Unless you have been living under a rock that has been very securely positioned under an even bigger rock, you will be aware of the fact that 2020 was an extremely volatile year in almost every way possible. With so many international disruptions and uncertainties, businesses were hit hard around the globe. As a direct result of the tumultuous events of 2020, many companies ventured online in order to sell their products or offer their services globally. As a result of this new approach, corporate FX quickly joined the list of words that best describes the modern way of conducting business.
While we did experience a host of sombre moments throughout the course of 2020, we also saw the best side of the human race. In addition to offering our fellow man a helping hand, our species' ability to solve even the most unexpected of problems was on full show for all to see. And while the incredible speed with which scientists from every corner of the world pulled together in order to produce a vaccine could be said to be our greatest feat, we also saw a variety of problems being solved in innovative ways in almost every sector. Whether it was in the world of public health, politics, the economy, entertainment or sport, no industry or sector could have predicted the events of 2020 before they occurred. Even in what we could refer to as a standard year, Foreign Exchange (FX) markets are known to be subject to change on a regular basis. Introduce the year that was 2020 and you can quickly understand how businesses were faced with a number of new obstacles. This article has been put together to focus on why business after business turned to a corporate FX specialised provider to help guide them through the rocky terrain that is the world post the events of 2020. So, without further ado, lets take a look how...
Desperate Times Call for Intelligent Measures
Experts, including NYU professor and economist Nouriel Roubini, were predicting that 2020 would be one of the most volatile years in history even before a global pandemic arrived, so it can be safe to say that they were right in ways even they did not imagine. As the regular avenues for selling products and/or services were removed, a large number of businesses ventured online for the very first time and, naturally, this brought with it a number of new challenges. As a business selling globally, you need to make sure that you can manage your finances against FX exposures. In order to do this, you need to make sure that you are paying reasonable amounts on exchanging money and when making payments. This is where a specialist can assist you by introducing you the possibilities of both market orders and forward contracts...
Set Market Orders
In unpredictable times, one of the biggest reassurances you can receive is a guarantee. As a business, using a corporate FX specialist is one way that you can make this happen.
By enlisting the help of a specialist, you can set what is referred to as a market order. In essence, what this means is that you can decide on an exchange rate that would work for you and as soon as the market reaches this rate, your specialist will secure a deal. Provided that you are not in a rush to transfer your money, this means that you plan ahead as you know exactly how much the money transfer will cost.
Forward Contracts
Developing on the importance of guarantees, one of their biggest benefits is that they remove the risk factors of a constantly fluctuating market. This is what corporate FX specialists can do and it is part of the reason behind why they entered the mainstream in a volatile financial environment.
FX rates change all the time and often go through periods of severe unpredictability. For businesses, this can prove to be incredibly stressful and even worse, a sudden change in the market can have drastic effects on the future of a company. This is where a specialist can offer you the opportunity to set up a forward contract.
A forward contract allows you to fix an exchange for a portion of time, which in turn means that you can plan and organise your business without worrying about major fluctuations in the market. To put it another way, you can think of a forward contract as an agreement between two parties to either buy or sell something at a fixed price at a future date.
The Right Choice For You
When it comes to corporate FX specialists, the number of options available to businesses is growing with each passing financial quarter. Their overall popularity, for the aforementioned reasons, has dramatically increased in recent times and this is reflected in both the providers and the services available.
One of the most popular financial specialist providers that deals with business foreign exchange is Wise, formerly known as TransferWise. Since being founded in 2011, Wise has been introducing more and more business functions to their array of services, making them one of the go-to choices in the world of FX specialists. Their included functions include invoice payments, payroll payments, debit cards for business expenses, and the ability to move money between accounts in seconds. In addition to this, you can even get an IBAN, routing numbers and a sort code for your account without the need to go through a traditional bank.
Another corporate FX specialist that has more than earned its moment in the spotlight this year is Moneycorp. While Wise may offer more business functions than most, the main difference between the two mentioned here is that Moneycorp offers its customers the option to buy both options and forwards to mitigate all exposure. This allows for businesses to plan ahead without the worry that a volatile financial environment will leave them in a compromised position.
This option has elevated Moneycorp to a high position when it comes to the popularity of corporate FX specialists. We spoke earlier of the want and need amongst business owners to ensure certain guarantees and this is one service provider that has perfectly catered for the current market.
The Bottom Line
A volatile financial year, in tandem with the benefits of corporate FX specialists when compared to banks, has well and truly brought providers into mainstream. We can't say that the days of banks taking advantage of overseas transactions have gone, but what we can say is that there is now an alternative.
If a business has a regular need to transfer money from one currency to another and is looking to open up their shop door to the world, then turning to an FX specialist for help is becoming a difficult option to ignore. After all, when you want to do something, you want to do it right, and in the digital age, it is now easier than ever to go straight to the experts for assistance.
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