Since the start of the millennium, the opportunities to conduct business internationally have expanded almost as fast as the innovation that facilitates them. Take the ease with which businesses can exchange funds from one currency to another and send them overseas. The internet’s ability to connect all four corners of the world instantaneously means this vital process can be conducted from anywhere, at any time. Despite this convenience, there’s more to making international payments than just clicking a button.
Currency market risk – the threat of political and economic variables causing exchange rate fluctuations that increase the cost of international payments – is a major concern for businesses that operate across borders. The potential impact of these market movements on your bottom line highlights the need to take a pragmatic approach informed by the insight and experience of specialists to help you navigate this unpredictable landscape.
Look beyond your bank
So, why do decision-makers often default to their bank when executing international payments, rather than taking the time to research the most specialised and cost-effective options on the market? They probably wouldn’t hesitate to be more prudent if they were buying business insurance, for example.
Banks offer corporate customers a diverse range of services, Forex included. Unfortunately, when it comes to facilitating international payments, small and medium-sized enterprises (SMEs) are often an underserved market, and subsequently fail to benefit from the same level of international payment know-how, and currency market strategy that larger enterprises have resources dedicated to. Does your bank understand your international transaction requirements and discuss the available options for your business? If not; perhaps your business needs to look to a specialist service provider.
Get help from the experts
Our impending departure from the EU has brought the importance of managing currency market risk into sharp focus for cross-border businesses. The protracted Brexit process has been dominated by political and economic uncertainty, stemming from a variety of events: negotiations, parliamentary votes, elections, leadership contests and resignations – all of which have combined to devalue the pound and drive up the cost of international payments. And with the future offering little in the way of clarity, question marks remain around key issues such as trade tariffs and how they might impact businesses with cross-border payment requirements.
So, don’t let the cost of significant expenses like paying invoices to overseas suppliers escalate because you haven’t considered the potential benefits of using a currency specialist instead of your bank. An FX specialist offering is built around the personal service you’ll receive from your own account manager.
Working with an experienced foreign exchange manager who will aim to understand your business requirements, commercial context and appetite for risk, should provide the products and solutions that best fit your businesses foreign exchange requirements. In addition, adopting a holistic approach to risk management helps to safeguard the cost of your international payments against currency market volatility now and in the future.
If you have any questions or require a live execution price or need additional information regarding a hedging strategy to reduce currency volatility, please contact us via email or directly on 020 3384 7280.