Manufacturing SMEs say banks have let them down with currency transfers
Over half (52%) of SMEs in the manufacturing industry using a bank say their that bank does not understand their business FX needs
Two in five (39...
- Over half (52%) of SMEs in the manufacturing industry using a bank say their that bank does not understand their business’ FX needs
- Two in five (39%) of SMEs using a bank think fees are not clear when making cross border currency transfers
- 46% of SMEs using a bank for cross border currency transfers simply use the same as their current account provider
- Two thirds (67%) of SMEs would switch from their current bank provider if they knew of a credible alternative
- 91% of SMEs view international expansion as one of the best ways to grow their business highlighting the importance of FX and having a currency strategy
SMEs in the manufacturing industry with their sights set on international expansion – some of the UK’s next mini-multinationals – are being hindered by poor service, unclear fees and a lack of appropriate products when using banks for international currency transfers, according the latest research by currency expert World First.
The survey of over 1,000 senior decision makers at UK SMEs currently trading internationally found that of those in the manufacturing sector and using a bank for their currency transfers, over half (52%) felt their bank did not understand their FX needs. Furthermore, 39% of SMEs using a bank admitted to not understanding the charges applied to their international currency transfers, whilst two fifths stated that their bank fails to offer them a full range of appropriate products to help them manage their FX needs.
Additionally, over a third (35%) said they did not think their bank acted in their best interests when managing their FX needs.
The research also highlighted the global ambitions of many manufacturing-focussed SMEs with 91% stating that international expansion was one of the best ways to grow their business. The chasm between the international ambitions of SMEs and the suitability of banks to serve their FX needs – one of the most important factors in any business looking to grow internationally – is clearly a cause for concern. This is particularly true considering UK SMEs make a total of £78bn in international transfers annually.
Despite such obvious dissatisfaction, the vast majority (61%) of SMEs in manufacturing industry still use a bank for their international currency needs, with 46% of these saying that they simply use the same bank that they have their business’ current account with. However, two thirds (67%) of businesses also said that they would switch to an alternative if they knew of a credible provider.
Jonathan Quin, CEO of World First, said: "SMEs, the engine room of our economy, are telling us that they are not being served well by the banks when it comes to fulfilling their foreign currency needs. If we want UK businesses to achieve their potential, particularly those in the scale up phase and eyeing up international expansion, then we need to break down as many barriers for them as possible. More than half of businesses in our survey say that they have struggled to expand internationally and even if 1% of this is due to a lack of support from their FX provider, then this is simply too many.
“UK SMEs collectively transfer around £78bn a year, so there is now a huge responsibility on the industry and policy makers to better educate businesses on the benefits of a well-managed currency strategy. Not only can a currency strategy offer certainty and security in what is likely to be a volatile year in currency markets, there are also significant cost savings to be had. For instance, if all the UK’s SMEs saved just 1% on their annual FX bill, this would amount to a whopping £780m in total savings.”
The World First SME findings chime with a recent report by consumer watchdog, Which?, that highlighted how consumers are also being charged high fees when using a bank to transfer money abroad. When comparing costs, eight banks made up the bottom of the list as most expensive, with alternative providers coming top - offering the cheapest rates.
Ultium Cells LLC/Li-Cycle: Sustainable Battery Manufacturing
Ultium Cells LLC - a joint venture between General Motors and LG Energy Solutions - has announced its latest collaboration with Li-Cycle. Joining forces the two have set ambitions to expand recycling in North America, recycling up to 100% of the scrap materials in battery cell manufacturing
What is Ultium Cells LLC?
Announcing their partnership in December 2019, General Motors (GM) and LG Energy Solutions established Ultium Cells LLC with a mission to “ensure excellence of Battery Cell Manufacturing through implementation of best practices from each company to contribute [to the] expansion of a Zero Emission propulsion on a global scale.”
Who is Li-Cycle?
Founded in 2016, Li-Cycle leverages innovative solutions to address emerging and urgent challenges around the world.
As the use of Lithium-ion rechargeable batteries in automotive, industrial energy storage, and consumer electronic applications rises, Li-Cycle believes that “the world needs improved technology and supply chain innovations to better recycle these batteries, while also meeting the rapidly growing demand for critical and scarce battery-grade materials.”
Why are Ultium Cells LLC and Li-Cycle join forces?
By joining forces to expand the recycling of scrap materials in battery cell manufacturing in North America, the new recycling process will allow Ultium Cells LLC to recycle cobalt, nickel, lithium, graphite, copper, manganese and aluminum.
“95% of these materials can be used in the production of new batteries or for adjacent industries,” says GM, who explains that the new hydrometallurgical process emits 30% less greenhouse gases (GHGs) than traditional processes, minimising the environmental impact. Use of this process will begin later in the year (2021).
"Our combined efforts with Ultium Cells will be instrumental in redirecting battery manufacturing scrap from landfills and returning a substantial amount of valuable battery-grade materials back into the battery supply chain. This partnership is a critical step forward in advancing our proven lithium-ion resource recovery technology as a more sustainable alternative to mining, " said Ajay Kochhar, President, CEO and co-founder of Li-Cycle.
"GM's zero-waste initiative aims to divert more than 90% of its manufacturing waste from landfills and incineration globally by 2025. Now, we're going to work closely with Ultium Cells and Li-Cycle to help the industry get even better use out of the materials,” added Ken Morris, Vice President of Electric and Autonomous Vehicles, GM.
Since 2013, GM has recycled or reused 100% of the battery packs it has received from customers, with most current GM EVs repaired with refurbished packs.
"We strive to make more with less waste and energy expended. This is a crucial step in improving the sustainability of our components and manufacturing processes,” concluded Thomas Gallagher, Chief Operating Officer, Ultium Cells LLC.