Foreign exchange is a minefield. No one really knows what is going to happen to currency rates when markets are incredibly unpredictable. Mis-timing a transaction can seriously leave you vulnerable if you aren’t prepared.
So, if you have any upcoming large transaction how do you know what broker is going to offer you the best rates, advice or service?
To help you decide we sat down with Sarah Webb, President of OFX, UK to get her thoughts on running one of the largest currency brokers in the UK.
Sarah Webb, thank you very much for talking to the Good Money Guide. Why did you decide to join OFX?
Thank you, Richard. I guess if I take you back to the beginning of my career, I’ve always worked in the payment space. I was at American Express and Barclays before, and joined OFX almost to the day a year ago. In fact, it’s my work anniversary tomorrow!
I think what really drew me into the FX space was a couple of things. It was the culture of OFX, especially at the leadership level. I was very much attracted to the heritage of the company, and why it was founded. 20 years ago, two surfers on a beach in North Sydney decided to develop an FX quoting engine. It was created solely as a disrupter to the banks to expose high rates and fees. It then morphed into a platform enabling the customer to do their own FX deals and take advantage of more competitive, transparent pricing. From its humble Australian beginnings, the company branched out globally with the UK office opening in 2005.
Offering fairer rates and better value to customers is the legacy of the company and remains what OFX stands for today. This extends to the leadership ethos, which is what attracted me to OFX.
Equally, having worked in payments for the last 20 years, looking at all the ecosystems, it really felt like there was still a lot of room for disruption in the FX space to help people move money overseas seamlessly.
What is it about OFX that makes you stand out from the crowd? Why should a customer come to you as opposed to your competitors?
That’s a great question. I always love to talk about this.
The customer is always at the heart of what we do. I guess I put it into a phrase that we use often, which sounds a little bit corporate, but it is the ‘digital plus human’ service approach we offer. This approach allows our clients to do business with us however they choose, with access to a currency expert 24/7.
We offer a brilliant digital experience for anyone registering online or using other devices to set up an account with us. It’s simple and easy to do and clients can then transact with us quickly.
But we also have a team of currency specialists on the floor who work closely with clients every day. They will make introductory calls and help with the registration process as well. Ultimately, the team is here to provide reassurance for clients. An example of that could be before a client makes a large transaction. Timing of moving large amounts of money and even key market events can certainly make a difference when it comes to saving or losing money.
If it was my first time working sending money abroad, I wouldn’t want to move large sums if I didn’t speak to someone about it. Generally, when clients are comfortable, many of them prefer to transact online. However, some clients will always want to consult with our team first – it’s simply a matter of preference.
Is there a trend where more customers are doing transactions online or do clients still like to have a key account manager or someone they know who understands the currency market?
It’s a mixture, but you do see clients become more comfortable transacting online once they’ve made a transaction. But if they wish to get an expert opinion, they may appreciate having access to one of our specialists 24/7.
I believe knowing you can call someone day or night and speak to a real person is quite important. It’s as simple as that. We’ve all moved money from account to account, whether it be a foreign exchange transaction or not. If it’s a large sum, you want to make sure you’ve make an informed decision regarding the timing of the trade and the purchasing power of your domestic currency.
So when it comes to the added value that your account managers can add, can you just briefly talk us through, other than updates on the transaction, what sort of transaction advice or strategy advice they can provide a customer who’s looking to do a fairly small transaction now but then let’s say £30-£40,000 for a deposit on a villa and then perhaps with £500 to a million in six months’ or two years’ time?
With our customers moving money to buy a house, or some of our small to medium-sized enterprise customers, we have specialist teams on the ground. Both focus on the high net worth consumer segment as well as the corporate segment. What they do day in and day out is stay close to the markets and key geopolitical events, such as Brexit. It’s incredible how key events can impact major currencies so dramatically, just look at the rise and fall of the pound in recent years! The average person simply doesn’t have time to stay on top of market trends to this level of detail, which is why a third-party currency provider can help them make informed decisions.
It is important people are able to get advice, but equally to plan with confidence. As we know, the UK market has been volatile since 2016 as a result of the referendum. And frankly, what’s ahead with the General Election is anyone’s guess. So well timed guidance from a trusted specialist is critical, but also understanding what the right combination of currency products can do to mitigate future risk, when markets are unpredictable OFX can provide peace of mind and help you save. For example, if a client wanted to trigger a transaction when a rate hits a certain level, they could. Or, if they wanted to book in a future deal at a specific rate, they could also do that. It’s all about managing risk more effectively. We work closely with individuals and business clients to develop bespoke strategies to support their currency objectives today and in the months ahead.
I always say it’s very difficult to make money speculating on FX, but it’s very easy to protect yourself from losing more.
Yes, that seems to be the theme here and rings true for most of our clients. Whether they are buying a property abroad or paying an international supplier, everyone wants to get the most from their money and that’s exactly what OFX helps them do. I can’t stress enough, it all comes down to market expertise and the right suite of currency products to help clients plan with confidence and minimize their FX exposure.
Absolutely. So you’ve been here a year. In the year you’ve been here, what have been your best moments? What are you most proud of since joining OFX?
I’ve been most proud of a couple of things, and it goes back to what I said about the human plus digital.
We’ve really focused on the digital experience this year to make it extremely seamless, without compromising any of our regulatory requirements. We’ve done it in a way that’s focused on creating a fantastic customer experience, allowing them to do business with us quickly.
Our Net Promoter Score (NPS) tells us if our customers are happy with our service. I’m proud to say our UK scores are in the high 70s. Being ranked that high puts us at the top globally, which is something I’m immensely proud of. Compared to our competition and other new entries into the FX space, we’re more than holding our ground. So that’s extremely exciting for me as it shows we’re getting it right.
We’ve also made a big investment in growing our corporate business as well, and we’re already seeing some fantastic growth in that space off the back of it. It’s not often you get to enjoy in-year growth, but it’s proven to be effective at a faster than anticipated rate. So that’s been an exciting challenge and opportunity. Watch this space for more exciting initiatives down the line.
And of course, when talking about finance, you must be balanced, so that was the best moment. What has been the worst or the hardest moments since you’ve joined? Is there anything you wish could’ve gone smoother?
To be a little flippant, I (and every other person living in the UK) wish we knew what’s going to happen with Brexit. That’s created a lot of uncertainty, a lot of stop/start, which has made getting on with life and business decisions challenging. Our clients talk to us about this daily with great frustration! I would say it’s such an unprecedented time in history, nobody knows where the market is going to move. And if they tell you they do, they must have a crystal ball.
It makes it difficult to help manage your customer’s expectations, but we do give them support by ensuring we keep them informed and help them plan for different scenarios. It’s certainly a challenge and with the General Election next week, more market volatility is sure to come.
Managing expectations is one of the most important aspects from how long the AML’s going to take to get your account open, through to these black swan events, like the very start of Brexit or Trump getting in, or whatever it is that was not odds on favorite that’s going to happen.
Exactly. I think it’s managing through that dynamic with Brexit, but it’s all part and parcel of what we do, day in and day out.
It does make it interesting at times. When the Brexit deal was looking like it was going to go through, it was all very exciting. Since the referendum, we’ve had to become quite dynamic in how we help our customers manage through uncertainty.
I think what’s interesting is when the Referendum result came out, I wasn’t here, but it took people by surprise across the industry. One of the things that we’re immensely proud of was that we were able to continue trading without any caps on the transfer levels that people could make and keep our doors open for business. This wasn’t the case for all currency providers.
Some of our competitors had to put caps on transaction amounts. But the way we’re structured as a company allowed us to continue trading, which was came down to our proprietary, international partner network. We take pride in being there for our customers when they need us and will continue to do so.
On a personal level, I think the one of the most challenging elements is working for an Australian-headquartered company. Whilst there’s a lot of empowerment and autonomy in running the business here in the UK it does mean VERY early starts and late finishes and some odd hours across different time zones. You need to grab your down time when you can, it’s essential!
But I would say that we gain from having such a great company based out of Australia. There’s lots to be said for working on a truly global exec team.
Why do you think that pricing from currency brokers is still so opaque?
It’s so easy to google live interbank rates these days, but you shouldn’t run into issues with credible brokers telling you what margin they charge, in fact, transparency is a key selling point.
At OFX, we always offer fair and transparent prices on all our currency conversions. Every transaction is fee-free so it’s purely the margin that we add on. We’d also say that we’ve got some very competitive prices, particularly at the top end of transactions based on the amount volume. If you’re making a large transaction and did the calculation around what the margin counted for, there could be a big difference between a high percentage and an almost zero margin.
However, when you’re looking across many of the players in this space, we can all appear similarly priced. The real differentiator is going to be the service you receive. The margin becomes secondary if you’re talking to an expert and getting the right information. This determines when you transact, what could be the best rate and how to minimize your risk when it comes to executing any FX transaction.
For a customer who’s potentially got a large transaction coming up, can you, having been in the industry for a while, recommend any resources that they should turn to that can help them be more educated on foreign exchange pricing, market timing, where to learn about risks and rewards and so on?
Obviously, I certainly recommend using OFX as a great resource. We have a daily market commentary to keep clients informed on where the markets are moving and upcoming events that are expected to impact the major currencies. It also goes without saying that our UK and global currency specialists are available 24/7 and offer any support our clients need when it comes to making a transaction – large or small.
On top of that, the resources that I use include, ForexLive.com. There’s a good blog there to keep tabs on market movements and events.
Equally, Bloomberg would be a resource that I would go to. We sometimes do some commentary for Bloomberg as well.
I think my advice for people would be, if making a large transaction, the best decision is an informed decision. It’s important to make an unpredictable market work for you by planning ahead.
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Richard founded the Good Money Guide (previously Good Broker Guide) in 2015 and has been a broker for 20 years most recently at Investors Intelligence and previously a multi-asset derivatives broker at MF Global (Man Financial). Richard started his career working as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson) after interning on the NYMEX oil trading floor in New York and London IPE in 2001 & 2000.