#40: FX & Global Payments Insights with Marc Racette CEO of PulseFX

[SPEAKER_02]: welcome to another episode of Fincher Piner. [SPEAKER_02]: This is Dave and Eli, where we talk about things that are FinTech and entrepreneurship related. [SPEAKER_02]: We're really excited today to have our guests Mark Reset on the podcast. [SPEAKER_02]: Welcome Mark, looking forward to learning more about you.

[SPEAKER_02]: Thanks. [SPEAKER_02]: On that note. [SPEAKER_02]: Yeah, absolutely. [SPEAKER_02]: Thanks for taking the time.

[SPEAKER_02]: You have been in FinTech specifically around payments effects for a while. [SPEAKER_02]: I know you're former employer for my effects, so it was a partner of ours a long time ago at merchant growth. [SPEAKER_02]: And I'm curious to hear your unique take on that. [SPEAKER_02]: industry with the business you're building today.

[SPEAKER_02]: Let's start by just getting to know you a little bit. [SPEAKER_02]: I want to understand your background, how did you come to get into this space in the first place? [SPEAKER_02]: Kind of give us the story. [SPEAKER_01]: Yeah, for sure.

[SPEAKER_01]: It's a great question. [SPEAKER_01]: Funny enough, a my journey into the foreign exchange realm, actually began working outside of Canada. [SPEAKER_01]: I had the opportunity to work alongside the Canadian government. [SPEAKER_01]: in China, specifically in Shanghai, and in Mexico, specifically in an area called [SPEAKER_01]: Essentially, my mandate was to help Canadian businesses expand into these international markets.

[SPEAKER_01]: I was playing matchmaker a little bit. [SPEAKER_01]: It was trying to find connections whether it's manufacturers or legal firms that could help businesses expand to immigration agencies, you name it. [SPEAKER_01]: My mandate was to facilitate international trade by helping these businesses continuously expand in foreign partnerships with these new markets. [SPEAKER_01]: With most government work, you know, there wasn't a lot of necessarily opportunity internationally.

[SPEAKER_01]: It was more so if I came back to Canada, but my passion was once more working with business owners that were operating internationally. [SPEAKER_01]: A lot of good friendships and great connections throughout those days. [SPEAKER_01]: And thankfully, one of them, when I made my way back to Toronto, connected me to a firm of foreign exchange, which is essentially the first foreign exchange for my work that, and I was able to essentially bring a lot of those connections, a client, and contact into the fold, and that's how I kind of hit the ground running.

[SPEAKER_01]: So to speak in this industry, you know, [SPEAKER_01]: It all started with needs, literally working internationally with these businesses in the markets and which, you know, I'm now helping them facilitate payments into. [SPEAKER_02]: And so why don't you just start by describing the firm effects business? [SPEAKER_02]: I know you're there for quite some time, almost a decade, and I guess what you learned over your time there, and then what was the kind of light bulb moment for you to start your own thing?

[SPEAKER_01]: Yeah, so a firm was more of an advisory focused firm compared to most of the players in the space of these days, which are more tech focused and what you would call the point of both more scalable models. [SPEAKER_01]: So you get a lot of companies out there that provided online only experience versus what firm a provider which was [SPEAKER_01]: every client that comes to the door, you're going to get an account manager that manager is going to know the ins and outs of your business, where FX payments might be happening, you know, if you're using a payment processor, if you're using a bank, if you're collecting payments via credit cards, you name it, we looked at every aspect of the business to see where the pain points were, and then we provided strategy to essentially help them mitigate those costs [SPEAKER_01]: did that, like you said, for close to a decade, and then we got bought out, unfortunately, by a company that wanted to come in and essentially move to that model, which was just an online only solution, where they're looking at potentially getting rid of a lot of the advisory aspect of what we did and looking at more solutions that were conducive to an online only interface.

[SPEAKER_01]: So, honestly, didn't work for a lot of the clients that I've worked with for years, didn't work a lot with the skillset I had, or I didn't work with my understanding of what the market wanted, which was not necessarily an online only portal. [SPEAKER_01]: But, you know, having more of that advisory, more of that guidance, you know, it's one thing to transfer to the foreign exchange realm to save a few dollars on a payment, but it's another to even find ways to take away the FX or foreign exchange variable from your business entirely, looking at strategies like hedging solutions, for example.

[SPEAKER_01]: So we wanted to bring that back to the forefront, so that's why we found a partner on the technology side that allowed us to scale online experience and the more of the self-service model, but by also bringing back that individual client relationship model where. [SPEAKER_01]: every single person would get an advisor that would learn the internet to their businesses and provide strategy that they could then either implement through us or even on their own. [SPEAKER_01]: And that's essentially where pulse effects came to fruition is combining the best of both worlds that tech forward approach with more of a human centric model.

[SPEAKER_00]: Most people know FSX trading this kind of companies like yours to be what they would use to hedge against huge fluctuations and currency and things like that. [SPEAKER_00]: What else is there to affect? [SPEAKER_00]: So if you were to give us a bit of an overview as to what companies like you guys do and how do you help these small businesses or would that be? [SPEAKER_01]: Yeah, for sure.

[SPEAKER_01]: So, I mean, on the strategy side, hedging is big. [SPEAKER_01]: I mean, there's a lot of opportunity for businesses to like, like I said before, almost eliminate that FX risk entirely. [SPEAKER_01]: But on, you know, some other avenues of where we find a lot of business. [SPEAKER_01]: There's a lot of ways that we can work alongside payment processors like Stripe, PayPal, you know, square, as well as ecommerce gateways like Amazon and Shopify fair, for example, to help those types of businesses that are using these systems mitigate a lot of the fees that are associated with these systems.

[SPEAKER_01]: company like Amazon, right? [SPEAKER_01]: Amazon is not necessarily a foreign exchange payment company. [SPEAKER_01]: So for a Canadian business selling on Amazon and generating U.S.

dollar revenue, if they were to just use Amazon to do the conversion back in the Canadian, they're getting charged pretty hefty fee compared to even if they use their own bank or [SPEAKER_01]: So we came up with essentially a solutions for those types of businesses where they could open up virtual collection accounts in the currency in which they're operating. [SPEAKER_01]: So it doesn't necessarily have to be for instance US dollars. [SPEAKER_01]: They could be selling their services due to Japan.

[SPEAKER_01]: We can open up and check these. [SPEAKER_01]: The end account to the UK, a British pound account. [SPEAKER_01]: You name it. [SPEAKER_01]: That allowed businesses to not necessarily get charged.

[SPEAKER_01]: These auto conversion fees. [SPEAKER_01]: That a lot of these payment processors would typically be charging. [SPEAKER_01]: So, that's opened up a whole new industry for us, specifically around the e-commerce space that's allowed us to streamline a lot of those payments and dramatically reduce fees. [SPEAKER_01]: And this is, you know, a space that originally a lot of people, you know, I would say almost take for granted that there's other options out there.

[SPEAKER_01]: But really, there's a lot of creative solutions out there. [SPEAKER_01]: And without digressing too much into the nuances, there's reasons why it's not even easy sometimes to even convert US dollar revenue on these platforms directly to Canadian dollar account. [SPEAKER_01]: And that's usually just because, you know, your US dollar revenue on Amazon. [SPEAKER_01]: They would prefer that to go to a U.

S. dollar account with a U.S. based or domicile bank.

[SPEAKER_01]: And essentially, without getting to the details, those are called ACH payments. [SPEAKER_01]: So it's free for them to do compared to a traditional wire. [SPEAKER_01]: Interesting. [SPEAKER_02]: So you've found that the sweet spot for a lot of companies, the ones that you have as customers [SPEAKER_02]: have self-service options, but have the advisor, you know, really know the business and advice.

[SPEAKER_02]: I'm curious as to whether you're starting to leverage AI and delivering that human or human-like experience, you know, at scale, is that bringing efficiency or changing how you can deliver that advice, given that it's taking in communications, doing analysis and coming back, like this is AI helping you with that? [SPEAKER_01]: Yeah, no, for sure. [SPEAKER_01]: So whenever we help clients with particular strategies, we, I mean, we have a documented list of questions that we typically go through, you know, we're able to once we essentially go through each question with the client come up with a series of answers for each one of them that allows us to ultimately then build out a strategy that works to them.

[SPEAKER_01]: So we do use AI for a portion of the overall construction of that. [SPEAKER_01]: Because that allows us to then come up with case studies based on previous clients that we've helped. [SPEAKER_01]: So it's really easy to explain it in a variety of different ways, especially when we're talking about hedging strategies for a lot of businesses, the idea of entering into a forward contract, or even more sophisticated entering into an options contract. [SPEAKER_01]: might not be, you know, the benefits or the solution might not be immediately understandable first.

[SPEAKER_01]: So it really helps us to create a variety of scenarios or explain things in different ways. [SPEAKER_01]: I should say that makes sense. [SPEAKER_00]: Mark, I'm not wondering if we were to step back a little bit with everything that's going on with Canada, U.S.

and so on, are most of the companies that you're serving in Canada still dealing mostly in the U.S. or have you seen a little bit of diversification starting to happen with that? [SPEAKER_01]: Yeah, I mean, most companies are still predominantly working with the U.

S. We are starting to see some clients reach out in terms of understanding what it's like to work in other markets. [SPEAKER_01]: But we haven't actually seen a huge update just yet and payments outside of the US market from clients that are predominantly simply dealing with the US. [SPEAKER_01]: So, Naomi, there's definitely been, you know, a lot of questions that come that way in terms of, you know, trying to figure out what everyone else is kind of doing in this space.

[SPEAKER_01]: Well, other questions people are asking the last few months alone have really brought a plethora of really unique and interesting questions to the forefront that we've never really been asked before. [SPEAKER_01]: So, I think there's definitely a lot of interesting generators right now, but we haven't quite seen it, you know, turn into much change just yet. [SPEAKER_00]: Yeah, I can imagine, like, payments being a big part of the hesitation people have. [SPEAKER_00]: Outside of, you know, protect themselves with, you know, for receipts, Wolves of credit insurance and things like that, the actual flow of funds and the different currencies and trying to understand all that.

[SPEAKER_00]: I guess could be pretty overwhelming for a small business. [SPEAKER_01]: Yeah, yeah. [SPEAKER_01]: It's, I mean, there's just so much going on these days. [SPEAKER_01]: I mean, you know, the currency markets are one thing.

[SPEAKER_01]: But, [SPEAKER_01]: I mean, just with the terror situation, just the political uncertainty, I'm both sides with a border with, you know, a change in leadership over the last year, if leaving a lot of businesses kind of scrambling to figure out what they can do to kind of eliminate some aspects of risk in this scenario, then you know, FX's, you know, have been one of those areas that I've been asked quite a bit about in particular. [SPEAKER_02]: Yeah, so Mark, you've been at this with pulse FX for just a little over a year now.

[SPEAKER_02]: How does one go about, you know, starting a business licorice? [SPEAKER_02]: How did you do it? [SPEAKER_02]: Did you bootstrap this thing? [SPEAKER_02]: Did you raise, see the capital?

[SPEAKER_02]: Give us a sense on how you're kind of structured, team size, that kind of stuff, how to where are you at and how do you get the thing going? [SPEAKER_01]: Yeah, a great question. [SPEAKER_01]: So we were thankfully able to bootstrap this. [SPEAKER_01]: How it played out is we had the essentially the opportunity to partner with a firm that provided a lot of the overlying infrastructure that powers our brokerage.

[SPEAKER_01]: So everything from the payment facilitation to the banking connection, still liquidity. [SPEAKER_01]: So we were able to build almost an advisory on top of that pre-existing infrastructure. [SPEAKER_01]: So that allowed us to hit the ground running with more of an out-of-the-box solution. [SPEAKER_01]: And thankfully this firm has, you know, that we've partnered with, is one of the leading financial technology infrastructure companies in the world when it comes to the FX space.

[SPEAKER_01]: So much better than what I've had access to honestly for the last decade both at the company I was with formerly and then the the brokerage with from a predominantly for that. [SPEAKER_01]: So a lot of new opportunity that allows hit the ground running, especially for new business segments and new clients that we could now go after, you know, there's just a much broader industry list that we could tackle. [SPEAKER_01]: largely this industry as well to being, you know, on the advisor side, largely relationship based, we have a lot of good clients over over the last year that, you know, I made the effort to figure out, you know.

[SPEAKER_01]: where me and a couple of co-founders went and that definitely helped for the most part. [SPEAKER_01]: But honestly, it's just been the fact that we've had, we've been able to kind of leverage our industry knowledge from the last decade to a whole new market segment. [SPEAKER_01]: That's from a lot of us to really grow this business and be where we're at today. [SPEAKER_02]: And it helped big as your team today.

[SPEAKER_01]: So right now, we have three co-founders. [SPEAKER_01]: We're onboarding another three people and we have a few outsourced staff. [SPEAKER_01]: So we have a marketing international tax advisor, that we work with quite a bit. [SPEAKER_01]: So the team itself is still pretty small, but the network around that of individuals we can call upon.

[SPEAKER_02]: is as ever expand a lean and mean that you know the number of employees not the the marker you know that you need to be chasing so I think that's awesome. [SPEAKER_02]: And it says what sounds like your own, like in terms of how you're using your own technology or building your own would be more on how you deliver that advice piece since you kind of have the back office covered with that partner firm and so it's kind of that AI piece I was talking about earlier and self-acted out the questioner is the understanding of the business like how do you you're kind of figuring out how you do that as as efficiently as possible.

[SPEAKER_02]: I'm sure you've got a bit of a tech stack with CRM and other things to help you do that. [SPEAKER_01]: Yeah, correct. [SPEAKER_01]: Yeah, and we actually, one of the best things we did in recent months is build out a custom CRM integration with dual cold air cable. [SPEAKER_01]: And that's allowed us to just connect to so many other systems, whether it's our marketing newsletter outreach to creating an inbound route-bound sales strategy or pipeline.

[SPEAKER_01]: It's been amazing. [SPEAKER_01]: And that helped us also scale quite a bit. [SPEAKER_02]: I think it's a really exciting time to be like building something new, right? [SPEAKER_02]: Because the amount of tools out there and then of course AI itself, like just being able to leverage that to the maximum, it's a really exciting time to be getting anything started.

[SPEAKER_02]: That was more common now, I'll pass it, you know, to Eli for next question. [SPEAKER_00]: No, I was just wondering in terms of the clients that you guys are serving, you're working with Canadian companies selling abroad, mostly to the US and elsewhere, but doesn't matter for you guys if it's a Canadian company or whether it's an American company trying to help them, but yeah, it would soon be very similar, right? [SPEAKER_01]: Yeah, so I mean, a great question. [SPEAKER_01]: So we predominantly started by just being able to service Canadian clients, but now we actually do have a partner in the US market as well.

[SPEAKER_01]: So we can onboard and help this old paid strategy and savings for both Canadian and US entities. [SPEAKER_01]: There's no limit to where we work around the world in terms of outbound payments, for example. [SPEAKER_01]: So the entities we work with in Canada and the US are dealing in 130 different currencies. [SPEAKER_01]: You name it.

[SPEAKER_01]: We probably have a solution in place through one of the partners we work with. [SPEAKER_00]: Cool. [SPEAKER_00]: I'm curious to understand a little bit more of this virtual account stuff in different markets, right? [SPEAKER_00]: Like you're saying, hey, because you're dealing in Japan or if you're dealing in Europe or whatever, we just open a virtual.

[SPEAKER_00]: What's the logistics with that? [SPEAKER_00]: And maybe, you know, I don't think you're going to have to give away some secret sauce here, but I assume not. [SPEAKER_00]: I assume there's a there's a concept behind it that's relatively easy to explain. [SPEAKER_01]: Yeah, so I mean, these accounts have been around for, you know, I would say the last few years now as a product that many banks will offer their MSB, so many service business clients, but essentially these accounts are called for actual iBans.

[SPEAKER_01]: It's an account that's [SPEAKER_01]: not necessarily a traditional bank account in the sense that you can walk into a branch, withdraw cash, or get a mortgage, for example, but they do allow for an account to be created with a bank. [SPEAKER_01]: I'll just use an example in the US where we're partnered with City Bank. [SPEAKER_01]: So it allows you to have an account with City Bank that is in your name. [SPEAKER_01]: This isn't a pool [SPEAKER_01]: And that's what allows it to play nice with payment processors and services like Amazon Shopify, for example, compared to a pool account, but yeah, depending on where we are in the world, we have partner banks that specifically can create these virtual events for most of the world, the part with, for instance, Barclays as the main provider.

[SPEAKER_01]: but city also offers a wide range of these as well. [SPEAKER_00]: And do these companies need to be in, they don't, I assume they don't need to be incorporated in that particular market. [SPEAKER_01]: Correct, yeah, they wouldn't need to be incorporated. [SPEAKER_01]: So the account would be tied to, if it's a Canadian company, it can tie to a Canadian entity.

[SPEAKER_01]: So I mean, one of the questions we always get asked, and you know, truth be told this isn't my era of expertise, but then when, from a tact perspective, and once more that goes back to the fact that where the business is located on, that's certainly where the account's located. [SPEAKER_02]: One of the core value props for FX firms is the cost of converting currency. [SPEAKER_02]: And that's been the case for a long time, you know, in my mind, I would have thought that [SPEAKER_02]: the delta between different offerings like would have shrunk by quite a bit by now and kind of really compressed.

[SPEAKER_02]: But is that the case or is there still a big difference between how badly you get dang different places and how are you able to compete with others in this particular dimension? [SPEAKER_01]: Yeah, no. [SPEAKER_01]: I mean, you know, surprisingly, the banks have not changed much. [SPEAKER_01]: If you're an early stage business, by early stage, honestly, I mean, less than five years old chances are, unless you, you know, aggressively negotiated with your bank within that time period.

[SPEAKER_01]: You're probably getting charged, you know, close to three and a half percent on most of your conversions, which is very close. [SPEAKER_01]: Yeah, very close to closer to rate, which would be, you know, once more if you were an individual going on vacation, let's just say to Mexico and you want to go to the bank and get some US dollars or Mexican pesos. [SPEAKER_01]: As a business, you would probably get the same rate as an individual coming off the street going into the bank.

[SPEAKER_01]: So that has not really changed on the new business side of things. [SPEAKER_01]: Even scaling up, I've seen large entities get charged quite significant margins from the bank largely because they feel like there's less competition perhaps on the larger side of things. [SPEAKER_01]: It really is all over the place, you know, when it comes to the bank. [SPEAKER_01]: Yeah, you know, I always use the example sometimes and this is really what it looks like on from things on my end, where it's just like, you know, there's a dark board with numbers and the banks just like, just throws it at the board and whatever hits.

[SPEAKER_01]: That's what you're getting charged like, I've seen businesses moving expensive, you know, $5,000 getting charged, maybe half a cent here and there. [SPEAKER_01]: then I've seen businesses get moving, you know, two to five million dollars getting charged close to two and a half percent. [SPEAKER_01]: It's so incredibly varied when it comes to the banks and the banks also make that a little more confusing by also sometimes having a tiered system where, you know, if you do a between, you know, zero to, you know, ten thousand dollars, you get one rate, [SPEAKER_01]: and you do 100 to 500 you get another.

[SPEAKER_01]: So some banks will have multiple tiers. [SPEAKER_01]: Maybe they'll have, you know, 5 to 10 tiers. [SPEAKER_01]: So some banks will have two tiers. [SPEAKER_01]: It's it's really all over the place.

[SPEAKER_01]: You know, I've always honestly really wanted to speak this home behind the scenes there. [SPEAKER_01]: I'll figure that out myself because it is it is a bit of a mess. [SPEAKER_01]: And even with the rise of online brokerages, I mean, the unfortunate reality is a lot of these online brokerages typically come into the market with more of a push on lower pricing, just to kind of get entry into the market, but then we've obviously seen slow creep up over time. [SPEAKER_01]: It's on the aspect of the online brokerage space.

[SPEAKER_01]: So, and that's because once more there's a lack of, you know, of that transparency and that contact with an advisor that's their necessarily to help look out for your best interests. [SPEAKER_01]: So, you know, you do see a bit of a, you know, a discord in that space as well. [SPEAKER_02]: And what's your approach to competing on this particular dimension? [SPEAKER_01]: Yeah, so I mean, honestly, we approach our client needs from an advisory first model.

[SPEAKER_01]: So basically, it's one thing that the look once more about where the rates are at, but let's also look a little bit about what the actual needs of your business are. [SPEAKER_01]: If you're selling a product in the US and your profit margin is slim, let's just say it's between one to five percent. [SPEAKER_01]: Now, if the rates move within that one to 5% realm between when you sell your product and when you actually convert it back to operational costs. [SPEAKER_01]: You know, you could be no longer profitable or even losing money, so, you know, it's one thing to, you know, try to, you know, shave a couple percent off, you know, or like, you know, half a cent for instance off that rate, but it's another to find a way to provide strategy first and foremost to eliminate that risk entirely.

[SPEAKER_01]: So we start there and then we go and we do obviously a comparison as well, too, just to see kind of where the rates are at. [SPEAKER_01]: with their bank or whichever kind of approach they're using just to see if there's some way we can also help improve on the spreads there. [SPEAKER_01]: But generally we do try to start with the strategy first approach because that's really what we believe will move the dial in a business more so than trying to save a couple hundred bucks on a transaction.

[SPEAKER_01]: It's looking at, okay, where are all the actual risks in your business? [SPEAKER_01]: Where are the pain points on the [SPEAKER_01]: and at the end of the day, help you keep a little more extra money in your pocket. [SPEAKER_01]: And that's generally our approach. [SPEAKER_00]: I think most people that deal with the bank and just take whatever rate is because of the they have like maybe a lack of trust in smaller things as smaller other providers may fintech or online brokerages or so on.

[SPEAKER_00]: So I think having a human to talk to and actually be able to strategize with probably the right move here. [SPEAKER_00]: So that's a good differentiator you guys [SPEAKER_01]: Yeah, it's been amazing for the business model with the last couple of years in the shift towards more online, it's something that people just keep coming back to. [SPEAKER_02]: This might sound like a bit of a dumb question, but, you know, it's a fintech podcast we talk about the nuts and bolts of how financial services are delivered and the technology that facilitates that and I'm guessing that the way that money moves globally.

[SPEAKER_02]: I mean, these are, there's nothing new here. [SPEAKER_02]: These are legacy systems decades old, I imagine. [SPEAKER_02]: Can you describe just step by step, how does money actually move? [SPEAKER_02]: And is that changing and just give us a glimpse under the hood of the financial system in this regard?

[SPEAKER_01]: Yeah, and for sure, a great question. [SPEAKER_01]: So largely the infrastructure in place is still somewhat antiquated, we're still relying on essentially the bank processing times and overall swift payment networks, which is the network used for essentially wiring [SPEAKER_01]: We are starting to see more domestic payment rails getting set up. [SPEAKER_01]: So in Canada, we have, you know, EFT transfers in the U.S.

[SPEAKER_01]: There's something called ACH and, you know, UK. [SPEAKER_01]: There's something called FPS in Europe and Europe and Europe. [SPEAKER_01]: These are more domestic payment rails which are cheaper, both incoming and outbound for payment processing because they're automated. [SPEAKER_01]: So I'll just use ACH, for example, because it's the most, the name itself is going to speak for, but ACH stands for Automated Clearing House.

[SPEAKER_01]: So I compared to a traditional swift wire, which would not have to be reviewed by someone at a bank before it gets sent out. [SPEAKER_01]: And ACH transfers something that can automatically get uploaded in a batch, then process in batches. [SPEAKER_01]: to vendors all over the world. [SPEAKER_01]: So you're starting to see a little more movement in terms of pain and rills.

[SPEAKER_01]: Still though, that's limited to domestic payments. [SPEAKER_01]: So the international payment space is still a tough not to crack. [SPEAKER_01]: We are starting to see the rise now of infrastructure such as stable coins for facilitation of payment in various places around the world for [SPEAKER_01]: Canadian to U.S.

transfers, for example, we're starting to see a little more people looking to what's called USD or USDT. [SPEAKER_01]: Still, that's still being limited to regulatory issues on both sides of the border, also around the world. [SPEAKER_01]: A lot of these banks, you know, I think almost kind of profit a little bit off a bit of a slowdown in the payment of a facilitation of funds. [SPEAKER_01]: So there's still a little bit of a sticking point there where we will need to see more regular and so we changes on that I think the government level to open up banking a little bit, especially in Canada, where we have...

[SPEAKER_01]: very poor open banking framework compared to the US. [SPEAKER_01]: So, still a lot of, unfortunately, legacy technology that's powering the so-called space and that kind of limits a lot of the capabilities of fintags or firms at this point in time to really move the dial forward in the industry, but we are starting to see more and more push on a regulatory level as well as ideas come to [SPEAKER_02]: What needs to change regulatory wise for blockchain based tech to take hold in a more meaningful way?

[SPEAKER_02]: Like what, I'm not actually sure, you know, why more can't move into the stable coin realm, but this is also not my area of expertise, what's slowing things down there? [SPEAKER_01]: Yeah, for sure. [SPEAKER_01]: I mean, and I'll be honest, it's not entirely my area of expertise, either. [SPEAKER_01]: But it's largely just, you know, from what I understand, just this lack of push on a regulatory level, to force banks to open up a little bit to the new technology, new payment rails, blockchain solutions, [SPEAKER_01]: once more being so largely still a functioning off legacy systems that go back, you know, 20, 30, 40, 50 years in some capacities and just being modelistic organizations, especially in Canada, there's just not a whole lot of speed associated with the adoption of new technology or changes.

[SPEAKER_01]: But we are starting to see a lot more happen in the US and just with the open banking framework, there's a lot of, you know, neo-type banks opening up and have a lot more solutions for clients that have just literally been hard for banking candidates. [SPEAKER_02]: So it's... [SPEAKER_02]: It sounds like because the bank's haven't integrated it in a way to make it easy, you know, click of a button type experience as a result just moving that money out into a crypto wallet and in and out and back into a bank in another country or something is just there's just a logistical pain in the assets just unrealistic for the treasury functions of most businesses [SPEAKER_00]: Yeah, it's probably the marketplace component to it, right?

[SPEAKER_00]: Like it, you know, it's great if the US passes it, but if they can't send it to Canada because the regulations here don't allow for it and it's limited and then the next country and next country is almost there to be like, a lot of country need to buy in to make this actually relevant at all. [SPEAKER_01]: Yeah, I mean, that's definitely a point too. [SPEAKER_01]: I mean, yeah, from country to country, you'll have different [SPEAKER_01]: Yeah, and that's, well, does that have any impact on on your industry?

[SPEAKER_01]: It definitely will. [SPEAKER_01]: Once more, I see this as still some years away, just because once more, they have the model of the nature of the Canadian banking industry. [SPEAKER_01]: Let's be seeing the on dramatic overhaul and change. [SPEAKER_01]: I think it's just going to be a slow adoption period, although we are starting to see more and more pressure.

[SPEAKER_01]: as our neighbor, and to the south, the US there is looking to progress things much faster. [SPEAKER_01]: If Canada doesn't get on board soon, then we might be reliant once more on utilizing US payment rails in these spaces rather than creating our own digital currency or digital asset that we can utilize type of Canadian dollar. [SPEAKER_01]: So for, you know, in the current climate with more and more businesses as well as government agencies trying to distance themselves from being so relying on the US.

[SPEAKER_01]: You know, that can hopefully speed things up a little bit. [SPEAKER_01]: You know, we started to see once more more people just. [SPEAKER_01]: want to differentiate themselves from the US, I suspect back in health, but I believe it's still a little bit of a ways away, just at least in Canada. [SPEAKER_02]: Yeah, and it seems to me that crypto rather than being a threat for your business market, that it would just be another arrow and your quiver for how you can help your clients, and just another thing for you to consult on and implement for people.

[SPEAKER_01]: Correct. [SPEAKER_01]: Yeah. [SPEAKER_01]: I mean, it would definitely be a help. [SPEAKER_01]: It would create the ability to send funds in different payment rails around the world.

[SPEAKER_01]: You know, for countries that have extremely volatile occurancies, it would be a way to send funds there and allow them to convert, you know, to have like, they have a bit in the front, since the digital asset or just stablecoin. [SPEAKER_01]: And if they send to a wallet in those countries, they could then convert into their local currency, uh, hopefully like a peg [SPEAKER_01]: there's a lot of opportunity there, but yeah, very much. [SPEAKER_01]: It'll be a new, uh, a new channel to an actual bell to a hero in our career.

[SPEAKER_01]: Yeah, or on our river. [SPEAKER_01]: Yeah. [SPEAKER_00]: Well, Mark, we have a tradition here to start doing a little bit of forward-looking questions, just a couple of to wrap things up, but, um, you know, if, you know, you're talking to an early stage company, um, whether it's e-commerce or whatever else, and you can give them one piece of advice around this topic. [SPEAKER_00]: What would you, what would you say, [SPEAKER_01]: what I've always found is I would be getting on this community ski and having people around you whether it's a you know a business advisor or someone that's walked the path before or an effects advisor you name it [SPEAKER_01]: out having someone provide you with some insight into where you're going, I don't know, sorry, what you've done, and where you're going, where you want to go, you know, means the world of difference.

[SPEAKER_01]: Even, you know, if there's one thing I've learned as an entrepreneur, there's, there's an endless thing that I need to learn. [SPEAKER_01]: You know, if there's an endless journey into discovery on a variety of topics, [SPEAKER_01]: My only insight, I kind of have to get the question at this point, but my only insight is, yeah, yeah, essentially surrounding yourself with people that can provide, you know, some insight or have been where you're at. [SPEAKER_01]: Awesome.

[SPEAKER_00]: Maybe one last one. [SPEAKER_00]: If you're looking back here 10 years from now, what do you hope to have seen happen in the industry? [SPEAKER_00]: I guess we talked a little bit about civil coins, but is there anything else that comes to mind that you'd like to have to see to see an industry or more specifically in Canada? [SPEAKER_01]: Yeah, honestly, I mean, the main thing is what we kind of talked about, just the emergence of more open banking regulation in Canada.

[SPEAKER_01]: I think that would make a rule the difference. [SPEAKER_01]: It would allow for so much change within a somewhat antiquated industry of the banking sector in Canada. [SPEAKER_01]: If you look at what's possible in the US these days, they're just miles ahead in terms of, [SPEAKER_01]: capabilities with banking systems with integration, you know, everything's connected, it's so easy to move from one bank to the other, it's so easy to get your data ported from one system to another.

[SPEAKER_01]: I think that's going to make a world of difference for businesses as well as even just individuals just making things a million times easier, you know, for client and pretty, you know, just as easily, you know, connect, you know, all their accounts to your system like a click of a button. [SPEAKER_01]: And then, you know, it imports all the data needed and all that's tied to, you know, the system there account uses to run their financials and everything. [SPEAKER_01]: And then, you know, the world would just be a functional officer and it would be a lot easier for business to not get bogged down by the, you know, the smaller details of collecting.

[SPEAKER_01]: So we have reports and sourcing so many different systems. [SPEAKER_00]: Dave, what do you think if we if we clipped the last 25 or 30, can any of the take leaders that have given us a similar answer around open banking and said that directly to the government and see maybe that will move the needle a little bit I think everyone's aligned around this right. [SPEAKER_02]: So don't speak topic, it's a big topic, and you gave some examples there, but in our world, we level up in banking because it'll allow us to provide a more seamless experience for our borrowers when they're applying for credit with us and also to maintain like a live connection that allows us to maintain kind of a credit limit with that business and not have to re-enter [SPEAKER_02]: In your business, what's the biggest benefit from open banking that you would see in your business, Mark?

[SPEAKER_01]: Yeah, I mean, you know, the main thing would probably be just with onboarding a new client, for example, I mean, there's a lot of information that we would be required to collect as many service business that their bank would already have on file for example, especially when it comes to allocating credit towards pre authorized debit limit on a client like very much, I guess, how you would run a credit calculation for a client applying for lending solutions. [SPEAKER_01]: It would be so much easier for us to just streamline that process, get a client fully onboarded within a matter of hours or minutes even compared to the KYC and they all the credit risk and process that we would have to do now, which is very manual, right?

[SPEAKER_01]: I mean, it would be here's the financial statements, you know, let's go through, okay, this checks out, we can provide the client with this much, you know, [SPEAKER_01]: I'm sure you run into this all the time on your N2 where you just make the process of applying for a credit line as this is so much faster and that same, you know, when would apply to us. [SPEAKER_02]: makes total sense. [SPEAKER_02]: And as he, like, put it, that's the, uh, maintains its spot on the heleter board for what our government can do better.

[SPEAKER_02]: Um, that's a really sour sector. [SPEAKER_02]: No doubt. [SPEAKER_02]: Thank you so much for joining us, Mark. [SPEAKER_02]: It's been great to learn about FX and about you and your business.

[SPEAKER_02]: Uh, I hope we get to meet the person sometime soon and really appreciate taking the time to be with us today. [SPEAKER_01]: Yeah, likewise, thankfully, again, once more for having me both that, I definitely would love to catch up with the person sometime. [SPEAKER_02]: Excellent. [SPEAKER_02]: Well, thanks for everyone tuning in, and until next time, this was Fincher Piner.