It is estimated that the value of international trade transacted by UK small and mid-sized business amounts to around £700bn annually. A growing number of these companies are taking advantage of the opportunities available to them in order to streamline their financial processes. In recent years, there has been significant growth in the use of technology to improve the way in which companies manage their finances, and this innovation has largely happened outside of traditional banking platforms.
The banks’ ability to change and adapt to new customer demands are somewhat hampered by legacy core IT systems that were developed in the 1970’s and that do not easily lend themselves to today’s trading environment. When it comes to the processing of cross-border payments, there are several advantages to using alternative providers, such as currency brokers, who specialise in this area.
If you are a manufacturer, importer or exporter of global products or services, then here are 7 key ways in which a currency broker can add value to your business:
- Banks are expensive: It is a well-known fact that banks generate big margins on foreign exchange, largely to due opaque charges hidden within exchange rate spreads. Alternative payment providers can reduce this cost significantly offering near wholesale rates, adding to your bottom line.
- Consistent pricing: It’s not just transparency of charges that’s important but you also need to know that those charges will remain constant. Avoid the hassle of ringing up to ‘negotiate’ exchange rates that ultimately benefit the bank and not your business.
- Speed of execution: Know that you can execute a currency conversion in real-time, easily upload multiple conversion/beneficiary instructions and benefit from faster payment processing.
- Collect receivables in multiple currencies: Opening foreign currency bank accounts is a costly and time-consuming exercise. Benefit from auto generated multi-currency accounts that allow your customers to pay you through local payment methods and reduce FX charges on conversion.
- User experience: Be better informed about the status of your transactions, with real- time push notifications for conversions, payments, returned payments and collected receivables.
- Help in managing currency risk: Fix exchange rates for up to a year ahead to avoid the risk of currency fluctuations adversely affecting your future supplier payments or customer invoice receipts. Develop a strategy to deal with potential currency movements affecting your company profits.
- Relationship: Many businesses don’t have the time or resources to plan their FX transactions effectively and receive little or no help from their bank. Get help from a specialist who can add real value to your business.