Study the landscape to find, face common business challenges

“In the business world, there are threats around every corner,” says Jim Altman, middle market Pennsylvania Regional Executive at Huntington Bank. “And in some ways, the level of volatility has increased in recent years.”

He says areas such as payments, whether making or receiving; data protection; interest rate changes; and currency instability have become a greater concern for many businesses. Fortunately, he says, there are steps businesses can take to address those concerns.

Understanding the good and bad of each business decision is inherent in most service areas of commercial banking and financial management that often manifests in something as basic as a conversation between the representative and the client. Moreover, there can be much to gain from a knowledgeable banking team engaging in a formal assessment of factors contributing to a business’ performance in the market.

Smart Business spoke with Altman about areas of volatility and how to move smoothly through them.

How is payment fraud affecting businesses?

Companies are typically reactive when it comes to payment fraud, responding as incidences happen to mitigate the impact of that event. That’s unfortunate because it takes days or weeks to understand that fraud has occurred.

Most companies believe that payment fraud will occur at some point, but they often don’t believe they can stop it from happening. There are, however, preventative measures companies can put in place to reduce the probability of a fraudster’s success and control the impact. Banks, for instance, have a treasury management suite of products designed in part to help secure ingoing and outgoing payments.

What are companies doing to fight data breaches?

Businesses are becoming more proactive as they attempt to protect themselves against data breaches, but often aren’t mobilizing until there’s a security breach.

Cyberbreach techniques are dynamic and continually evolving. As a result, there isn’t one tried-and-true approach to preventing a breach. Many proactive companies turn to cybersecurity insurance to soften the blow of a breach. The process of acquiring insurance often includes a risk assessment so companies can better understand where risk exists within their systems, giving them a chance to shore up those weak spots.

What might happen with interest rates?    

It is likely that the Federal Reserve’s early indication of two interest rate increases this year will impact commercial banking. If rates start to climb, the expectation is they’ll rise quickly. Companies that don’t budget for interest rate increases could experience higher than anticipated costs.

Banks can hedge the variable component of interest rates. That may not mean getting the extremely low interest rates that the U.S. has had in recent years, but companies will at least know what they’ll pay.

How is currency volatility affecting businesses?

When it comes to currency volatility, much like hedging interest rates, companies can lock in a price for a foreign currency that’s experiencing volatility, achieving a great measure of consistency and predictability in an uncertain market. In fact, the strategies to offset currency volatility do not rest with just hedging. There’s a lot companies can do when transacting with customers abroad to mitigate losses. For instance, companies can conduct business transactions in U.S. dollars as well as foreign currency to insure the most favorable payment option is always available depending on the most current environment, which can regularly fluctuate. And they can implement insurance programs to guard against losses related to domestic and foreign buyers.

Who can help navigate these challenges?

Companies can find aid in a knowledgeable banking partner that can help find and assess a business’ most pressing concerns, manage them and put solutions in place to mitigate them. In today’s environment, business owners should expect nothing less.

It’s important that companies assess their financial provider on its ability or willingness to help. Otherwise, companies are missing the chance to work with an organization that could do more to protect their business.

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