Watching this weekend’s news that First Citizens has finally agreed to buy Silicon Valley Bank, I thought this may be a good opportunity to reflect on the past few weeks and add to the conversation that has dominated the fintech world as well as the high-tech companies and financial institutions that we serve.
The series of bank collapses this month starting with SVB had an undeniable ripple effect on our economy, sparking dialogue and debate over how a culture of risk management could have prevented its demise.
What are the options available for businesses to safely store funds in these economically volatile times? How can we ensure the accessibility of money to meet our day-to-day operations whether it’s paying for our suppliers, employees or other obligations?
As we reflect on the implications of this series of events, these are just some of the questions being asked. There is no perfect answer, but it’s clear that diversification of where companies keep their funds is key to ensuring that critical areas of money movement and business operations are not affected by a set of events like the ones this month.
Before I dive into some of the things that allow us at Nium to provide a different option for storing funds outside of the traditional banking system, I should note that SVB has not been a Nium shareholder, nor did we hold funds in their bank.
Also Read: How fintechs can contribute to the world’s sustainability goals
Nium’s B2B payments infrastructure enables seamless money movement around the world so businesses can scale, grow revenue and access new markets. Helping our customers stay focused on their vision, we protect them from the risk of financial volatility in the following ways:
Safeguarded funds in segregated customer accounts
Nium holds customer funds in safeguarded accounts, a segregated customer money account in compliance with regulatory guidelines. These funds held in a separate account cannot be accessed by Nium, creditors, banks, or third parties for any purpose.
Unlike banks that access customer funds and use them to invest in bonds and assets to earn a financial return, we ensure that their money is protected. Nium does not use customer money for investments, nor do we use it to give out loans. With our protection mechanisms and compliance policies in place, you have the peace of mind as a business that your funds are available to you for withdrawal or customer payouts, as per your discretion.
On-demand, real-time money movement
Our modern B2B global payments infrastructure sets businesses up for fast-tracked success. Nium’s expanding payout network supports 100 currencies and spans 190+ countries, 100 of which are in real-time. Funds can be disbursed to accounts, wallets, and cards and collected locally in 35 markets. Also, Nium’s growing card issuance business is already available in 34 countries.
Global payment network and rails
Considering the dangers of relying on a single bank that has come to light, Nium gives its customer access to a wide network of large global banks and payment rails. Helping maintain liquidity and ensure transactions flow smoothly, we modernize payments, within the country and cross-border, for proactive risk mitigation and financial stability of your business.
Also Read: Revolutionising fintech in Southeast Asia: AI and ML empower businesses with data
Multi-currency support and currency hedging
With payments becoming increasingly cross-border, exchange rate volatility can take an expensive toll on businesses pursuing global growth. Nium’s multi-currency support and foreign exchange solution with bulk currency conversion and rate locking feature help businesses manage risk, meanwhile using FX fluctuations to their advantage during dips.
Real-time fraud detection and prevention
Nium detects and blocks fraudulent activities with real-time prevention and payment flow monitoring, further strengthening the risk mitigation strategy for companies. Our global B2B payments infrastructure is tailored to address businesses’ distinct challenges, and we stay on top of the latest technology to safeguard customer funds from payment fraud.
In the end, the traditional bank system and its stability are extremely important both to the macro-economy as well as to Nium’s ability to support our customers through the partnerships that we build together with major banks and institutions around the world.
But diversification of risk means that companies should start looking at options that allow them to place money in a wide range of accounts that safeguard and move money quickly for the critical activities that require that level of speed and safety.
If this is something that could be impactful for you and your company, especially in this environment, we’d love to see if Nium can help!
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