Our team are always thinking about how we can position ourselves to appeal to our target market. We begin with a focus on individual foreign exchange services because from an individual's use of our platform we can grow the scope and application of our work.
We've found that it is easier to present to a director of a business than it is to court the business at large. We want to eat the elephant bit by bite.
Hence, it is reasonable for us to ask - how can we work with employers, blue chips and multi-nationals to reach their staff and provide our personal services to those who may benefit from them?
A member of staff has just had their hopes of relocating to take up a position at one of your overseas offices green-lit.
They need to sort out a great many personal matters before they leave and once they arrive. Renting their UK property? Opening a foreign bank account? Sourcing somewhere to live?
All of these concerns and more have, to a greater or lesser extent, a foreign exchange application associated with them.
Corporate relocation and relocation services is big business, however, personal financial services are often left out of the move and this can be very much to the detriment of the employee both in terms of the hassle associated with the use of more mainstream services and in terms of their actual bank balance.
Here we explore the differences between a laissez-faire 'they will find their own way' approach and the active introduction and recommendation of a payments specialist. What does it mean for ease, what can an employee do without and how much could be saved in the process?
This matter and this area of foreign exchange services is broad. It crosses many more touch points than just personal movement of savings in one country in to another.
Hence, we'll use a real life example of a private client moving to Singapore to take up a role heading the sales desk of a company mapping and succession planning management consultancy firm.
This individuals experiences and the amount of information and support provided by their employer is typical of many and provides us with a frame work for explaining the options open to both the employer and the employee.
Let's set the scene:
This individual is an account manager in the UK office of a business with a presence in the UK, US and Australia. They have offices in Chicago, London, and Sydney.
One of their key clients operates globally and it has become important for the consultancy to have a presence in South East Asia as this is one of the key markets for their client.
So, the business is looking into establishing a base in Singapore.
They have one contractor based out there, but, as yet they have no formal corporate structure.
The UK account manager (the manager of the account for the large client whose presence justifies the establishment of this office) will move our to Singapore and, as well as overseeing this prime account, will serve as a territory representative, sales person and lead business developer.
It will be a touch slog, but, the employee is confident, capable and very motivated.
The prime|key client will pay this employee in Singapore Dollar (SGD).
Straight away this presents the business with a foreign exchange concern.
Whilst their employee will be living and earning in SGD, the company's currency of operation - at least in terms of the financing of this venture - is denominated in sterling GBP. Therefore, the business now needs to repatriate profits and, potentially, exchange GBP in to SGD to fund activities not covered by the Prime client's retainer.
The business does deal in other currencies - namely US dollar (USD) and Australian Dollar (AUD). From their London office they also incur expenses and earn somewhat in EUR.
Prime Cap would consider this brief to be one of a multi currency exposure.
Immediately we can discern that the accounts team, based in London, are managing multiple currency accounts and as well as moving|exchanging currencies between their own accounts (which carries it own operation costs and FX margin) they need to select which account to pay their various expenses from.
So, they might benefit from being able to see all of their foreign and sterling currency balances in one place, on one screen.
Our online platform gives them access to and visibility over all their currency holdings. By registering as our client they can use Prime Cap's access to segregated accounts and can send, receive, exchange and hold currencies as they wish. For longer term deposits they simply credit the relevant foreign currency to their own account...dipping in, debiting and crediting as their longer term financial strategy requires|allows.
At the moment the business uses their bank for their foreign exchange and payment services. Enabling them to see all their holdings on one screen is merely the tip of the iceberg when it comes to the efficiencies this business can benefit from by working with a boutique.
Each of their global entities, although centrally managed from an accounting perspective, rely on domestic and territory specific banking relationships. This is not necessary with our model.
Furthermore, every time the business moves money from one account to another and from one currency to another, they will incur a payment fee and be subject to whatever margin their bank sees fit to transact them at.
Payment fees are not much, but, if you can reduce your costs in this area by over 25% then the saving mounts up.
Additionally, shaving up to 4% off the rate of exchange margin - the amount by which the rate is marked up by their bank - ploughs that margin back in to their own margins and add to their bottom line. In a low interest environment like today's, anything over 1% is a truly compelling figure...we would argue.
So, there are a number of elements that feed in to how we approach an appraisal of a business's foreign exchange and international payments activity.
We have been doing this type of assessment for years so, although broad, it is not complicated and we can quickly cut to the main efficiencies available because most business using their bank suffer from the same issues.
Whilst the employee we initially referred to is in fact the only member of staff, at this stage, who will be paid and positioned in the aforementioned way by this business, the concerns they will face are shared by the vast majority of employees who move overseas or who in fact relocate to the UK for work.
Although they might never admit it when pitching for their move, many employees see secondment overseas as a way to save money. Their employer may be providing their accommodation. They may have tax benefits to living and working outside they UK. Without an as yet established social life they may be able to economise. All of these things mean that they might reasonably have excess income at the end of the month.
With a mortgage or savings vehicle back in the UK, sending excess funds back is a perfectly normal practise and one that benefits hugely from the easy to use, accessible and competitive services Prime Cap offers.
We also need to consider those who are still paid in sterling but are working abroad. They may wish to moving money to and from their primary current account.
Non-dom landlords receiving rent in the UK may wish to repatriate those funds and there are also questions over the payment of tax for US citizens living in the UK.
All these activities and more can be handled more efficiently, easily and economically by a specialist currency broker like Prime Cap.
Businesses can certainly do more to acquaint their staff with the personalised services out there. Many magic circle law firms and big four accountancy practises focus on removals and shipment of chattels and possessions, but not money and capital.
Simply by including a tailored and discreet pamphlet can they introduce their staff to useful and value added services.
It is not a responsibility, but it is certainly the case that these large business are able to achieve preferential rates on all the global mobility concerns by introducing key carriers to their staff relocating. No such wholesale benefit can necessarily be achieved in the work of foreign exchange, which may be why it is seldom peddled.
We relish the opportunity to speak with open minded human resources departments.
As we always say, working with an individual is our route to growth. Yes, the business referred to above is a prime target for us, but by catering from their staff first and foremost we bolster our position and have internal advocates for our brand and the value of our work.
If you would like to discuss or learn more then please introduce yourself to our team by call or emailing brokers@primecappayments.com