Whilst the bulk of our work with businesses focusses on introducing improved functions and lower margins on rates to owner managed firms where change can be actioned quickly and without disruption to day to day business, many companies overlook the simplicity with which they can incorporate our work in to their operations.
The UK arm of a foreign owned business will likely benefit from our services by as much if not more than an independently owned enterprise.
With your own balance sheet, currency exposure and profit and loss concerns, are you not at liberty to utilise the sophisticated tools on offer within the territory you operate?
From time to time we use an example that has now been relegated to the stuff of financial services urban legend.
It was one of our brokers that identified the significant expense being tolerated by one of the world's biggest hedge funds.
Simply because this hedge fund hadn't forced their banker, in this instance their 'prime broker' to revise their foreign exchange margins.
The accounts team of this business used to 'move' sterling in to their US dollar account on a daily basis. They might move as much as £250,000 daily.
We Identified that the rate used for this conversion was some 0.35% less competitive than we, or any other broker for that matter, might have offered.
This meant the business was leaving approximately £8750 'on the table' each day.
The accounts team would simply login to the businesses banking accounts and move one amount in to another account denominated in US dollars.
No consideration was being given to whether or not this margin could have been refined even by a fraction of a percent. The movement of money was arbitrary and the refinement of that margin was not a priority, but, in an age of necessary efficiencies and in a time of strain for the hedge fund sector, this saving, over time, would have a significant difference to the bottom line of the UK arm of this fund.
Now, it is unusual to gain access to the inner working of a financial institution the size of the subject of this example. It is a belief that these types of savings are out there which drives many brokers to focus purely on 'big ticket' corporate FX mandates. Prime Cap's focus on improving process and the implied improvement that can offer on rates, means we approach work with businesses slightly differently.
We are looking at how the individual conducts the movement of money, for a business, between one account and another.
If we can compete on process and improve it on a like for like or efficiency basis, then the improvement we can bring to the rate is cream that will float to the top and cement our position as the broker for that business.
The reason so many subsidiaries still use out dated settlement and strategy models is because many of their processes are hang overs from pre-take over or merger.
Yes, there is a belief that changing the way the UK arm does something could have broader detrimental effects on the reporting throughout a group.
Our belief is that this is a fallacy that can actually undermine both the autonomy and the performance of an overseas arm or subsidiary.
One of the most important things to emphasise is that when you register as a client of a currency company, you are not signing up to a defined contract of business.
You are not pledging to put a certain amount of activity through the currency broker, so, in theory, short of some calamitous error, your risk in considering a broker and truly understanding how they can be used, is negligible.
If you are in the finance or accounts team at a medium size business, perhaps you are unlisted perhaps you are listed, but, you will receive calls from currency companies on a weekly if not daily basis.
You will receive these calls because the staff at these 'factory firms' have taken a cursory look at your website and have convinced themselves not only that you engage in currency activities, but that the margins you receive are worse than they can offer, and that you, the person sitting in the accounts department running payroll or settling invoices, are in a position to consider and change the provider you work with.
In our experience no more than two of these conclusions are ever true.
Some times none of them are. Rarely are all of them true.
So, a factory firm hunts around calling businesses of similar size and activity and tries to find the one business where all these assumptions are true.
It is far cheaper and quicker to employ a sales team (a sales team and not a broking team) to call 100 businesses a day than it is to hire qualified, robust and experience professionals to nurture a relationship with the management of that business.
This is why you are inundated with calls. You are a number on a call sheet. A call sheet that gets recycled every time a graduate runs out of steam or when their employer concludes their time is up and they've not generated enough traction.
Your banking and payments systems should be there to support the ease with which you conduct your day to day business.
Whether you are repatriating the company's UK earnings periodically (and we've not forgotten that year end is moment away) or you are simply paying for purchases or stock from the UK operation.
Integrating services like ours is designed to be a simple process.
We have spent a long time stripping out the cliches and making sure that the function of the platform is just as appealing, relatable, teachable and compelling at the sharpness of our margins.
If you currently use an accountancy software for your ledger, or expense software, then platforms like ours sit nicely and recognisably along side those.
Bottom and top line cost efficiencies are built in not just to the platform, but the product...so you're getting an easier way to engage with your currency needs as well as getting the currency for less.
Try it...put it to the board. Compare the costs with the current process and we feel confident you won't be chastised for so doing.
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