26 April 2017
What inspired you to create Covercy
During my time at Leverate, a leading foreign exchange(FX) technology provider, I saw how expensive the SWIFT international payments network could be. I knew that things could be done differently, so I decided to set up Covercy, in order to offer a better option for individuals, businesses and especially SMEs.
How did you manage to deal with the regulation process so quickly?
Covercy Europe Ltd. is indeed fully licensed and regulated by the FCA – the U Financial Conduct Authority. The main missions of the FCA and HMRC (the tax authority) are to protect customers and prevent money laundering. Bearing this in mind, we set up an expert team to establish systems and controls that would answer these requirements.
Errol Rudnick, who has over 30 years of experience in financial services, joined as our UK Managing Director. He scoured the market for the right compliance advisers, who enabled us to build the proper protocols to safeguard client funds and track suspicious activities. We then built our systems from the ground up, incorporating instant flagging and automated processes to handle all customer transactions correctly. Covercy was conceived and constructed as a lean, efficient operations, and once we had the necessary infrastructure in place we were ready to approach the FCA to receive our licence.
What enables Covercy to be more efficient than other comparable services?
We have created a digital system for processing transfers that provides more efficient pricing than banks are able to offer. In order to avoid costs such as paying for currency converions, SWIFT transactions, and associated bank and recipient fees, we operate a network of bank accounts in various countries to send and receive payments. By utilising local accounts for handling the ‘last mile’ transfer of each exchange to and from the customer, we are able to reduce the costs involved with traditional cross-boarder transfers. We only charge for the cost of the spread and our standard fee, which is approximately £9.
Who is your ideal client?
SMEs which need to pay suppliers in other countries form the core of our client base. This category covers everyone from textile importers to media buyers. However, we are now seeing increasing demand for our services from foreign property investors who need to transfer large amounts of money in a fast, secure and cost-efficient way.
What is your prediction for the future of Fintech?
20 years from now we will be living in a very different financial environment. Innovations in the Fintech industry are already fragmenting existing markets for financial services. Instead of huge banks offering poor service in numerous areas (deposits, payments, investments, advice and many others), we’re seeing specialist companies taking over niche markets with flexible, cutting-edge products.
This trend will lead to significant consolidation in the banking sector. Some major financial institutions will shut down altogether, and two decades from now there will be very few independent banks. Smart, agile Fintech companies will be able to dominate the market by offering fast efficient solutions across the board.