/service quality

Week 4: Make a Decision

• Calculate switching ROI
• Negotiate terms and minimums
• Plan transition timeline

The Bottom Line

Choosing an FX provider isn't about finding the perfect solution—it's about finding the right fit for your current situation. Most SME CFOs stick with expensive bank relationships out of inertia—paying 5-7x more than necessary (2-3% vs 0.4% available from fintechs)—while others choose payment-only fintechs without considering risk management implications.

The real question isn't "Who offers the best rates?" but "Whose business model best aligns with my company's FX needs?"

For growing businesses with meaningful FX exposure, the answer increasingly points toward hybrid providers who combine fintech efficiency with genuine risk management expertise—bringing both competitive pricing (0.4-0.8%) and professional treasury management to businesses that banks have historically overcharged.

The gap isn't about what's available to SMEs—it's about awareness. SMEs can access institutional-level pricing today. The tragedy is how many don't know it, continuing to subsidise their bank's other services through excessive FX margins.