Tag Archive for: banking

Alternatives to banks – Is Fintech the answer?

| 14-12-2017 | treasuryXL |

With the steady rise of Fintech within the finance industry some people are already calling for the demise of banks as the historical financial partner of choice for corporates. Certainly, Fintech is showing itself to be very dynamic, offering many new products and solutions, and being a lot swifter than the banks. Banks seem to have grown too big and complacent, are being weighed down by new rules and regulations, are less prominent in the field of funding for corporates, and possibly have lost their focus on what used to be core businesses. But let us examine the relationship between bank and client.

The roles of a bank

Banks are, first and foremost, used so that clients can obtain and use financial services. Opening and maintaining accounts enable money to be received and paid – in this way the day-to-day financial operations of the client can be performed. Furthermore, banks offer additional services that compliment the needs of a client – business credit cards for key staff, sales services such as processing of credit card payments for goods, payroll services, online banking, loans and lines of credit.

What does a client want from a bank?

One of the main priorities is that there is an established history and a good working relationship – that the bank understands the client’s needs. A key indicator of a good relationship would be the ability and the willingness of the bank to provide funding to the client. If the bank wished the client to bank and deposit their money with them, then they should be prepared to extend credit where possible – if it meets the criteria of the bank. Running any business means there will be times when liquidity is scarce and a bank that refuses to extend credit runs the risk of losing the client. Other criteria can include the cost of banking services, support given, quality of delivery, credit rating and the overall efficiency of the services.

Fintech solutions

Fintech can provide genuine alternatives to existing banking services as they can compete with modern products – like giant ocean-going tankers, banks are large and very slow to turn around. Most bank services are still paper intensive and require many authorized signatures. By digitizing services, Fintech can reduce the transaction costs and the time taken to authorize a service. Fintech orientated lending services (like B2B) are entirely online and can be quickly approved. Through lending platforms, the risk can be spread out among many lenders.

Can the banks respond?

Banks have at their disposal very large existing customer bases and a wealth of proprietary data relating to the behaviour and patterns of their clients. This is a large untapped potential that does not need to be found or bought. If banks can utilize this data whilst offering a Fintech type of online service that is quicker and more efficient there is a possibility to fight back. The main option for banks would be to examine the Fintech companies and buy the ones that have the best products to compliment the requirements of the bank’s customers. As Fintech works in a different manner to traditional banking, this would require banks to develop internal incubators to discover new products and services that could be offered to customers. Alternatively, banks could look to design and implement their own solutions, but they appear to be behind the speed and knowledge of Fintech and might never be able to catch up.

One last word of advice

Realistically, Fintech offers attractive alternative solutions to banks. However, the power of the personal relationship should never be underestimated. We build relations slowly and by results – the cheapest offering does not get all the business. Having an account manager at a bank can be highly beneficial for a client – one point of contact, good understanding, a history. When things go wrong, you pick up the phone and call the account manager and he/she sorts out your problems. With Fintech, this could mean phoning numerous different companies to achieve the same result that can be obtained with just one account manager at a bank.

Choice is personal, but preference is normally determined by experience.

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Trading places – is big tech the real threat to banks?

| 01-11-2017 | Lionel Pavey |

 

Reading yesterday’s article about Fintech banks reminded me that, in the last few weeks, I had seen articles in the news about the growing interest in providing banking services by so-called Bigtech companies. Bigtech is defined as established “platform” players such as Amazon, Google, Alibaba and Paypal. These companies are already providing finance to small businesses – Amazon has already lent USD 3 billion to online merchants.


Whereas Fintech startups are trying to find funding for their ideas, they do not have a large supply of capital to truly offer large scale lending facilities. They are well suited to participate in peer-to-peer lending initiatives and can certainly show established banks how to do things in a new way, but they do not have the true scale to compete against banks. Bigtech companies, with their vast cash reserves and huge databases, present a very serious problem for existing banks.

Bigtech already collect and analyse data from all their clients. This gives them a unique insight in how to review and redesign the processes for banking, allowing for faster services, reduced costs and reaching a critical mass for trading on an electronic platform.

According to research from consultants McKinsey & Company “Seventy-three percent of U.S. millennials say they would be more excited about a new offering in financial services from Google, Amazon, Paypal or Square than from their bank — and one in three believe they will not need a bank at all”. Platform companies therefore appear to have a very strong and loyal relationship with their customers.

Japan’s largest online retail marketplace – Rakuten Ichiba – offer their customers:

  • Loyalty points and e-money usable at hundreds of thousands of stores, virtual and real.
  • Credit cards issuance to tens of millions of members.
  • Financial products and services that range from mortgages to securities brokerage.
  • Run one of Japan’s largest online travel portals.
  • Instant-messaging app, Viber, which has some 800 million users worldwide.

This is a very comprehensive list of what are, basically, supporting services to their main function as a marketplace. Banks offer traditional services with little or no additional services.

Where can Bigtech make a difference in the current banking model?

All online marketplaces bring both buyers and sellers together. Most sellers are companies that can be classed as SME (Small and medium-sized enterprises). In the current market SME’s are experiencing difficulties arranging finance. A survey conducted by the Asian Development Bank (ADB) concluded that there is a gap in trade finance – based on bank rejections on applications for trade finance – of about USD 1.5 trillion. SME’s make up around 75 per cent of that total. Furthermore, 60 per cent of companies that responded, stated that rejection led to losing trade. Realistically, if 10 per cent of those rejections had been financed, that would lead to an increase of 1 per cent in staffing levels for SME’s worldwide.

Trade finance is a special form of banking. It provides finance for a relatively short time – the average tenor is less than 180 days. It is a crucial form of finance as shipping goods around the world places a great strain on working capital – all the costs are upfront and the goods are only paid for after receipt. Any form of lending entails risks and for trade finance a good source of information can be obtained at the International Chamber of Commerce (ICC). This organisation is responsible for the business conduct codes for international trade. They analysed data between 2007-2014 with an exposure of USD 7.6 trillion. Defaults for short-term finance for import/export stood at 0.06%.

Providing trade finance is complimentary to online marketplaces and certainly an area where Bigtech firms can increase their presence in the financial industry. With all their data, they are better equipped than a bank to analyse the financial health of an export company. They can see how many orders have taken place, their geographical distribution, their trade value etc. They are also able to offer finance to buyers – their data is also available to Bigtech fims.

Bigtech companies have the means to take on banks; they have the data; knowledge of the marketplace; work completely in an online environment; are open 24/7 and are better known and regarded by young people. The opportunities are there – the question is how much of the supply chain do they want to influence?

When I first started in banking I worked in import and export departments. It provided a good insight into how an economy really works. I was raised on the South coast of England and, as a child, regularly played around the local commercial harbour. I still recall the smell of fresh timber and casks of Sherry and Port. The harbour was the gateway to the world; it was where adventures started. I still live on the coast – some things never change.

 

 

Lionel Pavey

Cash Management and Treasury Specialist

 

Uitgelicht: ECB strenger voor fintechbanken

| 31-10-2017 | Peter Schuitmaker |

 

Recentelijk lazen we een artikel over de verhoogde toezicht dat de ECB wil toepassen op Fintech-partijen die bancaire diensten aanbieden. (bron: FD ) De ECB schrijft in zijn eerder uitgebrachte gids Guide to assessments of fintech credit institution licence applications dat fintechs zorgen voor unieke risico’s in het financiële systeem. De ECB zegt “Fintechbanken moeten aan dezelfde standaarden voldoen als andere banken.” treasuryXL vroeg een van onze experts, Peter Schuitmaker, om zijn mening:

Is er een fintechzeepbel?

Peter Schuitmaker – Registered Advisor for Business Transfer and Succession

Door de opkomst van ICT, met name de mobiele platforms (telefoons en tablets) en de gebruikte software (apps) is de bancaire dienstverlening ook in een innovatieve stroomversnelling gegaan. Waar traditionele banken de nieuwe ICT gebruiken om hun diensten te vereenvoudigen en te verbeteren, deels ook om operationele kosten te drukken, zijn een groot aantal fintech bedrijven die juist -denkend vanuit de ICT technologie- producten en diensten aanbieden. Het zijn vaak niche producten of een producten met een beperkte functionaliteit die juist wel aansluit bij een zekere doelgroep.

De ECB heeft dat geconstateerd en wil op die fintech dienstverlening enige grip krijgen. Dat lijkt vrijwel onbegonnen werk, omdat het aanbod, zowel de functionaliteit als de onderliggende ICT, zeer divers is. Hoe dan ook, geen richtlijnen waarbinnen fintech bedrijven zich op de markt mogen begeven en ontwikkelen, lijkt ook geen optie. Vandaar deze eerste voorzichtige poging “Guide to assessement of fintech credit institutions”. De motivatie is nobel: men wel gelijke monniken, gelijke kappen. Maar hoe zaken zich zullen ontwikkelen en binnen welke termijn aanvullende of nieuwe richtlijnen nodig is laat zich lastig voorspellen. Maar erg optimistisch daarover ben ik niet!

 

Peter Schuitmaker

Registered Advisor for Business Transfer and Succession

 

 

Brexit – hard or soft? What does it actually mean?

| 20-9-2017 | Lionel Pavey |

Brexit is a fact, no news here. Discussions about how this Brexit is going to look like are an ongoing topic in the newspapers. Hard Brexit or soft Brexit – what does it actually mean for the UK and the European Union? What are the consequences of a hard Brexit compared to those of a soft Brexit to all of us? It implies there are 2 paths that can be followed – actually there are 3.

3 paths

  • No deal
  • Hard – should really be called a clean Brexit
  • Soft – should really be called unclear Brexit

No deal

This is exactly as it says – if no deal is reached between both parties. UK would no longer be obliged to follow EU law and treaties. This would lead to a period of uncertainty and confusion and new treaties would need to be implemented, whilst both sides would not be receptive to each other. The EU could still try to pursue UK through international courts for monies that it felt were still owed. Highly turbulent, but could happen.

Hard

Leaving the EU by mutual consent but not actually agreeing on the future, UK would no longer have to observe the pillars of the EU that currently prevail. This includes such issues as immigration, free movement, asylum, fisheries and agriculture to name but a few. Trade would fall under WTO rules until a mutual trade policy could be drafted.

Soft

This implies links being retained between both parties, specifically towards trade. It would mean UK would gain entry to a tariff free EU market, whilst accepting free movement of people. UK would have to pay for entry, whilst being denied a vote in EU matters.

Scenarios and consequences

So, what are the chances of these scenarios and many others happening?
To answer that question we have to go back to the actual question asked at the referendum – “Should the United Kingdom remain a member of the European Union or leave the European Union?”
The wording is very important – it was not worded should we leave the EU; yes or no. This was to remove any bias in people’s comprehension as to what they were voting for. As the majority of the electorate voted to leave the EU, this makes any attempt at a soft Brexit difficult to justify against the vote of the people. Any agreement where UK pays the EU and accepts EU rule negates the referendum question.
If the referendum is negated by the actions of politicians against the will of the people, then this could lead to a crisis in the country. Flagrantly ignoring the will of the people could lead to social and political unrest.
Politicians in the UK work in Parliament, work for their party and also, very importantly, work for their constituents. A MP has to make him/herself available to answer questions from their constituents.

In the UK, voting, whilst primarily for a political party, is specifically for your local MP who represents you in Parliament. It would take a very brave (or foolhardy) politician who would ignore the will of the majority of the people. That is not to say that it could happen, just that the consequences are far reaching and difficult to predict.

The divorce settlement

The EU is demanding a sum of money from UK (currently thought to be around EUR 100 million) to settle outstanding commitments. As the 2 were never legally married, it appears an affront to demand money. UK was entitled to grant a referendum, allowing the people to decide, and no laws have been broken. The argument used by the EU that there is an agreed rolling budget for the period of 2014-2020 makes it appear that it is set in stone and can not be changed. Based on current UK contributions and the fact that they will leave in 2019, then EUR 100 million sounds excessive for the 1 remaining year of the budget.
Furthermore, if the EU wishes to pursue a divorce settlement, then UK can look at obtaining their rightful share of the assets of the EU – that also happens in a divorce. UK has been a net contributor to the EU budget for the last 40 years.

What are the consequences for all involved?

Markets will remain volatile – uncertainty will prevail at least for the next 18 months. Certain markets and countries will be badly affected – the EU fishing industry will certainly suffer if the UK exercise control over their maritime waters. Banking will be in a state of flux – will large banks leave UK and resettle in EU to have access to EU markets? Where will settlement of EUR transactions take place? German car manufacturers could be denied access to one of their top markets or face stiff tariffs to import their vehicles into UK. Will we be able to freely move and live where we want to, whilst seeking employment or claiming benefit?

The chances of forming any agreement within the next 18 months are small. There is so much that needs to be agreed upon in a relatively short time frame. If the will of the people is to be honoured, then one must draw the conclusion that the end result will be a hard Brexit.
If UK politicians choose for a Soft Brexit, then they could face the wrath of the people and a second Glorious revolution could happen, though I do not see Rutte playing the role of the Prince of Orange.
He, after all, ignored the will of the people over the Ukraine referendum…

I always try to write from an objective point of view. Being English by birth, I realize that a lot of what I have written can be perceived as subjective.I was unable to vote in this referendum but, if truth be told, I would have gladly voted to leave.
The EU has lost its way and further integration will eventually lead to fiscal union. This would result in a permanent transfer of wealth from the wealthy countries to the poorer. There would be no incentive for poorer countries to improve their economies – the rich will pay.

Lionel Pavey

 

Lionel Pavey

Cash Management and Treasury Specialist

 





More articles from this author:

The end of the Euro as we know it – When the party ends?

The treasurer and data

Managing treasury risk : Risk management (Part I) (Parts II – VII to be found on treasuryXL)

Blockchain Innovation Conference 2017- An inspiring event

Treasury for non-treasurers: Data analysis and forecasting – seeing the future by looking at the past (Part I)
(Parts II – III to be found on treasuryXL)

Building a cash flow forecast model

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De 100 meest veelbelovende FinTech bedrijven – wie wordt de winnaar?

12-9-2017 | FM.NL | treasuryXL |

Op 27 september is het zover. Buitenlandse investeerders en FinTech-specialisten van naam reizen dan af naar Brussel. Tijdens de European FinTech Awards & Conference 2017 zullen zij oordelen hoe de veelbelovende techbedrijven van Europa ervoor staan. De omgetoverde FinTech-awardzaal van ‘The Egg’ bombardeert  de Europese hoofdstad deze dag tot hét techcentrum van Europa. De top 100 aanstormende FinTech-bedrijven van Europa zijn bekend. Wie wordt gekozen tot winnaar?

Meer dan 34.000 FinTech enthousiastelingen hebben gestemd op hun favoriete Europese FinTech-bedrijf. Het is nu aan de FinTech vakjury: wie winnen de European FinTech Awards 2017? U hoort het op 27 september.
Honderden Europese fintechbedrijven staan op het punt door te breken en uit te groeien tot scale-up. Miljarden liggen klaar om geïnvesteerd te worden in bedrijven die de markten gaan veroveren. Wie wordt de volgende?

De 100 meest veelbelovende FinTech bedrijven

 FM.NL heeft de 100 bedrijven in een artikel gepresenteerd:
 

Bron: FM.NL

Top 3 FinTechs per categorie

 

 

 

 

 

 


Bron: FM.NL

Veelbelovende FinTech-bedrijven & verrassende visies op de European FinTech Awards in Brussel:
Deel expertise en visies. Laat u verrassen tijdens de vele kennissessies, keynotes en pitches. Krijg de beste antwoorden op uw vragen: Hoe schaalt u efficiënt een FinTech-bedrijf op? Wat kunnen we leren van succesvolle FinTechs? Hoe reageren banken en wat denken investeerders?

Laat u inspireren door de meest veelbelovende FinTech-bedrijven ten overstaan van aanwezige investeerders, stakeholders en andere belangstellenden op 27 september 2017.  Dit is de dag waarop u de beste FinTechs van Europa pas écht leert kennen.

Korting via treasuryXL

Bezoek de European FinTech Awards & Conference met korting
Ontmoet 27 september 2017 in ‘The Egg’ in Brussel 400 nationaal en internationaal befaamde FinTech-entrepreneurs, bankiers, investeerders en adviseurs. De European FinTech Awards & Conference 2017 biedt een unieke kans om uw netwerk te vergroten. Laat deze kans niet glippen om gearriveerde FinTech-sprekers op het podium te zien en 30 pitches te zien van Europa’s beste innovatieve ondernemingen van dit moment.

Speciaal als TreasuryXL community lid krijgt u 10% korting met de code: Friend2017, boek vandaag uw ticket(s)

De European FinTech Awards wordt georganiseerd door Alex van Groningen en B Hive. 

Annette Gillhart – Community Manager treasuryXL

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Bitcoin nieuws! De Splitsing!

| 4-9-2017 | Erna Erkens |

Wat is er gebeurd met de Bitcoin per 1 augustus? De Bitcoin is gesplitst! Ik zal het hieronder proberen uit te leggen. Ik voorspel u vast, het is niet eenvoudig. Na de vele discussies over de schaal van de digitale valuta Bitcoin, is er besloten om een ​​geheel nieuwe valuta te maken, de Bitcoin Cash. Het is wel een beetje ingewikkeld allemaal. Het is een resultaat van politieke, technologische en ideologische discussies over het laten groeien van de Bitcoin. Sommige deskundigen zeggen dat een hele nieuwe valuta,  genaamd Bitcoin Cash,  kan helpen om Bitcoin op grotere schaal toegankelijk te maken voor een grotere groep mensen.

De afgelopen tijd was er een strijd tussen concurrerende visies,” zegt Zaki Manain, een onafhankelijke cryptocurrency expert. Deze strijd is per 1 augustus voorlopig even gestreden. Om ervoor te zorgen dat de Bitcoin een eenvoudiger wereldwijd betalingssysteem wordt dat iedereen kan gebruiken, moet de Bitcoin over de groeipijn heen geholpen worden. Er is nu voor de oplossing gekozen om een ​​hele nieuwe valuta te maken met soortgelijke blockchain software.

Wat betekent dit nu?

Laat ik beginnen met te zeggen dat uitgeven van de Bitcoin moeilijk en ingewikkeld is.
Bitcoins zijn gebouwd op iets dat blockchain heet. De Bitcoin blockchain is een openbaar grootboek dat alle transactiegegevens bevat van iedereen die Bitcoins gebruikt. Transacties worden toegevoegd aan “blokken” ofwel de koppelingen van codes die een keten (blockchain) vormen. Elke transactie moet in een blok worden opgenomen. Maar deze blokken zijn vol en dit levert een grote vertraging op in de betalingen. Momenteel zijn er gemiddeld ongeveer 1.700 transacties die per Bitcoin block kunnen worden opgeslagen, bij ongeveer drie transacties per seconde, zegt specialist Manain. Dat is niet heel veel. (Visa, bijvoorbeeld, handelt duizenden transacties per seconde).
Omdat de Bitcoin blockchain te druk wordt, kan het gebeuren dat iemand iets betaalt met een Bitcoin, maar dat het heel lang duurt voordat de betaling goedgekeurd wordt. Het verschil is de grootte van de betalingsblokken. De originele Bitcoin heeft blokken van 1 MB die snel vollopen met opdrachten, waardoor het verwerken van betalingen veel tijd kost. En dus duurt het lang voordat de partij waar de betaling aan verricht wordt kan zien dat hij/zij het geld ontvangen heeft. Dat is niet goed voor het vertrouwen. Bij Bitcoin Cash zijn de blokken 8 x zo groot, waarmee de betalingen veel sneller kunnen worden uitgevoerd. Er is ook een poging gedaan om dit probleem op te lossen door een regelwijziging toe te passen op de software. Deze werd genoemd: “Segregated Witness” (gescheiden getuigen. SegWit2X). De regelwijziging zou mensen in staat stellen om meer transacties op elk blok te zetten. Dit wordt in technische termen een “soft fork” genoemd. Sorry, ik kan er ook niks aan doen.  Dit zou niet hoeven leiden tot een hele nieuwe cryptocurrency. Deze nieuwe regel zou moeten worden ingevoerd in november. Dit vergroot de grootte van de software van 1 MB naar 2MB. Voor sommigen was dit niet genoeg. Daarom een tweede Bitcoin: De Bitcoin Cash.

Wat is de Bitcoin Cash?

De Bitcoin Cash is een zogenaamde “hard fork” (sorry, ik heb het niet bedacht). De makers zorgen voor een volledig nieuwe software, die het aantal transacties per blok acht keer groter maakt ( 4 x na SegWit2x). Geen idee hoe dit precies werkt. Dit betekent dat Bitcoin Cash transacties veel sneller kunnen worden verwerkt. Bitcoin Cash is niet hetzelfde als de “normale” Bitcoin. Op 1 augustus was een eenheid van Bitcoin Cash USD 240 waard. De echte Bitcoin was toen meer dan USD 2.700 waard.
Bitcoin Cash valt of staat met het vertrouwen van de markt, net als de gewone Bitcoin. Het zal alleen succesvol worden als mensen vaak beslissen om de blokken voor de Bitcoin Cash blockchain te creëren (minen of vinden, zoals u wilt). Het eerste blok is aangemaakt dinsdag 1 augustus.

Hieronder het koersverloop van de Bitcoin Cash tegen de USD van de eerste week:

Wat het betekent voor consumenten en bedrijven?

Voor iedere “oude” Bitcoin die u bezit, bezit u ook een Bitcoin Cash. Echter, niet alle Bitcoin-uitwisselingsplaatsen (de plek waar mensen hun bitcoin opslaan, waar je je Bitcoin wallet hebt een soort van Bitcoin portemonnaie) zullen Bitcoin Cash accepteren. U krijgt alleen Bitcoin Cash erbij als u zelf  uw Bitcoins beheert of als u bij een Bitcoin Cash-vriendelijke Bitcoinbeurs zit.
Dit kan een belemmering zijn voor de wereldwijde acceptatie van de Bitcoin Cash. En om Bitcoin Cash te gebruiken voor gewone transacties zoals koffie kopen, zullen bedrijven het moeten accepteren, ongeacht of ze de gewone Bitcoin al accepteren of niet. De toekomst zal uitwijzen of dit gebeurd of niet.  “Dit hele proces zal ons veel informatie geven over hoe we in deze toekomst met deze systemen omgaan,” zegt Manain. “Het zal een blauwdruk zijn voor toekomstige ontwikkelingen in de wereld van cryptocurrencies op basis van blockchain. We gaan hier heel veel van leren.
De vraag blijft: welke versie gaan de miners ondersteunen? Bitcoin-miners zetten de enorme rekenkracht van hun computers in voor het ‘ontdekken’ van nieuwe bitcoins. Om dat te kunnen  doen zijn ze verplicht om betalingsopdrachten te verifiëren. Zo fungeren ze als verwerkers van de Bitcoin betalingen en zijn dus essentieel voor een betrouwbaar systeem.
Het is mogelijk dat alle Bitcoin-miners overstappen naar de nieuwe versie, waardoor de oude variant niet meer functioneel is omdat er dan niemand meer is om de opdrachten te controleren. Maar de kans bestaat ook dat alleen maar een deel van de miners overstapt. Dan ontstaan er dus zelfs drie versies van de Bitcoin. Het is nog niet klaar met de Bitcoin ontwkkeling.

Hieronder nog het koersverloop van de “gewone” Bitcoin tegen de USD van de afgelopen maand:

Als u vragen heeft hoor ik het graag. Alles rond Bitcoins is flink ingewikkeld. Ik weet niet of ik meteen de antwoorden weet, maar ik ga er in ieder geval naar op zoek.

Erna Erkens

 

Erna Erkens

Owner at Erna Erkens Valuta Advies (EEVA)

 

Going cashless or not – will we have a cashless world?

|30-8-2017 | Olivier Werlingshoff | GTNews |

In their article ‘Going cashless or not: are Central Banks resigning facing private companies?‘ GTNews and author Nathan Evans depict an image of a cashless world and the decline of Central Banks. With online shopping sites or GAFA companies (Google, Amazon, Facebook, Apple) taking over with cashless payments because, as Nathan Evans writes, ‘the more cash disappears from our economies, the more money falls into their virtual pockets’  will we have a cashless world? We asked our expert Olivier Werlingshoff to give us his opinion about a possible disappearance of cash.


Alliance

According to Nathan Evans a surprising alliance is slowly coming together, in the global war on cash. Large internet-based companies and commercial banks are mixing interests with top-level governmental bodies to press for the disappearance of hard currency, and speed up the digital transition towards a cashless world. On the losing end of the intended shift, central banks which seem to be putting up feeble resistance. Private banks are fed up with the high costs and low profitability of managing cash and its expensive security services.The EU Commission discretely published its anti-cash measures on its website: “The establishment of a common cash control strategy upon entering or leaving the territory of the EU was a decisive step in the EU policy aimed at the strengthening of measures to prevent money laundering, terrorist financing and other illegal activities. One would have imagined that central banks and mints would be the first on the barricades to defend the national symbols bequeathed upon them , as they cease to exist if coins and banknotes dissappear.   But so far, they have been remarkably feeble in their resistance.

Our expert Olivier Werlingshoff has read the articel and comes back with the following remarks:
I don’t think cash payments will disappear soon. At this moment 60% of all payments in Europe are done with cash. A few positive aspects of cash are:

  • It is anonymous
  • Secure
  • A save haven
  • It is a direct transaction
  • And it helps budgeting

Two years ago I set up a test at a shop B2C to see what happened if during six weeks cash payments were not accepted. What happened was that the number of contactless payments increased but the total turnover of the shop decreased. After the test when cash was again accepted the turnover didn’t reached the level of before the test.

A few customers decided during the test to look for other shops where they could still pay with cash and decided after a few weeks not to come back.

For more information about this topic you can visit de website of G4S for the cash report: http://www.g4scashreport.com/

If you are interested to read the complete article at GTNews, please click on this link.

Olivier Werlingshoff - editor treasuryXL

 

Olivier Werlingshoff

Owner of Werfiad

 

 

 

 

More articles of this author:

How to improve cash awareness without targets

How to improve your working capital with trade finance instruments

 

 

Startup FinTech company Facturis and the traditional bank: How do they do it?

| 23-8-2017 | PowertoPay – Unified Post | Sponsored content |

Facturis, a partner of UnifiedPost, is an online platform that helps to optimize the financial situation of small and medium-sized enterprises in the Netherlands. The platform facilitates a more efficient flow of incoming and outgoing invoices, debtor management, retrieval of digital debit authorizations, dynamic discounting and dynamic working capital credit. In this interview, Nico Ten Wolde, CEO of Facturis, is telling more about developments in the financial technical (FinTech) world.

 

How did Facturis originate from the Rabobank?

Nico: “Rabobank started a strategic orientation in 2010 to increase its added value and uniqueness for its business customers. Rabobank wants to provide services within the customers’ business processes whenever and wherever they are needed. Where Rabobank has traditionally focused on offering products such as transactions, finance and insurance, she wanted to offer services to support the full order-to-cash flow process of her customers. This goes further than the execution of transactions and the provision of funding. By offering different services that work in synergy on one platform, the customer has lower operating costs and a lower need for external financing. In order to achieve this, Rabobank has established a partnership with UnifiedPost in the form of Facturis. UnifiedPost delivers the invoicing platform technology.”

What is the target group of Facturis? What do you do to connect the product to this target group?

Nico: “Facturis focuses on the business market, with the primary focus on small and medium-sized enterprises (SMEs). These types of organizations need to obtain services from many different parties in order to optimize the financial and administrative processes. Because they buy services from different parties, there is insufficient insight into and grip on the overall financial process. By integrally providing services from various partners on one platform, we give entrepreneurs more insight into their financial situation. That goes further than sending invoices – it’s about getting bills paid as quickly as possible.”

Fin Tech initiatives – what changes?

Everyone talks about the changing role of the banks, partly through the FinTech initiatives. What do you think are the things we already notice?

Nico: “What I see is that 10 years ago a bank was the only place you would consider for financial services, this is no longer always the case. Think of FinTech parties like Adyen, which offer a wide range of financial products from banks and other financial institutions on a platform. The customer no longer deals directly with a traditional bank. In addition, we see a strong growth of (crowd) funding platforms. The financing is no longer obtained through a bank. More recently, several blockchain initiatives and the oncoming implementation of PSD2 will create new opportunities for players outside the traditional banking world.”

Why do you think banks will increasingly work with FinTech companies? What is the benefit for the banks?

Nico: “On the one hand, banks often have to deal with complex legacy systems which limit the possibilities to quickly implement new solutions. On the other hand, banks have to deal with implementing and maintaining new rules and regulations with the current processes. This makes it almost impossible to quickly implement innovations. FinTech companies can quickly launch new concepts for specific target groups. Through cooperation with banks, the power of the existing brand and distribution channel is optimally utilized. A win-win situation for the customer, the FinTech company and a bank.”

What was the biggest success in Facturis?

Nico: “The launch of the pilot Invoice Credit. The Invoice Credit is a dynamic working capital credit that moves along in real-time with the (outgoing) invoice flow of a company. As a result, the entrepreneur does not always have to return to his bank to make an adjustment on his credit line. Due to the flexibility of InvoiceCredit, companies can streamline the flow of money, thus optimizing their working capital. InvoiceCredit fulfils the companies need for a credit that reflects fluctuations in the invoice flow and that grows along with the company.”

What is your biggest challenge within Facturis?

Nico: “Our biggest challenge is to maintain the speed you need as a FinTech to be successful and to be able to continue to innovate. Laws, regulations and legacy systems sometimes limit the speed to launch new services quickly within large corporate organizations. In cooperation with large organizations, such as banks, we face the challenge of balancing speed and adopting new banking services.”

How has such a creative thinking startup within the (traditional) bank been adopted so well?

Nico: “On the one hand, with a lot of missionary work within Rabobank in the form of presentations and writing many memo’s to convince the right stakeholders inside and outside the Rabobank. On the other hand, the arrival of Wiebe Draijer (Chairman of the Board of Rabobank) helped us greatly with the adoption of Facturis within the Rabobank. With the establishment of a FinTech & Innovation department, Rabobank made a clear choice for the adoption of FinTech companies in the future.”

What do you think is the most successful FinTech initiative in the market?

Name 1 launched and 1 that has not yet been launched.

Nico: “Launched: Kabbage: Kabbage is an American FinTech that can assess a consumer’s or SME’s financing request within a few minutes.

Not launched: Easytrade, an innovative currency hedging solution for hedging currency risks of (international) companies. Easytrade is a new FinTech initiative created by Rabobank Moonshot Program, an internal acceleration program aimed at realizing the advancing ideas of employees.”

What do you think are the most important FinTech developments in the near future?

Nico: “In the coming years, I see major changes in risk management. Through the application of AI and machine learning, we are able to better estimate risks and utilize opportunities with a much larger predictive ability. This has a positive impact on customers, we can deliver services exactly when the customer needs them. In addition, integrating blockchain initiatives and virtual currencies within the financial sector will take a huge run. With the implementation of PSD2, it is possible for FinTech companies to combine the old world and the new world. This allows for gradual adoption
of these new developments for customers.”

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Saving on FX deals? Often neglected but potentially a “pot of gold”

| 21-8-2017 | Patrick Kunz |

 

Doing business internationally often means dealing with foreign currency (FX). This poses a risk as the exchange rate changes daily, basically every second. To mitigate this risk a company can hedge the position via FX deals (discussed in a previous article). But what are the costs of those deals to companies?

 

FX deals

FX is traded on exchanges where only authorized parties have access to. This can be brokers or banks, the so called market makers. They can take your fx position for a give rate and they try to find a counterparty for the deal who is willing to take the opposite trade. For this effort (and risk as they might not be able to directly match the position) they ask a provision. This is the bid-ask spread; the spread between rate for buying and rate for selling the currency. The fx (mid) rate is determined by supply and demand.

The spread depends on several things:

  • Market liquidity; how many people are buying and selling and with what volume
  • Market timing; is the market open for that currency
  • Restrictions: some currencies have restrictions

For a company to trade FX they need an account with a party that has access to fx market makers. This is often a bank. This bank will take another bite out of the spread for their profit (and maybe risk as they might take the position on their books). The spread the bank will charge depends on how many deals and how much volume you will be doing. Sometimes it is an obligation to trade with the bank from a financing arrangement. For the big currencies for big clients the spread can be as low as 2-3 pips (0,0002/0,0003).

Trading FX seems to be without costs as the bank charges no fees. However, those fees are put into the fx rate. When doing spot deals it is easy to calculate them, it’s the difference between the traded rate and the then actual market spot mid rate. When doing forward deals or trading illiquid currencies it is harder to determine the spread. Always try to get to know the spread you are paying. The spread is basically the costs of the fx deal (for forward deals there is an interest component).

It therefore makes sense to always compare your FX rates and get quotes from several banks. Trading with a broker sometimes can be cheaper as one party in the process is eliminated. Savings can be up to 5% per deal (for exotic currencies), for the bigger currencies an average saving of 1% is possible. If you do several million worth on FX deals a year this is a big money saver.

Pecunia Treasury & Finance b.v. has an online fx trading platform backed by one of the biggest worldwide fx broker.

Patrick Kunz

Treasury, Finance & Risk Consultant/ Owner Pecunia Treasury & Finance BV