The world of currencies is definitely an interesting one. Not even talking about the elephant in the room, cryptocurrencies, which steal the show these days. But that’s tiny in our big wild world. Rather let’s talk about good old currencies. A world that goes far beyond the almighty US Dollar, the Euro, or the Great Britain Pound. What about emerging market currencies? There must be more to the eye than the sacrosaint USD… Fintech Review asked a few questions to Mike Robertson and Adrian Brown from AbbeyCross.
Tell us more about AbbeyCross. What is your elevator pitch?
AbbeyCross is the world’s first B2B marketplace to focus on improving the underlying market infrastructure for Emerging Market (“EM”) currencies. Our team has an acute understanding of the problems that beset the EM payments industry, with our collective experience of decades spent on bank trading desks, within transaction banking teams and across payment companies and associated industry bodies. By improving the underlying market infrastructure for EM currencies, our results are clear: Banks and payment providers have access to deeper liquidity for EM currencies and greater price transparency for all.
AbbeyCross is not anti-bank: we work alongside banks and payment providers to remove the inefficiencies in the market. Typically, banks and payment providers use one external vendor to outsource currencies. The payment banks will often contract one external vendor, which means there is a clear lack of price competition, limited transparency, and questionable market data.
Our offering enables banks and payment providers to achieve significant cost savings and reduced regulatory and compliance risk. We provide improved efficiencies for EM payments. This will provide greater transparency and improved market data for all. Therefore, banks and payment providers will be able to verify to their clients and regulators that they are offering a fair market price. Consequently, they are reducing their regulatory and compliance risk.
What is your background and what is the story behind the company?
Mike Robertson and Adrian Brown founded AbbeyCross.
Mike: I am the CEO and co-founder of AbbeyCross. I have 20 years’ experience in transactional banking. Until recently, I was at the Bank of America where, from 2013, I was responsible for the global cross-border transactional business. In that role and my previous roles at HSBC and at RBS, I grappled with the problems that banks and payment providers face in emerging markets. During my time there, I had a lot of conversations with my counterparties in banks across the world, including Adrian, which led to the idea of AbbeyCross being born. Adrian will delve into this.
Adrian is the COO and co-founder of AbbeyCross.
Adrian: I have 25 years’ experience in legal, banking and fintech roles. As a lawyer, I‘ve acted for banks and multinationals, advising on information technology, electronic commerce, FX, and payments-related matters. At RBS, I was Head of Transactional FX Products, focussing on FX pricing and risk management for payments and trade finance products. I have also been Head of Commercialisation for FX payments at BNP Paribas.
Mike and I met at the Royal Bank of Scotland in 2008. The idea for AbbeyCross came about over several years, as we discussed our shared experience and concerns about how banks manage deliverable EM currencies. We had both spent time, on behalf of banks, looking for better solutions and had concluded that there was an underlying, structural problem with the market that no individual bank, or specialist vendor, could solve. As this conversation developed, we decided to solve the problem ourselves, setting up AbbeyCross as a result.
What are the main trends in EM currencies?
The key trend is the growth in trading volumes between developed markets or the OECD countries and Emerging Markets. This is being driven by the shift in international trade from west to east and from north to south. As a consequence, FX volumes in these currency pairs have grown significantly. In some cases, they account for over 25% of a payments bank’s trading book.
Emerging Markets are also driving the transformation to digital payments as local banks, unimpeded by legacy systems, adopt newer technologies. However, this is largely for domestic payments. The cross-border flow is not yet digital and AbbeyCross is seeking to address this.
How is AbbeyCross responding to these trends?
AbbeyCross enables banks and payment providers to achieve significant cost savings and reduced regulatory and compliance risk. We are committed to making money transfers for Emerging Market currencies smoother and cheaper for individuals making remittances, corporates, NGOs, charities, and governments worldwide.
Any innovation in fintech more broadly that you are really excited about?
What excites us is seeing what a wider adoption of blockchain technologies will mean for settlement processes. Distributed ledger logic does make sense but how banks, heavily regulated and hamstrung somewhat because of this, can make this work will be interesting. And obviously, CBDCs play into this narrative, so that too will be intriguing.