With 2020 already being a trying year for UK businesses, and with the Brexit deadline looming on the horizon, expanding into international trade is an exciting prospect which may also become a necessity as we approach the new year. By utilising technology to aid in their global expansion, businesses have the chance to survive and thrive.
Lee McDarby, Managing Director of U.K. International Payments at moneycorp, leads the global payments division, and spearheads growth, focusing on treasury risk management for UK businesses. Lee joined moneycorp in September 2015 from Nomura, the Japanese financial institution, where he was an Executive Director. Prior to this, he gained a wealth of knowledge and experience with Investec and RBS.
Here he shares his view on how businesses can drive expansion through technology
It goes without saying, the last few months have been testing for UK businesses, whatever their size, whatever their sector. With Brexit fast approaching, and the impact of Covid-19 seriously impacting supply chains, businesses have had to think and act fast to keep their heads above the water and abreast of negotiations and regulations – not to mention the corresponding currency movements. Currency volatility has been a defining feature in 2020 – with GBP/EUR rates altering by 13%, GBP/USD by 16%, and EUR/USD by 11%.
Yet, as the deadline looms closer, we know from our recent survey that 88% of UK businesses trading internationally have admitted that they haven’t looked and aren’t going to look at switching their supply chains in preparation of Brexit, yet 43% have said that they’ve changed their business model altogether as a result of Covid-19. Nevertheless, when 18% of UK businesses trading internationally saw an uptick in demand during the first half of 2020, this begs the question: what is stopping others from following suit – thinking ahead, thinking differently, thinking globally?
The key to unlocking international business potential is finding the right payment partner that can get your money where it needs to be at the right time, no matter how many borders between supply and demand. But this is no easy task when the banking sector is increasingly proliferated by new players, disruptors and challengers. So, what differentiates a partner that thinks globally, and has the technological expertise to back it up?
First up, the multi-currency IBAN account. A multi-currency IBAN account is the cross-border payment industry’s best-kept secret. Whereas, some traditional banks require you to open multiple bank accounts for different currencies – bringing time and hassle into the simple act of receiving a payment (sometimes months to open multiple euro and/or dollar accounts), the multi-currency IBAN account is the hassle-free and significantly simpler option.
With one multi-currency IBAN account, businesses can receive international payments in varying currencies across the globe. Supporting UK corporates to enhance their supply chain and take their business to the next international step in their global expansion.
Secondly, APIs. A good API should have the propensity to fit varying business needs, and you shouldn’t settle for one that doesn’t. For an SME, corporate, or individual trading in various currencies across the globe, a seamless API that integrates ease of user experience, alongside speed of delivery is crucial. However, one API doesn’t fit all.
Find a partner that develops to deliver. The keyword here is API “solutions”, a dedicated development team, who align the agility of fintech, with substantiative banking networks to create bespoke API solutions, dependent on the client’s requirements. A substantive API goes beyond a flashy interface and ensure the central API endpoints built as part of the programming allow clients to have access to core banking facilities connected to an instant-access multi-currency wallet. Really comprehensive systems will encompass peer-to-peer facilities for instant transfers, global and local beneficiary validation, 24/7 multi-bank dealing, international payment and transactional and statement capabilities as standard.
Having a banking system that offers API integration gives you access to an array of benefits that leave you with more time to invest in your business. It also gives customers the capability to monitor exchange rates and automate conversions at the desired value, putting FX hedging tools right in the palm of their hands.
Prioritising security is paramount when you’re trading internationally, especially crucial when you’re choosing between old-time banks and newcomers. There are a number of measures to look out for to ensure the security of your accounts. These include:
- Ascertaining where your money is held. Relevant client funds should be held in safeguarded segregated accounts
- What your FX provider does with any margin provided by a customer. Many firms use the margin provided by customers as security for forward contracts to fulfil their own margin requirements – using client money to secure their liabilities. At moneycorp, we only ever secure positions with our banking counterparties with our own funds
- Whether your provider has external audits to ensure it is managing and safeguarding relevant client funds
- If the provider has been subject to any regulatory, investigations or sanctions
Technology can be frustrating. In this world of Zoom calls, instant messaging and shared drives, sometimes technology just doesn’t cut it and reassurance has a human voice. Customer service is critical to the relationship between a business and a bank. While it is imperative that customers have 24/7 access to their account regardless of where they are in the world, talking to a person at the other end of the phone is just as important.
While our society has moved to be digital-first, when there’s an issue, the first thing the customer wants is to speak to someone. As such, access to a support team, across a multitude of channels, is irreplaceable when you need it most. Supporting all of your customers across the entire spectrum, means it’s imperative that customer services are multi-faceted. This is why, at moneycorp, our UK based customer service team is on hand to ensure our customers can get access to the assistance they need efficiently and effortlessly.