Currencycloud Blog August 12, 2021

Future-proof your brokerage with Currencycloud Spark

FX brokers need to awaken to the fact that the deliverable FX industry for SME’s is changing. 

Having already secured a strong consumer client base by offering simplified, digital FX and payment services, Fintechs and neobanks are now aggressively looking to target SMEs. By offering SME focused features such as FX forwards, these tech savvy players are expanding their market share and tightening their grip on the FX and payments sector as a whole.

Think like a challenger

To keep up with these disruptors and maintain market share, FX brokers must start thinking differently. 

You have to consider new ways to add value and compete on something other than price – with Fintechs and neobanks offering transparent pricing, it’s vital you are able to offer your clients a personalized customer experience and service. 

To differentiate yourself, you need to think beyond your clients’ immediate needs. But how can you do this? 

We know the demand for dedicated virtual accounts in the name of the client is growing. For example, marketplaces like Amazon and eBay are increasingly requiring funds to be collected into an account in the name of the business selling on the platform. The digital challengers can fulfill this need and offer a cost effective one-stop-shop solution with virtual accounts, making it easier for their clients to pay and be paid. So to keep up with the market, you need to offer a banking-lite solution.

Why use Currencycloud Spark?

Currencycloud Spark lets you issue multi-currency accounts in your clients’ name. This enables them to send, receive and hold funds in more than 34 currencies in a single account. 

Let’s say your client is a UK-based importer. They want to invoice a supplier in GBP but the supplier based in Hong Kong wants to pay in HKD. Without the right solution, the supplier would be forced to pay in GBP, often through a bank with an inflated FX rate, no visibility on costs and high SWIFT fees. The payment will most likely take days to credit, intermediary fees applied, funds arrive short and cause a reconciliation nightmare.

Thankfully there is an easier way – through Currencycloud Spark, you’d set up an account in your client’s name. The supplier could settle the invoice in HKD and your client would receive the funds in GBP a few hours later. Funds are automatically screened and reconciled. Everyone’s happy. 

Or imagine your client is an exporter who receives payments from all over the world. Having a single, multi-currency account means they don’t have to manage numerous bank accounts and relationships. Neither do they have to go through the time-consuming, expensive and complicated process of opening an in-country bank account every time they need to handle a new currency. 

Adapt and thrive 

Currencycloud Spark is a potential game-changer for your SME and corporate clients – and for your business, too. 

Your clients won’t need to look elsewhere for collections, conversion or payments. As such, your retention rates will improve and churn will become less of an issue. And as your client book grows, so will your attractiveness to investors. 

Monetizing collections will serve as a new revenue stream which could boost your margins and open up more verticals. One of our FX clients serves large payment initiation firms who need to refund 20 – 30% of the funds they receive back to their customers. Working with Currencycloud enables this broker to process their clients’ refund flows, where previously they were unable and losing out on revenue. 

Having a new digital service to sell, one which other brokerages don’t offer, will re-energize your sales team. They’ll have a compelling message to put out to market whilst being able to sell into new areas such as e-commerce, bringing in more revenue. 

E-commerce is booming – a trend largely fueled by the pandemic. FX brokers can capitalize on this growth sector by integrating Spark and offering named accounts to their SME clients. 

Future growth, expansion and opportunities

Businesses that trade on marketplaces like Amazon tend to sell globally. They collect funds in various currencies and require named accounts to do so. 

These funds then need to be converted into a base currency so businesses can pay staff and settle invoices. Giving these SMEs access to named accounts through Currencycloud Spark would save them time and money, and improve efficiencies through automation. It would open up a whole banking ecosystem in which they could freely receive and pay out in more than 35 currencies.  

As Fintechs and neobanks make a play for the SME sector, your brokerage needs to evolve and innovate. Currencycloud Spark will allow you to fend off these digital-first challengers, future-proofing your business in an increasingly challenging market.  

To find out more about how Currencycloud Spark can help you service SME clients, speak with a payments expert.

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