Bob Dowd is the Americas CEO for the Global payments and currency risk management company Moneycorp. He shares how the original FX tech was a calculator and how the foreign exchange business has evolved.

Three things in this episode that we dive into. 

1. Russian sanctions impacting Foreign Exchange Risk
2. How the AI is helping Moneycorp customers make better decisions
3. The importance of providing a high touch experience in Fintech leads to success

Learn More about Moneycorp at http://www.moneycorp.com/

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the challenge is that most people are looking at is, how

do I make my business bigger in the global space and how do I then

facilitate payments around the world?

welcome to the show.

I'm excited to have you on to discuss global payments and

currency risk management.

But before we dive into the deep end, why don't you share with us how your

decades long career in FinTech started and how you came to be appointed the

CEO of Moneycorp Americas back in 2018.

Thank you, Tedd pleasure to be here.

Yeah.

So I'm 39 years in the cross border international payment

foreign exchange space.

I actually started my career at Kennedy airport in New York, selling

currency to people traveling overseas.

I worked two to 10.

Would roll in about one 30, we pick up our money and we be dispersed

through the international arrivals building that, had air France.

And back then you still had the German mark and the French Frank and the

Greek drama and the Italian Lira.

So you name it, we sold it.

And that was a great kind of learning ground for me to

learn about this business.

And then from there I worked 25 years for the combination of Deak-Perera, Thomas

Cook and Travelex, where you name it.

I did it from retail to our wholesale group, which was

our travelers check business.

And then we started delving into this corporate foreign exchange,

the back of retail branches.

We would go out to local businesses who were dealing with their banks.

And we realized that they were being underserved, overpriced,

not in a very proactive approach.

And we created this corporate payments business, which is

now flourished to numerous.

Non-banks providing these services to small, to medium sized businesses.

That's grown into the enterprise space where we help them with integration.

So you can start at the bottom in this.

And find yourself at the top, if you work hard and learn the trade.

So it's been a nice ride.

Oh, wow.

Yeah, that's crazy.

Cause like with myself, I started out, feet on the street.

I was the guy that, was helping the merchants fixing their credit

card terminals, I totally get it.

And that is exciting to see that Fintech, it really has that leveling

the playing field type scenario.

And you and I both started before it was called FinTech.

I'm just glad we actually have, a name for it now

,there was no FinTech in 1984.

We were handwriting tickets with a calculator, figuring out exchange

rates and how much buddy, you need to pay me in us dollars.

The calculator was the tech.

I got it

exactly

with Moneycorp, being a global company.

What is the focus on the Americas group and what is the success look like?

We've had some tremendous success over the last three years,

basically taking, a business doubling it both from a top line perspective

and from a bottom line perspective.

And quite honestly, That comes with it people.

To me, this is a people business.

It's all about having the right people in the right roles who understand

the business, who can articulate value to our customers and it's

moving from what was traditionally an FX brokerage business, which.

In my mind, a price play, Hey, I can beat the bank on their exchange rates.

I can waive your service fees and really a price play.

And we move that really into a consultative sell.

So how can I help you streamline your payments?

How can I integrate into your ERP system?

How can I integrate into your accounting package?

How can we do this through APIs or through SFTP?

And things that you're doing manually today.

And then you look at risk management.

How do I go in and help you create an effects policy statement to take

a look at foreign exchange risk when it comes to your balance sheet or.

The amount of euros that you might have exposure on an annual basis, and

what's the best way to protect yourself against your budget and what your

expectations are in order to pay that.

So those require individuals to go in and sit down.

Whiteboard have conversations that is just not about dollar up dollar down.

Let me give you a better rate, but what is your process and

how, what does good look like?

And really sharing industry best practice with our customer.

That's great.

Especially with that consultative approach.

I bet that with the current sanctions on Russia, , you are really helping

them manage this elevated risk.

What does it mean for the volatility of the broader market in

international payments with these things we've got going on right now?

It depends on what side of the market you're on Tedd, obviously,

but as always, you'd all have a huge exposure to Russian rubles.

You should be okay.

Because the dollar has actually increased since the conflict has occurred.

And many of our customers are taking advantage of certainly several months,

lows or highs within the dollar.

The Euro's now in an attractive rate where, we actually have a lot of

activity with our customers who are taking advantage of the dollar being so

strong against the Euro and the pound.

Most of our customers are doing buying versus selling.

So they're buying that foreign currency.

So as the dollar is strong and they like to take advantage

of that and start hedging.

So our hedging activity has gone up quite a bit.

The amount of conversations that we've had with our customers, engaged in looking at

their exposure has gone up quite a bit.

Our integrated business really hasn't changed.

They make those payments.

Every single month.

So they might have a thousand payments.

They're going to make them regardless, but it's really our hedging business

that I would say we've had about a 30% uplift since the conflict, in terms of

the amount of activity that we're doing.

And certainly companies are becoming much more.

Aware when they see the Russian ruble dropping by 30%.

Well, what other currencies do I have that might have that volatility

that I need to make sure that I'm protecting myself against.

Yeah, I, for me as we discussed prior to hopping on and hitting the

record button I, I remember working in cross border and FX and Argentina always

seemed to be the one that, had to spend.

Yeah.

Brazil was a little interesting because of just the.

I did cross border and moving the money across the borders.

And with Brazil, it's a little bit more complicated than just moving it

like, like you can with most countries.

That is true.

With that going on, that sounds fantastic that you guys are able to help them.

Hedge better be positioned to, to make the right moves.

What other challenges do you see in the global FinTech markets

and how is Moneycorp position to really solve for those problems?

The challenge is that most people are looking at is

things that we talked about earlier.

How do I take my infrastructure and create.

Economies of scale, meaning how do I make my business bigger in

the global space and how do I then facilitate payments around the world?

And most of that is really driven and the type of payment rails.

So in, since the conflict there's been a lot.

Info on swift.

So people who had no idea what swift was historically right, are

now going, oh, what's this swift, what does this banking system about

moving money around the world?

So swift has probably gotten more press in the last three weeks and

they've gotten in the last 30 years.

But swift is just one payment rail, and swift is traditionally a very high.

From a cost perspective, very high cost payment rail.

And one of the things that we are doing as a business and certainly

in the FinTech space is there's other ways to make payments.

So there's alternative payment channels like Venmo, PayPal pay to a card Pedro

a bank account, which is traditionally kind of a swift payment, but there's

also a low value payment rails.

So in the United States we use ACH, and those are cost

companies, 10 cents to send an ACA.

Where, if you send a wire through your bank, it could cost you $30.

The same applies to cross-border payments.

You go through swift and there's an intermediary bank.

They could do a lifting fee on that payment.

The beneficiary bank gets that payment.

They do a lifting fee on that payment.

So you send a thousand dollars and it goes through an intermediary

bank and then goes through the correspondent bank and the beneficiary

bank, $30 could be lifted from that.

If I send that same payment through say SEPA, which is the low value payment

rails in Europe, that'll cost me 15 cents and they'll get full value.

So instead of 970 euros whining up in someone's bank account, because

it went through swift, we can send it through SEPA and they'll get back.

And they've actually speeded it up.

Now you can actually get those done many times, same day and next day.

And that's just one example of hundreds, regardless of where you are

around the world in the Philippines.

For example, when we are paying crew members of a cruise ships, right?

So seafarers who are getting payroll and, many are from the Philippines.

We actually can get payments to the Philippines and in.

And hitting their bank account in an hour and it costs us 26.

As opposed to a swift payment that gets there and Philippine pesos two days

later and could be charged one, I'm charging the Seafarer $30 to initiate it.

Plus there's $30 being deducted out of it.

So the whole landscape in terms of alternative payments and the way

you make payments today has changed.

And that is making sure that we are sitting down with our customers that are

making payments throughout the world, educating them on the best way to do that.

And the most cost-effective way to do that.

So you hit on a number of different things and hopefully

I read this right, but Moneycorp supports over 120 different currents.

How do you see defy cryptocurrencies and numerous proposed it?

Central digital central bank, digital currencies impacting real-time payments

and the global payments ecosystem.

You just talked about how the Philippines, you can do this.

Near real time, you can do it.

In Europe really quickly in the us, or also getting to the ACH same day,

ACH, next day, ACH, all kicking in and everybody's talking about the real-time

payments ecosystem that's going on.

So help us understand how has the defy side of the house really impacting

the overall real-time payments?

ECOS.

So digital currencies is definitely that's future.

And that future is coming a lot sooner down the track than I think most

people recognize or even understand.

They using blockchain technology, which is real time ledger movement.

So literally I could press a button right now.

And Tedd, you now have that money in your account.

That's powerful.

That was unheard of five years.

There was talk about it, but now it's becoming a reality.

It's becoming more mainstream.

It's not, oh, this is sort of underworld and things we don't want to touch.

Banks are figuring out how do I get into the digital currency space?

How do we support it?

And how do we support our customers in order to facilitate it?

Because if we're not on it, we're going to make.

And we have a number of examples of companies in the FinTech space

that's all they're focused on and they're doing quite well with it.

So we actually deal with a number of digital currency companies

where we're doing their liquidity or we're making vendor payments.

So we haven't quite touched the consumer side yet.

We're dipping our toe in we're looking at it.

We're managing it.

We're looking at it from a risk perspective.

We're looking at it from a compliance perspective, but in today's day and

age, they are checking off all the boxes and it's becoming a much more

mainstream product and something that we want to make sure that we

are participating in moving from.

So it's really interesting as we talk about the digital currencies.

And just a few weeks ago, there was a huge announcement that

the fed the feds had busted.

Some launders of, I think it was Bitcoin, maybe a few other cryptocurrencies

and trying to remember off the top of my head, but one of the things that.

Most major banks when we go to the back to the FX side.

And I'm really with you starting to dabble in the liquidation of these

currencies, most major banks when you're talking international transfers and FX

desks and teams of fraud professionals.

They've got these big groups that really handle all of these different things.

What is Moneycorp doing to stand up?

To really help these businesses manage and mitigate the risk.

And in these new waters that they're charting into.

Yeah.

We're not unsimilar to a bank in that regard.

So we have dedicated compliance for our teams.

In fact, Moneycorp operates in two jurisdictions as a financial institution

or a financial institution in Brazil with Moneycorp bank under Cambium, and also.

As many core bank.

So very much when we look at our compliance and our fraud regimes were.

Pretty much across the group doing the same that our

banking counterparts will do.

And what we're doing again very much like sharing best practice with

our customers on the best way to initiate a low value payment or how

to integrate into your ERP system.

We're doing the same thing as it comes to starting to work with digital currency.

And what we're comfortable with.

And in many cases, we're looking at their compliance regimes and

therefore for our controls to make sure that we're comfortable with them.

And if we are, we're willing to do.

Business to a certain extent.

And if we're not, we won't.

So we do enhance due diligence on these type of customers.

We then share that with our customers because again, our customers, aren't

dealing with digital assets through money.

They might be doing it through someone else.

The only thing we're really doing is we're working with digital currency

companies when they're flushing euros and they got 10 million euros and

they need to move them into dollars.

In terms of helping our customers understand what they can and

can't do in digital currencies.

We're not quite there yet.

And so we actually refer them to partners that we have, that we're

actually working on the liquidity and we actually point them to them because

they have the expertise in that regard.

So

when we started and I totally get that with the digital currencies

because that landscape is changing.

I about said daily, but it's really.

An hourly rate, right?

At this point, what types of things, excuse me, what types

of things does Moneycorp do to help these companies who are.

Really just new to the cross-border FX.

Maybe it's a us company that just decided to go to Europe or just

decided to go to Latin America.

They've heard about, they heard about all these great opportunities all over the

world and they say, I'm ready to expand.

There are a lot of rules and regulations and all these fun compliance things

that, that everybody gets excited about.

And I say that extremely fishy facetiously how has funny Corp helping

them through that process of maintaining compliance and minimizing their

overall risk and the movement of the.

Yeah.

So just like what we do with FX policy statements, to look at how our

customers manage foreign exchange risk.

We are also sharing best practice when it comes to facilitating a payment.

We mentioned Brazil before and since.

You're familiar with this space.

You know that there are many requirements.

When you facilitate a payment to Brazil, you need tax ID numbers, you need phone

numbers, you need all these other aspects.

And we actually have guides that we provide to our customers on all the

requirements on a per country basis.

So whether you're sending in dollars or the local currency, there are still

very specific requirements on a per country basis that people are not aware.

And that's important for them because you don't want to facilitate a payment.

Thank you.

Have everything.

It goes out the door.

It's unable to be applied.

It gets returned, it delays the payment.

And so we're very much in that proactive approach within that consultative sale.

So whether, again, how to facilitate a best case.

Or what you need to do to be compliant around that payment as well.

And certainly within our systems, we have beneficiary bank validation

tools that help them with that, so that if there are missing information

we will then provide that information in real time to them through an API.

As we're looking through these different things, I was noticing

on your website that you guys cover.

Different discussions around machine learning and really using the data and

data has become a really big thing and leveraging that the right way in FinTech.

How has Moneycorp using that technology to help the company, but also

help their customers move forward?

from a compliance and fraud perspective.

we're using machine learning to take a look at transactions that

are occurring throughout the world.

we have something called HRJ, high-risk jurisdictions that we make payments into

and we take that machine learning and we're doing enhanced due diligence on

those types of payments to ensure that, everything that is required is, on there.

And that we're actually having a second set of eyes.

We also take that information, transactional information and slice it

and dice it in a number of different ways to provide it back to our customers,

whether that's in report carding, quarterly reviews, annual business

reviews, and we share with them that data so that they can go through and

make proper business decisions on.

Their payments or their risk management.

And we provide that in a very detailed document that we then share

with them on a consistent basis.

So machine learning and AI has definitely helped our business go to

the next level and has made us again, taking that consultative approach.

We're being very proactive with our customers and sharing that

data with them to help them make proper business decision.

That is great.

We talk about data a lot in how we're leveraging that to help everybody.

And it's really interesting, especially when you talk about those

high risk jurisdictions and really understanding how do we mitigate a lot

of those risks that come into play?

I do want to ask a question and this is something that, that happens a lot in

my consulting business when I'm helping.

Companies that are, US-based that hear about all of these we talked about

earlier here about all these opportunities outside the U S how does Moneycorp or does

Moneycorp help companies determine where they should be taking localized currency?

Where should they localize?

When they started looking at the expansion of their business?

I would say Moneycorp probably doesn't help point them

into, Hey, here's jurisdictions where you need to be doing business.

And, but in many cases certainly in the United States, we have this, the

almighty dollar concept where if I just pay them in dollars, I'm fine.

And many companies around the world are more than happy to tell

companies, pay me in dollars.

Because they will actually throw in additional margin to

give them the benefit of that.

So we actually sit down with companies and go, if you're paying in dollars,

there's two things that we can do for you.

One, you can ask your vendor.

Or your supplier to be in local currency.

And then we can look at it and determine which is the best way to do it.

The other is we mentioned swift earlier.

Swift now has a product in any time you send a U S dollar wire,

you have to send it via swift.

There is no other mechanism to send us dollars around the world.

Swift now has this great product called GPS.

And GPI is literally the FedEx tracker for swift.

I can see every bank who's touched it.

I can see how much money they've taken out of that payment.

And I can also see the end bank who's received dollar.

And what they've converted that into local currency.

So Tedd you and I don't hold a pound account, a Euro account or any other

currency account here in the United States on most people in Europe,

don't hold the us dollar accounts.

That's not their currency.

However vendors will charge you or bill you in dollars because they

think it makes it convenient for a us company to pay in dollars.

But what they don't realize is that they're paying exponentially

more money than they should.

For that payment.

So again, we can ask them to provide you a bill in euros, as well as dollars.

Take a look at the exchange rate and what makes sense, or we can

facilitate that dollar payment.

And I can tell you exactly how many euros, because they are

converting that on the other.

And tell you exactly what's it gained converted at, and then you can determine

what is the best way for you to facilitate a payment to your supplier overseas.

And in many cases, they're going to find out that, oh, if I actually pay

in local currency versus us dollars, I'm actually providing a benefit

and a financial savings to my.

Oh, yeah, it's interesting.

A lot of the time, I guess I get in, on the front side of it where they're

like, I'm doing a bunch of business in the U S how do I expand beyond that?

And I hadn't thought about it from the perspective that you just mentioned,

but that makes a lot of really good sense that other countries and companies

and other countries look at paying it, us dollar, one of two things.

If the dollar is stronger gay, they get a little bump in their revenues.

And two, if they're increasing the margin in order to cover the

conversion, there's a little bit extra extra cash in there for them too.

So that is interesting.

I hadn't thought about it that way and I really appreciate you sharing that.

There's one last question I want to ask today because this is super

important to me, especially with the number of the folks that I work with.

A lot of the fintechs that I work with are building their own in-house technology.

So they're building those in-house and realistically, a lot of them are

really trying to ensure that they have that seamless experience from the

consumer all the way through all of the process and procedures so that it feels

that the payment is really invested.

And I'm curious too, to how Moneycorp is enabling those fintechs.

You've mentioned APIs.

You mentioned the consultation.

How are you bringing those two together to make sure that they have that, that really

secure line of cross border payments?

It's actually a combination of all those put together, that

you want to get to because you want the fin, you want the tech,

but you also want the high touch.

Many fintechs go, with the FinTech with a low touch, because they don't

want to have, whether that's boots on the ground, additional resources,

what have you, and Moneycorp is actually a combination of those two.

And in my mind, you can have a proper FinTech without having a proper high

touch from a customer perspective.

Number of different reasons.

So when I say combining all those that is automated onboarding through API

APIs and making the onboarding process and doing business with us seamless,

and that's being able to facilitate a payment and trust that we will route that

the most cost-effective way for your.

That will be, Hey, here's the best way to deal in high-risk jurisdictions or

these are the business requirements in order to facilitate a payment to Brazil

or other places that require additional information and building all those into

an API with beneficiary validation.

so from the onboarding to the transaction, to the execution of the transaction,

you've done everything in a very seamless manner, from a customer perspective.

And then from there, it's what does Moneycorp do from there?

And we want everything to be straight through processing, but we don't want

to be straight through processing at the cost of unable to apply

things, getting returned rejected.

We want to make sure those payments go out accurately the first time.

So we actually look at beneficiaries.

We do beneficiary validation on our end as well to make sure

that they go out correctly.

The first.

And then from there it's post transactional based activity.

This is where we truly differentiate ourselves in my

mind because payments do go wrong.

Payments do go awry payments are unable to apply beneficiaries, do

claim non receipt, and there could be a number of various reasons behind it.

And it's how you perform from a post transactional base perspective.

Can I pick up a phone and talk to.

Does that person know what they're doing?

Do they understand what my need is?

Do they understand my business?

Do they understand that inherently the service level I'm providing them

is a service level they're providing to their vendor, supplier subsidiary,

whatever, in order to find out what's happened to that payment.

So it's con.

Combining the FinTech with the high touch approach.

That to me, we've put the bounds together to figure it out.

Fantastic.

Bob you've answered all of my deep dark questions about Moneycorp.

Is there anything that I should have asked that I didn't ask?

And then that the listeners and viewers would want to know about Moneycorp, how

to get started with Moneycorp, whether it makes sense to get started with money.

Thank you, Tedd.

Reach out to moneycorp.Com.

we are a global organization that has entities all around the world.

If you go to moneycorp.com you'll find the appropriate offices that can help

you with your cross border and your foreign exchange risk management needs.

everybody You'll be able to find that in the show notes as

well as down in the description.

So go ahead and click through and have a great time working with Moneycorp

and getting that high touch experience.

Bob, thank you for hopping on this early in the morning, and really glad

we were able to get together on this.