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Which Fintech started in a basement in Stockwell, has done over £65bn of FX business, do over 1 million transfers a year with 600 staff in 7 offices, whose chairman is a former deputy Governor of the Bank of England and according to price comparison sites offer better prices than other Fintech FX players on virtually all sizes of deal?

Quin.jpg">Quin-150x150.jpg" alt="" width="150" height="150">Worldfirst as many of you might not have guessed (though those of you reading this online will have had a huge hint in terms of the banner above

Jonathan Quin their co-founder and CEO for 14yrs joins us today to discuss the art and science of international expansion – a truly vital step if UK Fintechs are ever to move beyond a potential audience of 1% of the world’s population to far far more.

Topics discussed on the show include: 

• the Isle of Mull; its mild climate
• how to get there
• Jonathan’s career journey in particular always wanting to form his own business before he was 30 and inspiration behind that
• WorldFirst former a year before Zopa which is often taken as the start of the modern era of “Fintech” per se
• before 2004 there was pretty much only hedge funds in terms of new independent FS players
• they raised no capital to start and self-funded, “start small, think big, move fast”; the relationship between this and Jonathan’s long tenure and WorldFirst’s very solid growth
• a comparison with Synechron, former brand-partner of the LFP
• WorldFirst’s evolution through identities as a FX provider, a payments company and now a Fintech company
• in the early days 100% of their deals were by telephone, now 90% are online
• they generate best prices by:
  • (a) doing large volumes (2017 £11bn) and thus getting tight prices from the banks and
  • (b) taking smaller margins than banks do esp on smaller customers [they can deal in £5k, talk to the client on the phone, make money and still charge finer prices than banks]
• 2009 opened in Australia, 2012 in the US, 2014 in Hong Kong, 2016 Singapore, 2017 small offices in the Netherlands, Japan, Korea
• the key aspects to successful international expansion
  1. Know “Why?”
     • opportunity to scale
     • UK very competitive marketplace, plenty of markets with less competition
     • netting opportunities, being able to work for both the exporter and importer
     • higher growth rates in other markets and more willingness to adopt new ways
  2. Cultural challenges
     • the spectrum of “going abroad” and “not changing (fail to dock locally)” vs “going native (&losing your value-add)”
     • their formula is to keep the product core about 70% unchanged and 30% localised
     • eg in Singapore they hire someone on a moped to drive round every day and collect cheques
     • pricing is different
     • speed of payment is different (eg slower in the US)
     • some of the necessary adaptations only become clear when you are in the market and you learn the hard way
     • control challenges
     • it can take a loooong time to really understand a local culture
     • Jonathan’s biggest challenge in the expansion has been that it is that much harder to “read” some in an unfamiliar culture than it is on one’s own (particularly crossing language boundaries)
     • challenges even if everyone speaks English (Iceland vs Japan qv)
     • China is their biggest market
     • local rules which in some aspects may be laxer, some tighter
     • the importance of respecting and being interested in the local culture (and complete no-no of judging cultures different from your own)
  3. Correct Assessment of RIsk
     • “people often over-price risk, they worry about risk too much, or they are irrational about risk”
     • Jonathan’s metric is to be at least 70% sure of what the risk is – you will never get to 100%
     • WorldFirst’s survey of the main reason more businesses don’t expand “it’s a hassle”, too busy with their existing business that they never got round to it
     • equally many business do not go abroad due to over-estimating the risk compared to their returns – eg fraud rates which whilst always a concern might be a fraction of the profit margin
  4. Organisational structure
     • their model is to pair one person who understands them and HQ, ethics etc and one local who understands the local market, partners, business approach, how to hire
     • ideally the latter will have been educated not far from (in cultural terms) their UK approach
     • “You have to carve out [of the organogram] and prioritise international expansion .. the person we have sits outside other reporting lines and reports directly [to the CEO] so that the internal immune system of the business does not close in on that and kill it as it’s a hassle and a worry and a risk”
  5. Choosing where to go
     • rational approach (where there is a lot of importing/exporting, where banks rates look high etc)
     • if you solely rely on this you risk missing opportunities and so you must also look at your gut feel – you need to get out on a plane, meet people and talk to them
• WorldFirst:
  • 86% B2B
  • main thing is services to importers
  • bank account solutions and payment services to exporters (esp e-commerce merchants (of whom they service ~60,000))
  • customer acquisition via Google, partners or word of mouth
  • their WorldAccount a multi-currency bank accounts for businesses
  • they are hiring new developers

And much much more

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