Poor communication. It’s something that many of us have experienced in all facets of life. At best, poor communication will cause confusion and irritation. At worst, poor communication could progress to costly misunderstandings.

In the business world, internal communication is the key to a cohesive, productive organization. Unfortunately, many organizations around the world have little to no communication between teams. Sometimes this is a result of the organization being large or having recently undergone significant growth. It can also be the result of people believing that certain processes are only the responsibility of one department.

In reality, foreign exchange risk can affect the entire business, and poor internal communication is one of the most common mistakes that can increase a business’s exposure to FX risk. But what’s the solution?

How does poor communication add to foreign exchange risk?

When businesses operate in silos rather than as one collective unit, it’s very likely that they aren’t making decisions with the bigger picture in mind. Poor communication between units means that units are unlikely to have a clear picture of just how their particular operations
and currency market exposures factor into the company’s overall risk level and exposure.

If the poor communication is allowed to spread to decision-making, this could lead to businesses making autonomous decisions about transactions and risk management that aren’t consistent with the business as a whole, and could ultimately undermine other parts of the business. One example of this could be supply chain managers hedging out the risk of higher import prices without taking into account the sales department’s expected revenues from overseas.

Ultimately, your business’s FX goals should be to get the best possible rates for your international payments and minimize your risk exposure. Without effective communication, it will be very difficult—if not impossible—to accomplish this. So, how can you improve your organization’s communication?

How to improve your organization’s communication

There are two parts to this: you should prioritize internal communication, but also make a point to have strong communication with your FX provider. Internal communication, as we’ve discussed, will help your organization to make decisions that are best for the business as a whole, while communicating with your FX provider will help you to effectively resolve issues as they come up and prevent potential issues from arising.

Earlier in this series, we advised you to work with your FX provider to develop a comprehensive foreign exchange risk management policy. Having this policy can address communication issues in the following ways:

• You and your team will better understand every aspect of your organization’s risk exposure.

• You can then develop and implement processes to address said risk exposure on a holistic and company-wide basis.

• You can establish protocols and procedures for how different units across the business should collaborate and communicate, in order to reduce the risk of issues arising as a result of miscommunication.

On one final note, it’s also important that you consider how you can communicate with your FX provider—not just on a day-to-day basis, but in the event that an unexpected issue arises or you need additional assistance with something. When searching for the right provider, take this into account.

Consider:

• Do they offer phone-based or web-based assistance that you can utilize during any hour of the day?

• Will there be one person or team as your designated point of contact?

• How will they provide you with the information you need to make proactive decisions?

These questions could help you to find the provider that’s the right fit for your operation and your currency needs.

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If you’ve never sent money online before, it can seem pretty confusing. You enter in your information from your home, on your computer or on your mobile phone, and your money somehow travels from your bank account to your friend’s on the other side of the world.

There’s quite a lot of information online about money transfer, but unfortunately, not all of it is accurate. Been doing your research, but not sure what to believe? Let us help you out. We’re going to share some of the most common misconceptions about online money transfer, and then let you know what’s really the case.

Myth #1: You should check the exchange rates and send money at a particular time of day.

We’ve discussed this concept before, but we think it bears repeating: the time of day you check the rates has absolutely no bearing on the rate that you’ll get. The global currency markets never sleep, and it’s likely that at any given time, something is happening that could affect the value of your chosen currencies.

There’s no objective “best time” to send a money transfer. That’s going to depend entirely on the values of your chosen currencies, and since those can change at any moment, it’s not going to be easy to determine when the rates will be in your favor. You can study the markets, but you can’t predict the future!

If you are interested in knowing the best time for your transfer, you can set up Rate Alerts for your currency pairs that will alert you when your target rate has been reached.

Myth #2: You’ll always get the same rate, so you don’t need to shop around.

On the other hand, some people think that checking the rates is little more than a formality. After all, global currency values are the same around the world, so wouldn’t the exchange rate always be the same?

You would think so, but that’s not quite the case. While the mid-market rate is the exact midpoint between a currency’s buy and sell rate (also commonly referred to as the “true rate” of exchange), not every provider offers you the mid-market rate. Many services (including banks and wire transfer providers) add margins onto their rates that will benefit them. And it’s not always made clear when you look at their rates. So before making a transfer, check our Currency Converter to see what the real rate of exchange is. You could be surprised!

Myth #3: Online money transfers aren’t as secure as bank and wire transfers.

We get it. You trust the bank to hold your money, so naturally you’re going to turn to your reliable local bank and think that they’re the most trustworthy organization to handle your money transfer.

Banks are absolutely trustworthy, but they aren’t always the best choice for handling money transfers. In addition to the unfavorable exchange rates that we already mentioned, service fees and limited working hours could lead to you paying more money for a slower money transfer.

Additionally, online money transfer providers are no less secure than the banks. At Xe, we have enterprise-grade security measures in place and adhere to regulatory standards in every country that we facilitate transfers for.

Myth #4: Money transfers are complicated and take a long time to execute and complete.

This can be broken down into two separate thoughts:

1. The money transfer process is confusing, and it’ll take you ages to figure out how to send money.

2. Once you’ve sent your money, it’ll take days or even weeks for your money to reach its destination.

Both false!

Signing up for an account is completely free and takes just a couple of minutes. Once you’re registered, you’re ready to start transferring, which can be initiated in just a couple of minutes online or on the phone. Want to make the process even easier? Take a look at this list of everything you’ll need to make a transfer, before you start the process.

Additionally, online money transfers travel pretty quickly. Because you’re not working within bank service hours, you can initiate a transfer any time of day, any day of the year, and your money will reach its destination quickly. At Xe, our transfers take within 1-4 business days, often arriving within 24 hours, sometimes even within minutes.

Myth #5: Money transfer is expensive.

You will need to provide the funds for your transfer. But when it comes to additional costs, online money transfer is no more expensive than a wire transfer or bank transfer—it’s often less expensive. Between the straightforward rates and lack of excessive fees, what you see is what you get when you make an online transfer.

Get in touch with XE.com