Foreign exchange and payments firms have upped their game significantly in recent years, with a handful of big players diversifying and looking for new opportunities. Looking to evolve in the marketplace, Moneycorp, which also provides hedging and risk management consultancy services, united its global operations on a single digital platform with the aim of strengthening its presence both regionally and globally.
But the firm needed a strong and experienced leadership team to “leverage momentum”, as global CEO Mark Horgan put it recently, so they recruited Currency Exchange International’s senior vice president of North America Bob Dowd as CEO of North America. Appointed in April this year, bobsguide caught up with Dowd to learn more about where the company is headed, and the market conditions it finds itself in.
How's it been so far?
It’s been a whirlwind. Among everything else, we’ve got a new general counsel, new chief compliance officer, new head of sales, new head of marketing, four senior salespeople for the North American market. We’ve also added a new business CRM - the list goes on and on. I can look back and say we’ve done a lot in 90 days.
That's quite a lot of change. How do you ensure everything goes smoothly?
It is a lot of change. The new general council and head of compliance started the same day I did – she’s been in the industry for more than ten years and immediately our working relationship was fantastic. All the other hires have worked for me previously throughout the business and all of those coming in are very experienced people.
In essence, we're enhancing the North America team, which was very much an FX brokerage business, but we're trying to go by the successes that moneycorp has seen elsewhere - the UK market for example – bringing in additional talent enhances the core group of people we have within North America which will take us to the next level of achievement.
What does that next level look like, and what are the steps to getting there?
One of the biggest things was, we’re not just a traditional FX brokerage business, where your value proposition is price and waiving fees and much of your selling activity done over the phone.
We’re moving into more of a consultative sales organization where we’re offering integrated payments, hedging and risk solutions. We’ve got great partnerships and vertical markets to tap into in order to expand our customer base. Also it's about moving from being a traditional SME player with a smaller type of customer size and moving into the enterprise space.
That requires a much different skill set from both a sales and service perspective. That's very much a different value proposition in which we’re going to the market, discussing things like how to facilitate payments around the world in a cost effective manner, utilising integration into ERPs or accounting packages or wiring systems to streamline processes. It's very much a different conversation than ‘hey, compare me on your next euro payment and I'll save you a buck or two’.
It’s really a mindset of value creation and where we’re differentiating ourselves in the market rather than being just one of 25 FX brokerage houses going after SME businesses.
So a lot of that is leveraging the success that the UK has seen over the past several years and leveraging what I’ve done in other organizations over the history of my career.
Why has the SME focus been so successful in the UK? And is it a case of just mimicking the model in the US?
Definitely we’ll be pivoting the best practices of what is working well in the UK.
That said, the North American market is very different. Just as an example, your average transaction size in the US is roughly about $20,000, where your average transaction size within our UK business is about $100,000. That's a big difference. There is much more hedging products involved in the UK than in the US, and Canada is different in the sense that there is a lot of hedging being done through US/Canadian dollar strategies. I would also say the US is a little more risk averse to looking at alternative structured solutions.
So customers are very different, needs are very different, and even the customer journey on an average transaction is very different. The products and services will remain fairly standard across the group globally, but certainly the customer experience and how we service customers is very different geographically.
The payments world has evolved beyond recognition over the past few years, in terms of technology – with organizations looking to blockchain and other developments to boost offerings. What are the firm’s drivers in that area?
In terms of integrated payments we’re leveraging our API capabilities as a business to help companies streamline their processes and integrate their systems or packages. So from a tech perspective, streamlining and utilising APIs to both push and pull data, and then provide reconciliation back to our customers, and facilitate that in a very seamless approach is critical for the growth of our business - and it’s certainly a solution that we are doing well.
One of the things we're looking at on an organizational level is a situation in which we have a moneycorp customer in the US and a moneycorp customer in Great Britain with basically ewallets for currency accounts - and there's no reason one can't fund the other’s currency account and make a payment and do it such as a book transfer, which in essence is a blockchain – a journal ledger entry priced to the platform. So we're certainly looking at leveraging that. Then you have customers saying ‘hey, you want to get paid in real time then get on my network, in my closed user group, and then I can pay in real time.’ We’re looking at leveraging that aspect of our solution at a group level, and as we expand globally.
We've acquired businesses in Hong Kong, Dubai, the US, as we look to expand in Canada and other markets and becoming a bank in Brazil, those type of solutions are going to be difference makers compared to anyone else in the marketplace that comes in.
Take payments, because there’s a network. Clients have the relationships, they have the customer base, and they have a unique technology where they can leverage their own blockchain and not rely on when will Ripple ever become a thing. It’s a great marketing thing, it’s a great solution but until everyone's on that platform, it's really not a thing.
From an economic point of view, the US is currently flying, but there are bearish sounds coming from some quarters.
Yes, the economy is very strong, the unemployment rate is at historic lows, and there’s great opportunities for businesses to grow. We're becoming a global economy as well, so that growth engine isn't focused on just what we can do on the domestic front. But more and more companies are expanding their global footprint which creates additional opportunities for services like ours. We want to help companies learn through a consultative approach, be their partner as they start to expand globally and help to facilitate payments around the world.
There are uncertainties in other corners of the globe, how does that change your business plan?
Certainly from a Brexit perspective my UK colleagues have their hands full in terms of understanding the impact to our business and what needs to happen to protect ourselves.
From that Brexit perspective within our EMEA markets there are challenges, but then that's where we look to areas like the Americas where there is much more stability in terms of growth, to offset that uncertainty. That's where companies can leverage structured and hedging products to mitigate their risk around things like Brexit and other things that are happening around the world so they don't have balance sheet exposure. We're more than just a payments company. We are, in essence, a consultative management company, helping develop hedging strategies on a customer by customer basis. We provide them with four or five hedging strategies that they can look at. We can help them put together their FX policy statement. We're going to the board to look to see how they want to mitigate that exposure. And then we let them make a business decision on what's the best strategy to move forward, then we implement that on their behalf. And we’re not only implementing it, we’ll constantly review that strategy for them.