Business Leader recently spoke with Stuart Gregory – the Head of Business at TransferWise, a fintech company based in the UK, that is changing the way money is being transferred across the world.
TransferWise believes that sending money should be low cost, easy and fast, and with major companies using their platform day-to-day, the business has experienced exponential growth since it was founded in 2011.
Stuart talks to Business Leader about how the UK has emerged as a fintech giant, as well as TransferWise’s own global mission to change money transfers.
How does TransferWise compare to the traditional banking model?
The main difference with TransferWise is that we make sure payments remain local, which has let us lower the cost of international transfers and also speed the process up. Local bank transfers and payments work pretty efficiently, and so we have been able to join up with all these local banks to create something that makes international payments faster at a lower cost than traditional banks.
If you send money abroad with TransferWise you’re really paying into a local account in your home country, and we pay out the required amount from an account in the destination country. As much as possible, money doesn’t have to cross borders.
Can you give me an overview of your day-to-day role?
I have been at TransferWise for two-and-a-half years and joined specifically with the objective of growing the company’s proposition to businesses. Whether it is helping them to pay invoices or move money between international accounts, my aim is to get them to use TransferWise to do this. A lot of my day-to-day is spent showing companies how it can help them grow and save money that they are wasting using traditional banks.
When I joined, we were working with just a few thousand businesses in total, but now we have 5000 new business customers every month. We have seen some rapid growth there.
How has the company grown since it was founded in 2011?
Today, we have over four million customers and transfer over £3bn every month. If you compare that with what they would be paying at a bank, our customers are saving around £3m at day.
The growth of the company has been incredible. When I joined, we were doing a quarter of the volume of business we do now and had under half the 1200 employees we have today. TransferWise has grown so fast. One of the most notable things about what we have achieved is that for both businesses and consumers, the growth has come from people recommending it – to friends, family and other businesses – 70% of our new users are acquired by word of mouth.
That has been driven off the back of us being very focused on making a product that is so much faster and cheaper to the other alternatives.
TransferWise has been described as the ‘Robin Hood’ of the banking market – why is that?
There isn’t a reason why money should cost so much to transfer internationally. We just don’t understand why it would cost 3 or 5% to send £1000 to Europe through your bank. Our view is that if you think about international money transfers, eventually it should be almost free. We should be able to move money internationally as easily and quickly as it is to do nationally.
Domestic bank transfers in the UK are completely free using your bank – they are also almost instant. We do not see a reason why international transfers should be any different – that has been our mentality.
What are the future plans for the business?
We launched the borderless account for businesses in May 2017 and for consumers earlier this year. This allowed business to send and receive money internationally through TransferWise, as well as hold money in different currencies. We also have a consumer debit card that lets them spend money internationally, with one for businesses coming soon.
The second phase of TransferWise is about looking into making money ‘borderless’. We want customers to be able to receive money from international clients and to pay online invoices with a debit card, for example. That is a big area of focus for us. We are at a tipping point, where TransferWise is shifting from challenging some of the norms around international banking, and we are becoming a standard within the sector for what transparency should look like. That is why we are seeing the banks starting to work with us now, such as BPCE in France.
Regarding fintech, how does the UK compare to the rest of Europe and the USA?
The great thing about the UK is that the regulators within the sector are very progressive, which has allowed flexibility around the tech platforms a business can use.
For us at TransferWise, one of the big milestones we hit earlier this year was becoming the first non-bank in the world to have direct access to the Fastest Payment Scheme in the UK, and have a settlement account with the Bank of England. A central bank, giving a fintech business, TransferWise, access to their banking infrastructure – we are essentially the first non-bank in the world access to a central bank account.
This kind of innovation is why many fintech companies are choosing to set up in the UK and why other regulators around the world are looking at how the UK operates. As we expand internationally, we speak to regulators in different countries and explain to them what we do, they are very interested in learning from us about how regulators in the UK work with us to help us grow.
Have you considered moving your London office because of Brexit?
We’re committed to our London office and will not moving our HQ – we have huge talent and 200 people here. For a company like TransferWise, the main issue is licensing in the EU, so it’s looking likely we’ll have to set up an additional office to maintain a license somewhere in Europe.
The impact it has on smaller fintech companies will be a lot more pronounced. London will lose some of the benefits we have enjoyed by being part of the European market, which is why we have been vocal in our concerns about Brexit and we will be doing all that we can to make it work.