![Counterparty Risk What you need to know when making international transfers. Firstly, what exactly does Counterparty Risk mean? Counterparty risk is the probability that the other party in an investment, credit, or trading transaction may not fulfill its part of the deal and may default on the contractual obligations. Simply stated, the risk of not being repaid. While this seems like it only applies to institutions giving credit, it encompasses a much wider scope. Bonds are rated by agencies, such as Moody's, and the status conveys the amount of risk but more than that, this status can change. Stocks values rise and fall with the company’s performance and even its reputation or the reputation and performance of its CEO or founder’s actions and other interests, look at Elon Musk as an example. How exactly is it relevant to me and my international transfers? When making an international transfer, you are sending your money to a beneficiary offshore and this has the potential of counterparty risk. Let’s look at some examples: • You pay an invoice to a company or individual for services or goods. There is a possibility that you do not receive the goods or they are of substandard quality. • You invest in a Traditional Broker’s Fund as a long-term investment for retirement. The fund underperforms or the company goes bankrupt. • You are trading for Crypto Arbitrage and the markets were not on your side, or an exchange faces bankruptcy as evidenced in the recent FTX collapse, and you lose money on the trade. Now that I know I am engaging in transactions that have counterparty risk, what is my next step? It is imperative that you understand the risks involved with your specific transactions and the roles of the parties involved. As your FX Intermediary, Currency Assist’s duty is to perform the execution only of the trade or transaction acting upon the client’s instructions. What does this mean? It is not the bank nor Currency Assist’s responsibility to validate the credibility of the counterparty and the risk lies with you, as the client.](https://currencyassist.co.za/wp-content/uploads/2022/12/Picture-1.jpg)
In the name of ease, the world is increasingly becoming more digitised and while this may open up many wonderful experiences and life changes, it requires we adjust our thinking and habits when it comes to our security. With everything migrating online; like our correspondence, instructions to companies, even our banking; we need to take appropriate precautions in this new “Meta” world we find ourselves in. As we can see, Cybercrime is projected to more than triple over the period of a decade.
We wouldn’t leave valuables lying on the car seat of our car in a busy street. We would leave them at home, or conceal them and at the very least, we would take precautions like lock the doors and arm an alarm. Even though this digital world may seem overwhelmingly new and strange, some basic steps can go a long way to ensure your online safety: just like the simple act of locking your car makes a difference. The reality is that new attacks are happening every few seconds, so this is a matter no one can afford to ignore.
![Image of two computer monitors titled Frequency of attacks, indicating that a Cyberattack happens every 39 seconds. A Ransomware attack happens every 14 seconds](https://currencyassist.co.za/wp-content/uploads/2022/12/Picture-2.jpg)
10 Online Safety Tips For Everyone:
1) Validate who is corresponding with you. How do we do this? It is as simple as checking the number, reading the email address on an email, or checking the site name before opening it.
Let’s look at some examples:
You receive an email and the name is one of your colleagues or a friend, or even a bank name. Don’t assume that it is from them. Read the full email address. Is that the email address you have for them? A name of a real person or company might show, but if you read the email address it could be different to the one you have for them. If it is not that colleague’s correct email address, check your previous correspondence for the email address you know is correct, contact them telephonically, check official sources for contact details – like the bank’s details are on their websites or on previous documentation received.
The same can happen for a website, it can have a company’s logo and details but the site name doesn’t read correctly. I.e. Instead of currencyassist.co.za it might read currentassist.co.au. This might seem fanciful but hackers have caught people out by sending them a seemingly legitimate looking email or link to a website and it wasn’t the official bank or company email or website; the result was that their banks accounts were hacked.
Another example is receiving “new” bank details from an existing creditor or supplier. Since there was no verification that the email came from that supplier or company, they paid funds to fraudsters and their money was gone.
2) If you ever receive anything you are unsure of, only use the known and valid contact details to contact that person.
Email the correct (former) address you have for the person, or even better, contact them telephonically on the details you already have and confirm if this is indeed from them. Fraudsters have been known to send sms’ or emails that seem to come from legitimate courier companies and as you click on links and type your card details, they are entering that information into another device and gaining access in real time with the access and information that you are giving them.
3) Don’t ever click on links, open attachments, download from unknown sites, or respond if these are not from verified sources.
If a company has explained to you that they will send you a document, or you need to click on a link to complete some process, and the email address is verified then you can complete this. Err on the side of caution and if you are ever unsure, just stop. Get in contact with the company to check first, or even ask someone else who has more experience with the company or the technology to assist you. A phone call is a small price to pay to ensure security of your information and finances.
4) Never let anyone rush you and never share your login details, passwords, information about security questions, or anything like that with anyone. Especially not on the phone, over email, or even in person if you do not know them personally, and even then be wary and sure they are trustworthy.
There are other sorts of scams, not just on email. Another example is of telephonic scams where people claim to be from the bank and need information from you immediately, as someone hacked your account and they need the information to stop them from taking your money. People feel overwhelmed, unsure and divulge information they shouldn’t. Or they are on an online platform and something pops up looking like it is a legitimate chat box. This type of scam has caught many people and enabled funds to be accessed.
5) Do not connect your devices (mobile phones, iPads, laptops) to Wi-Fi or other devices that are not known, verified and trusted. This is a potential way for someone to hack your device and get information off of it. If you think that isn’t too bad, remember that all or your email, logins, banking and personal information is likely on your mobile.
6) Do not use the same password for everything, and do not use easy to guess passwords. It is worth the time it takes to learn how to use a password manager to keep track of passwords and keep you safe. Also, do not allow your browser to remember passwords, this is not safe.
7) Set up two-factor authentication. It does take a little longer for you to connect, but that little bit of time is worth the peace of mind to know you are safe online. Just like locking up your house and arming the alarm, this needs to be part of your online safety routines. This is very basic and yet most people do not do this and it is the very least you need to be doing on your emails as this platform is the least secure at the moment.
8) Keep your software up to date. This doesn’t seem important until you understand that safety features and bug patches are included in updates that address potential issues and will keep you safer.
9) Use Anti-virus and malware software. There are free versions available, but naturally you get the amount of protection you are willing to invest in. Always ensure these are active and up-to-date at all times.
10) When venturing out onto the internet, keep your privacy settings on and ensure that you make purchases from secure sites. You can identify secure sites by looking for an address that starts with https: (the S stands for secure) rather than simply http: They may also be marked by a padlock icon next to the address bar. Again, if you are unfamiliar with safety settings, take the time to have someone set it up and, just like anything in the real world, check up on these settings once in a while to ensure all is still setup correctly and working as it should.
Like in the real world, you have the choice to implement safety measures to the point that you feel is necessary. You might not have felt this was necessary before but in this digital world, thieves are intercepting emails, buying your logins because you don’t have secure passwords, and you use the same login for different sites. They can restrict the legitimate information you receive and control what you do. This is a very real threat and you certainly have engaged in some of the online activities in the above examples, so even if you were not aware of how wide spread it is, you have some idea now.
As your intermediary, we at Currency Assist, as well as the banks we work with, are investing large amounts of money and effort to securing your information. However, if you do not keep yourself safe on your side, you are exposed and it is only a matter of time before someone exploits that. You can contact Currency Assist to discuss the safety of your money with regards to international transfers