By Paola Gasca, Assistant VP, Blades International
As companies have adjusted to working remotely as a result of COVID-19, they have been finding new ways to cut costs and save money wherever possible. Our AFP 2020 session, The Future of Integrity and Data Analytics in Foreign Exchange, will explain how technology and transparency aid in efficiently managing FX arrangements and driving down FX Costs.
HIDDEN FX COSTS
Our session focuses on a segment of business that many companies often overlook—the hidden costs and excessive fees associated with international business and cross-border payments. As companies begin to reevaluate their business practices, they are wise to review their FX costs, as they are easily overlooked. Furthermore, a foreign exchange review can be done remotely, with technology and expertise, by contracting a professional third party.
Knowing how to review FX costs is crucial to establishing and managing your bank FX agreements. You should review your costs on a monthly basis for about a year, after which you can move on to quarterly auditing. Regularly reviewing your FX costs can help you become more experienced in FX economics and, therefore, more confident in negotiating fair FX arrangements. The goal is to foster healthy relationships with your banks in order to obtain FX arrangements that lower costs and improve your business processes using data analytics and, most importantly, integrity.
An issue we often run into when discussing the high costs associated with foreign exchange is that no one wants to admit they were wrong or unaware of their FX costs. This can make a client hesitant to review their FX costs and continue missing out on the savings associated with a fair FX markup arrangement. It is important to be open to change and welcome improvements by having your FX data professionally back-tested and reviewed to see how well it has been priced on FX markups. In embracing this service, which is aided by the innovative use of integrity and data analytics, companies are well on their way to achieving verifiable foreign exchange costs—resulting in improved processes and increased confidence in their business practices.
Don’t miss The Future of Integrity and Data Analytics in Foreign Exchange, which is part of the Risk Management track at AFP 2020. Register for the conference here.