Ebury - Focus Points Customer

Question 1

Potential Pain Points for Customers

Answer 1

1) High Transaction Costs
–Traditional banks charge high fees and offer poor exchange rates for international payments. SMEs struggle to absorbe those costs
– FX providers like Ebury offer competitive exhange rates and lower fees, significantly reducing the cost of cross-border transactions.

2) Currency Volatility
–Businesses operating internationally face the risk of currency fluctuations, which can erode profit margins.
– Hedging products like forward contracts can help lock in favorable rates.

3) Delays in Cross-Border Payments
– Traditional international payments can take several days to process, disrupting cash flow.
–Faster payment processing using advanced technology and global networks.

4) Lack of Multi-Currency Options
–Holding multiple banks accounts in different currencies is cumbersome and expensive.
–Multi-currency accounts that allow businesses to hold, pay and receive funds in multiple currencies.
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5) Difficulty accessing Trade Finance
–SMEs often struggle to secure financing for international trade due to complex banking requirements.
–Flexible trade finance options, including invoice financing and supplier payment solutions.

Question 2

Factors effecting market conditions and foreign exchange

Answer 2

1) Central Bank Activites:
– Interest rates - Central banks adjust interest rates to control inflation and stimulate or slow down economic growth. Higher interest rates attract foreign investment, increasing demand for a currency.

2) Geopolitical Events:
–Regional Conflicts - Uncertainty can lead to the increase in demand of safe-haven currencies.
– Trade wars - Tarrifs and trade restrictions impact currency valuation by affecting trade balances and economic growth.

3) Political Events:
–Elections - Uncertainty around election outcomes can lead to volatility as markets speculate on potential policy changes.
–Government Stability - Political instability or corruption scandles weaken investor confidence. For example, Brexit referendum caused significant volitlity in GBP.

4) Commodity Prices:
– Commodity-linked currencies - Countries like Australia, Canada rely heavily on their commodities and therefore any change in those influence currency prices.