World First’s chief economist, Jeremy Cook is in the thick of things. Working at a UK headquartered specialised international payments provider at a time when the world is at its most divisive, Cook speaks to GrowthBusiness on the company’s growth in relation to world events, top exporting myths holding SMEs back, and what to expect in 2017–what he believes will be a really tough year.

How is World First doing in the context of all this political uncertainty?

I think this is the ideal time and the ideal environment to be a specialised international payments’ provider because of the way that this market is starting to fall out. Businesses are becoming more international, and are increasingly fearful about the political and economic climate. We’ve got the ability to speak to a lot more businesses about international growth and also making sure that they do it in a measured and protected way. Of course, we have to practice what we preach.

If we can take our expertise to growth markets that haven’t had the kind of competitive international payments market we have here in the UK, like Hong Kong or Singapore, then we can hopefully grow their small and medium business landscape as well.

“They still view ‘made in UK’ or a ‘headquartered in the UK’ as a status symbol. It’s a sign of security and expertise.”

Do you think the UK has been much at the centre of those markets as well?

I think that the UK has a lot of legacy ties, especially in Asia, and it is a constant source of amazement for me actually, sitting in meetings with a Singaporean business or someone in Hong Kong, or in the US or in Europe about dealing with a British financial institution. They still view ‘made in UK’ or a ‘headquartered in the UK’ as a status symbol. It’s a sign of security and expertise. London is still the financial hub of the world, I think. We are the experts in that, so if we can continue to keep the ethos of World First as a UK company, while expanding across the globe, I think we’re going to be doing a good thing.

How do you stay local in global markets?

I think the company culture is crucial. I’ve been with the company for nearly 10 years now of the near 13 that we’ve been going. I was employee number 28 and now we’re 650 globally. It’s been bit of a roller-coaster ride, but the culture has stayed very, very true throughout those 10 years. We have a small company mindset; we want to do things quick, we want explosive growth and we know that if we’re allying ourselves and helping other companies grow, then we’re going to grow alongside them.

We’ve got to stay true to our core ethos, which is, if we can make things faster, easier, and cheaper for businesses, than we’re probably doing things right.

How do you see that relationship evolving post-Brexit?

I think it’s going to be difficult for British business to continue to sit there and say that we want to be part of the single market when obviously members of government are saying there’s going to be no specific deal around the single market. Everything is just so uncertain at the moment, it certainly allows competitors who remain part of the Eurozone a little bit of an advantage over British businesses. But as much as UK economy has been about services, moving forward it’s going to become increasingly about trade with larger economies, be it China, be it the European Union, or be it the United States.

British businesses are going to have to make sure that they are remaining open to these trade channels. In business, as with all things, it’s all about negotiation. I don’t think British expertise can easily be replaced. I think it’s going to be a really difficult thing for British businesses to continue to portray themselves as international leaders moving forward because of the political situation, but we’re ready to do that. We just have to be open.

“Chinese authorities are fiercely protective of the growth and of the infrastructure, be it financial or purely economical that they have build.”

How is World First working with smaller business to encourage that culture of openness?

We have a lot of partnerships and we do a lot of introductions, helping companies meet the right people if they’re looking for finance or advice. Obviously, we’ll take care of the currency side of things. We will make sure the logistics of you paying the people you need to pay is taken care of, but you need to find the supplier who actually makes the things, you need to find the guys who ship it, you need to find your stockers–but UKTI can help you with that.

World First entered the Chinese market, which is known to be such a challenge for western companies. What are some of the lessons you’ve learned from the experience?

From our perspective, I would say that it’s a very, very closed economy. But it’s the way it is for a reason. Chinese authorities are fiercely protective of the growth and of the infrastructure, be it financial or purely economical that they have build. You look what they are doing with their currency, with the re-evaluation of the Yuan, and the council controls–they are petrified of this coming tumbling down. They’re putting some fairly prescriptive rules out there, but these are rules for self-preservation as opposed to trying to block out UK, US or European business from coming into the market. Change comes in painfully slow increments, and that’s absolutely fine because change will eventually come.

I reckon we’ve only touched 1 per cent of the market that is out there.

“The UK and US we’ve only been the economical centre of gravity for the past 200 years. It has started to drift back east. This is why we have to be a part of the growing momentum in that part of the world moving forward.”

A lot of UK companies like to talk about the transatlantic relationship between the US and the UK, but do you foresee more traction for UK businesses in other markets?

I think so, we’ve talked about Brexit a little bit, we haven’t talked about Trump yet. Trump’s pivot away from Asia is one really interesting geo-political and economic swing. Obama was so pro-AsiaPac, and Trump is so anti-AsiaPac, that the vacuum that could be left is primed for resolute businesses with a compelling model or product to come in.

The US will leave a vast chasm within AsiaPac as far as trade goes. I think it’s only right and appropriate that the UK and the UKTI as a whole start to expand into that area. EU companies or Japanese companies could step in, for example. Japan is already trying to step into the gap.

The UK and US we’ve only been the economical centre of gravity for the past 200 years. It has started to drift back east. This is why we have to be a part of the growing momentum in that part of the world moving forward.

“It’s not like we’ve voted to leave the EU, and everyone who knows how to code and has an idea immediately jumped on a plane and left the country.”

Fast-growth tech companies here look at Silicon Valley as a global hub for growth and VC funding. Is this something that may change in the future?

It’s kind of slowed, in my personal opinion. You hear less about those crazy valuations and IPOs. For us, instead of choosing Silicon Valley as a place to expand into in the US, we picked Austin, Texas because it has that similar start-up vibe, but almost three or four years behind. I’d say the ground is a lot more fertile than it is in Silicon Valley.

I think it’s the British way. The pick up in British fintech will continue regardless of what happens with Brexit. It’s not like we’ve voted to leave the EU, and everyone who knows how to code and has an idea immediately jumped on a plane and left the country.

The government is going to be going out (to places like Silicon Valley), hat in hand, asking for investment, and investment at the moment isn’t going into manufacturing, construction, or other sectors. It’s going into fintech, and small agile companies. We stand in a very, very good stead, regardless of Brexit.

With Trump doing what some would call “bad PR” for America, do you think this could be a good thing for investors here?

I think it’s a good thing for investors all over the world. It depends on the tax breaks — everyone loves a tax break. We will see how fiscal plans of the Trump presidency equal out over his first budget, for example. His campaign was not based around financial technology, start-ups, or on hubs like Silicon Valley. It was based around the rust belt, and it was based around putting boots on the ground in the American Mid-West. If you can name me a growth start-up from Iowa, fair play. But I don’t see the investment going into those areas. Look at the landscape here in London or Berlin or Amsterdam. It’s still very, very fertile.

“For businesses who have become successful in (emerging markets), or have supply chain of operations that involve that part of the world, the guiding mantra has always been get on a plane, go out there, meet people, shake their hands, sit down, take a week of meetings, and then see how it is. You will come back with contracts signed and ready to go.”

What are some of the myths that may be be barriers for SMEs from expanding to markets beyond North America?

I think there’s probably myths around corruption, quality, the language barrier, and just the logistics of it all. It’s a pain to go out there and set up, so is it actually worth the time and effort? For businesses who have become successful in (emerging markets), or have supply chain of operations that involve that part of the world, the guiding mantra has always been get on a plane, go out there, meet people, shake their hands, sit down, take a week of meetings, and then see how it is. You will come back with contracts signed and ready to go.

If you don’t put yourself out there then you’re not gonna benefit from it at all. I think there’s a stigma attached to looking outside of the comfort zone, which obviously before Brexit has been the EU.

I think Brexit will force businesses to have to be open whether they like it or not.

With so many markets pegged to the dollar, would you say that the UK has an advantage?

Given Brexit, everything’s on sale here in the UK. Everything is 15 per cent off. People could come in to the UK and look at the highly specialised products that we have, and say, “actually, these are a lot cheaper. We should be investing in these companies and we should be starting new strategic lines with these businesses moving forward.”

I think currencies out there in Asia that are pegged to the US dollar are only going to get stronger. We are forecasting a certain amount of USD strength in 2017 and if like me, you believe that the sterling is going to continue to remain weak, then businesses here in the UK that are export-focused or part of an export supply chain will stand to win.

Markets that were traditionally in the supply chain for British businesses could now easily be new customers, as opposed to just the next facet of the cycle.

“As soon as your business crosses the border you have currency risk, I don’t think enough business really realise that, it could be a customer or it could be a company buying another company elsewhere, or a foreign currency loan, or investment abroad. All of those have a currency risk especially in a world of very, very thin margins at the moment.”

With the popularity of near-shoring and off-shoring, what about the pricing and exchange of soft skills?

Let’s say the example of a UK headquartered business with an HR function in India, and tech support in Indonesia. The local currency has got more expensive, courtesy of Brexit. If you make the most of your revenue in sterling, you have risks that need to be hedged. We would sit there and say “where’s your in-bound revenue coming, and where are your costs?”.

We work out a plan of action for making sure that the first thing you do is identify any local currency revenue that can be portioned against those costs at the beginning of the financial year. It’s important to know exactly how much budget you are portioning towards this call centre for example, or this department in this part of the world.” That’s the first step of eliminating currency risk.

As soon as your business crosses the border you have currency risk, I don’t think enough business really realise that, it could be a customer or it could be a company buying another company elsewhere, or a foreign currency loan, or investment abroad. All of those have a currency risk especially in a world of very, very thin margins at the moment. They could easily be eroded by a couple weeks’ movements in these markets.

The first thing I do when I sit down with any business is ask if you have knowledge of your costs. Do you knowledge of a worst case rate within your business that you can deal at? And have you hedged it?

“Everyone is saying “oh thank goodness 2016 is over”. I mean sorry, but 2017 is hardly going to be a walk in the park.”

Final thoughts?

I think it’s going to be a really, really tough year for the UK. We’ll be talking a lot more about inflation, we’ll be talking a lot more about margins and the pressure that businesses will put themselves under by cutting margins through this period. It’s kind of a deflation like that we saw in 2014/2015, while trying to rebuild that, because prices are running higher, wages aren’t running higher. Therefore they have to either cut their margins further or risk pick up in unemployment.

The first quarter is going to be so interesting, from Trump’s first hundred days, China’s reaction, Dutch elections, Article 50 being in place. Everyone is saying “oh thank goodness 2016 is over”. I mean sorry, but 2017 is hardly going to be a walk in the park.