Three questions for Pierre-Antoine Dusoulier
CEO of iBanFirst
The CEO of iBanFirst is an expert on international transactions. In this interview he reviews the risks associated with exchange rate fluctuations and explains how to manage them – critical issues for fashion sector businesses.
In recent months we’ve seen large fluctuations in the currency market. How can iBanFirst help businesses in our industry?
It’s true that for the past few months the currency market has been extremely volatile, a trend that will continue in 2023 and have a strong impact on companies. Our services are carefully tailored to help fashion businesses manage their transactions in foreign currency in the best possible manner and to protect themselves against the risks of exchange rate volatility. In the fashion sector, for example, many businesses work with Chinese suppliers and pay for their imports with dollars. In these cases, iBanFirst services are especially useful; we give businesses advantageous rates, help them improve relationships with foreign suppliers, and facilitate currency conversions.
One of our unique services is real-time tracking for international payments, an option that’s rarely available with traditional banks. Our tracker reports a payment’s exact status to our clients and to their suppliers, who are waiting to know when they’ll receive the funds. These benefits are not usually provided by regular banks, and they are undoubtedly the reason behind iBanFirst’s success. For the past five years, we’ve experienced over 70 percent annual growth.
As experts on international payments, what changes do you predict for the foreign exchange market in 2023? And how could those changes affect the garment industry?
Currency markets will continue to be very volatile in 2023, and the context of recession combined with strong inflation can only exaggerate those variations. Today the euro is technically in a rebound phase, even though it was in parity with the dollar in September. In the clothing industry, where point margins are often low, these variations can be very dangerous. That’s why more and more businesses are protecting themselves against risk and safeguarding their margins. Contracts for specific time periods let users block exchange rates when they’re making their budgets to avoid unhappy surprises. In fashion, where collections are created very early in the process, it’s key to have a clear idea about the cost of international transactions for future raw materials purchases.
Here again, it’s essential to cover all or part of the exchange rates for the currencies used in these payments. In the fashion sector, our clients generally cover around 50 percent of the total sum of their order. This means that commercial margins are guaranteed for 50 percent of business. With this strategy, it’s possible to benefit from an eventual improvement in rates on the remaining half.
What advice would you give a brand that wants to develop its e-commerce activity, particularly on the American market?
I’d suggest having a local dollar account – a solution we also provide. This lets businesses pay in dollars on the American market without fees. Despite the context, I maintain that businesses shouldn’t be afraid of expanding in the United States or Canada. Even though monetary variations can cause worry, entrepreneurs should, on one hand, look ahead and protect themselves in the short term and, on the other, create long-term forecasts. We have several fashion sector clients who have started doing business in these countries, and it’s going very well. For entrepreneurs, international activity – whether import or export – is often no longer optional. It all comes down to getting great support and moving ahead with confidence!