Neil Helm says it’s simply the quality of what OzForex does that continues to attract and retain staff from often bigger companies.
Photo: Michele Mossop
OzForex, the online international money transfer business, was a finalist in 2013’s BRW/GE Mid-Market Awards for outstanding companies, with revenue between $50 million and $100 million – but we’re happy to admit, it probably wasn’t the biggest highlight of its year. That honour would belong to its stellar debut on the ASX on October 11, when it closed 28 per cent above its $2 opening price on the first day and, at press time at least, had not looked back.
The success of the OzForex float was a much-needed injection of confidence for investors – or at least their stockbrokers – after a so-so year for initial public offerings. It made the company founded in 1998 by former Bankers Trust forex salesman Matt Gilmour probably the most talked about mid-market company of 2013.
Just don’t ask OzForex’s 180-odd staff exactly what the share price is today. “We had a good celebration after the listing but my message to staff was clear: we’re not going to become stock-watchers,” says OzForex chief executive Neil Helm.
“The stock will go up, the stock will go down, but all that matters is that we continue to give our customers the best price and best service on a foreign money transfer, and treat them – and our investors now, too – in the same open, transparent way we have always done.”
Overdeliver to the underdog
With a market capitalisation now exceeding $500 million, OzForex is destined to one day no longer be a mid-market company, at least by the definition of annual revenue between $10 million and $250 million.
Turnover at OzForex will have to more than treble to break out of that band, but with a growing number of global white-labelling deals being struck to use its money transfer platform – some of the latest being with ING Direct and Travelex – there is a sense that such a metric will not take that long to achieve.
As OzForex heads for the top end of town, the challenge for Helm will be to maintain the one element of the company’s culture that has arguably created most of its success – a sense of respecting and standing up for the underdog; in OzForex’s case, the fellow mid-market and small businesses once shut out of the plum deals in foreign exchange.
That anti-establishment streak has been evident in all of BRW’s conversations with Matt Gilmour over the years, the first of which was when OzForex debuted on the Fast 100 list of Australia’s fastest growing companies in 2005.
Back then, the business born in the sun room of Gilmour’s house on Sydney’s northern beaches – originally as a forex information site, then after 2003 as a transactional site once it was no longer required to hold a $10 million capital reserve, thanks to Howard government reforms – was buzzing off a 2004-05 turnover of $3.4 million, up from $300,000 in 2002-03.
Gilmour shares the credit
Gilmour shares the credit for building the business with Gary Lord, who had worked with him in the 1990s at Bankers Trust’s foreign exchange division. Both knew first-hand the raw deal that small to medium-size enterprises were getting on their currency transfers compared with large institutions.
“At BT, each dealer might have 10 or 15 clients,” Gilmour says. “They’d get the red carpet treatment – Hong Kong Sevens and all that rubbish that goes on. I was also on the e-commerce committee, so I’d get to assess online dealing systems that were coming through. Brilliant, instant access to the spot price, so long as you had at least $500,000 to trade at a time.”
Meanwhile, the average small importer had to fill in a telegraphic transfer form at the local bank branch. “They’d get whatever the hell the bank said the rate was that day.”
After spending more time with Sequel Server than he cares to remember, by 2001 Gilmour had a rudimentary version of the OzForex online dealing system ready.
He prepared a brochure on his proposal – forex delivery and forward contracts for deal sizes as small as $500, without the fat bank margins and slow turnarounds – and sent it to 12,000 importers. The response rate was “huge” by direct mail standards – 4 per cent – encouraging Gilmour to begin hiring staff and lobby for the removal of the $10 million capital requirement still preventing “true competition” in Australia’s forex market.
That hurdle fell in 2003, and OzForex has grown ever since.
At the time, Gilmour and Lord knew that consumers were becoming more comfortable with looking beyond the major banks for services such as mortgages and savings accounts. “We have tried to ride on the coat-tails of that trend. It is not really a difficult pitch – to encourage customers to pay a lower price and get higher service levels,” Gilmour told BRW, revelling in getting up the big banks’ noses.
No opinion is sacred
A not-quite-so-big bank, Macquarie, bought 51 per cent of OzForex in 2007 and Helm – then working for the Millionaire’s Factory after being a project management consultant at Accenture – came in to run OzForex as part of the package.
He says it’s simply the quality of what OzForex does that continues to attract and retain staff from often bigger companies.
“Doing something good appealed to me – OzForex really did give clients a better deal than they were getting elsewhere, and I could see its potential as a ‘best kept secret’ that I wanted to make a ‘worst kept secret’,” Helm says. “The platform was globally applicable too, which was exciting.”
Yet no matter how many new countries OzForex enters, Helm says it must maintain its classically mid-market, “high-tech, high-touch” philosophy if it is to succeed.
A human being from OzForex calls every new online customer within an hour to finalise their account set up, and again within minutes of them entering their first online transaction. “Obviously we do that in part to give ourselves comfort, and to abide by anti-money-laundering rules, but we find it gives our customers a lot of comfort too,” Helm says. “In surveys it’s funny how many people don’t even mention the rates we’ve got for them, but they do mention the customer service, particularly around those first two phone calls.”
To put this in context, OzForex currently executes about 500,000 international money transfers each year, with 85 per cent of them now carried out purely online.
Helm also highlights that about 25 per cent of new customers mention a family or friend referred them to the service.
It’s unavoidable that there are more policies and processes in place than there once were at OzForex – Helm should know, it was his job to introduce many of them.
Listing on the ASX will only add to those compliance obligations, but Helm is determined that OzForex will not become a stifling bureaucracy. “There’s a saying inside the company that no opinion is sacred,” he says.
“We’ll listen to and consider any suggestions our staff make about how we could be doing things better.”