Finance

With the World Bank and the IMF planning green debt swaps, financial think tank reveals why African countries should be the priority debtors

LONDON –  The World Bank and the International Monetary Fund (IMF) are promoting green debt swaps and are working to have a plan in place by November, ahead of COP26. The two Bretton Woods Institutions are developing an ‘organising framework’ that will connect debt relief to a country’s plan for investing in environmental improvement.

A green debt swap involves an indebted developing country undertaking – in exchange for cancellation of a portion of its foreign debt – to establish local currency funds to be used to finance an environmental, climate or nature programme. Green debt swaps have three main benefits: they enhance climate/nature/green spending, boost economic recovery, and reduce external sovereign debt. The joint requirements for green debt swaps indicated by the World Bank and the IMF are high levels of indebtedness and a “climate” or “green” agenda.

In a new report published today, Planet Tracker examines this broad climate and environmental definition against two main measures: the Notre Dame Global Adaptation Index (ND GAIN) and a country’s percentage of protected areas as a proportion of national territory.

The ND GAIN aims to summarise a country’s vulnerability to climate change and other global challenges, such as over-crowding, food insecurity and inadequate infrastructure, in combination with its readiness to improve resilience. It aims to help governments, businesses and communities better prioritise investments for a more efficient response to these global challenges.

Highly Indebted Poor Countries (HIPCs) have a lower (worse) ND GAIN score of 36.5, compared to the rest of the world (ROW) at 52.6. Norway has the highest (best) score in the world at 76.7. Planet Tracker aggregated the ND GAIN scores with debt levels, giving them equal weight, and ranked the top 10 HIPCs. The resulting list contains only countries on the African continent.

The report’s author, John Willis, Director of Research at Planet Tracker, said: “When we ranked countries by the percentage of protected areas as a proportion of national territory, this produced a very different list.  Oceania and Latin America (including the Caribbean) rank as the highest priority, because they have a large number of small island states with a low proportion of their territorial waters covered by marine protected areas.”

He added: “However, when Planet Tracker aggregated debt level and protected areas metrics into one combined score, the resulting list only contained countries in the African continent. This shows that regardless of the methodology used, and because of its prominence in the HIPC group, the African continent should have high priority when determining which countries are most in need of green debt swaps.”

To make these swaps more widespread, the report recommends that:

• The debtor nations need to determine whether their development plans can align with sustainable financial instruments and, if not, what needs to be adapted. The finance ministries and central banks of these countries should be contacting International Financial Institutions (IFIs) as well as their creditors. Some argue that the debtor nations, especially from emerging and developing countries, need to get into the driving seat.
• Creditor countries will also need to play their part. They should review their debt restructuring frameworks to incorporate issues such as environmental/green and nature/biodiversity objectives. They can also invest in the research required to embed sustainability risks into fiscal and monetary policy rules globally, sharing this through other institutions.
• The private sector alsohas an important part to play. Presently, there are well documented inflows into sustainable products, so investors can play a systemic role in responding to and moving this agenda. Where investors are unprepared to do it alone, blended finance options may be possible.
• The international financial institutions(IFIs) continue to push the agenda on this topic. They have already provided leadership in sustainable finance, funding different types of products such as blue bonds. IFIs are able to work with governments and investors to identify and deploy innovative instruments or reboot the process. They can also be important providers of technical assistance to countries to align their policies, identifying and eliminating perverse incentives and shifting available public finance in the direction of the chosen funding mechanisms, all of while can act as an encouragement of private capital flows as well.

The full report, Green Debt Swaps – Firmly On The Agenda, is available here.

Notes for editors
ABOUT PLANET TRACKER

Planet Tracker is a non-profit financial think tank aligning capital markets with planetary boundaries. It was created primarily for the investor community to analyse the risk of market failure related to environmental limits which, other than climate change, are often not aligned with investor capital. Planet Tracker generates breakthrough analytics to redefine how financial and environmental data interact with the aim of changing the practices of financial decision makers to help avoid both environmental and financial failure.

• Crowdfunding is still open to US investors via the Republic platform 
• Almost 1,200 investors join Glint’s payments revolution as consumer appetite for alternatives to fiat currencies grows  
• Follows recent 32% growth in client numbers during 2021 

Glint, the global gold-based payments system that allows clients to instantly and securely save, spend and share real gold, has successfully raised over £3m ($4m) through its joint US/UK crowdfunding round – smashing its initial target by 51%.

The campaign aimed to raise £2m, but funding closed having raised 151% of this target with 1,190 investors. Crowdfunding investors have secured 7.81% equity with Glint valued at £35.9m.

Glint’s crowdfunding round was the first joint fundraising campaign across the Seedrs and Republic platforms in the UK and US. Whilst fundraising through Seedrs (open to investors in the UK and rest of the world) has closed, accredited US investors can still invest via Republic in the US.

Glint explains that the successful crowdfunding demonstrates consumer appetite for alternatives to fiat currencies. Currently, the value of fiat currencies erodes over time due to factors including rising inflation, lower interest rates, continued quantitative easing and record levels of government borrowing and debt. This desire for alternatives to fiat currencies has driven the rising popularity of cryptocurrencies as well as gold as money.

The amount raised through this crowdfunding round will enable further key strategic hires, growth marketing, product innovation and the development of new revenue streams such as the potential to facilitate gold purchases with Bitcoin, the enabling of corporate accounts, adding more currencies and products, like savings accounts.

Glint has enjoyed rapid growth over the last six months, with a 32% increase in new clients looking to spend and save gold – hitting 82,900 clients in June, up from 62,900 at the start of the year.

Jason Cozens, Founder & CEO of Glint, says: “The response from private investors has been overwhelming and reiterated the necessity of our mission to digitise gold and to provide an alternative to fiat currencies. Securing this additional funding is a huge milestone allowing Glint to take the next steps in our development and growth to once again position gold as the global currency.”  

“Our investors believe that gold occupies a unique position as the most viable alternative to government issued currencies. Currently, the monetary system punishes consumers and savers as the value of paper money erodes over time due to factors including low interest rates, the continuation of quantitative easing and the huge levels of government debt and borrowing – which has soared in response to the Covid-19 pandemic. Soaring global inflation is arguably the biggest crisis facing our cash and savings.” 

“In the US, inflation is currently at 5%, its highest level since the financial crisis; whilst in the UK, the Bank of England’s 2% target for 2021 has already been surpassed and there are warnings that inflation will exceed 3% by the end of the year. There’s also huge global concern around the 9% spike in production prices in China as it may be a matter of time before these costs are passed on to the consumer. In this period of high inflation, a hedge is vital; for many, gold remains the ultimate long-term store of value and has proven itself over millennia. After all, this is the main reason it is held by central banks. Whilst gold can decline in value, many believe its purchasing power is less prone to erode over time.” 

“Through Glint it is now possible to use gold in electronic payments; gold is no longer simply a store of value, it is also a viable means of everyday exchange. Glint launched to democratise gold and once again enable it to be used as money, affording everyone an equal opportunity to prosper. This crowdfunding round has expanded our community of advocates, who all desire a return to sound money that is independent of the banking system. Through Glint’s technology allowing gold to be traded via our app and our card that enables gold and other currencies to be spent anywhere in the world that accepts Mastercard, we’re unlocking access to gold as a trusted global currency that can be used on an everyday basis for the first time in centuries.”  

Those who invested in this crowdfunding round will join existing shareholders include institutional investors such as Sprott Asset Management, The Tokyo Commodity Exchange (TOCOM), NEC Capital Solutions, Bray Capital and accredited High Net Worth individuals. In total, Glint has raised over £20m since launch.

John Lanaro, Global Head of ETFs at RIMES

When Exchange-Traded Funds (ETFs) were developed in the 1990s the aim was to provide individual investors with access to passive indexed funds. However, as ETF investing has risen in popularity, the nature of the funds have evolved.

Today, in addition to traditional, passive ETFs, investors can place their money in thematic ETFs and/or active ETFs. Both options look extremely attractive.

The ETF boom

Thematic ETFs, as the name suggests, track funds that are tied to a specific theme, such as artificial intelligence or renewables. Last year, thematic ETFs performed very well – 33 of the 36 European-listed thematic ETFs significantly outperformed the MSCI World Index – and as a result attracted €9.5 billion in net new assets in Europe alone. This year, they are maintaining this winning streak, with 70% of thematic ETFs in Europe having outperformed global equities in the year up to May.

Active ETFs, in which fund managers buy assets without following an index, are also experiencing a boom. According to data from TrackInsight, twenty-two new ETF issuers have already come to market this year, a surge that is in part fuelled by legal changes in the US which make it easier for fund managers to conceal their decision making from competitors. Active strategies are also inherently preferable to asset managers as they command higher fees than passive alternatives.

The data challenge

However, the very proliferation of ETFs that marks out this booming market is also a significant challenge for investment firms. The vast and growing number of ETFs represent a deluge of data that firms must master if they are to understand the true risk exposure of each ETF.

At present, there is no standardisation when it comes to the file formats or data delivery channels used for ETFs. That means ETF data must be sourced, normalised and validated on a case-by-case basis – before the underlying composition data can be analysed for insights into risk and performance. With every new thematic ETF, the more challenging this task becomes.

Active ETFs bring with them additional data management challenges. While active ETFs do not aim to mirror the performance of indexes, fund managers do need visibility into market conditions to make intraday asset allocations that will, they hope, deliver alpha. These firms therefore need timely visibility of any relevant index data, as well as validated daily ETF composition and reference data on which to base their investment decisions.

So, although active and thematic ETFs offer investment managers significant opportunities, they also require commitment to data management practices that are ultimately non-core. This is why outsourcing such activities increasingly makes sense.

The appeal of outsourcing

When it comes to investment management, firms have traditionally shied away from outsourcing their operational data. They pay for the data licenses, and so feel they should retain control of the data. However, as data volume and complexity increases the economics and value of managing that data in-house shifts.

Outsourcers bring with them economies of scale, as well as the direct relationships with ETF issuers. What’s more, data manifestly is the core of outsourcers’ business: they have invested in the technology, processes and people needed to streamline and optimise data management.

The benefits of the approach applied to the ETF space are clear. The first is quality and accuracy. Data management outsourcers can provide quality-assured, decomposed data so that firms can instantly see their true risk exposure. The second is velocity. One of the core benefits of ETFs is that they can be traded intraday. The timelier your data, the better able you are to manage active funds. Moreover, thanks to their close relationships with data providers, data management outsourcers can also enable quick access to new ETFs as they come online, along with the seamless integration of new file formats.

The competitive choice

The fruits of active and themed ETFs mean most asset managers will look to incorporate them in their portfolios. They have two options in doing so: manage the data in-house, or outsource it to experts. The latter approach frees up internal resources from non-core data wrangling so they can focus on what is core: finding alpha or selecting the investment themes that will deliver the best returns or best meet the client mandate. It’s an approach that reduces the complexity of the ETF space and which will deliver a significant competitive advantage to those who employ it.

By Jessica DiNapoli

NEW YORK (Reuters) – Wall Street rose on Friday after a rocky week in which investors fretted over rising COVID-19 cases, spurred by the more contagious Delta variant, while oil prices slipped after a strong recovery from Monday’s slide.

Megacap tech stocks helped drive main U.S. indexes up again, with the S&P 500 and the Nasdaq 100 indices hitting record highs. Yields on U.S. Treasuries were also up, as was the greenback, with investors eyeing next week’s Federal Reserve meeting, where the U.S. recovery and the Fed’s support for the economy will be in focus.

Despite its decline, oil was set to end the week little changed.

“As long as monetary policy continues to be this aggressive, equities will continue to do well, over the long term,” said Steve Massocca, managing director at Wedbush Securities. “There are concerns about the Delta variant. It’s a concern that will impact the economy because of government intervention and shutdowns. We’re seeing money go back into names that tend to do well regardless of economic shutdowns.”

Investors have been assuming “things will improve, travel will increase,” Massocca said.

“If that thesis is thrown into jeopardy, it put a hitch in the ‘giddy up’ in the market,” he added.

U.S. business activity grew at a moderate pace for a second straight month in July amid supply constraints, suggesting a cooling in economic activity, a report from data firm IHS Markit showed on Friday. IHS Markit said its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, fell to a four-month low of 59.7 from 63.7 in June. A reading above 50 indicates growth in the private sector.

The Dow Jones Industrial Average rose 237.61 points, or 0.68%, to 35,060.96, the S&P 500 gained 37.39 points, or 0.86%, to 4,404.87 and the Nasdaq Composite added 115.07 points, or 0.78%, to 14,799.66.

The dollar index rose 0.141%. For the week, it is up 0.2%, after rising 0.6% previously.

The yield on 10-year Treasury notes hovered around 1.3%, or almost 17 basis points higher than a five-month low set on Tuesday, but was still at the low end of a recent range. The benchmark note traded up 1.8 basis points to 1.285%.

Upbeat earnings helped lift European equities. But Asian shares outside Japan were lower as COVID anxiety continued to take a toll.

Financial markets have swung from one direction to another this week as investors try to assess what the surging Delta variant means for the world economy.

After recording its steepest one-day drop since May on Monday, the S&P 500 stock index went on to post the biggest one-day jump since March a day later. It is set to end the week higher. Currency, bond and commodities markets have seen similar gyrations.

“Equity markets are signaling some symptoms of being tired after a long rally and recognize the peak growth environment,” said Antonio Cavarero, head of investments at Generali Insurance Asset Management.

“But in the short-term, real yields are still too low to provide an alternative, so the evolution of what happens next depends on COVID and the macro data.”

The pan-European STOXX 600 index rose 1.14%.

MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.7%, leaving it down 1.4% on the week.

Japan’s Nikkei was closed for a holiday, but off 1.7% for the week and a whisker away from a seven-month trough.

(Graphic: S&P 500 stock index vs absolute change, daily, https://fingfx.thomsonreuters.com/gfx/mkt/klpykegajpg/stx2307.png)

Financial market volatility was expected to continue, given the resurgent Delta variant and economic uncertainty.

“Uncertainty has increased again with the pandemic,” said Pascal Peronne, a fixed income portfolio manager at Eric Sturdza Investments in Geneva. “I don’t think there will be a closing of economies to the extent we saw last year, but we don’t know.”

(Reporting by Jessica DiNapoli; additional reporting by Dhara Ranasinghe and Wayne Cole in Syndey; Editing by Ana Nicolaci da Costa, Pravin Char and Dan Grebler)

By Elizabeth Howcroft

LONDON (Reuters) – Currency markets still showed signs of caution on Wednesday, with the safe haven dollar touching its highest since early April and riskier currencies losing out due to a combination of fears over inflation and surging COVID-19 infections.

The Delta variant of the coronavirus replaced inflation as investors’ primary source of concern this week, prompting global stocks to drop sharply on Monday. European equity markets picked up on Wednesday and Wall Street futures pointed to a stronger open.

By 1120 GMT, the dollar index was up 0.1% at 93.055, having touched 93.194 in early trading, the highest since April 1.

Joel Kruger, currency strategist at LMAX Group, said the risk-averse mood and inflation fears were joining forces to push the dollar higher.

“It’s becoming increasingly difficult for the Fed to be able to reconcile its stance that inflation is transitory. At some point the definition of transitory is called into question,” he said.

Kruger expects more dollar strength in the third quarter, with the dollar index heading towards 96 to 97.

The Australian dollar, seen as a liquid proxy for risk appetite, fell to its lowest since November in early trading before recovering somewhat. At 1124 GMT, it was down 0.2% on the day at $0.73135, while the New Zealand dollar was up 0.1% at $0.6924.

Australia’s two largest states reported sharp increases in new COVID-19 cases on Wednesday, a blow to hopes that lockdown restrictions would be lifted as more than half the country’s population was subject to stay-at-home orders.

The British pound, which on Tuesday hit its lowest since February, was down 0.1% at $1.3616.

Analysts pointed to a stand-off between Britain and the European Union. Prime Minister Boris Johnson said that his government would outline its approach on the Northern Ireland Protocol to Britain’s parliament on Wednesday. COVID-19 cases in Britain are also surging.

The euro was down 0.4% versus the commodity-dependent Norwegian crown, with the pair changing hands at 10.5722 compared to 10.7038 in the previous session, a seven-month low for the crown.

“Generally, we see the recent dip in cyclical FX as a correction rather than a more pronounced trend and look for a recovery in higher beta currencies backed by hawkish central banks later this summer,” wrote ING strategists in a note to clients.

Currency markets are looking ahead to the European Central Bank’s (ECB) meeting on Thursday. A dovish tone is expected after ECB President Christine Lagarde foreshadowed a guidance tweak in an interview last week.

The euro was down 0.1% against the dollar, at $1.1772, having earlier hit a 3.5-month low.

The ECB announced a new strategy which allows the bank to tolerate inflation above its 2% target, and Lagarde said policy guidance would be revisited to demonstrate the bank’s commitment to the new goal.

In cryptocurrencies, bitcoin rose back above $30,000, having dipped below this key level for the first time in a month on Tuesday. At 1129 GMT, it was trading around $31,441, while ether was at $1,902.

(Reporting by Elizabeth Howcroft; Editing by Joe Bavier, Kirsten Donovan)

More financial service firms have harnessed data over the last 12 months to gain insight into business performance

• 82% of financial service organisations have become more reliant on data over the last year
• Over a quarter (26%) have seen an increase in their data needs
• While 38% increased their data budgets over the last 12 months
• COVID-19 has brought with it a business migration into the digital landscape

82% of financial service organisations have seen an increase in their data needs over the last 12 months to help enhance business operations/performance following the Covid pandemic, with nearly half of all respondents planning to increase their allotted budgets as alternative data acquisition has become increasingly important.  

The findings showcase that the rise in data needs have been largely down to the rapidly increasing amount of useful information scattered across the web. This has allowed financial service firms to harness the right data during the pandemic to gain insight into business performance, identify future investment opportunities, and recognise market trends.

Data has become so crucial during Covid that most businesses would see a significant negative impact if their data flow were interrupted for up to two days, while 4% would start seeing negative effects within an hour.

Julius Černiauskas, Chief Executive Officer at Oxylabs, comments: “Clearly, the financial sector has doubled down on its data needs throughout the last 12 months, which is largely down to Covid. We have seen a trend that since the pandemic there has been an acceleration of businesses migrating to the digital landscape. As day-to-day processes have become digitised, more actionable and important business-related data has become publicly available. Implementing ways to gather such data provides previously inaccessible intelligence that can be pivotal for financial organisations if utilised correctly.”

As a result of this reliance on data, budgets have increased. The findings highlight nearly a half (43%) of respondents are planning to increase their budgets over the next 12 months.

Julius continued: “The landscape of data has changed. While traditional sources maintain their relevance, nowadays few businesses rely exclusively on them. As alternative data acquisition becomes increasingly essential, especially in the wake of the global pandemic, companies are expecting to increase their scraping-related budgets. By increasing budgets, financial companies can use alternative data to help them gain valuable, previously unseen insights and market signals, aiding them to bet on data-backed decisions.

“However, not all of the respondents plan on increasing their budgets. Almost one in ten businesses (9%) indicated they are planning to decrease their budgets allocated to data collection and management, most likely due to post-pandemic economic pressures. For these companies in the finance sector it’s going to be far more difficult for them to remain competitive with their competitors who are committing to strengthen their commitment to data.

“It is clear that alternative data has played a prominent role for financial services firms during the past year, allowing them to gain insights into performance and trends. With almost half looking to enhance their budgets over the next year, these organisations are already set to improve their knowledge and strategy for life after the pandemic,” concludes Julius.

By Ritvik Carvalho

LONDON (Reuters) – Currencies such as the Australian dollar, the Canadian dollar, Norway’s crown and Britain’s pound took a beating on Monday, catapulting the U.S. dollar to its highest in 3 months as a worldwide surge in coronavirus cases hit sentiment in global markets.

The only major currency which did not cede ground to the dollar was the safe haven Japanese yen, which gained 0.3% on the day to 109.74 yen to the dollar.

With England lifting all COVID-19 social restrictions on what some local media has dubbed “Freedom Day”, the continued spread of the highly contagious Delta variant of the coronavirus drew further doubt from investors about whether a total economic recovery to pre-pandemic levels is possible.

Earlier this week, British health minister Sajid Javid announced he had tested positive for COVID-19 and was in self-isolation, also forcing Prime Minister Boris Johnson and finance minister Rishi Sunak into quarantine. Sterling hit a 3-month low against the dollar of $1.3703. [GBP/]

The dollar benefited from the risk aversion in global markets, with the index that measures its strength against peer currencies hitting its highest since April 5. The greenback also benefited from the divergence in trans-Atlantic real yields.

Germany’s 10-year inflation-linked bond yield fell to its lowest in nearly two years on Monday on concerns that the resurgent Delta COVID-19 variant would undermine economic recovery and weigh further on euro zone inflation.

“We’re starting to see the FX markets catch-up to bond markets, and more recently equity markets, in terms of fading reflation bets,” said Viraj Patel, FX and global macro strategist at Vanda Research.

“We think it’s wise to start taking chips off the table as risks of a policy mistake on both sides of the Atlantic are increasing (Fed tightening amid a growth moderation or Europe reopening amid Delta).”

The Aussie dollar, which hit its lowest since December 2020 during Asian hours, extended those losses during morning trade in London to hit a low of $0.7363. It was down 0.6% on the day.

The Canadian dollar, which dropped through its 200-day moving average in Asian trade, fell past C$1.27 against its U.S. counterpart to C$1.2780, its lowest since Feb. 8. It was down 1.2% on the day.

“Despite rising vaccination rates, a return to pre-corona normality seems questionable,” said Ulrich Leuchtmann, head of FX and commodity research at Commerzbank in a morning research note.

If consumption and production were not to return to 2019 levels Leuchtmann said, a significant chunk of productive capacities worldwide would “not just lie idle temporarily but would become devalued on a permanent basis.”

“If we are no longer simply dealing with who will survive the corona period but about whose goods and services will remain in demand long term at all the risk perception of the markets will rise. It is hardly surprising that the FX market cannot decouple from that.”

The euro dipped 0.3% to $1.1777. Investors will look to this week’s European Central Bank meeting.

Also taking a beating among European currencies was the Norwegian crown, which fell 1% to its lowest since November 2020 at 8.9320 crowns per dollar.

(Reporting by Ritvik Carvalho; additional reporting by Tom Westbrook in Singapore and Saikat Chatterjee in London, Editing by William Maclean)

By Patrick Reid, co-founder of the AdamisPrinciple.com 

Trading can be a brutal and unforgiving health hazard. If you search on the internet there are dozens of mind coaches and gurus to get you calm and tranquil before the trading day starts. 

The only problem is many of them have never traded at all. When you are at the coal face losing your shirt it’s hard not to mock these coaches. The last thing you need is someone going all Zen on you. 

Being positive has a direct correlation to the amount of risk you take. Risk controls fear. If you can define your risk you remove the fear. That makes you positive by default. 

At any one point I know exactly how many trades I’ve got in me before I stop. I plan for risk events and when there is a liquidity shock I know what to do. And I always have a stop in place. Many retail traders think the big banks don’t use stops and they are flat plain wrong.

Patrick Reid, co-founder, AdamisPrinciple.com

I’ve read a few books and one that still stands the test of time is Mark Douglas “Trading in The Zone” It was my first “mind coaching” book which taught me probability but not in the conventional sense. 

One of the many nuggets I gleaned was realising that if you take a loss it is just 1 in a thousand trades. If that is true then why worry? Also, some of the best traders in the world loose billions. Look at Bill Ackman and how he came back from shorting Herbalife? Now that is a perfect example of a positive mind set. Respect. Now he’s back to making billions with a scorching last year with his hedge fund Pershing Square. 

Some of the practices I use and teach on my masterclass programme is to understand ratios and what they do. Win: loss and risk: Reward are crucial and being mentoring by the best bank and derivative traders on the planet I quickly realised that one is 50:50 and the other needs to aim for 3:1

Another tip is having a non-trading goal in mind. Buying a house, giving to charity, owning a golf course or even going back to study are many long term plans that can help with being positive – especially if you are having a bad run of form. Remember to stay fit, love your family and eat what you want – within reason. I gave up partying 7 years ago and never looked back. I’m sharper for it. All adding to positive mind set. 

Research, preparation and practice. Nothing in this world matters more than doing your homework. I look at markets each day with structure and amazement but once in a while I get caught short in the headlights of crazy moves. Again I have a plan and execute it most of the time. I am human after all. 

If you are having stress in your day job we can help you navigate past the pitfalls of fear and anxiety with the Adamis Principle’s Absolute Masterclass. 

Millions of Brits provide financial support to their families overseas, with an average of £7.7 billion being sent from people in the UK to support loved ones each year¹.

With money transfer apps becoming the new norm, it is now easier than ever to send money to family and friends back home. People can make payments from the comfort of their homes or on-the-go without having to enter a physical store or bank.

However, as with any modern apps, there are a few things to bear in mind in terms of online security whilst sending or receiving money from abroad. The experts at global cross-border payments company WorldRemit have compiled some top tips for any first-time sender.

1. Secure your email address

Most companies require an email address to set up an account, therefore it’s important that you ensure that your email is protected with a strong password to prevent anyone from gaining access to not only your emails, but any apps you use via this address.

Strong passwords include a combination of lower and uppercase letters, numbers, and symbols, it’s also important to ensure that you don’t use the same password for multiple applications.

2. Avoid public wi-fi 

Although it seems convenient to connect to a public wi-fi to make a quick money transfer, the open access can be a security threat, allowing unauthorised users to intercept your sensitive personal information or gain access to your device.

It is recommended to avoid logging into online banking or money transfer apps, or managing your mobile wallet using a public network.

Instead, either waiting until a secure wi-fi network is available, or using mobile data, is the safest way to use money transfer apps while you’re out and about.

3. Research the app you’re downloading 

Before you download a money transfer mobile app, try to find more information about the company online. If there is little to no online presence, stay away from it. On social media, always look for the verified “blue tick” next to the business name. Last year, WorldRemit launched a Transfer Tracker App which allows recipients of money transfers to track their funds. The app is free to download through the Google app store in a number of countries including India and Nigeria.

4. Keep your operating system up to date

Whenever your smartphone’s operating system, internet browser or applications notify you that there are updates available, be sure to install them as soon as possible.

Many of these updates are fixing bugs or weaknesses in order to help you stay safe online.

5. Use a pricing comparison tool to get the best deal

The cost of sending money abroad takes numerous factors into account, for example, the exchange rate as well as any sending fees.

Be sure to use a pricing comparison tool to ensure you’re getting the best deal ahead of making the commitment and sending the funds.

A spokesperson from WorldRemit added: “Sending money overseas for the first time may seem like a daunting task, but it’s actually easier now than ever before.

“With WorldRemit, you can send in 70 currencies to more than 130 countries worldwide, in a safe and secure manner, and it can be done within minutes – it’s as easy as sending a text message.

“If it is your first time sending money to your loved ones overseas, we have customer service advisers available to help 24/7, to make your money transfer journey as seamless as possible.”  a