Offering people cheaper transfers on currency seems like a great idea, but launching a new financial product in an already overcrowded market place comes with a number of challenges. Financial institutions are not necessarily at the top of our lists for making the world a better place and many people believe that the industry is in line for one of the biggest shakeups it’s ever had to face.
The service from Transferwise aims to revolutionise the currency exchange transfer market and take on the old banking behemoths, giving customers more choice at a lower cost.
And it’s succeeding quite nicely.
According to founders Taavet Hinrikus and Kristo Käärmann, their product is set to cause a big splash in the banking world and be one of those innovations that disrupt the market place. People are looking for greater choice and offering low cost money transfers is something many businesses and individuals are interested in. More and more we live in a global market where billions of dollars are exchanged every day and cutting the cost of those transactions could save even small businesses hundreds and thousands each year.
What is Transferwise?
Most banks that handle money transfers have hidden costs or add ons that hike up the price. While they may well say there is no interest to pay, you usually end up having to add a significant amount onto the money you want to send. If we had a common currency across the globe, it would make a difference and the banks wouldn’t be able to get away with charging so much. At Transferwise they came up with a plan to use peer to peer money transfer rather than going through the bank, matching up with other people transferring money who are heading in the opposite direction.
Transferwise’s Digital Strategy
There were a number of issues for the company to overcome before they could actually hit the world with their product. First they had to get enough funding and secondly they had to bring lots of people on board while making sure the product they offered was entirely trustworthy. These two strategies essentially interlinked.
The company managed to raise $58 million in venture capital with entrepreneurs such as Richard Branson investing. That means Transferwise is now valued at over $1 billion making it a serious player in the market and giving its brand a strong reputation. Big name investors also gave the company a significant boost in getting the initial message across to potential customers. Bringing in the right people to operate the business has equally made a difference. The company has been mentioned in August publications Business Insider and Forbes helping to promote it to a wider market.
Transferwise have branded themselves not just as a business, but a revolution. It’s a strategy that sits well with many millennials who are used to smart technology and new innovations such as Uber. In fact, they’re just the kind of people who are hungry for new, cheaper and easier ways of doing things. Funding a venture like Transferwise has been nothing less than epic, especially when you consider that Europe has often lagged behind other technology from the US and Asia.
Part of the company’s strategy has also been about not overstretching itself– learning to walk before it can run. While they are beginning to expand across the world with a lot more currencies, Transferwise started with just the dollar, pound and euro to test the waters and see whether their idea would sink or swim. The digital strategy involved marketing the company as a challenger brand, delivering eye-catching ad campaigns and making sure their content was more visible in the places that mattered. Engagement with social media has been scaled up considerably since the launch, creating an evangelical sense among followers and fans.
Transferwise has also done a good job of exposing those hidden fees that banks charge just to send money from one country to another. With many of us nowadays working across borders, it can be expensive to send money from one account to another and a lot more of us are doing it than just a few years ago.
Scalability is the Key
Growth from just a few currencies to most in the world has also been the key to getting the Transferwise brand out there. They’ve done this by growing their key staff and presenting themselves as an innovative and forward thinking company that appeals to young, upcoming entrepreneurs. Referrals are a big part of their marketing strategy and providing a great experience for their customers is high on the agenda. People can go online or download the Transferwise app onto their smartphone and have instant access to money transfers that are carried out painlessly and at a low cost in just a matter of days.
The Right Time for Disruption
One thing that has helped Transferwise succeed is the current attitude in today’s marketplace. We are way past the time when banks are used to holding sway and dictating terms and conditions without any challenges.
Millenials are key to this and a big part of the company’s future.
Disruption is nothing new to these individuals and they like nothing more than seeing a new venture come forward that pulls the rug from under the feet of the big conglomerates. Banking is also a prime target for this type of disruption with many millennials keen to get a better return on their own finances. Millenials also want to work for a company such as Transferwise because it is seen as doing some good in a world that is often overladen with fat cats who keep the deck stacked.
As with many successful companies, the Transferwise digital strategy is grounded in an easy to use product and the right brand profile. It’s a product that is there to help, not to make money. It is eminently useful to millennials who are the key drivers for products such as this which essentially take the market and turn it upside down. Finally, there’s a touch of Robin Hood about it all, taking on the big companies and succeeding while corporate CEOs grind their teeth and snarl about it all being a bit too unfair.
Transferwise may well be a model that many new companies adopt in the future and one that will change our financial industry forever.