Author: Kevin Moore, Head of Treasury, Enhance Jersey
With fintech continuing to shape the global financial landscape, firms and individuals alike have a whole new range of tools at their disposal to get better results at lower prices. Technology has opened up incredibly powerful services to smaller businesses, and we are seeing more and more wealth managers turning to fintech firms to help them carry out their fiduciary responsibilities in a way that’s more transparent and cost-effective for their clients.
Having worked in the trust and fiduciary industry for over ten years, Enhance saw the challenges companies working in the fiduciary sector were facing and the benefits that could be gained through the use of platform technology. An area where we are clearly seeing the positives of fintech’s role to supplement and complement financial services is where professional trustees undertake foreign exchange transactions. Here technology has brought transparency to what was previously quite an unclear market, driving down prices for clients in the process.
Before the advent of fintech a market intermediary requiring FX, such as a trustee, would turn to the bank holding the account of the entity they were administering to get a quote and execute the trade. While the trustee might have shopped around to see if they could get preferential terms elsewhere, they still didn’t have access to the data which would let them assess the reasonableness of any of those rates in the first place.
This led Enhance to partner with a leading fintech company in 2014 to form a new, first-of-its-kind service platform in Jersey, Enhancefx. Whilst transparency and competitive exchange rates were available from a number of platforms we wanted to look beyond these issues and create a platform that addressed the other common challenges, including a lack of flexibility and management tools, the costs of additional setups, the lack of a central point of contact and communications to track the status of payments, alongside restrictive reporting capabilities and the lack of an offshore banking facility.
For anybody managing wealth in a fiduciary capacity, transparency for clients and having a trusted adviser whose expertise you can rely on are central. By providing an holistic, integrated FX platform Enhancefx now provides trustees with complete management control over currency and multiple payments, reducing the time and cost of making transfers, alongside a clear audit trail, and a single point of contact should they have any questions.
By addressing foreign exchange transparency and providing control over the payment flow Enhancefx has addressed significant issues for the fiduciary sector. This has clearly tapped on a nerve which has reverberated globally, with the platform opening up across 6 new jurisdictions since its foundation 18 months ago.
Spotting such openings in the market and finding ways to automate processes and maximise the use of data is at the heart of successful fintech solutions. These developments are radically shifting the profitability of the market in favour of clients, presenting challenges and opportunities alike for the whole financial sector.