March 2017 Credit Management magazine

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We manage the risks, you grow your business RMC is essential for managing our credit risk and monitoring the credit standing of our customers. Having visibility into the current and long-term financial performance of these buyers helps us qualify customers and then determine reasonable credit limits once we sign them. Tinubu Square is now part of the culture at Fraikin. More than 300 people use the Tinubu Risk Management Center daily to assist them in their trade credit decision making. RISK MANAGEMENT CENTER (RMC) Tinubu Risk Management Center (RMC) is a cloud software solution that gives greater visibility and improved control of your risk. It is a secure SaaS cloud-based platform with a full range of integrated credit management features that helps you to: Optimise credit management and risk transfer Mitigate a company’s risk and grow its business Some of the largest multinational corporations trust us Founded in 2000, Tinubu Square is a software vendor, leading expert in trade credit risk management. Tinubu Square enables organizations across the world to significantly reduce their exposure to risk, and their financial, operational and technical costs with best-in-class technology solutions and services. Tinubu Square provides IT solutions and services to different businesses including credit insurers, receivables financing organizations, and multinational corporations. For more information, visit our website www.tinubu.com. www.tinubu.com 28 Paris London New-York Montreal Singapore March 2017 www.cicm.com The recognised standard
TRADE TALK WHAT FUTURE FOR FOREIGN EXCHANGE OPTIONS? Lesley Batchelor OBE, FCICM warns businesses with exposure to currency fluctuations to be certain of their strategy. IT’S perhaps a sad irony that whenever we most need a financial product such as insurance or credit, that can be the time when it’s denied to us. For example, when faced with serious illness, health insurance is suddenly out of our reach. Or if our neighbourhood suffers floods, we may find it difficult to get property insurance. And of course, when a business or an individual applies for a loan, it seems like they have to firstly prove they don’t really need it. Given this somewhat cynical view of financial services, it’s not really surprising that rumours have been growing in response to the decisions by certain financial services companies to withdraw from the Foreign Exchange Options (FX Options) market. This has occurred as banks are reporting that a growing number of international traders are reverting to traditional methods of securing payments such as letters of credit (despite their inevitable costs and documentary burden), as well as relying on the relative security of credit card payments for smaller transactions, in spite of the expense and unpredictability of the final value of such transactions. FX Options are a long-established facility that enables exporters, and other companies, who regularly buy or receive funds in foreign currencies to manage the risks of currency fluctuations by fixing a future price on the currency they expect to receive or require. Although widely used by companies in the United States, FX Options have traditionally been a service that only the largest European companies have sought. But more recent reports are suggesting that such facilities have been enjoying increasing demand from British and European SMEs in recent years. So it came as a surprise when at least one major UK company announced that they were withdrawing from the FX Options market. Some observers have looked to market conditions for an explanation. It is certainly true that it has come at a time when movements in major currencies have been particularly strong and difficult to predict. Sterling fell by more than 15 percent against the US dollar and the euro after the EU Referendum last year, while the dollar itself has been unusually volatile since the presidential election in November, and the euro continues to face strong headwinds due to the ongoing uncertainty about Greece. World prices for key commodities such as oil have also continued to move erratically. In these circumstances, perhaps it wouldn’t be surprising to see service providers becoming reluctant to keep carrying the risk. Is this news the start of more changes for the financial exchange market? The decision relates only to options, the most flexible facility where the client has the right to buy at a future date, with no obligation. Companies exposed to foreign exchange risks can still avail themselves of forward contracts, where they are tied in to the exchange contract. Although this doesn’t have the same flexibility, it does offer the benefit of knowing in advance the value of the transaction in the customer’s own currency. FX Options, in particular, carry a greater level of risk for those who provide them. They offer the client a choice about whether to take the offer when it matures or not and the provider stands to lose heavily if market prices move significantly in the wrong direction, with less chance of reaping a benefit if rates move the other way. For this reason, FX Options tend to be relatively expensive, particularly for smaller businesses. Is this move a response to customer demand, rather than any concerns about conditions in the exchange market itself? So far at least, there doesn’t seem to be any evidence that other companies are planning to exit the FX Options market. But the developments ought to serve as a prompt to credit professionals to review their management of currency fluctuations and consider the most appropriate actions in view of the continuing uncertainties. The methods available to exporters and importers may be about to change significantly, and companies with greater exposure to currency fluctuations ought to consider whether they are following the best strategies. And with ongoing uncertainties about Brexit, the Trump presidency, and the continuing difficulties in the Eurozone, there do seem to be plenty of reasons to expect changeable conditions to continue for the foreseeable future. In fact, in relation to FX at least, we can be certain of only one thing: we can’t be certain about anything. Lesley Batchelor OBE FCICM is Director General of the Institute of Export. The recognised standard www.cicm.com March 2017 29
Page 1 and 2: CM CREDIT MANAGEMENT MARCH 2017 £1
Page 3 and 4: CONTENTS MARCH 2017 www.cicm.com RE
Page 5 and 6: Choose the partner leading companie
Page 7 and 8: INSOLVENCY LEVELS TO INCREASE UK bu
Page 9 and 10: News in Numbers - provided by the M
Page 11 and 12: INSOLVENCY STANDARD FINANCIAL STATE
Page 13 and 14: IS AMLCOMPLIANCE DRIVING YOUNUTS? T
Page 15 and 16: One of the comments we hear is that
Page 17 and 18: DRIVING FORWARD IT’S an ‘unders
Page 19 and 20: From May 2017, companies with an an
Page 21 and 22: The recognised standard www.cicm.co
Page 23 and 24: THE THREE OBSESSIONS OF THE SILICON
Page 25 and 26: celebrating credit week FREE webina
Page 27: TAILORED SERVICES I believe it does
Page 31 and 32: NEWS IN BRIEF > ACCESS ALL AREAS P
Page 33 and 34: Supplement special THE CICM BRITISH
Page 35 and 36: FEATURE SPECIAL REWARDING EXCEPTION
Page 37 and 38: Winners Choose Rimilia! Rimilia at
Page 39 and 40: COMMERCIAL CREDIT TEAM OF THE YEAR
Page 41 and 42: YOU MATTER TO US We are proud to be
Page 43 and 44: LEARNING AND DEVELOPMENT IMPACT WIN
Page 45 and 46: High Court Enforcement That Will Em
Page 47 and 48: Presenter: Brenda Linger, CICM Vice
Page 51 and 52: 5 years in succession as winners an
Page 53 and 54: ting Better Getting Better st e ds
Page 55 and 56: 65 APR 2015 MAY 2015 JUN 2015 JUL 2
Page 63 and 64: THE CREDIT CONTROL RECRUITMENT SPEC
Page 65 and 66: Proudly supported by Attractive dis
Page 67 and 68: FORTHCOMING EVENTS Full list of eve
Page 69 and 70: NEW CICM MEMBERS THE INSTITUTE WELC
Page 71 and 72: ARRANGE YOUR CAREERS BANNER STAND N
Page 73 and 74: INTERNATIONAL CREDIT CONTROLLER EXC
Page 75 and 76: Cr£ditWho? CICM Directory of Servi
Page 77 and 78: Cr£ditWho? CICM Directory of Servi
Page 79 and 80:
MONTHLY PRIZE CROSSWORD CREDIT CONU
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