In the final part of our ‘FX for tech’ blog series, we recap how technology can help almost every industry improve their handling of currencies, for both their clients and themselves.
In today’s world, business is borderless. Transactions take place across the globe, products and capital travel oceans and hundreds of currencies swap millions of times a day - and this applies to almost every industry imaginable. Whether you are running a consumer retail website, a banking application or a software company, FX has never been more important.
However, having a stream of FX rates is no longer enough. Firms, from start-ups to multi-nationals, need the right software and the right programs to access the most accurate, up to date rates in order to execute currency conversions and list local prices that won’t hurt their bottom line. Long gone are the days of relying on rudimental FX processes – it’s now a job that has fallen into the lap of the IT team, and they have to understand how to work with currency data in order to build successful systems.
With this in mind, here is a recap of some of the issues we have addressed in our ‘FX for Tech’ series:
- Product development: For any company with wide international reach, using FX in their daily operations – which requires accurate and reliable rates – is becoming an increasingly important part of decision making. And the responsibility for FX rates is increasingly falling to developers who are expected to find and implement real-time exchange rate APIs to power products and web applications. For many on the technology team of a start-up, or even an international exporter, for example, FX is an unfamiliar area. They do know, however, that in order to best serve their client base, their company needs real-time rates to keep on top of fluctuating prices. Therefore, product managers and developer teams are on the hunt for reliable APIs that can be integrated easily into their ecosystem.
- Pricing engines: It’s no secret that high street retail is in decline, while e-commerce continues to boom. As transactions move increasingly online, more and more small and medium sized businesses are offering their products and services on the web. This means international customers, and naturally, multiple currencies.
For a small brand, access to a global marketplace is a huge opportunity. While a product might not be selling hotly in the UK, it could go down a storm in South America or Eastern Europe. In order to maximize on this though, websites and applications must have a pricing engine in place so that customers can purchase products in their own familiar currency. Currency localization and conversion can happen quickly and accurately, but owners and developers need to equip their businesses with a pricing engine that sources the most accurate data and one that can convert prices in an instant.
- Predictive algorithms: Disruptive technology is transforming how we understand and interact with our finances. Now, sophisticated analytics and forecasting tools are being offered directly to consumers to help us make more informed financial decisions. All this means that IT teams across a number of sectors have to build and maintain programs with predictive functionality to stay competitive.
Take the wealth management industry a prime case in point, which is facing significant competitors from automated advisory and wealth management programs, or “robo-advisors,” which are giving investors the ability to track and manage their investments with an unprecedented degree of sophistication. FX functionality is playing a pivotal part in helping them serve investors – and almost all of them now offer sophisticated analytics and forecasting tools to calculate foreign exchange exposure.
So how can developers and IT departments ensure they have the best solution when their CFO or CEO tells them to improve their FX functionality? Ultimately, it boils down to three things:
- Accuracy and Reliability: At the core of FX is the accuracy of the data. It doesn’t matter what the front-end system looks like or what your provider might be promising you. If your pricing engines and your redisplay system isn’t consistently fed with real-time, up to date and accurate FX data, then your prices will be uncompetitive. It’s the crucial ingredient and the first thing to get right.
- Ease: Once you have a data feed you can trust, you have to also ensure that the API can easily integrate with your platform. The right partner will make any integration seamless, and a foreign exchange API should plug right into your existing architecture.
- Competitiveness: Finally, when it comes to FX, you have to be providing the most up to date offerings to your clients. This is the same whether you are a travel company, a wealth manager, or a new fintech start-up. Armed with technology, new market entrants are utilizing predictive algorithms, forecasting and redisplay to constantly improve the customer experience. Therefore, developers in any business have to stay up to date with the latest FX trends and make sure they are offering the same – and more.
Of course, handling FX can be a daunting task for any developer, but done right with the correct partner, it’s a job that only has to be done once. So before committing to the first platform or technology offering that appears in Google – dig a little deeper and find the technology that suits your needs now, and one that can adapt with you as you grow as a business.