Web Summit debates FX’s “Currency Wars”

The world’s most important online event, Web Summit, wasn’t just about networking opportunities, it was a chance to build public awareness of Fintech in FX, and therefore of the great currency exchange rip-off perpetrated by banks. A debate on ‘Currency Wars’ with fellow sector players, about how disrupters of traditional banking services continue to grow in size and scale, with currency exchange just one example, provided just such an opportunity. However, as we can still see, a significant part of the corporate world still lacks the trust and education to make the switch to Fintech for currency exchange needs.The debate centred on banks lack of preparedness, even now, to match the transparency, efficiency and fair pricing of FX tools, like Kantox’s, despite the sheer size of the global FX market, $5.3 trillion exchanged daily - the equivalent of the entire world’s GDP every two days. We are small, we are fast, we are very flexible, which can actually be an advantage. Banks, however, do not really know how to compete with that, just like Goliath when faced with an upstart David, and are too slow to keep the pace.It was vital to point out that the main challenge for us is education: a lot of clients still think they do not pay anything to banks for

their currency exchange. I would say as much as 90% of businesses that come to Kantox don’t know about the hidden fees and FX spread they are charged when dealing with traditional banks and brokers.The second barrier of course, is trust. Although Fintech has witnessed incredible growth in the last few years, the revolution is still being largely steered by early adopters. To answer the question posed by a journalist on whether the continuous headlines we see around FX rate fixing are ‘the gift that keeps on giving’ from a Kantox perspective, I answered of course, yes. Every time we see these rip offs hit the news, it represents another opportunity for businesses to see the lack of transparency in the current system and to explore alternative options.As you know, my view for the growth opportunity for Fintech is infinite. I see our sector as having 10-20% of the currency exchange market within 10 years. In a few years, I think we’ll be seeing fully-operational Fintech banks as the ‘second wave’ of FinTech takes hold – beyond hyper specialisation to ‘marketplace banking’.These core banking platforms will be built from scratch with an API layer to connect to third parties. There’s no doubt in my mind that the first of these will come from a Fintech start-up, as it is too disruptive and the risk of cannibalisation too high for an incumbent to attempt this.Web Summit was just the tip of the iceberg in terms of the need for us and other Fintech players to begin disrupting the established ways of doing business by convincing others, even those in the most innovative sectors.