Dublin technology start-up eyes Belfast operation as Matthew goes 'Trading Places'
DUBLIN financial technology start-up Assure Hedge, which helps big companies like banks to automate foreign exchange hedging processes and smaller firms to buffer against currency volatility, plans to have a presence in Belfast early in the new year.
And according to the company's Cookstown-born chief operations officer Matthew McAllister, the volatility in currency markets created around Brexit has led to "a soaring demand" for automated foreign exchange hedging products that enable businesses to de-risk and manage their future cash flow.
Queen's University computational maths and finance graduate McAllister enjoyed a lengthy stint as a successful financial market trader, specialising in the forex, equities, fixed income, energy and commodities markets.
He admits to choosing that career path after being influenced by the 1983 comedy film 'Trading Places' starring Dan Aykroyd and Eddie Murphy, which tells the story of an upper-class commodities broker and a homeless street hustler whose lives cross paths.
"I watched it as a kid and thought that's what I want to do, but 13 years is a long time at that game, and a chance meeting with Assure Hedge's founder Barry McCarthy in the digital hub in Dublin earlier this year has led me to this point," he said.
Assure Hedge is an end-to-end solution that allows businesses such as banks, brokers and corporate treasury departments to automate their full forex hedging processes and rapidly deliver tailor-made solutions.
"We replace the old ways of hedging, which often involve phones, faxes and other inefficient systems, with a simple product that can handle the entire hedging process. As a result, it becomes cost-effective for banks and brokers to serve even the smallest businesses that are faced with foreign exchange risk," Matthew says.
“Foreign exchange fluctuations can shock or even wipe out a small business, and as Brexit has demonstrated, there can be great volatility in currency markets. But Assure Hedge helps safeguard against this.”
It is thought that around $4 trillion trades hands in foreign exchange markets globally every day, so even a small ripple in one or more currencies can cause a tidal wave of buying and selling.
Assure Hedge - a provider of automated foreign exchange hedging technology - is a web-based service using innovative proprietary algorithms to reduce the effects of future currency price fluctuations. The company deploys institutional-grade technology, working with SMEs in Northern Ireland as well as large London-based institutions.
Assure Hedge is democratising hedging, offering small businesses and individuals hedging services usually only available to large corporates and multinationals.
Through the company's website (www.assurehedge.com), customers can generate a quote to hedge their foreign exchange exposure in seconds.
"By entering the amount of foreign exchange risk, how long they will have the risk for and the currency of the exposure, our product allows the customer to generate the quote that will protect their downside while also allowing them to profit from beneficial currency movements in their favour," added Matthew, who recently completed an Executive MBA at Smurfit Business School (UCD).
Although based in Dublin's financial quarter, Assure Hedge is doing business across the island and in Britain, and has received a boost from the UK Financial Conduct Authority (FCA) under a programme aimed at drawing financial technology under its regulatory oversight.
The regulator named it among 24 fintech companies taking part in its so-called "sandbox" programme, which allows businesses to test innovative products services in a "live environment" while ensuring customers remain protected.
Matthew added: "Assure Hedge is looking to raise €3 million to take it to the next stage, and intends to have a present in Belfast in 2018.
"There is a real demand right now for the type of service we provide - underlined by the fact that a recent survey of 450 Irish firms found that 45 per cent of businesses cited currency falls as their biggest concern, yet only 24 per cent of exporters had taken measures to reduce the exposure by hedging their foreign exchange risk.
“From May to October last year, sterling lost 18 per cent of its value against the euro. Fluctuations on this scale can seriously hit profitability and damage business competitiveness.
"Local companies - particularly from construction and manufacturing industries - should consider managing their exposure to currency fluctuations as we move closer to Brexit,” he said.