How to Find the Right FX Provider

As we close out our blog series on improving your business’s foreign exchange risk management and avoiding costly mistakes, it’s come time for us to answer one last lingering question, the question that’s had a recurring presence throughout our blog series.

How do I find the FX provider that’s right for my business?

It’s a question that’s come up throughout our series of blogs. From avoiding inflexible solutions to taking care of tricky regulatory compliance, nearly every piece of risk management advice has come down to finding the holy grail FX provider, the one that understands your business and its operations and has the expertise and solutions to address your unique risks.

Now, we’re finally going to talk about how to find this perfect provider.

The importance of shopping around in foreign exchange

The biggest mistake you can make in your search for the perfect provider? Not searching at all.

It can be tempting to just stick with your friendly local bank, or go with the first provider you speak with just for the comfort of having a dedicated provider. But you don’t want to do that. Keeping a narrow focus (and not shopping around) can lead to you missing out on:

• Better exchange rates

• Better or more varied service opportunities from working with a specialist provider

• A more targeted, strategic approach to your foreign exchange.

Now that we’ve established that you should be exploring your options, it’s time to start shopping. But where do you start? What kinds of things should you be keeping an eye out for in your search?

What should you look for in your FX provider?

Ultimately, the right FX provider for you will be the one who can help you to streamline your business operations to make international payments while minimizing regulatory delay, human error, and risk exposure. In order to do that, they’ll need to understand your business, understand what you do, and be able to work with you to directly address your risks and other issues without compromising your business in the process.

When meeting with providers, we encourage you to keep an eye out for (and ask about) the following things.

• Competitive, but realistic solutions. Don’t fall for the hype. If an exchange rate sounds too good to be true, it almost certainly is. Additionally, some providers may encourage you to speculate in the currency markets or tell you that they can help you to second guess rate movements. In reality, it’s impossible to know how the markets will move, and you should be wary of anyone claiming that you will always be on the right side of market motion.

• A provider that understands your needs. You shouldn’t be the only one asking the questions. Your provider should be doing everything they can to understand your business, what you do, and how you do it. A provider that doesn’t take the time to learn about your business will not be able to offer the quality of service that you’re looking for.

• Bespoke solutions to fit your needs. Continuing from that last point, a provider that only offers a generic service will only be able to provide generic protection. As we mentioned in our article last week you should look for a provider with solutions that meet all your foreign exchange needs, including helping you to manage future risk more effectively. Don’t settle for anything less.

What next?

This brings us to the end of our blog series on foreign exchange and effectively managing your business’s risks. We hope these articles have been useful to you and you’ve come away with more knowledge on what you and your organization can do to better your international payments and work with your FX provider to manage your risks.

At Xe, we have been an expert authority in the currency world for over 25 years. We provide a broad range of currency services and products to businesses around the world such as International Payments and foreign exchange risk management solutions to help you navigate the world of foreign exchange and make the best decisions for your business and its customers. We will work with you to ensure that your foreign exchange procedures are the right ones for your business and its needs, and will be able to navigate the ever-changing currency markets.

Ready to learn more about our business solutions? Visit our Business page for more information about our offerings and to take the first steps in enhancing your organization’s foreign exchange risk management.