What is an FX Health Check? Discover how understanding currency risk management is crucial for businesses to protect profits and navigate global markets effectively.
Universal Partners London is an award-winning payment specialist UK, redefining the finance industry through intelligent, client-led solutions. Driven by advanced technology, deep market expertise and a commitment to real partnership, we design solutions around your business ambitions to keep you moving forward.
At Universal Partners London, we understand that managing currency risk is crucial for any business operating internationally. As a leading foreign exchange (FX) company and payment solutions company, we offer the FX Health Check, a quick, easy way to gain insights into your current currency strategy and identify areas for improvement.
Our FX Health Check is a simple tool designed to give you a clear picture of your currency risk exposure and its impact on your business. Whether you’re paying international suppliers, managing overseas revenue or navigating fluctuating FX rates, this assessment highlights key risk areas and opportunities to save on currency costs.
In today’s global marketplace, businesses of all sizes are exposed to foreign exchange risk. Whether you’re involved in international trade finance, importing goods, exporting services, or holding assets in multiple currencies, changes in exchange rates can significantly affect your bottom line. To navigate these challenges, many organisations are turning to FX health checks as a proactive currency risk management tool. But what exactly is an FX health check, and why is it so important?
What Is an FX Health Check?
An FX health check is a thorough evaluation of a company’s exposure to foreign exchange risk and its current strategies for managing that risk. It serves as a financial “MOT” for your currency management practices. Our FX Health Check is a comprehensive assessment of a company’s FX processes, strategies, and overall currency management approach. It is designed to identify potential inefficiencies, risks, and cost-saving opportunities within your organisations FX operations.
The process typically entails analysing your company’s international transactions, reviewing international currency exchange flows, identifying potential areas where currency volatility could impact profitability, and assessing the efficacy of your existing hedging strategies.
Why Should Businesses Consider an FX Health Check?
Currency markets can be notoriously unpredictable, influenced by political events, global economic data releases, and shifts in global sentiment. Without a robust FX risk management framework, businesses may find themselves vulnerable to sudden exchange rate movements that could erode profits or increase costs.
Key Benefits of the FX Health Check:
- Risk Mitigation: By assessing risk management strategies, Universal Partners helps businesses implement effective hedging techniques and safeguards against adverse currency fluctuations.
- Operational Efficiency: The assessment evaluates operational processes, systems, and tools to identify opportunities for streamlining workflows and enhancing efficiency in FX operations.
- Cost Optimisation: The FX Health Check examines transactional costs, ensuring that businesses are obtaining the most competitive FX rates and minimising unnecessary fees.
- Strategic Guidance: Our experts provide tailored recommendations and strategic guidance to help businesses optimise their FX management approach, aligning it with their overall financial goals.
- Identify Risks and Save on Currency Costs: Many businesses face hidden costs due to currency fluctuations, but they’re not always easy to spot. Our assessment highlights where you may be losing money on foreign exchange transactions and helps you take steps to protect your bottom line.
What Does an FX Health Check Involve?
While the specific steps may vary depending on the size and complexity of your business, a typical FX health check will include:
- Transaction Analysis: Reviewing all international transactions to map out your currency flows.
- Exposure Identification: Pinpointing where your business is exposed to FX risk, both directly and indirectly.
- Policy Review: Assessing the adequacy of your existing FX policies, procedures, and controls.
- Strategy Evaluation: Analysing the effectiveness of your current hedging strategies and exploring alternative solutions.
- Reporting & Recommendations: Providing a detailed report with actionable recommendations to strengthen your FX risk management framework.
Benefits of an FX Health Check
By undertaking an FX health check, businesses can gain greater control over their currency exposures, reduce unexpected costs, and make more informed strategic decisions. Regular reviews help ensure your FX policies remain fit for purpose as your business grows and market conditions evolve.
As global trade continues to expand, effective FX risk management is no longer a luxury—it’s a necessity. An FX health check offers a practical way to safeguard your business against currency volatility and optimise your financial performance. Whether you’re a seasoned multinational or a growing SME, regular FX health checks should be an integral part of your financial strategy.
With the current volatility, contacting a currency specialist will allow you to safeguard your business and finances by planning ahead. If you are a business transferring funds overseas, get in touch with Universal Partners and our dedicated team to discuss the latest market movements ahead of your currency exchange. Universal Partners can provide invaluable help on efficient risk management, payment and finance tailored solutions to your business’ transfer needs.
