Instructions to students: All questions are compulsory

Materials:

Dictionaries are not permitted.

TASK: BS1005 Management Practice & Skills Assignment for business studies

Question : Case – Corey Stronghart at Swiftcap, 2017

Corey Stronghart couldn’t believe it. Just five years ago, Corey was finishing his undergraduate degree at Cass Business School. Now he was relaxing in the business class section of a flight from London to San Francisco. Corey was the Chief of Staff at Swiftcap, an innovative currency exchange “start-up” based in London. They had 100 employees who were graduates of the top universities in the UK and Europe, and who had joined Swiftcap in the four years since the founding in 2013.

The idea

The two founders of Swiftcap, Hamish and Hans, were old friends from university and had been always wanted to go into business together, and they hit upon an idea whilst enjoying a late-night kebab after a mutual friend’s stag night at a West London club. They recognised that in an era of increasing globalisation, emigration, and cross-border business, the high exchange fees that conventional banks charged represented a ripe opportunity for disruption. The two founders were an odd couple in many ways. Hamish was a self-professed quant nerd from North London, who was working at the time in data analytics at Google. In his free time he enjoyed railing against the establishment, voted Green, and enjoyed strategy board games like Diplomacy. He thrived on coming up with AND completing his own projects, and his managers let him have free rein over much of his work. Hans, on the other hand, was from Luxembourg, had worked in investment banking, and had built his career on his reputation for knowing everyone in his department, anticipating clients’ needs, and generally fostering a team atmosphere. Hans and Hamish were both on the flight too, sleeping soundly after swilling the free champagne and wine at dinner.

Swiftcap had an incredibly simple, genius premise: instead of actually moving money from a bank account in one country to a bank account in a different country, paying astronomical fees to the banks for the transaction, why not simply keep the money in the countries of origin, and match the loans locally? Hamish and Hans simply could not believe that no one had developed this business model when they conducted competitor research, and when they first pitched to potential investors, people’s jaws quite literally hung open. Both founders were pleased because they felt that their company was not only disrupting an industry, but helping ordinary people engage in financial transactions that were keeping families afloat and supporting the cosmopolitan flow of people and ideas they both envisioned as the bedrock of an innovative society.

Nonetheless the new company would be entering an extremely competitive field. There were many ways in the UK for travellers and companies to acquire foreign currency. The traditional operators were the big four UK banks – Barclays, HSBC, Lloyds, RBS. But this was a seemingly ever expanding sector, as the government sought to create a more competitive industry by supporting the development of new challenger banks. Recent arrivals included Santander, The Co-operative, TSB, Metro Bank, Virgin Money… Banks sell currency direct but will also support the traveller through the use of debit cards when abroad. Other competitors include The Post Office and specialist currency dealers such as; torfx; Purefx; currencies direct.com, worldfirst.com, travelex.co.uk, moneycorp.com, avatrade.com.