SMEs back FinTech sector citing 'better service' than banks
9 out of 10 (87%) UK SMEs using a FinTech ‘specialist for FX rate their service as better than banks
Banks share of FX market under threat as...
- 9 out of 10 (87%) UK SMEs using a FinTech ‘specialist’ for FX rate their service as better than banks
- Banks’ share of FX market under threat as FinTech boom gives rise to specialist providers
- 94 percent of UK SMEs using a specialist FX provider say their proposition is more tailored to their business compared to the banks
- 85 percent of UK SMEs using a specialist FX provider believe they understand their business better than their bank
- Whilst 88 percent say pricing of specialist FX providers is more transparent than banks
UK banks are facing a fresh set of challenges from the FinTech sector with nine of out ten SMEs (87 percent) stating that when it comes to FX, they receive better service from the FinTech sector’s specialist providers, according to the latest research by currency experts, World First.
The survey of over 1,000 senior decision makers at UK SMEs also found that those using specialist providers felt they demonstrated a better understanding of their business’s needs (85 percent), delivered a more tailored proposition (94 percent) and provided greater transparency on fees (88 percent), suggesting that major banks are coming under increasing pressure from more specialist and nimbler technology-led alternatives.
World First’s new report – Don’t Bank On It: The FinTech FX – also reveals that of those UK SMEs using a specialist provider for their international currency transfers, 89 percent would recommend their services to another business compared with just 35 percent of those using a bank.
‘Worrying’ lack of awareness
Despite the high satisfaction amongst SMEs using a specialist FX provider for international payments, lack of awareness remains a major issue with almost a third (31 percent) completely unaware of any providers outside their traditional banks.
Worryingly, 30 percent of SMEs stated instances where their bank had been unable to meet their FX requirements, yet 88% percent of those affected didn’t switch to an alternative provider.
With sterling currently down 10 percent against the euro since December, and further volatility likely before and after the EU referendum result in June, having an effective currency strategy has become increasingly important. Despite this, 70 percent of those surveyed felt their business could be better prepared to protect themselves against exchange rate fluctuations.
Jonathan Quin, CEO and Co-Founder of World First said: “Whilst SMEs have historically had to rely on the big banks for any sort of financial service, genuine innovation and technological development from the FinTech sector has given rise to a wide range of truly compelling alternatives. This new breed of specialist providers are often better placed to serve the needs of SMEs than traditional banks, offering greater flexibility for the user, more transparent pricing and, ultimately, better value.
“Currency market volatility is ever present, and with the EU referendum in June and the US election later in the year, is likely to continue. Therefore, much more must be done to raise awareness of currency risks to SMEs, as well as the benefits of using FinTech specialist providers. This is particularly true for the mini-multinationals targeting business growth through international expansion. Until this awareness gap is addressed, UK SMEs – the engine of our economy – may be exposed to additional risk and cost, which could impact on them achieving their potential.”
The recent report, Landscaping UK Fintech, by EY and commissioned by UK Trade & Investment estimated that the market size by revenue of the UK FinTech market for online payments and FX is £1.9bn. World First data also shows that the average UK SME trading overseas made international transfers to the value of £256,700 last year.
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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.