Hamish Anderson, what inspired you to form Money Mover?
Money Mover is an online business currency exchange service that Andrew Comber and I set up in 2014. I worked for several large banks before Money Mover, including HSBC, Merrill Lynch, Dresdner Kleinwort Wasserstein and Schroders.
We knew that SMEs had traditionally been underserved and overcharged by banks for almost any service. Consumers benefit from special offers and competitive rates, and big corporations can use their size to leverage the best deal. SMEs are caught in the middle.
This is as true for global payments and foreign exchange (FX) as it is for any other service. Speaking to friends and colleagues, it became clear that even financially and technologically literate people accepted the status quo. They just went to their banks when they needed to move money abroad. Fees, charges and wide currency spreads were accepted as a fact of life, and they were never really sure when their money would arrive at its destination. In particular, small and medium-sized businesses doing significant international trade were not benefiting from the ‘wholesale’ rates that they should be entitled to, given volumes.
We knew that there was an opportunity to offer SMEs something they couldn’t get anywhere else – a service that’s transparent and offers low-cost, predefined rates. While we do very often reduce total fees by up to 90%, what really inspires and motivates us is using technology to improve transparency and the user experience. We know how SMEs work, and the Money Mover platform reflects this.
What do you believe makes you stand out in an already crowded market?
Our focus on SMEs is unique. Our typical customer makes or receives regular international payments, or perhaps they have supplier relationships outside the UK. There are others in the market who look similar but use peer-to-peer systems aimed at consumers that are not aligned with the needs of SMEs. We’re unique because you know exactly what exchange rate is being used, how much is being charged, and there’s no peer-to-peer matching getting in the way.
We offer the mid-market exchange rate and then apply a single, all-inclusive fee. While this means money transfers are cheaper, it’s this transparency that really makes Money Mover stand out.
In your opinion, why should an SME use Money Mover?
When we stepped back and looked at the international business payments, we realized that no one had yet designed a service that provided tools and functionality specifically for SMEs. Most of the other services out there are really run for the benefit of the providers. We’ve approached the problem from the SME’s perspective and have tried to address the problems they face. For example, we’ve made it easy to get real-time market quotes, create and download reports, and track where a payment is at any stage of its life cycle. We’ve also created a fully audited user and account structure that allows professional advisers, such as accountants or outsourced finance directors, to work with multiple businesses from a single profile. We’re updating our web application constantly to respond to feedback and requests from our customers. It really is a platform built for its users by its users.
While most of our customers use Money Mover to make payments to third parties, an increasing number use us, rather than their banks, to move funds between their local currency bank accounts. This is because Money Mover is less expensive, faster and we disclose our fees up front. It’s alarming that banks’ regard for SMEs is so meagre that even these internal transfers are a ripoff. To be blunt, any SME in need of global payments and FX system, however infrequently, should be using Money Mover.
So far, money transfer has been focused on consumers over small businesses. How big is this market?
The SME market is huge and dwarves the consumer market by quite some margin. SMEs make US $5.6tn in international payments each year. Consumer money transfer grabs the headlines simply because consumer services tend to do so – there’s a chance that anyone could use a consumer service, whereas Money Mover is used mainly by entrepreneurs, business owners and directors. This tends to skew the perception of the SME market in general, and is possibly why they’re so underserved by banks.
The service you offer is a threat to banks. How do you think established financial institutions will react in the long-term?
Increasingly, retail and business bank customers are not wedded to the traditional players and are open to alternatives offered by the best fintech companies. Yet, the big financial behemoths still have size and inertia on their side. We talk of fintech disruption, but in relation to the sheer scale of the big banks, it’s still just a ripple.
In the short-term, we don’t expect any reaction. As a former banker myself, I can promise you that banks only perceive competition to come from the other glass towers in Canary Wharf, rather than Old Street or Silicon Fen. In the long-term, banks will need to react to specialist fintech players that are targeting specific parts of their business by attempting to become more agile, more transparent, and fairer to their SME customers. But we see this as a long way off and may well be too late to repair their reputations.
Fintech is taking off around the world. What would you say are the challenges and opportunities for new players?
It’s tough for new challengers to compete on a level playing field, as the banks are still the controllers of the financial infrastructure. For example, access to the core payments architecture, along which move the majority of global financial transactions, is jealously guarded by the largest banks and financial corporations. This won’t change until this architecture is ‘unbundled’ in the same way that telecom networks were, opening up competition.
To give them their due, the UK FCA (Financial Conduct Authority) is one of the most enlightened regulators, and through Project Innovate and the new Payment Systems Regulator, is trying to set out the framework for this process.
The opportunities for new players lie where the traditional players are refusing to change. If you’ve ever been frustrated or overcharged by a financial services provider – and it’s not down to regulation – then it’s likely to be ripe for disruption.
Aside from money transfer, what area of fintech has the greatest potential?
Money Mover is part of a bigger change in the way banking is done, and this change is where fintech has the biggest potential. Fintech is currently focused on cherry picking single aspects of financial services (eg invoice finance or international payments) and doing this one thing really well. But this means customers, in order to get the best service, need to go to a number of separate providers in order to access the suite of services they had previously received from a single provider – ie a bank.
In the next few years, I predict that it will be possible to access the same suite of services, from best-of-breed providers, in a much more convenient way. The best providers will group together or combine to form virtual banks, without the legacy issues that hold back our existing banking sector. This reformation of the banking sector is where the potential really lies.