OzForex makes cut online

Agnes King - Australian Financial Review, 20 September 2005

Online foreign-exchange service OzForex has acquired 550 customers in three months thanks to a bold marketing campaign designed to boost client referrals.

The success of the campaign, plus a 240 per cent rise in after-tax profit for the 2004-05 financial year, has convinced the Sydney-based firm to expand its overseas operations.

It will start by increasing staff in its London branch from one to five in October. Co-founder Matt Gilmour envisages that within 18 months the UK office will have 15 to 20 staff, making it equal to the size of the home-base operation. From there, he said, there was nothing to stop OzForex pushing into Canada, South Africa, Singapore and Asia.

The outfit will face stiff competition from the big banks looking to reverse any gains by niche players, including Travelex, Western Union and OzForex, in the corporate market. A Commonwealth Bank spokesperson said the commercial banks viewed these transactions as their turf and would soon launch aggressive campaigns to win it back.

Old and cumbersome computing systems put the big banks at a disadvantage however, limiting their ability to transact foreign currency online and hindering efforts to service small to medium enterprises cost effectively.

OzForex has capitalised on this weakness by establishing itself as a low-cost online entity with a strong customer service culture. The concept is similar to internet banking except that instead of shifting money to an Australian institution, it goes to, or comes from, an offshore facility.

"We call ourselves high-tech, high-touch. We're very technology focused but throughout the process there's a lot of human contact so you don't get bogged down in the e-commerce," Mr Gilmour said.

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