The Silicon Review
“Our aim is always to discover existing pain points and build innovative solutions to remove them.”
Cross border payments typically take longer and are more expensive to process than local payments. There is normally a need for more information to enable the transmission of international payments than would be used within a local payment. In addition to beneficiary information such as account number and bank details, the beneficiary’s bank BIC (Business Identifier Code) or IBAN (International Bank Account Number) may be essential to ensure correct routing of an international payment instruction.
In light of the foregoing, we’re pleased to present Banking Circle.
Banking Circle is a next-generation provider of mission-critical financial services infrastructure leading the rise of a super correspondent banking network. The company empowers financial institutions to support customers’ trading ambitions – domestic and global – whilst reducing risk and the operational cost of transactions. It was founded in 2016 by Anders la Cour and Laust Bertelsen with offices currently in London, Copenhagen, Luxembourg, Amsterdam, Munich, and Berlin.
In conversation with Anders la Cour, Banking Circle Co-founder and Co-CEO
Q. What sets Banking Circle apart from other banking institutions? How did you intend to keep it different than the existing banking firms in the industry?
Becoming a member of Banking Circle, financial institutions can offer their customers banking services – from local and cross border payments to accounts, loans, and receivables financing – to help them trade domestically and globally – efficiently and at low cost. Importantly, the company can help its customers improve cash flow through enhanced speed of settlement whilst remaining fully compliant with financial regulation.
We launched Banking Circle specifically to help businesses transact more efficiently – opening up international trade by providing fast and affordable payment solutions for businesses previously unable to expand internationally due to the high cost of cross border payments.
We continue with this aim by giving FinTech businesses the unique ability to offer their merchants the facility to pay suppliers and partners directly from a web interface delivered by them, in their name, without the need to invest in in-house infrastructure. This is done without any loss of time or cash, empowering global trade for even the smallest business.
Unlike other providers, we do not repurpose existing legacy solutions. Instead, we carry out detailed research to identify failings in the current offering and build solutions from the ground up, with these current market needs right at the heart. This ensures our solutions are able to better serve businesses. Our aim is always to discover existing pain points and build innovative solutions to remove them.
Banking Circle is empowering financial institutions to support their customers’ international trading ambitions, without the need for multiple banking relationships, whilst reducing risk and the operational cost of transactions.
Q. How do you help your clients focus on financial inclusion for their firms?
Businesses of all sizes, but especially the smaller, younger firms, can find themselves held hostage by difficulties with payments and cash flow and this limits them achieving their full potential. Yet, despite its importance to business success, the area of banking and payments is often left out of business planning. Transfers can be too slow and expensive, and without access to additional funds, many SMEs struggle and potentially fail. Traditional banks have been unable to provide flexible, fast and low-cost solutions, which leaves many SMEs financially excluded.
In 2012, together with Laust Bertelsen, I identified a way to address the time and cost challenges of B2B cross border payments. In 2016, we launched Banking Circle (then Saxo Payments) to provide access to faster, cheaper payments locally and internationally. Since then, we have continued to build solutions that truly help businesses of all sizes to compete and prosper. Our suite of innovative Banking Circle solutions is increasing financial inclusion by giving financial institutions the ability to offer previously excluded businesses access to affordable, flexible, low-cost, real-time payment, banking, and lending solutions.
Q. What kind of services does Banking Circle offer to financial institutions?
Through Banking Circle, Banks and Financial Tech businesses can provide customers with accounts in 25+ currencies. Financial institutions can issue multi-currency physical and virtual IBANs for customers in multiple jurisdictions. Accounts deliver full transparency and faster settlement, enabling Financial Institutions to offer merchant customers a full transactional service.
Banking Circle Virtual IBAN enables financial institutions to give clients their own virtual IBANs, negating the need for several banking relationships. As a result, improvements are experienced across payment acceptance, screening time, reconciliation/settlement times, and customer experience. Payments are made and received at a low cost per transaction, delivering a valuable competitive advantage previously unavailable to smaller firms.
Q. What benefits do you offer to firms that partner with Banking Circle?
Banking Circle underpins the service propositions of a wide spectrum of financial institutions including FinTechs and banks, allowing them to focus resources on their own customer relationships.
Membership of Banking Circle gives financial institutions the geographic reach and access to the markets their customers want to trade in, underpinned by a financial utility that enables global payments and settlements through a global account infrastructure. We also offer global FX capability. And it’s all delivered through a secure and compliant banking platform.
For banks, Banking Circle offers an add-on to the correspondent banking model. For Financial Tech businesses, Banking Circle offers an alternative for managing multiple banking relationships in different regions. Through Banking Circle, financial institutions can provide their customers with faster, more affordable and flexible payments, accounts, and loans.
Q. What are the elements that aid Banking Circle Outshine Competition?
We recently commissioned a study of 500+ SMEs to uncover pain points they experience in accessing funding through traditional lenders. In response, we built two propositions; Banking Circle Cash Advance and Banking Circle Instant Settlement.
These innovative solutions provide financial institutions with the capability to offer merchant customers a fast, transparent, flexible, low-cost, and easy-to-manage loan solution. Where once smaller businesses were unable to achieve global ambitions due to a lack of necessary funds, Banking Circle is improving financial inclusion by giving financial institutions the ability to offer SMEs fast access to loans with flexible repayment options.
Banking Circle Instant Settlement enables PSPs to offer their merchants instant access to cash, while they wait for payment from card schemes or marketplaces – taking up to 90 days. Banking Circle Instant Settlement provides instant settlement for receivables due, giving Merchants access to the cash flow they need to run their business effectively.
Q. Banking Circle: Building a Financial Ecosystem
Through Banking Circle we have championed a whole new ecosystem in the financial sector – that of the ‘financial utility’. As a financial utility, Banking Circle is not in competition with banks or Financial Tech businesses; instead, it underpins their proposition.
SMEs with access to suitable financial solutions are better-placed to increase internationalisation and exports, helping to support the diversification and resilience of the wider economy, leading to improved social integration and community cohesion.
The Enterprise Europe Network recently reported that 65 percent of small businesses expect to increase their turnover and 85 percent expect to create or preserve jobs in the next year. However, these ambitious companies need financial services providers equally committed to innovation and growth. Despite the EU recognising the importance of financial inclusion and bringing in policies and programmes to help deliver better access to SME finance, many SMEs are yet to reap the benefits.
The industry is at an inflection point. To move forward, we believe that all ecosystem participants must continue the conversation and work together, to build collaborative models and solutions that can fit this diverse and disparate market. If they can, it will help build a larger marketplace from which providers old and new can benefit. We have seen evidence that there are significant gains to be made by all participants. But rather than relying on top-down directives from state institutions, this needs to be led by forward-thinking participants, who can find and build accessible and inclusive solutions from the bottom up.
Q. Where do you see Banking Circle in a couple of years from now?
In September 2018, EQT VIII and EQT Ventures acquired Banking Circle, in partnership with Banking Circle’s founders and other co-investors. The 12 months since the acquisition was confirmed has seen many developments and changes for the financial utility, as well as impressive growth. And our goal is to continue on that aggressive path of growth over the next 3-5 years.
This will be achieved both through increased customer acquisition as well as through the delivery of new products and services. With the backing of EQT, we have been able to invest heavily in new solutions, improvements to existing products, and new technology. In addition, we have had the resources to carry out a number of industry research studies, to help provide the entire industry with an up to date picture of the market and how we can work together in an ecosystem model to improve financial inclusion for SMEs and boost the economy as a result.
We have also taken significant steps forward in our aim of delivering inclusive, accessible solutions for businesses of all sizes around the world. And we have won a huge number of awards for our ground-breaking solutions and service to businesses.
With such exciting plans in the pipeline, including opening a number of new international offices and expanding our team, Banking Circle is excited to build our presence across many more international regions.
The Dynamic Duo Behind Banking Circle
Anders la Cour, Co-founder/Co-CEO: Previously a technology and financial M&A lawyer at a tier-one law firm in Copenhagen, Anders is responsible for the day to day management of Banking Circle as well as investor relations.
Laust Bertelsen, Co-founder/Co-CEO: With more than 15 years in the financial services sector, in particular focusing on FX, Laust brings valuable currency market knowledge to the Banking Circle proposition.