Navigating Rand Volatility: The Role of ISO-Accredited FX Intermediaries in Mitigating Currency Risks
5 compelling reasons why ISO accreditation matters when selecting an FX intermediary
The South African rand has endured considerable volatility recently, attributed to a myriad of global factors including commodity price fluctuations, financial-market risk perceptions, and local political uncertainty. Amid this turbulence, South African individuals and businesses engaged in trade and investment have encountered both challenges and opportunities.
According to leading FX intermediary, Kuda FX, many investors have reaped the rewards of the rand’s instability, by steadfastly sticking to their foreign investment goals and strategies.
However, given the unpredictable nature of global currency markets, Kuda FX’s Forex Relationship Manager, Beulah Brown underscores the critical importance of managing and mitigating the risks associated with currency volatility, by aligning with a trustworthy foreign exchange intermediary.
In particular, she says FX partners that bear the prestigious ISO (International Organisation for Standardisation) accreditation can offer a multitude of advantages and assurances.
Quality assurance standards
Quality assurance standards require companies to maintain high levels of quality in their operations and risk management procedures. When working with an ISO-accredited FX intermediary, clients can expect a commitment to quality and accuracy, which reduces the risk of transactional errors and ensures that trades are executed reliably.
“In contrast, less accredited or unregulated advisers might not have the same level of expertise in managing FX risks, exposing clients to currency fluctuations and market volatility, and potentially leading to significant financial losses,” says [SURNAME].
Robust security measures
ISO-accredited companies typically have vigorous security measures in place to protect sensitive financial information. This is particularly important in the world of FX, where data security and privacy are a priority.
“Unaccredited or poorly regulated intermediaries may not invest sufficiently in cybersecurity measures, leaving clients unprotected from data breaches and security risks that could lead to the theft of sensitive financial information or funds.”
Regulatory compliance and best practice
A strong commitment to international regulatory compliance helps ensure that ISO-accredited intermediaries follow industry best practices and adhere to relevant financial regulations. This is especially important in the heavily regulated FX industry, where compliance failures can lead to serious legal and financial consequences.
“Clients who choose non-accredited advisers or offshore entities might have fewer legal protections in case of disputes or fraudulent activities, proving it challenging to recover their losses.”
Consistency and reliability
The establishment of documented processes and procedures has created standardisation and predictability for clients working with ISO-accredited intermediaries, reducing the risk of surprises or inconsistencies in their FX dealings.
“Less reputable firms may not provide the same level of transparency, for example clients might not have access to real-time market data or understand the pricing mechanisms used by these intermediaries, leading to misunderstandings and losses.”
Client Confidence
ISO-accreditation is a recognised symbol of commitment to quality and performance, giving clients confidence in an intermediary’s ability to handle FX transactions professionally and competently.
“When engaging with unaccredited advisers, clients may experience delays or difficulties in resolving issues or receiving assistance, which can be particularly problematic in time-sensitive transactions In addition, certain advisers may engage in hidden fee structures or unfair practices that are not disclosed upfront, resulting in unexpected costs and disadvantages.
Brown concludes: “Selecting an FX intermediary with ISO-accreditation can provide individuals and businesses with the assurance of quality, security, consistency, compliance, and overall professionalism in their FX transactions. However, while ISO-accreditation is a valuable indicator, clients should also conduct their due diligence and consider other factors, such as reputation and specific service offerings.”
Kuda FX is immensely proud to have been awarded the ISO certification 27001 and ISO 9001.
ISO 27001 gives Kuda FX clients a widely recognised international standard for information security management. It provides a framework for establishing, implementing, maintaining, and continually improving our information security management system (ISMS).
The ISO 9001 standard sets out the criteria for Kuda FX in a quality management system and is based on several quality management principles, including a strong customer focus, involvement of top management, process approach, evidence-based decision-making, and continual improvement.
