[Interview] Kees Veerman, Head of FX Desk, Ebury, Netherlands
Kees Veerman is Head of Desk, Foreign Exchange at Ebury, Netherlands. His interview with Africa Business Communities:
Would you please introduce Ebury?
Ebury is a currency specialist, providing access to almost all currencies, allowing your business to effectively operate in or trade with almost any country globally. We specialize in emerging market currency execution, hedging and analysis, in some of the world’s most illiquid currencies at market leading prices. Due to the volume of currency we trade, as well as our relationships with market makers and local banks around the world, we not only consistently offer best prices but also best access to liquidity in these markets, enabling clients to process large volume trades confidently.
In which industries does Ebury operate and who are your clients?
As a foreign currency specialist, Ebury enables over 6,000 organisations to trade and transact globally with access to 140 currencies. Ebury specifically caters for the needs of international small and medium-sized enterprises (SMEs) who often lack the time and resources to strategically manage their currency needs. Our clients include importers and exporters of food, flowers and consumer goods, freight forwarding companies, real estate firms, service providers and charities.
What are the USPs of your business?
Ebury is a currency specialist. This means that we are able to capitalise on investments in financial technology, an extensive network of banks and full time currency analysts. This allows us to quote more competitive rates and operate without transaction fees. Due to our excellent relationships with major liquidity providers, we can provide access to over 140 currencies including many African currencies. Every client has an assigned currency specialist who can inform them about real-time market conditions and alert them when adverse movements are expected. We can also provide SMEs with hedging products that major banks reserve for their corporate clients or do not offer at all.
Why was Ebury started?
Many SMEs do not get the personal service and tailored products they need to stay risk free and compete internationally with larger corporates. Many large banks do not consider this segment profitable, so custom solutions and competitive rates are beyond their reach. Our founders discovered a gap in the market after banks increasingly automated their front office processes and failed to provide entrepreneurs with the personal support they need for their first steps in international business. While many banks use technology to increase front office automation, Ebury uses proprietary technology to automate back office processes, allowing the brokers to focus on our clients’ individual needs instead.
What can be done by entrepreneurs and government to stimulate the business environment in Holland?
The largest challenge for Dutch SMEs is access to finance. Holland needs more initiatives like that of Dutch Minister of Economic Affairs Henk Kamp who is trying to get pension funds to invest in Dutch businesses. If the banking sector is not going to increase funding for SMEs, alternative finance could be the solution. Crowdfunding has grown, but the scale of these initiatives is limited under current regulation. Increased government regulation of alternative finance providers will eventually allow them to grow beyond their current boundaries and provide a real alternative for SMEs. In the meantime we are able to help importers finance their purchases with trade finance.
How would you evaluate doing business in/with Africa?
Relationships are key in (international) trade, but in Africa this is more important than anywhere else. Emerging markets also have a way of finding their own solutions to challenges. A well-established banking system and an abundance of regulation can hinder the adoption of new financial technology in the Netherlands. Leapfrogging can put Africa ahead in FinTech initiatives - there have been many successful examples already. We see many possibilities as more and more European businesses and organisations are trading with Africa. These include importers, exporters and institutions looking for investment opportunities. However, there are challenges too. While trading in dollars is expensive for both parties, paying in volatile local currencies exposes businesses to FX risk. This is why we provide our clients who do business in Africa with tailor made hedging solutions.
What can you say about the targets, plans and ambitions of Ebury for the rest of 2015?
Ebury is expanding rapidly. We currently have offices in London, Madrid, Malaga, Amsterdam and New York and recently opened an office in Warsaw. We also succeeded in getting a license for South Africa which will ultimately result in an office there. Challenges of SMEs are the same the world over and we will be entering new markets as long as there are international SMEs who need personal financial solutions.
Do you believe Social Media and the Internet to be a plus to the business environment, as it applies to your industry?
It is hard to imagine international business without the Internet. It can give small businesses a real international presence. Previously, international entrepreneurs had to rely solely on distributors and agents and building these networks took a long time. The Internet now connects small businesses across the globe with potential trading partners. I think social media is a great way to connect or re-connect communities that would otherwise be fragmented due to large distances or cultural differences with their immediate environment. It also helps connect entrepreneurs who work in certain industries or who face mutual challenges. Our managers and analysts regularly share articles via their social networks and contribute to discussions about challenges in various countries and industries. Contributing to public opinion and sharing business insight helps build our image as a thought leader in international trade and transactions. We also use social media as part of our content marketing strategy. By sharing best practices and market insight, we build relationships with current clients and prospects.
What expectations do you have for the Dutch economy in the second half of 2015?
The Dutch economy depends heavily on international trade and due to its position in Europe and its history as a trading nation, it is heavily dependent on the rest of the Eurozone. The Eurozone has performed quite well despite the recent Greek debt crisis. After the launch of the European Central Bank’s quantitative easing programme in March, the exchange rate of the Euro has dropped and inflation has picked up. We expect further weakening of the Euro throughout 2016. This is good for Dutch exports, but can present a challenge for importers. Many of our clients who pay their suppliers in dollars are hedging their dollar positions to protect them against further Euro depreciation.
Which African countries will perform best in 2015?
Ghana – The IMF mission was a success, the extraordinarily cheap Cedi is good for exports and we expect a good cocoa crop this year. Also, cocoa prices are bucking the general downward trend in commodities and are up over 10% YTD.
Botswana – Botswana’s main exports are diamonds and tourism, neither of which are particularly affected by the collapse in commodity prices. The government debt is very small and with a huge surplus on the current account the country is hardly at risk should interest rates increase.
South Africa - The Rand is relatively cheap for buyers in the Eurozone which is good for South African exports. As a net importer of oil, South Africa has benefited from the decline in oil prices which improved its balance of trade. Also, foreign exchange reserves have increased significantly in the past few years.
For further business interests, contact Kees Verman
Africa Business Communities is conducting a series of interviews with CEOs and high-end professionals in Africa. Are you interested in an interview? Please send an e-mail to Andrea Ayemoba: andrea@africabusinesscommunities.com