Javier Quintana: "Currency risk is no longer just for large companies; today, everyone has an international component."

CURRENCY MANAGEMENT

In a global environment where currency volatility can drastically impact the profitability of companies, the foreign exchange risk management It has become a fundamental pillar for any company with international operations. The internationalization of the Spanish business sector It has experienced historic growth in the last quarter of a century, almost quadrupling the value of exports. This boom has democratized access to foreign markets, but it has also exposed SMEs to challenges that previously seemed reserved for large corporations. To analyze this new scenario and the tools available to protect trading margins, we talk to Javier Quintana, Managing Director of Moneycorp SpainWith a solid track record in foreign trade and financial services, Quintana leads the company's strategy in the Spanish market, helping businesses navigate the complexity of the foreign exchange markets.

MoneycorpFounded in 1979, it is an entity specializing in the foreign exchange and international payments which has established itself as a alternative to traditional operationsWith over 45 years of experience, the firm offers services to businesses and individuals. foreign exchange risk hedging servicesTransfers and payment solutions are offered through an advanced online platform and a team of experts. The company, which operates globally with a presence in 11 countries, manages an annual volume exceeding [number missing]. 100.000 million for more than 40.000 corporate clientsstanding out for its ability to offer competitive prices and tailored solutions. In this interview, Javier Quintana reveals the keys to mitigate currency risk and how the specialization, the service and technology They combine to strengthen the competitiveness of Spanish companies abroad.

From your perspective, how has the internationalization of Spanish companies evolved, and in parallel, currency management?

Javier QuintanaWell, I'd say the evolution has been historic. Consider that in '99 we weren't even reaching 100.000 billion in exports, and yet in 2023, which was the peak, we were close to 400.000 billion. That is to say, in this quarter of a century we've practically quadrupled. From there, sales have also increased significantly. In '99, 20-25% was sold abroad, while now it's around 40%. And what I consider most important is that this It's no longer something for the elite or a select few.But today, practically everyone has an international component in their businesses. The same is true for currency. Consider that before it was opaque, slow, and costly, and today, on the contrary, it is transparent, agile, and highly competitiveAnd even more so since 2009, when the sector was liberalized and competitors other than banks, such as ourselves or other specialists, entered the market.

What are the main challenges companies face when expanding internationally, and how does currency risk specifically affect them?

JQWell, the challenges haven't changed that much and remain practically the same, from finding a local partner, financing for the project, legal certainty, regulatory issues, taxation, currency, and so on. We obviously focus on currency and are very used to news reports like "this company ends up with losses due to the currency effect," "this other one reduces its profit margin by a certain percentage due to the currency effect," and so forth. We, obviously, We cannot make the risk disappear.But we can make available to our clients all the tools we have at hand to mitigate that risk and that the company can concentrate on doing its business.

Compared to traditional banking, what differentiating advantages does a specialist like Moneycorp offer?

JQI would say the main advantages are price, service and specialization. SpecializationIt's not the same to make one product as it is to make 20. And it's reasonable to think that the one who makes one should be able to do it better than the one who makes 20. ServiceIt's not just about having a dedicated management team; all the investment, all the infrastructure, is dedicated to being the best in this field. priceObviously, if we're not price-competitive, then everything else is pretty much irrelevant. In our case, we have a pool of 20 banks and we handle over €100.000 billion a year. That allows us to negotiate prices that our clients couldn't obtain on their own.

What kind of tools and solutions do they make available to companies to manage this risk?

JQTools, all of them. From market information for decision-making, to simple tools such as... traditional exchange rate insurance or a market order, or the more complex tools via structures and derivativesWhat we believe is that it's about having the licenses that allow you to have the entire product catalog, as well as the liquidity that allows for the best execution. By combining product with better execution, we can adapt our proposals to the needs of each product and always have them custom-made.

Do they target a particular sector or is their service applicable to any internationalized company?

JQYes, it's true that there are sectors traditionally linked to currency, sectors like fishing, commodities, metals, tourism, and so on, but we, I insist, don't make that distinction. We are a currency provider, and anyone who faces currency risk, we're going to help them mitigate that risk and, as I said before, try protect your profit margin so that it isn't affected by currency fluctuations. How do we do it? Again, I'll repeat what I said before: we have the products thanks to the licenses we've obtained over the years, and we have the liquidity through the 20 suppliers we work with. By combining these two, We listen to the client and adapt our proposal to the needs of each case, because they are all different and all require particular and specialized attention.

Looking ahead, what are the next milestones for Moneycorp and how do you see the evolution of the payments and foreign exchange market?

JQI would say the future is promising. Consider that the foreign exchange market is the largest market in the world and, as we've seen, it's constantly evolving. From there, the most immediate projects are... bank license in the United States, as well as the SEPA InstantWe are already a bank in Brazil, for example, and we have a Fed license—one of only three in the world, by the way—but now the next milestone is to also be a bank in the United States and thereby gain access to... clearingwhich will allow us to be even cheaper and faster. Regarding SEPA Instant, it is expected to be a reality by April 2027, and what today are transactions that can take hours or even days will, once that reality arrives, be a matter of 10 or 15 seconds for money to be transferred from point A to point B. Apart from these two projects, which are the largest and most immediate, of course, significant and constant investment is being made in models of Artificial Intelligence and everything that is the structure of blockchainI believe that, as a commercial organization, our greatest strength is our more than 45 years of experience in this sector and our more than 40.000 corporate clients. Therefore, simply being close to these clients and listening to their needs and their vision for the future is what allows us to work and invest to always be at the forefront and pioneers in everything related to currency management.

Key Questions and Answers

What is currency risk and how does it affect businesses?
Currency risk is the uncertainty surrounding the value of a company's future cash flows due to fluctuations in exchange rates. It can negatively impact profit margins, reduce earnings, and even lead to losses if not managed properly.

What are the main advantages of working with a foreign exchange specialist like Moneycorp?
The key advantages are specialization in a single product, a dedicated service with all infrastructure focused on foreign exchange, and a more competitive price, obtained by trading large volumes of foreign exchange with a broad pool of liquidity providers.