OFX Group Limited (OFX) Earnings Call Transcript & Summary

Thank you. Well, it's a very, very warm welcome to the brave souls who've made it here in person. They get the extra dividend of good food, and they get to read the body language. But a very warm welcome to the people who have dialed in as well online. For those of you I haven't had the chance to meet, my name is Skander Malcolm, I'm the CEO and Managing Director of OFX, and welcome to OFX Investor Day 2022. We're going to -- I'm going to go through the agenda in a moment, but we're going to spend a bit of time today going through a trading update and a little bit about our strategy, but it's also a chance for you to ask questions of us. And I'm joined today by members of my global executive team. Some of them are going to come and speak to you. Some of them are here for questions. And we've also got Alfred Nader online, who's going to talk about our North American business a little bit later. The only one who couldn't join us is Sarah Webb, who is the President for our EMEA region. And I gave her a pass just given the time frame, but I'll take any questions relating to Europe. The way the logistics are going to work when we get to the questions section, if you're here physically, please raise your hand physically and we'll get a microphone to you. There's no point asking a question without a microphone because no one will be able to hear you. If you're online, please raise your hand virtually and Matti, who's moderating this for us will unmute you. You'll get to ask the question. Anyone who's asking a question, please state your name and who you're working for and then the question, and then I'll either answer them or Selena or another member of the executive team. Okay. Let's jump to the agenda on Slide 2. As I touched on, 2 sections. The first section, I'll give you an update on trading and performance in the fourth quarter. Then I'm going to dive into the strategy. Then Selena is going to talk to us about the financial outlook, key drivers for the company. Then we'll take Q&A. Then we'll break for about 15 minutes so grab a break, then we'll reconvene and as I mentioned, Alfred Nader, who leads our North American business, will talk a little bit about the North American opportunity, and then I'm going to interview him and ask him a bunch of questions that you've been asking me. Then I'm going to ask Yung Ngo, who leads our APAC region to talk a little about the enterprise world that we operate in and the deals that we're working on, and he'll share with you a bit of a case study on one we've done. And then we're going to skip across to Mark Shaw, who's our Chief Operating Officer, and Mark is going to give us a bit of a tour around risk excellence. And for those of you who know the company and for those of you who've been around the stock for some time, you know that we've always talked about risk excellence being the foundation of the company. And so you're going to get to hear from Chief Operating Officer, Chief Risk Officer, Mark, about his philosophy and the investments we've made that give us comfort around risk excellence. But before I get into the content, I would also like to just say, and I was having a chat to one of our investors just before that strategy without numbers is a bit of a marking exercise. So we are going to share with you some numbers in a moment. I'm really delighted with the momentum of the company and the strategy that goes with it. And that's what today is really going to be about. It's going to be the choices we've made and the choices we are making going forward, but there will be numbers to back all that up. So let's jump to Slide 4, which is our performance update. And the key word here is momentum. We're absolutely delighted with the fourth quarter. We're coming in with record NOI of between $145 million and $147 million, which is growth of between 23% and 25% year-on-year. And that's also going to drop down to the bottom line. The EBITDA will be between $43 million and $45 million, which is growth of between 41% and 48% year-on-year. So an absolutely outstanding result. But underneath that result as well, some very, very strong drivers. Our average transaction values have remained very, very strong. Our turnover is up over 30%. And what I love is that every single region is growing double digits. Every single segment is growing double digits when we think about online sellers ex Asia. So it's an across the board, very, very strong result. And also, what I like is that we've delivered that positive operating leverage. You very rarely grow the top line as well as that and deliver that operating leverage. But you can see in this business, when we start getting that top line going, we can take that down to the bottom line as well. So we're really, really happy with that. And we're certainly looking forward to next year on that basis. But I want to take you back as well. If we can go to the next slide, please, Matti. For those of you who aren't as familiar with the company, this is a little bit of a time frame on what we've been doing for the last 20-plus years. And it was founded back in 1998. And back then, what the founders built the company around was this idea that the clients could get a better service at a much better price. And really, it took us about 15 years to get to the first month where we generated more than $1 billion of turnover. But really, the teams up until that point, did a fantastic job of delivering on this promise that you could get a better price. And over that time, we really built more of what I would call a consumer business. Most of our revenue was consumer and also not unusually because we were founded here, most of our revenue was generated out of Australia and New Zealand. And what you get as a result of being a mostly consumer business is you get some recurring revenue because some of those use cases happen every year. But as Selena will talk to you about when we get into the differences by segment, you don't get as much recurring revenue as you do when you are servicing SMEs. And so I arrived in about 2017, 2018. Again, for those of you who remember, we did an Investor Day where we talked a bit about how we wanted to take the company forward. That evolved a little in 2019. And really, it came down to a few things. We said, look, we really believe that the company has very, very strong foundations, but they need to continue to get investment. And we talked about people, we talked about risk, and we talked about scalable systems. Those 3 things get investment every single year, but to accelerate growth, we identified 3 things that we really wanted to invest in and one was being more global. One was being a bit more partnership driven and one was being a deeper impact on our client experience, and that's what we started to do. And I'm delighted to share with you the progress because we now generated over $3 billion and that was in less than 3.5 years, the gap between $2 billion and $3 billion. And as I touched on, the momentum is very, very strong. And certainly for investors, you now have a company that's more than 50% B2B. You now have a company that's 50% of the revenues are global. And I'll show you in a minute why that's so valuable because the total addressable market is really global, and look at that recurring revenue number at 78% and growing. I think that's a very, very investable company. And what I haven't put on there is also that it's genuinely profitable, and Selena will touch on the cash flow generation as well. So it's a great story, a lot of momentum. Let's talk about strategy. And if you could, please just jump to Slide 7. Any strategy starts with what's your opportunity. And for those of you who are here in person, you probably can't see that little orange blip in the corner of the screen, but that's OFX. And this chart is produced by McKinsey's. It's a view of the total addressable market in revenue terms. And we said, well, which segments are we focused on how much revenue are in those segments. We've shared this with you before. It's over $200 billion of revenue per annum in the segments that we target. And as you can see, OFX has a very small market share, kind of less than 1%. It's largely still held by banks and incumbents, Although, as you can see, the new entrants have done a great job, particularly, I'd say, in the last 5 years of growing share. But the real takeaway from this slide is it's still all to play for. It will not be a winner-take-all game. There's still a lot of revenue sitting in organizations that are charging too much. They're too slow. They're not as focused as companies like OFX. So that's what we're going after. And if we jump to the next slide. The danger of very large markets is that you go chasing butterflies because everything looks like you can make a reasonable return. But what we've certainly said as a company and as a board is that our focus has to be crisp here because to win you have to differentiate and you have to be strong and you have to be clear about how you're going to win. And so OFX chose 4 segments that we felt we could create differentiation around. And I'm just going to briefly touch on those because Selena will touch on them a little bit later as well. But the first is high-value consumer. And as you know, these are the types of use cases where I've sold equities or I've sold my property or I've got an education expense and the ATVs are up at around $17,000. Those types of clients, what they're looking for is safety, reliability, they want to make sure that the money moves fast. And of course, price is really, really important on larger transactions. Those types of things are kind of must haves, clearly, a digital platform that they can use is also really, really important. And as I've shared in the past, over 90% of our transactions are completed digitally. It's because clients find it easy to navigate, easy to book, their beneficiaries get paid and they can manage that fairly easily. So that's the consumer segment. In the corporate segment, very, very similar. The higher you go up the food chain in terms of the size of the corporate, and we typically focus more on small businesses, some micro, some midsized, but again, they're looking for that reliability, that security. They're looking for a service angle as well. The SMEs want to serve themselves digitally, but they also want to talk to someone in the event that something goes wrong. And of course, they're open -- they're generally doing this sort of stuff at the weekend. So they love the fact that OFX is open all weekend and they can talk to someone. The next segment really started to emerge in about 2015, 2016, and we call it online sellers. They are SMEs, but what makes them distinct is that they are typically connected to either marketplaces or payment service providers. And so there's a new dimension here. They're not just sending money from A to B or even receiving money, they're actually connected up through a marketplace. So think of them as Amazon sellers, for example. And what they've found is they've said, you need to be able to connect into these large marketplaces and the large marketplaces want you to have the highest standards of security and reliability, as you would imagine. And the clients themselves, they also tend to operate in ecosystems. So they want you to work with tax providers, with logistics companies with freight forwarders with marketing companies that operate in that space. And so the more we kind of learned about this segment, the more we said, well, look, our global platform works, our risk management program works. We've got great global banking support. We could serve this segment, and we've been doing that. And again, Selena will touch on this later on. And then the final segment is not a new segment for OFX. For those of you who are students of history, you'll see back in 2013 when we IPO-ed, we were serving enterprise back then and Macquarie was a major client. Yung is going to talk about enterprise, but this has been a big shift in the last few years, certainly for us and certainly in the industry as a whole, because enterprise clients are typically are serving clients one way or another, and cross-border payments are inherent in the service that they actually provide. And so our job as told to us by Richard White, who's the CEO of WiseTech is to make his customers more productive. In other words, simplify the process, make it faster, make it embedded, make it a lot easier. And we've really been pushing into that space. And as I said, Yung is going to talk about that in more detail in the second half of the Investor Days. But what I would say to you is that it's very, very easy to lose focus in the payment space. There are so many different segments. I haven't talked about the segments that, as I say, John West rejects, there are remittance segments where we're not necessarily the best place provider. There's institutional segments where we wouldn't necessarily be the best place provider. But in these segments, we really think we can be and we can deliver good growth. All right. What about the competition? Let's move to Slide 9, please. And again, if I go back to 2018, I remember sharing this chart and hearing a bit of an audible gasp from the audience because it's a very, very busy and competitive landscape. And back then in 2018, I shared that just in the 5 years leading up to 2018, there have been over 5,000 new entrants fueled, of course, by a wall of free money, and they were also looking at things like the multiples, the tech multiples, they were looking at things like the IPO market, which is very, very strong. There was also infrastructure that made it very, very low barriers to entry. So you've got cheap cash, low barriers to entry, great exits. I mean it's sort of like a PE playground. And sure enough, they piled on in. And since then, they've continued to be very, very competitive. And the shape of competition has continued to evolve. And the way we try and make sense of it with our board and with our investors is as follows. We look at what the competitive dynamics are that affect our ability to grow. And I've just highlighted 5 here for your consumption. The first is you saw about 3 years ago, particularly in neo-banks, were making a big play. And what they were doing was they were using cheap foreign exchanges as their onboarding product as they called it. So they literally were saying, we'll give you free foreign exchange if you take a transaction account or a deposit account. And they have been piling on in. What we've seen is over the medium term, that hasn't necessarily succeeded. And in this market, in the U.K. market as well and even in the U.S. market, some of those high-profile neo-banks have started to pull back, and they've certainly pulled back on foreign exchange as their onboarding product. I think we're yet to see which neo-banks are going to survive and certainly some have already exited. But that definitely had an effect on our ability to win clients because there was a lot of marketing. It also had in sense a positive effect because what it did was that 72% share sitting with major banks and incumbents, they became more educated about what's possible in cross-border payments and foreign exchange, and it kind of shook the tree a bit. The second is what we call incumbent MSBs. So think about Western Union, Core Pay, these guys. Right companies built over a long period of time, strong banking, strong service delivery. They know what they're doing. What they've really used this last 2 or 3 years to do is to rapidly digitize their business. Western Union, particularly when you look at their results, it's always about how we're digitizing the company. And that, again, has, I think, been a net tailwind for us. Because what it's done is it's really sharpened up our own technical capability and our desire to invest and deliver a great digital experience. But you've seen that investment in technology grow and grow and grow from those incumbents. And it's -- I think it's producing a better industry. The third one is that some of those new entrants going back over the last 5 years, we call them digital money service providers, very tech led. They started in consumer, and then they started to see the economics in corporate, as we call it, are significantly better. They saw churn-in consumer, so they start to shift to consumer added to corporate, I should say. And there's been some success. Definitely, some of them have got some very nice growth rates they're getting -- they're generating some earnings from that as well. There's also been a few mistakes, let's call it. We've seen some very, very big losses from some of these players in the last 2 or 3 years. And that's partially because when you're serving an SME, particularly when you get above micro, small or midsized businesses, you've got to have great payments infrastructure. You've got to have account managers who're prepared to make margin calls. You've got to be able to think of them as a credit risk if they want to do forward products. And of course, you've got to have a very strong AML program as well. And some of those digital businesses weren't as ready for that as others. And so a bit of mixed success around that. The fourth one is there's this whole new category which we call payments-as-a-service. And more and more because payments is a fairly complicated and regulated place. You're getting these companies, generally larger companies who are getting in there and saying, we can integrate with your ERP provide an embedded payment service. Now it's a good business. It's similar in a way to our enterprise at some level. The different being is it's a massive scale business. It's billions and billions of flow at very, very low margins. And so really to win in that business, you need to have very, very strong technology and you need to live off 2, 3 basis points worth of margin, not the 50 or so that we make. That's how those businesses tend to prevail. And then finally, the GAFA's or the GAMA's, I should say now, have continued to dabble. And again, for those who are around in 2018, we kind of said at the time, my view is the social giants are the natural owners of the consumer remittance space. And the reason for that is they've got by far and away, the largest networks of connected people all around the world. Some of the digital MSBs talk about, I've got 5 million, 10 million customers. These guys have 3 billion, right? And so they can connect people, consumers for payments very, very easily. The challenge that they've had is that the regulators are not so fast. And really, they've taken different approaches. Obviously, in the case of Apple, they've partnered. Certainly, in the case of Amazon, they've done a blend of partnering with companies like us and doing their own as well through Amazon Pay. And then you've had Facebook/Meta. And again, it's a bit of a case study that regulators are very, very serious about this space. When it gets to cross-border, there are risks that they want you to take care of and there's a mindset that they want you to have. And obviously, Meta has now pretty much exited that space. But I don't think it's over for this segment. They will continue to look at how do they add value to their client bases and how do they leverage their networks, probably more with partners over time. All right. Let's jump into Slide 10, which is how do you make sense of that at an industry level. And again, we do a lot of work to try and simplify the complex into a few key things. And these are 3 trends that we would observe particularly in the last sort of 6 to 12 months. The first one is that the regulatory scrutiny is absolutely tight and strong and getting stronger. Again, I remember the AGM in 2018, and there was a bit of a concern from one of our cofounders about the degree of compliance we were putting into the system and the next day, CBA announced a record fine. The following year, we saw Westpac. I saw in February that HSBC has just been fined, GBP 63 million. AML fines have gone up 5x. And what that means is that you have to invest in risk and compliance. It's not something you do in your spare time. all right? And for us, it plays to this idea of being a specialist. If I had 5 products in 5 different places, I'd be doing that at a compound level. But because I'm in payments, I can leverage that risk culture, that risk investment into the same thing and keep up with it. And as Mark will talk about, what you're also seeing is the major banks that we work with for our banking infrastructure are less and less likely to support players who don't have that infrastructure. And again, I was noticing that the FCA in the U.K. have just recently issued a significant find to one of our partnered banks for their support of an organization that went under. The next is -- the next trend, which, again, U.S. fund managers and investors would be much closer to than me is that this divergence between companies that make money and companies that don't make money in the short term is getting more and more stark. And I've seen 3 decades, the '90s, the noughties and subsequently, where basically, the same play just gets rolled out. I'm going to go acquire a whole bunch of customers and make no money, but the business model is I'll cross-sell another product, and then I'll make money. And what you're seeing is that is playing out all over again. There's lots of companies with lots of customers, but hardly any of them make money. And I think that's going to be very, very challenging in a kind of more risk-off environment because the funding cost behind these companies is just going to get more and more expensive. In turn, they're going to have to grow faster in order to justify the funding costs plus the way we think about the business is that if you don't have a sustainable core product, one that makes sense for a customer, a regulator and an investor, sooner or later, one of those is going to get very, very upset with you. And we think that, again, being a strong specialist suits OFX very well in the world that we're facing. And then finally, a trend that has nothing to do with us, but we're very happy to catch is the whole boom in e-commerce. And I would say if we were talking March 2020 and I was investing in the online seller segment, I would say strategically, that's a good move. But if you fast forward to March 2022, it feels like a master stroke. And the reason for that is SMEs now are all into e-commerce. They really don't have much choice because I used to talk about having an omnichannel strategy. Now they're saying, I have to be able to work with marketplaces. I have to be able to do what I do digitally as well as in person and many other different ways. So now they're saying, we need our provider to have good connections in the marketplaces. We need to be able to move money around the world through our supply chain. And again, it's great to have that capability as OFX. And obviously, it doesn't come for free. The marketplaces have their own challenges, very significant investments from their side in compliance, cyber and we have to keep up with that. But we think that's kind of where SMEs are going. So we're focused very hard on it. A question I get asked on if we jump to the next slide, Matti, on 11 is, well, what's going to happen in this post-COVID inflationary era to OFX? And I would say that there's a few things here that I think investors can reflect on. The first is that prior to COVID, we had been investing in deeper exposure to SMEs. And what you've seen is SMEs generally, not in every industry, but generally speaking, have done very well out of COVID. Selena and I were talking about a data point the other day. We've got an SME that generated almost $1 million of revenue this quarter just by importing rat tests. Now that is extraordinary. That probably won't repeat next year, but it just gives you an idea that being nimble and being able to react to the market is really, really healthy for SMEs. Secondly, what we're generally seeing, and it changes every day, but the GDP growth outlooks look fairly positive. When they are north of sort of 3%, 3.5%, typically SMEs will do well, okay? Notwithstanding inflation. And then the third thing is History shows that generally, inflation and payments companies do well. It's different if you're a lending company, but when you get inflation, typically, you see payments, and we see that in our consumer business. Definitely, there's a correlation with inflation. That's the first thing. The second thing is we were investing in Tier 1 bank excellence really for a very, very long time. And if I take you back to that competition point, a lot of the competitors were coming in and using outsourced providers for their banking infrastructure, whereas we always invested in the model of working with Tier 1 banks. I would say, as you move to a risk-off world, that's going to be even more important because Tier 1 banks, so long as you invest, and again, Mark will talk about this in a minute, are there for you, they can provide that liquidity, that transactional capability that your clients want at that point in time. And we really do think risk excellence then becomes a competitive advantage because you can complete that transaction when others couldn't. You can go win that enterprise client because of that strength that others couldn't. And then the final thing, technology is really at the heart of this company. We are a digital company. We grow because we've got -- we grow profitably because we generate scale, we create great client experiences through our technology. What we're seeing is notwithstanding some of those incumbents, you're getting a bit leaders and laggards on the technology space. Some have been investing a lot in the client experience. That's great, but haven't been investing as much in the infrastructure. The infrastructure is what tends to make you more productive, and we really want to generate leverage through our infrastructure. And that's -- that, for us, through lower bank fees, bank payments, that sort of thing actually then creates leverage from your top line to your bottom line. So those are things that we believe set up OFX well for that post-pandemic era. Okay. Let's jump to the next slide, Slide 12. Again, for those of you who saw the presentations back in 2018, 2019, we introduced this idea of 3 foundational pillars that we would invest in, and they were reliable scalable systems, risk management and people. And those 3 areas get investment from OFX every single year. Because you can't build a company of size and scale and global unless you've got those things operating well. And I'm deeply proud of the progress we've made in all 3 areas. But then we said, look, our investors want us to grow. Our clients want us to grow. So how do you take a growth rate and improve on it. And really, the 3 that we determined could give us much stronger growth where the customer experience, that's about our ground. And every day, if you fall behind, customers can move quite easily. Second of all, geographic expansion, and we'll touch on that later with Alfred, but it's true in Europe as well that the TAMs are just significantly bigger offshore. And so if you've got the licenses, how do you make sure you make the most out of those licenses around the world. And then the final one is partnerships. And that's really evolved into the enterprise segment that Yung is going to talk to us about. All of those will continue to be our filters for investment. And as you can see down the left there, we've highlighted a few things that we'll be investing in a discretionary sense going forward. First is North America and Europe. Second is corporate and online sellers. Thirdly is enterprise. And fourthly is high-value consumers. Now before I get on to M&A, let me also add that, that doesn't mean we're investing -- we're not investing in APAC or anything like that. In fact, APAC is a very, very strong region for us. It's really been the backbone of the company. We continue to see great performance out of Australia and New Zealand, and Asia is growing again. So we feel good about that, but we see the bigger opportunity offshore for discretionary investment. And then finally, M&A. And as you know, this has been a historic year for us. So we announced, in fact, our 2 first investments and Axel, who is our Head of Corporate Development is at the back of the room. The first was in TreasurUp. And TreasurUp, as you know, is based in the Netherlands. Their job is to make clients who are banks typically make their corporate clients more productive with risk software, all right? So they allow you to do things like automate your hedging strategies or your cash management strategies. And it's extraordinary in the banks how inefficient they are with their clients in this respect. And for that matter, so are the CFOs of small and midsized companies. Most of this stuff is run on a spreadsheet. So if you're sitting there with an order or to say, show me how your hedging policy is run and all the controls, they can't really do that. That's the gap that TreasurUp fill, and they're doing a great job. And I've been meeting with their board every single month since we made that investment. And then the second one, of course, is Firma. It's a wonderful company based up in Canada. We announced in December, December 20. The acquisition of Firma, we are expecting that to close in April. I have been meeting weekly with their CEO, Dave Dominy. I've been -- I've had over 20 one to ones now with their leadership team. We have an integration team set up in OFX. We're developing that over in Firma. And we're highly encouraged by the Firma culture and the Firma business. So we'll tell you more about that once that's closed, because it would be premature to say that, but it's on track according to what we announced in December. So that helps you get a feel for where we're going to invest going forward. M&A has to be where it fits strategy, not the other way around. Obviously, we're entering a time where a lot of assets are going to be for sale. But we'll always look at the filters as these and do they add value to our core business. All right. So I'm nearly finished. Slide 13 is kind of the whole thing on a page. I'm not going to go through this because I've done it other than to say, before I introduce Selena, on the right-hand side, this is what Selena's going to talk about. How do you financially dimension a more valuable company. What is it about our revenue growth, our cash generation, our EBITDA margins that investors can get comfortable with and drive value in the company. But as I said, I will now hand over to Selena, and then I'll come back subsequently after Selena's finished and we'll do Q&A. With that, Selena, over to you.

Thank you, Skander. Turning to Slide 15. Our financials are going from strength to strength. As Skander already updated you, we're expecting a record year of EBITDA with a range of $43 million to $45 million, which is really continuing that growth path that we saw before being disrupted by COVID. Our financial foundations are strong. 52% of our revenue now comes from B2B relationships. That includes all revenue that is not from the consumer segment, which with the acquisition of Firma increases more to 65%. We like all segments of the portfolio, but the B2B revenue each client provides the [ portfolio ] over its lifetime is more than 8x that of the consumer. And in the case of enterprise, it's a lot more than that and varies by the end client and also the use case that we're solving. The reason to this is their OFX needs. A B2B client will have a regular supplier, payroll or other payments to make. And once embedded in the client process, they continue to use us. You can see that in our recurring revenue rate of 78%, which is revenue from clients that have been with us for more than 12 months. With Firma being a B2B client base, this will increase to more than 80% when combining the 2 businesses together. We have a business model that can scale and the economics are really attractive. We generate about $0.30 of EBITDA from each dollar of net operating income booked. This also translates to real cash flow of over $38.7 million and underlying earnings per share of $0.88. Firma adds to these economics is they also generate strong EBITDA returns from their revenue and operating cash flows of over AUD 8 million. Currently, our balance sheet is debt-free. And as of the first half, we had cash of $63.1 million and net available cash of $37.6 million. This has allowed us to purchase Firma with debt and generate incremental underlying EPS growth for shareholders of 20% in year 1. We are not a profitless tech company. We generate real EBITDA, strong cash flows as we grow a great place to be in an uncertain world. Looking at Slide 16. You may remember this slide from when we announced the Firma acquisition. We are really excited about the addition of format the OFX portfolio, subject to being completed in the first quarter of fiscal year '23. It fits our strategic goals of growing both corporate and North America. It is also a business that generates good revenue and EBITDA. The combination of OFX and Firma will create a larger business, which will generate synergies and $55.1 million of EBITDA and at margins of 30%. This will make it one of the most profitable cross-border payment companies globally and well above our peers, which many remain loss-making. These strong EBITDA margins generate strong cash flows, which will enable us to continue to invest in the client experience, product innovation and geographic expansion, in line with our strategic priorities. Our intangible investment has been in the range of $9 million to $12 million over the last 3 years. We expect this will increase by a few million as we integrate Firma and continued investment for our corporate product set. We like the resilience the combination creates. And given further geographic portfolio diversification and reoccurring revenue streams from its corporate clients positions us really well for a post-COVID world. Turning to Slide 17. We will now walk through each of our segments, provide an insight on acquisitions and client profiles and how they drive value for the group. First up is corporate, the segment which represents 40% of our revenue as of the first half of '22. Our corporate clients have an average transaction value of their lifetime of $26,500 and on average trade monthly. There's usually a supplier or employee to pay or equipment to buy. These clients are really sticky and have a reoccurring revenue rate of 86%. Due to the frequency of trading, their contribution to the overall portfolio is an EBITDA margin in the range of 30% to 35%. We use a multichannel acquisition strategy to find new corporate clients. The 3 channels we use are digital marketing, alliance relationships and business development managers. All 3 channels are effective and pay back their acquisition costs within 18 months. And all are necessary as they target different profiles of corporate customers. The digital alliance channels tend to attract micro and small corporates. Our business development managers target small- to medium-sized corporates, which over time have more than doubled the lifetime revenue, those in the digital and alliance channels. Another important point is to operate across diverse industries, which limits our exposure to any particular sector. They are nimble businesses and react quickly to the environment around them, which has met -- which has been especially valuable during uncertain times. Skander has already mentioned, but in Q4, we've generated almost $1 million in revenue from companies that even bought rat tests. Service Industries is the largest concentration there from a portfolio perspective with approximately 44% of the client base, followed by wholesale trade, although service industries incorporates a variety of businesses. Note that not all corporates have an industry listed in Dun & Bradstreet. The chart represents 63% of the portfolio. Turning to Slide 18. As Skander has already mentioned, 20% of the global retail traders in e-commerce and SMEs are increasingly moving from just having online sales channel to being e-commerce businesses. The investment in our online segment is critical to support this business and has a substantial opportunity, as it really does represent corporates of the future. We have a dedicated vertical supporting the segment, which includes business development, sales, marketing, product and functional support teams. Revenue is growing really well, up 13.5% half-on-half ex Asia as at the first half '22 results. This growth continued in the third quarter, up 19.7% from the third quarter of '21 and on the consecutive quarter during second quarter '22, 14.8%. As you may remember, we made the commercial decision some time ago to pivot away from Asia online sellers due to the intense competition and low margins, preferring to focus our efforts on other more attractive markets, which have been growing well. That said, we can still grow Asia in a disciplined way, and it's an important region to be in for supporting global corporates. Our typical online seller has an average transaction value of $15,400 and trades fortnightly. The high frequency is driven by their need to maximize working capital. Recurring revenue is higher than the footfall average at 79% and EBITDA margins are yet to get to a point of scale as we are still in an investment and growth phase. What is interesting in this segment is it also has a multichannel acquisition strategy. We use all 3 channels being digital, alliance and business development managers to attract new clients. We have found that online sellers collaborate and you need to connect to their networks and ecosystem. More than half of our clients in this segment comes through alliance relationships and have great economics as each alliance partner will have a network of online sellers to reach out to. As you may expect, the clients in this segment are largely retail trade and wholesale trade. They want to collect and use their money where they buy and sell it in the world, which is why a virtual account offering through our global currency account product is so important for the trade. We continue to build out new features and expand the corridors, which our clients can use. Turning to Slide 19. Our loyal and high-value consumer clients have rebounded, and we're seeing good growth as certainty returns post-COVID. This has also been supported by heightened market volatility. We intentionally target customers, consumers that value the digital and human service and have an average transaction value for over the lifetime of $17,200. We are not a remittance or travel money business. More recently, these ATVs have been elevated due to the continued market volatility and higher value use cases contributing to the strong second half performance. The use cases include purchasing goods, transferring salary, property investment, family support and investment in shares. These typically don't occur monthly. And what we see in an average trading pattern is biannual trading. The recurring revenue is lower than the overall portfolio at 71%, an excellent revenue stream for our consumer portfolio. Our consumers are loyal. They may not need us every month. But when they do, we remain relevant and they use us. EBITDA margins are in the 20% to 25% range. And while we have 112,000 active clients, we have over 1 million registered clients. Again, we have a multichannel acquisition strategy, being digital and aligned partnerships. Each channel has a good return profile, but less than a typical corporate or online seller. The acquisition cost breakeven point is quicker on a digital client being less than 12 months, but it is not infinitely scalable. You may remember, we pivoted our promotional spend, which has been up to 70% search in the past, 45% search and 55% building brand awareness to drive a more sustainable digital acquisition strategy. The segment we have not covered is enterprise. Yung is going to take you through this in more detail later in the presentation. So in summary, our financial foundations are strong. We have higher recurring revenue rates. We have good EBITDA return to generate cash. The addition of Firma being a corporate foreign exchange business adds even more to this solid base. A great place to be in an uncertain world. We have a multichannel approach and the investment and higher growth rates in our B2B segment bring corporate online talent enterprises, incrementally driving value for the company. I'll now hand back to Skander to lead off with the Q&A.

Great. Thank you, Selena, and I should have said upfront. Selena is dialing in because she's managing the family with COVID. So she didn't want to miss it. So with that, we've got time for questions. And as I said upfront, if there are folks here who have questions, please just raise your hand, and we'll get a microphone to you. If you've got questions online, please stick your hand up virtually and Matti will feel those. We've got about 15 minutes for questions in this section.

Seth. This one is going to be for you Selena on tipping.

Actually sort of on the high level market data upfront. So given the level of competition, I suppose, investment that's come into the market. How is the sort of 72% that the bank's control trended over time? And do you think that -- I suppose that investment has been as successful in getting the money out of the banks as I suppose, initially expected? And then just on, I suppose, OFX, is it easier to acquire a customer from a competitor once they've moved away from the banks? So are you typically still acquiring from the banks?

Yes. So the first part of the question was really around how much of the bank share has gone up and down and how successful in new entrants. I'd say, if you had to look at that chart, I haven't actually got the McKinsey's data, but if you looked at that chart sort of 5 or 6 years ago, it would have been well over 80% was held. And in certain subsegments, like if you look at SMEs, it would have been north of 85%. And again, it depends a little by region. So you'll hear from Alfred in a moment about North America. They tend to be more banking with major banks in the U.S. because the regional banks in the U.S. have less capability in this space. So it does vary a bit. But no question that share has been declining from banks. And I would say per the strategy. The reason is that when I was trying to win clients from major banks in the lending and leasing space, it was a tough gain because the banks had the credit and the transactional banking, and that's where they made most of their money. But in foreign exchange, it tends to be kind of an additional product. And occasionally, we find a very strong relationship manager in a bank, and they will notice that their client is using OFX for payments and then they'll come back with a price offer or a price match. But sure as night follows day, 1 year later, that relationship manager will have left and the overall managers going why are you discounting for this client and all others, and so we tend to come back in. The other thing I would observe is that to the second part of your question us versus, say, other digital competitors, we tend to win them more from banks just because of the virtue of more people are with banks, whether it's consumer or corporate. And then there's another factor, which is typically, if the banks are pricing at 350 to 400 basis points and you switch to OFX and on average, you're getting 50 you've saved a big chunk of money. Then you're getting the OFX award-winning service, if a digital competitor comes along and says, "Well, I'll do it for 40, let's say, you're only saving 10 basis points and you're taking a risk and you're not necessarily getting the service and it's the same the other way around. We are seeing more these days, particularly in some regions. Clients who have gone to digital players in the corporate space saying, well, actually, it turned out to be problematic because they're not open when I thought they were open, I can't reach someone when I really wanted to talk to some, and it was fine for the really easy transactions, but it was no good for that more complicated ones. But at a general level, we tend to win them from banks still.

And just I suppose on the competitive landscape on Slide 9. You sort of broken it down by I suppose, the capital providers and the public nonbanks. So I was just wondering if you could I suppose if you rolled the clock forward a few years ago, it was now -- back a few years ago, as neo-banks coming in and offering free FX, if you kind of look forward over the next 5 years, what do you think out of those sort of cohorts as the biggest competitive threat going forward?

Well, it depends on the segment. So I'd say in the SME space, you're getting very strong specialist start to emerge and some of the SME players are starting to emerge. So if you take the firmer acquisition, you're starting to get players who really understand corporate doing really, really well. And I would definitely say that we're certainly trying to become bigger in our specialist segments, and we think that's going to be the winning strategy. I mean what's interesting is just in exactly the same way OFX started as consumers started to have corporate clients and built up a little bit of knowledge and then started to push into corporate. I would call crossing that chasm is a real tough job because most companies have one way or another, a bit of a DNA about them. And what we're seeing is the new entrants have a bit of a DNA around great technology, great marketing programs but there shouldn't be any need for service because the technology does it all, right? And so when they start to say, well, or the CFO or the investor says, well, you should be in corporate because you're making 8x a lifetime revenue they say, Great, let's go do that. But actually, it turns out that the client wants a bit more than that. It doesn't mean they don't win corporates because they do. But over time, there's a bunch of things you've got to do well. Plus the other factor that we've certainly seen in the last few years is that, that regulatory scrutiny is make it tough for them in the corporate space because they're not getting the banking support that they want and need to do lots of transactions and to be there when the corporates need it. So I think we're going to see some more consolidation in the next sort of 2 to 3 years, probably in every segment, but particularly in corporate.

And just a final question for me, and then I'll hand it over to others. Just I suppose, continuing on that thought, is that why the corporate margin sort of at 30% to 35% is a little bit higher than the other segment. It's actually more difficult to get in there and own that customer?

Yes. It's -- the EBITDA margin on corporate is higher because you get higher recurring revenue, the marginal cost of every other transaction is very low. And as Selena touched on, you get the second, third, fourth transaction for free. Whereas with the consumer, you pay the CAC upfront and then they don't trade as often. And in the case of some consumer subsegments, they're much smaller ATVs, but you've got the same fixed cost. So that's why the EBITDA margin is generally better on a corporate. Chris?

I have 2 questions. One was already answered on the competitive landscape. But just a -- great result on the upgrade this morning to earnings of $43 million to $45 million. EBITDA you continue to reinvest back in the business whilst you're seeing that operating leverage come through. Can you maybe just highlight where you are reinvesting in the business and the opportunities set that's in front of you over the medium term there?

Sure. So in FY '22, relative to our own plan and our plan had a series of investments, more promotional expense, more North American growth, more CapEx invested in our reliable, scalable systems. And then we saw through the first quarter and outperform, let's call it that on the top line. And so we felt at that point that we could start to reinvest even more -- and the 2 things that we did at that point were one is invest in our online seller segment. So we did some incremental promotional expense around that. And we've actually also done a little bit of incremental around our alliance channel in that space. And then the second thing we did was Alfred found this opportunity with the NHL. So we put together a sponsorship program, which is a multiyear sponsorship program with NHL, which is obviously, it turned out to be a stroke of genius because we did the Firma acquisition, but it's really focused on corporates and North American corporate. That's what's that NHL sponsorship. In FY '23, which is the year that's coming up, as I touched on that slide, we want to grow in North America and Europe. We plan to do more activity in those 2 places. But Australia and New Zealand is also doing really, really well. And there's more promotional expense earmarked for that. The marketing campaign is working hard, but we're looking to refresh those. The technology investment is going to go up, both in terms of OpEx and CapEx because what we're really seeing is that ability to do faster payments and cheaper payments is really paying off for clients. So for example, this year, we did a partnership, which allowed us to do payments to exotics much cheaper for clients, and we've seen a great ROI on that. Historically, as well, there's been a significant investment in our risk capability and that will continue into FY '23 as well. Is there anything I've missed Selena?

You did a brilliant job. That's everything.

Matti, any questions online?

Thanks and Yes, we've got a few questions online. The first question we'll take is from Lafitani Sotiriou.

Good morning, everyone. Lafitani from MST. I wanted to dive into the multichannel acquisition buckets you've provided for each segment. It's handy information, so thank you for including it. With it, how dynamic is the marketing spend that you are putting into these buckets studies? If 1 channel isn't getting [ made for buck ], do you -- like what is the process that you actually go through? And which channels at this point in time, are getting the most efficient payback at the moment?

Do you want to take that one, Selena? Or you want me to?

Yes. So the different channels have different dynamics to them. So digital is search and branding. Alliance, it requires -- it does require people to reach out to alliance partners to sign them up and then to get their clients coming through. And BDM is also very much a people game. So -- we -- as we see the -- it was really interesting as we look at the returns on the investments, they're not wildly different between each channel, but what you may get the most differentiated is probably in that corporate channel when you get the BDMs that do get larger corporates but less of them compared to the digital channel, which get lots of corporates, but smaller value. So what we really like is actually the returns on each channel are good. The multi acquisition channel is -- works really well because you're not reliant on 1 channel. And then when we see success, we throw more investment at it. So we see success in the BDM channel, and we think we can add some more BDMs in a particular region, we go for it. So -- but it's not as -- alliance and BDM is very much people dependent, whereas the digital is more search and marketing dependent. So if you see that volume there, you can spend more. It's a little easier to turn on. Whereas alliance and BDM, you just need that lead time to hire those people to then get them in market and selling.

And I thought I might just invite Elaine Herlihy up on stage. She is our CMO. So she could probably add to what Selena said. I'll just turn myself off.

Thanks, Skander. What I'd add to what Selena just said is actually one of the things we've been really encouraged by is our ability to actually attract corporates, particularly through online marketing, which is something that has worked really well across the business in the last couple of years, in particular, and changing that mix from consumer to corporate. We're seeing good acquisition costs, which are comparable with 2 years ago actually in terms of our cost per acquisition -- excuse me, blended cost per acquisition of clients. So we know that, that marketing spend is working really hard for us. And as Skander said, when we see demand in market, we follow it. So we're really -- when the operating leverage is there, we know that when we are seeing more demand in market, we will work with Selena and with Skander to go. We're seeing the fish in the river, let's go and find them and that works particularly well. The one thing I would also add because Selena mentioned it a little bit earlier, is we are investing a bit more in brand. And the reason for that really is around brand and awareness correlate to trust, which also impacts across all segments. So though we have a big focus on our marketing acquisition, the awareness of the brand in each market and the trust that, that generates, particularly in financial services, means that it also helps our BDMs. It also helps our alliance channels. And it also helps, frankly, our enterprise efforts when we're going out to acquire those clients because people know who OFX is to some extent and they trust what they're seeing around the proposition in market.

All right. Thank you. Thank you, Laf. Is it -- do you have a follow-up question?

No, that's it for now. Thank you.

Okay. Matti?

Great. Thank you, Skander and Laf. That is the only question online. We've got another question coming through on the Q&A chat, so I'll just read that out. The first question is from Joshua Hain. He asks, in light of FY '23 investment priorities just outlined, are you still targeting operating leverage in FY '23 from current 30% plus margins?

Yes.

Great answer. Okay. We have 1 more question come through on the chat. [Operator Instructions] This question is from John Pitt. He asks what impact is blockchain technology having on OFX's business?

That's a great question. To be honest, right now, not a lot. But to give you a feel for how we're thinking about blockchain as well as crypto, I've been working pretty closely with various players for the last 4 years. Every time I'm in San Francisco, I go and visit some of those folks, same in London. We've been -- we've had a working group on OFX, in OFX working on this for the last 12 months as well. In fact, we're going to the Board this week, I think it is or next week, to talk a little bit about what we're seeing. Blockchain per se is not having a big effect right now. We do think probably the biggest effect in the short term will be more around the Central Bank Digital Currencies or CBDCs. And the reason for that is that essentially, SMEs will have the opportunity to settle with CBDCs. And our job as a payments company is to be agnostic to regulated payments. Crypto much less so, we've had a look at a bunch of different crypto platforms and currencies. And at the moment, we don't find that for customers. They're doing the job. In other words, if I'm an SME and I'm using crypto, I'm exposed to extreme fluctuation and volatility. And that's not the use case that they tend to use as far as Selena touched on, it's stuff like payroll or inventory. They don't want that fluctuation. I think the other thing on blockchain that we are seeing is the major banks are investing pretty hard in blockchain. My guess is that what they will do is a little bit like what Wells Fargo have been doing in the U.S. and have an internal blockchain which will allow their SMEs to settle if they're a Wells Fargo customer much more quickly. That's more fixing a Wells Fargo ledger issue than reinventing payments for clients. So at this stage, it's still quite nascent. And -- but we're very close. We're watching it. We talk to the board about it. We've got groups of people inside OFX working on it.

Great. Thank you so much, Skander. We have 1 final question on the line from Cameron Halkett.

Excellent. Thank you, operator. Skander, Selena and everyone else. One quick question around is, given what you've talked about the EBITDA margins. Now obviously, lower ATV, but higher frequency and as Selena said, it's still in the process of scaling I'm just wondering if you can comment around where you think that can get to in terms of EBITDA margin over time in comparison to, say, corporate? Just interested to understand the drivers there.

Do you want to take that one, Selena? Or do you want me to?

Yes, I can take it. So you're right, Cameron. It's lower ATVs but higher frequency. So you would hope that as it scales and assuming that you can get your variable costs to scale at a lower rate than the revenue being the bank fees because it is [ bank fee ]. And there's a lot you can do there, and we've done a lot in the last 12 to 24 months. I do think it can be at least at that corporate margin level because just think of those number of transactions that are coming through, it would be wonderful. We can already see that lifetime revenue for an online seller is higher than a regular corporate. And so as long as we can keep the costs in line, it should be at least at those corporate EBITDA margins.

And maybe just to add to what Selena said, there's 2 factors at the moment that are pretty -- have a lot of our attention around that segment. One is that by their very nature, Selena call some of the working capital king. So they're trying to turn inventory very fast. And so you have to be careful and thoughtful about how you actually provide them product because if they can't make a margin call or something like that, you can bear losses on that. The second is that the banks who support us have been very deliberate, and we've stepped up and met that standard about what they want to see from a transaction monitoring perspective. If you think about our corporate business traditionally, it's all been about payments out. And so what Mark and the team do in terms of transaction monitoring is figure out beneficiaries, transactions, those types of things. Now, you've got a receivables product. So you have to understand the payment in as well. And that's relatively new. So we're moving thoughtfully and that's what's probably affecting the EBITDA margin somewhat in the short term.

Thank you, Skander. Cameron, do you have a follow-up question?

That was all. Thank you both. Very clear.

Thank you. We have no further questions on the line for now.

All right. Well, just as we go into a break, we've got a short video for you and then coffee. For those folks who are on the line, we'll reconvene at 20 after the hour. [Break]

Okay. Jim, can you hear me? Well, welcome back. Greatly appreciate the call questions. And hopefully, from the first section, you got a good sense of the envelope and how we're performing and the kinds of choices that we've made and are making. The next section per the agenda is I just want to take a deep dive on 3 things that get a lot of our attention. The first one is North America, and many of the investors in this room and many on the line are constantly asking me and others, how come we can't grow North America faster? So you get the chance to ask Alfred that yourself. We also get a lot of questions around our push into the enterprise segment. And the enterprise segment is a very interesting evolving space, and you're going to have Yung Ngo, who's going to -- who leads our APAC region, talk about the work that he's done here to win enterprise clients, and he's been absolutely front and center of those efforts. He's going to walk you through how we think about it and a bit of a case study. And then we'll bring it home with risk. And as I said, I don't think there's a great financial service business out there that isn't good at risk. And it was a very, very important part of our value proposition for clients, for regulators, for banks and for staff, quite frankly. So Mark Shaw, our Chief Operating Officer, is going to talk about that. All right. Let's start with growing North America, and Alfred is on the line, you'll see him in a moment. Just briefly to talk about Alfred and his background, he's been with us for a little over 2 years. And he's got a background with Western Union Business Solutions. Before that, he was with Ruesch. And for those of you who don't know the industry, you'd be forgiven for not knowing Ruesch, but they're a corporate foreign exchange specialist. Alfred ran the Lat Am region for Western Union Business Solutions. And that was actually quite important to me because part of our global operating model is having executives who can operate offshore with the head office. They know how to get investment, they know how to make the case and they've got support. And Alfred's done a fantastic job of that. So with that, I'm going to hand over to Alfred, who's going to set the scene with a little bit about the North American market, and then I'll come back and conduct a bit of a Q&A. Over to you, Alfred.

Thank you. And it's great to have joined you, even though I'm online. As you know, I was in Sydney for the first time in a long time a few weeks back, and I got some nice weather, it wasn't raining. I got a little hiking and did some swimming then. Just a little side note, my favorite Australian animal is actually the majestic ibis. But for some reason, my Australian colleagues speak pretty poorly of this. So I guess that just demonstrates what I've been told, that I'm just another American who loves all the wrong things about Australia. So in these next 2 slides, I just wanted just to walk you through why I think North America is the best -- it was the best growth that OFX can access. If you look here on Slide 23, you can see pretty similar themes to what Skander laid out for the group. Firstly, it's huge with around 20% of that global revenue being in right here. Number two, the concentration with major banks is even higher than in Australia. And that's mainly because historically, Americans have been less inclined to be educated on foreign exchange. But slowly, that's changing, even though that's a real shame as major banks are even more expensive than Australian major banks, if you could even imagine that. Right here in the United States, if I want to send a wire transfer, just to make a payment to a colleague, it's going to cost me upwards of USD 25. And foreign exchange is no difference. When you're looking at major banks seeing spreads over 400 basis points, it actually isn't uncommon at all. And what's not on the page is that unlike Australia, there are thousands and thousands of regional banks, and I'll get into that, but nearly all of whom serve our target clients. But they just all have very, very little capability. But the good news is, is that like Australia, SMEs want better service. They want a better price. They have gone online during the pandemic, and they're all more global. They are waking up to the alternatives like us, like OFX. If you could just move over to Slide 24, please. We're unlocking the opportunity. The investors that I have met with personally as well as Skander and the Board all want growth north of 20%. And obviously, so do I. And we're delivering north of 20% on a CAGR basis. And I'm optimistic that we continue to do that because we have the infrastructure, we know the prospects and the clients just really love what we do. With that, Skander, it's all you.

Okay. Thank you, Alfred. So what I want to jump into with Alfred is a few questions that I often get asked by investors and give you a chance to hear Alfred as it were unplugged on the same questions. And the first one, Alfred, is we get a lot about competition. And even in a break, there were questions about the competition and people would know a lot of the European names, but what about the U.S.? What about Canada? Can you just give us a little bit of an insight as to who you compete with and what you see?

Sure. First of all, competition is different based on who the target client is. So let's talk about this first, and let's then move on to the types of competitors that we see, which are banks and nonbanks. And simply because it's the most similar to Australia, I'll go ahead and start with Canada. So the entire country of Canada has less than 50 banks, right? The main banks in Canada with whom we compete are RBC, TD Bank, Bank of Nova Scotia, Bank of Montreal and CIBC. Locally, they're known as the Big 5. In payments, you're judged on 3 areas: price, service and speed. Price, we won. Third-party research has shown that in price, we're usually well over 100 basis points cheaper than Canadian banks. With service, we win. The problem with the -- the plight of the major bank client is pretty much universal. Where we aren't winning is speed with the dollar-Canadian cross. The U.S. is Canada's largest trading partner. And all of the major banks offer U.S. dollar accounts with almost immediate value date. That means if I send a payment, it gets there within a few moments. But luckily, because we're so much cheaper and the money arrives in less than 24 hours, we do win clients from the banks. But the good news is, is that we are investing in our Canadian payment infrastructure. So this issue will be a thing of the past very, very shortly. So with all other crosses, we've been across the board. Just moving on to the United States. The U.S. has over 4,000 banks. And the bank competition is pretty dependent on the geography of the clients. If they're on the West Coast, you may see Wells Fargo being more [ prevalent ]. If they're in New York, you may see Citibank. Our main bank competitors, including the 2 that I just mentioned, are Bank of America and Chase. Pricing in the U.S. is quite different from Canada. And we're generally well above 200 basis points better than the major banks. We went across all areas mentioned with Canada, but in the U.S., I'll also add how we win with compliance, which isn't really something that you normally hear, but let me give you an example. When you're buying a $1 million -- EUR 1 million villa in Portugal or Spain, your compliance team has a lot of questions. And with the big banks, you may not always get someone who understands the type of documents as fast. With us, this is all we do. The process is much, much smoother for the client. It's able to speak to a human being to send large ticket items. In a large bank, this process can take days. With us, it's a few conversations. On the nonbank side, both countries have pretty similar competitors. I would say, Wise and xe.com are the 2 main ones. xe.com is actually a homegrown Canadian company who gets brand recognition in its country of birth and is investing pretty heavily in marketing in the U.S. Wise is -- Wise is wise, right? They're the new kid on the block who had made a big splash. They offer more currencies than we do. But these currencies that we don't service are, as Skander mentioned earlier, they're traditionally remittance portals for small value amounts that -- and we're not going to play in that space. I'll tell you this, which is something I'd like to say. Go on xe.com and try to find the number to speak to somebody, speak to a human being. You're not going to be able to find it. Wise does have customer service until 3 p.m. Eastern Standard Time. So if someone is in Vancouver or San Francisco, where I'm at, and wants to speak to a human being, they have to do so by noon. That's a big difference for us, as Skander mentioned a few times. And with corporate clients, the same players across all geographies supply, right? With the difference being that you add in Western Union Business Solutions who were just sold and Corepay in the larger opportunities. Of interest is we've done a really good job of concentrating our efforts in our alliance and partnership group, where we have many partners sending us clients instead of relying on marketing and sales. Our corporate revenue has increased over 60% over the last year.

Awesome. Okay. Just in terms of the competition, Alfred, and going back to your past, one of the things that we've tried to build is that global operating model, as we call it, where strong regions able to serve their clients make good risk decisions, good finance decisions, good marketing decisions in region. Maybe you could just compare that to what you've experienced with your -- the predecessors that you worked for and how you think that kind of plays out competitively.

All right. Well, look, the first thing I'll say is that OFX doesn't operate with a control tower mentality, which is popular with a lot of, for instance. So 99% of all decisions are made right here without ever involving Sydney. When Sydney does need to get involved, things move quickly. I'll give you my favorite example. Probably a lot of people, their favorite example. If you look at bad debt. I started in late 2019. And in one of my very first conversations with you, I said we have a problem, right? And we need to fix this right now. And you just said, do it. We got a team together, both in North America and in Sydney, and we were able to very quickly integrate an industry-leading anti-fraud system and also another system that presented insufficient transactions, NSF transactions. Long story short, you've seen the numbers. We've lowered our bad debt line by over 47% in fiscal year '21. And this year, we're currently down 98% in fiscal year '22. So that's a really nice story to tell, and it would have taken many, many, many months if we had this type of control tower model. Another example of how we do things here is that we really quickly changed the organizational structure of the region by adding what we call the inside sales team. And what the inside sales team does is that it squeezes as much as we possibly can out of our marketing spend. So because of this team, which is actually headquartered in Toronto, we were able to quicken the time between the corporate clients submitting their paperwork, open up an account and making their first transaction. And we sped that up by 37%. Not a small feat. Corporate onboarding is obviously more complicated than consumer onboarding because of the KYC and the compliance checks involved. So we're very proud of that number. We continue to tweak the process and always looking to continue to make things better here. And honestly, this shows collaboration with operations, with clients, with sales to really move quickly and to make something better. And I'll just say before handing it back, I have friends at all the major banks and all the nonbank players in North America. And from stories that I'm told, and just from examples with my last stops, OFX is the least bureaucratic company in the industry.

Well said heading into bonus time. So let's talk about corporate, Alfred, because that's your background, it's our DNA and you've really done an amazing job. For those of you who don't know, he's been driving our corporate business in North America at record growth rates. Tell us about corporate, what you see, how you think we ought to compete, how we -- whether we're well-positioned, all those sorts of things.

Yes, definitely. So simple answer, just focus, right? We know what we are and we know what we're not. If you're an American company that you're only sending U.S. dollar payments to China, right, where you don't have foreign exchange fees, there's others that can service you better than we can. If you're a large company, when you're getting screened, basically what you see on the Bloomberg terminal and all of your deals, someone's going to want your flow. But if you're a company who has a feeling that you could be getting better pricing and service than you're currently receiving, if paying your suppliers is taking you hours every single month, if you're thinking about maybe billing your clients in their home currency, but you think that's complicated, those are all things that we can help with. And the focus on North America is really paying off. And we're the fastest-growing corporate book and we're up 36% versus this time last year. So I'm operating in an environment where I have to show not only top line growth, but profitability every single quarter. So we're not giving away the farm hoping that we're going to be making money later, right? We make money now, and we're winning. We've grown the corporate book while we've increased our profitability by really focusing our efforts on where we can win, and we're just getting started. We have the ability to sell in every single state in the United States and Canada without any restrictions. And we're very focused on industries that are profitable, are geographically concentrated and are underserved. So just 2 examples, Texas and Florida. Those are 2 states that meet those criteria that I just mentioned, and they're up 84% and 56%, respectively. And we just hired a sales leader based out of Texas to really further our coverage in the state.

Okay. Yung is going to talk in a moment about enterprise. It's another question I often get asked by investors. When are we going to see an enterprise deal in North America?

All right. I'm not going to steal Yung's thunder, but look, enterprise in North America is coming, right? We just hired an industry veteran in a gentleman named Trevor Brown, based out of Florida, who's really focused on these deals. And just to give you a little taste, we have some really, really interesting things in our pipeline in the financial institution space, payroll and pension, just to name a couple of industries. We're -- along with creating a sales infrastructure, we're also enhancing our technology stack to be able to compete in this space. And conversations and actions are happening across the organization as we've made it very clear, enterprise is a global priority. So North America is no exception. It's coming. Just stay tuned.

All right. There's so much patience in this room, Alfred, in case you haven't picked that up. But all right, last question, which again is one I always get asked is, what should we do differently or better to grow North America faster?

All right. I'm really close to bonus time, too. So from a strategic perspective, I'm happy with the direction that we're going. So the Firma acquisition is going to be bringing on a lot of market and vertical know-how for how the Canadian market -- for the Canadian market. The team were really excited about working together. So we're doing a better job with keeping clients that make it onto our platform. We can actually show that with a 15% increase in clients who actually quote on our system and are making their first payment. We're focused on lowering our cost per new dealing client, and getting that commitment is really showing that we're moving in the right direction. Something else to mention is that before COVID, we had staff in San Francisco and Toronto. Today, we have staff in over 10 major cities across the continent. And the Firma acquisition is actually going to add 5 additional major cities to our list. So this is going to be great because we're going to be even closer to our clients. Viewers in North America have just started to see the National Hockey League-branded ads, the NHL, on the Internet and TV, and we're really excited to see what this relationship brings. This isn't just a simple brand recognition play, right, as we're having doors open to us that we really didn't have before, right, being part of this fraternity. So we're really excited to see the full year results of this partnership. This relationship, as Skander mentioned, was a stroke of genius, I'll take that one. It's really important with the Firma acquisition, right? Because as you all know or you may not know, the NHL is like a religion in Canada, and it's going to help make introducing our brands to our new clients and staff even easier. So long story short, I'm getting the investment I want. And when I need more, I've been given it.

Awesome. Well, thank you very much, Alfred. And everyone got a chance to ask Alfred questions directly at the end. But let's switch gears and talk a little bit about winning in enterprise. And enterprise is our fastest-growing segment. Historically, as I said upfront, it's been a very, very valuable part of OFX. If you go all the way back to 2013, 2014, it was sort of 13% to 15% of the company. So it was always valuable. And to talk us through it, I'm going to introduce Yung Ngo. So Yung and I actually go some way back. We first worked together back in 2008 at GE Capital. But before that -- sorry, subsequent to that, Yung worked at Westpac and St. George, and I managed to lure him to OFX about 3 years ago and he's doing a stand-up job. So let me hand over to Yung to talk us through enterprise.

Great. Thanks, Skander, for that kind introduction. Hi, everyone. It's my pleasure to take us through enterprise and just wanted to share with you our approach in this segment and how we win. So let's go straight on to Slide 27. So firstly, in terms of enterprise, it's really a client that we help with them offering FX services to their own customer or end user, and it's one where we scale -- or acquire and onboard those end users at scale, right? So -- and they're not large corporates, and they're certainly not wholesale opportunities. And there's probably a couple of key strategic reasons why we find this segment really attractive, all right? The first one, as I mentioned, is that it does -- it is a channel that allows OFX to scale end users, right, acquire end users and onboard end users at scale. And I'm talking about consumers. I'm talking about corporates. I'm talking about online sellers, as Skander mentioned, that really fit our strategic profile, right? We can certainly scale them in this channel. The second thing is that this channel is highly profitable. As Selena shared before around lifetime value, how our corporate is more -- generates 8x more lifetime recurring revenue than consumer, where in an enterprise space, an enterprise generates around 180x more lifetime value than even a corporate, right? So highly profitable. The other point I'd make too here is that the deals that we have in the enterprise space is typically a 3- to 5-year deals, right? So when you think about that, it just gives us a great opportunity to be able to lock in those recurring revenue for a longer period of time. And then finally, I'd say the other key strategic reason is that this market is huge, right? And importantly, for us, we really believe that it is underserved by the banks and other FX providers because you really need to have a holistic solution in this market in order to win. And I'll talk through a bit more about that, but I think we're really well-placed. Just top right, in terms of the chart, so in terms of the page, let's talk a bit about the verticals which we target. They are kind of the 4 main key ones at the moment that we're targeting. So equity management is one that we like because it gives us an opportunity to acquire high-value consumers at scale, right? And I'm talking about wealth creators, I'm talking about investors who typically look to overseas-type investments, and they need an FX solution, obviously, as they acquire and also bring back those assets, right? So Pearler and also Link Market Services are good examples of where we serve in this vertical. The second one is banks and FIs, and we did talk a bit about that. And we really like this space. We really see great opportunities here. And obviously, our relationship with Macquarie Bank is a great example of how we serve this segment. But we think we can win in 2 ways. Firstly, you will have financial institutions that do not offer FX, yet we all know that FX is a relevant product within their business, right? And where they have hesitancy in deploying capital to a noncore product and building their own FX infrastructure and system and taking on AML, we can obviously help with all that. And in that situation, it makes total sense for these folks to partner up with a specialist like OFX because that's what we do. So that's a key opportunity for us. The other area, too, is that what we find in our experience, too, is that even when you have financial institutions that do offer their own FX, invariably, they're noncore to their overall business, right? And in our experience, they often get to a point where they actually face a bit of a dilemma. And that dilemma is that in this competitive environment, do they invest more of their capital into a noncore product or do they leave that, right, to the core products like lending? And what we typically find is that they have this internal dilemma, so to speak, around investments that they make. And in that instance, actually partnering up with someone like us as well, also makes a hell of a lot sense because the risk is if they don't, right? And if they don't invest in the FX, they fall further and further behind in terms of the industry standards as well. Platforms is the third vertical that we target. And this is a very interesting vertical, right? Because we're talking about businesses, right, that core to their business is they operate a platform. And we invariably see opportunities here and very compelling opportunities to actually embed the FX solution within the platform and thereby complementing their core product. And WiseTech Global is a great example of that. And again, I'll take everyone through that at the end of my presentation. And then finally, government. If you want to have the license -- I think we all know if you want to have the license to deal with government or to service government, ticket to the game is really you need to have strong reputation, great compliance, infrastructure and risk culture. And we've got that in OFX, which is why we believe we are well positioned in that vertical. You would have known that in April 2021, OFX was appointed as accredited FX provider to the Reserve Bank of Australia, all right? So our relationship there with the RBA allows us essentially to operate and work with government agencies, where government agencies may have a need for FX solution for their clients. So in fact, since May 2021, we've been helping the ATO. We launched this FX solution with the ATO and helped them and Australian tax players, both individual and corporates, living or operating overseas, when they need to remit their taxes back to the ATO, we'd help them with a streamlined process. So we really like that government space. Just quickly moving on to the chart then on the bottom right of the page. You'll see here the performance in this segment over time. There's a couple of things I wanted to point out to you on this chart. The period prior to FY '18 was a period where we had both Macquarie Bank relationship and ING in our portfolio. Now whilst we still have the Macquarie Bank relationship, we did pause the ING relationship in FY '18. And then you see the period in the middle really from FY '19 through to FY '21, it is a period where I would say that we have spent a lot of time just resetting this whole segment, making the right choices, setting the right strategy, and we're really confident in that strategy now, and we're really confident in the investments that we're making in this segment to keep growing this segment. And you can see that with the anticipated revenue growth in FY '22 and beyond. The other thing I'd say about this chart too is that if I compare the portfolio that we have with the growth trajectory now going out and we've got compared to current portfolio that we have in the enterprise to the ones a couple of years ago, I would say it's a lot more quality. So for example, back in the day, we probably still had a remittance-type business, right, in the enterprise portfolio, for example, the Travelex relationship, right? We had less corporate before. We have more corporate now. And we only have high-value consumers in that space. So we are building not only growth here, but we are building high-quality growth in this portfolio. So moving on to Slide 28. Thanks, mate. There's a lot on this page, but what I wanted to take everyone through, it's important for me to explain how we win in this segment, right? That was the what. This is the how. And how we win in this segment really is the value proposition that we provide in this segment is extensive. It is the one segment in our whole business, quite frankly, where we bring together the collective strength of the whole organization, right? That may sound cliche, but sales, marketing, product, risk management, technology, bringing all of those parts together into one single proposition for the client and for the end user. And I'll say upfront, we -- our approach in this segment is not just about providing good technology at a low price point, right? We don't just provide good technology at a low price point because, in fact, we believe that approach actually undermines the full value that OFX brings to the table in this segment. And it also undermines, in our opinion, our ability to be able to unlock, quite frankly, order revenue that's on the table in this huge market, right? The other thing I'd say about players adopting that type of approach is that they tend to chase generic needs, right? And they tend to meet generic needs of the client. And when you have technology that support generic needs, that technology can easily be replicated by competitors. That is not our approach here. Our approach here, right, is -- and our strategy here is full service, full relationship. And what I mean by full service and full relationship in this segment is that we are not afraid to tackle all of the clients' requirements. And we've got 3 main areas where we really target on to add value to the enterprise clients, right? The first one is about improving their customer experience, right? It's not good enough for us to just offer an FX, good technology, low price point, you have to help them fix their customer experience or processes. And we do this in a number of ways. We obviously combine all the API technology that we have. We tailor that. The way we embed our FX solution ultimately natively within their environment as well, right, right through to the way we design our workflow for case management to service the end customers. We do all of that with the client, with improving the customer experience at heart. And that's adding value. The second area is that we genuinely help them solve pain points. Now different enterprises or different clients have different pain points. But one key one that we commonly come across is that we help them with the AML and we help them with the compliance obligations. And Mark will take us through that later, right? These clients don't really want to take on those type of obligations, right? But they still want to offer the FX solution to their customers and add value there, right? So our approach in order to acquire and onboard the customers on a direct basis, that's why we have that approach, allows us then to take responsibility over those compliance programs, and thereby also saving a pain point for the clients themselves. And then lastly, I'd say, helping an enterprise grow is critical in any partnership that you have. But this is not just about top line growth here for these clients, right? It's not just about a good price. In fact, our clients here often place higher value in the total value that we bring to the table when we're solving pain points, right? We're going to be helping them with better processes. It's also about the cost savings and the synergies that, that create internally because we're making things a lot easier and efficient for them and their customers. And it's even also about the ability for them to redeploy what would otherwise be very, very valuable capital into other things because they have to support like a partner like OFX. The last point I want to say about our full service and full relationship model and approach, and you probably get a bit of a hint that I'm pretty passionate about this point, is that this approach allows us, right, to build deeper and more valuable and more long-term relationships, right, deeper and more valuable long-term relationship. Going back to my point before when I said every enterprise deal, 3 to 5 years, right? I'll run a scenario. Consider the position of strength that OFX has at the renewal of those relationships at the 5-year mark, where we have a full service relationship, where we've been able to embed FX processes within the enterprise, where they are relying on us still to help them with their pain points. Consider the position of strength that we have at the 5-year mark, right, compared to if we took an approach that was just simply chasing generic needs, good technology at a low price point. Again, we are building not only a valuable portfolio here, but we're building this sustainably for the long term. That is at the core of our enterprise strategy. On the right-hand side of the page, it is our go-to-market strategy and the pipeline and how we think about it. There were 2 phases here in terms of how we execute the enterprise pipeline. There's acquire and then there's activate, right? And acquiring is everything that we do from prospecting an initial client right through to successfully negotiating a deal with those clients. And the one thing I would say is that we have a very disciplined approach, and we have dedicated resources internally to support every part of that acquire phase. And as Skander mentioned before, our disciplined approach actually requires -- if we don't see prospects or we've declined RFIs because it doesn't meet this criteria, we would actually decline that upfront. So we have a very rigorous filtering process there. Activation is all about implementing and working deeply with the customers and the client to raise awareness of that -- of the thing that we just launched, the solution that we've launched. And the other thing I'd say about activation, too, it is an important period where once we've developed the relationship, once we've launched the product, it is also about continuous improvement. It is also about continuing to work with the partner and the client to explore other FX opportunities within their wider organization. That occurs critically in this phase. And a good example of that is Link Market Services. What started out as helping them with international dividend disbursements has now extended to executive share planning and even helping them actually clear out some of the unclaimed monies and unbanked check pool as well. So finally, I'll go to the last page now. This is a very exciting opportunity here that we have. And I did want to showcase WiseTech Global as an example of bringing to life everything that I've just said. So our relationship with WiseTech Global, in case some of you are not aware, they are now a global Australian-listed company, operating over 50 locations around the world. They have 18,000 customers. And they are a specialist software provider to the logistics and freight forwarder community. And their core platform is called CargoWise One. And CargoWise One also acts as an accounting platform for freight forwarders. So when we initially engaged WiseTech and when we helped them sort of map out the FX process, what we both found was that, that process was very manual and it required the customers to move in and out of the CargoWise platform, right? So when you think about, they have to move in and out of the CargoWise platform back to their banking platforms just in order to replicate data, to transfer data. And what we kind of like realized is not only is that process unproductive for the client, but it was also prone to error and risk. And again, if you've got an arrangement where you're transferring in millions of dollars at the click of a button, that risk is really, really significant. And so both WiseTech and OFX, with that, and we realized there was an opportunity here to really help streamline the FX process and thereby, again, creating a better customer experience. So what we were able to do with them was we built out, through APIs and through a lot of technology, we're able to deploy an FX solution right, natively and fully integrated into the CargoWise system. We've been able, by doing that, cut a lot of manual processes. And from an accounting perspective, we created one single workflow, which is significant for the customers. Now we've launched that solution with CargoWise in October '21. So it's still very early days for us. But as you can see on the right-hand side of the page, I've given you a bit of a summary of what we are really focusing on now with CargoWise. It's all about the activation phase, all about working closely with them and their clients to make sure that awareness is up, et cetera. I won't go through that plan, but the key call out I would say is that every element of that plan is done in conjunction with CargoWise and WiseTech. So again, in this segment, our clients not only support activation, but they have complete skin in the game in both the execution and outcomes with OFX. And I'd say, again, in terms of summary, you cannot have that type of relationship and that type of activity with the client unless you had a full service and full relationship model, which we adopt strategically for this segment, and it's also the reason why we believe in it, and we have confidence to grow this in the future. So I'm going to end there, and I'll just -- before I hand back to Skander, I did want to play a video and share a video with you of the CargoWise system. And I'll make the pertinent point again. Actually, this video was developed by WiseTech in conjunction with our marketing folks as well, highlighting our solution. So thank you. [Presentation]

We can listen to that all day. Now I'm just going to briefly introduce Mark Shaw, who's our Chief Operating Officer, to talk us through risk excellence. A little bit of background on Mark. He's been with us for just over 4 years. Before that, 10 years with ANZ. His experience covers regulatory, compliance, operational risk and his agreement as Chief Operating Officer, is all of our operations, including our risk management program. So Mark, over to you.

Thanks, Skander. And it's great to talk to you today about risk management and why now more than ever, we see having a strong risk management culture and capabilities is really critical to the strong and sustainable growth of OFX. OFX has, throughout its history, had a strong risk culture and excellent compliance track record, which has helped us to develop and retain the broad footprint of regulatory licenses and Tier 1 banking relationships that support the business today. However, it's worth reflecting on how the landscape for risk management has changed for firms like OFX over the past 7 years and where we need to continue to focus into the future. So firstly, in meeting AML requirements, it has always been and will always be an essential part of operating across border payments business. Over recent years, however, we've seen that the regulatory approach has evolved in this area. The fines and some of the enforcement actions we've seen have demonstrated that having a ticket box approach to AML compliance is simply no longer good enough, if it ever was. Regulators today are primarily focused on how well you understand and manage the specific risks of money laundering in your business. You cannot just demonstrate that you have policies and processes in place that you need to be able to show how you consider the risks presented by the types of customers that you have, the types of products that you offer, the types of transactions that you facilitate among other things. And you need to show that the controls that you put in place to manage these risks are effective. We're also seeing an expansion of the regulatory focus on payments companies into more prudential areas, including organizational resilience and the protection of client funds. And this is really being driven by the rapid increase in the number of e-money providers who are now holding significant amounts of money out for clients outside of the traditional banking system. Given many of these providers are recent start-ups and still dependent on ongoing capital injections, regulators are increasingly focused on ensuring that client funds will not be lost in the event of the corporate failure. And so this includes focus areas like capital adequacy, business continuity plans, cybersecurity and even things like wind-down plans. Banking support is a key requirement for firms like OFX, and we have built strong relationships with our panel of Tier 1 banking counter-parties over a long period of time. We've also seen that many banks are now moving away from blanket prohibitions on supporting our businesses like us for money services businesses. They still have a legitimately concerned about AML risks that are posed by those sorts of business, and therefore, they are very selective on who they work with. However, for those who meet those very high risk thresholds, they're actually now actively seeking to expand their offering and have developed their own risk management processes and capabilities in order to do this. And so for us, we see that as a profitable and publicly listed company with a long track record, we're now regularly talking to banks who haven't previously supported us about how we might be able to work together, and we see that continuing into the future. In terms of technology, there's been significant changes over the last few years as it relates to risk management. Firstly, in the area of identity verification, businesses like OFX were pioneers in establishing processes to verify customers digitally rather than face-to-face. And we've been early adopters of pledges such as biometrics to help ensure that we know who we're dealing with, and those people are who they say they are. We've seen much greater adoption of digital onboarding over the last few years, really accelerated by the impacts of COVID. However, along with this, there's been a similar acceleration in the amount of fraud and fraud attacks that are happening. But thanks to the ongoing development of our controls in this area, we've continued to be very successful in identifying and preventing identity fraud even in this environment. Secondly, there's been a rapid expansion of the RegTech industry with investment growing to over $10 billion in 2020. This has seen the development of technology solutions to risk management challenges that are much faster and cheaper to deploy and maintain. And OFX continues to invest in implementing these types of cutting-edge solutions. However, RegTech is not a silver bullet. Instead, these solutions augment the human skills and experience that you still need to have in order to understand and manage your key risks. And this is the approach that OFX takes when implementing or developing any new technology. So moving to Slide 33. And as I indicated before, in addition to these changes in the risk landscape, regulation of payments companies is increasing. And as you can see from the slide, it's increasing in almost all markets. This isn't going to change anytime soon. Given the pace of change in fintech, both in the adoption of solutions by clients and the large numbers of recent entrants into the market, governments and regulators will continue to focus on ensuring that firms operating in financial services are doing the right thing and the right thing by their customers. Managing these requirements isn't easy and fundamentally depends on having a strong risk management framework and a mature culture in place. Compliance is only becoming more onerous and between our banks and our regulators, our business is constantly being looked at. And this includes independent AML reviews of each of our 8 entities in each geography every 1 to 2 years. So that brings me to how we think about risk management at OFX, and I'll turn to Slide 34. Earlier, Skander talked about the advantages of a strong specialist business model and one of the clear advantages of being a specialist is in the ability to have a very focused risk management program. So for instance, we have 4 clearly defined client segments that we focus on in terms of our approach to due diligence. And we're clear on the types of customers that we aren't able to support such as speculative traders or cash remittance. We've got 3 key regions in which we continue to operate, supported by experienced regional management and compliance teams who understand the local context and requirements. We have a clear and simple product set supporting cross-border payments, which allows us to be very focused on the specific risks that these products present and the controls required. The more complex your product offering becomes, the more complex the risks you need to manage. So being a specialist here is a clear advantage. As I mentioned earlier, technology solutions are never a silver bullet when it comes to risk management that our people are very empowered to identify and escalate risks that they see. So our focus is on implementing technology that can process automation that augment these capabilities rather than take to replace them. This digital plus human service proposition is a big part of how we manage risk, putting in place the digital controls to protect their customers, their funds and their data while also empowering our customer-facing teams to understand our customer needs and to identify anything untoward in their interactions with them. Finally, the partners that we work with, whether they be banking counterparties or enterprise partners clearly value our risk management capabilities, which are a key part of our relationship. While the large banks can be more difficult to deal with in terms of compliance requirements, having partnerships with those who share our determination to understand and manage risk is an important part of our own risk management approach. At the center of all of this, however, is a strong risk management culture. Across the company, from the board down, we understand our responsibilities as the financial services company. Apart from this being a cost of doing business, we believe our risk management experience and capability is a key competitive advantage that supports the ongoing sustainable growth of OFX. And with that, I'll hand it back to Skander.

All right. So we're at the end of the second session and the end of the day. So I'm going to hand it back for any questions at all, first of all, from folks who are here, and then we'll go any questions online for any of the presenters or members of the global executive team.

John, just on CargoWise, can you just touch on the activations you've seen in the last 6 months since it's been live?

Sorry for people who couldn't hear that was Owen Humphries from Canaccord.

So thanks for the question. Again, like I said, we launched a product late last year. So it's still very early days for us, but we are seeing good awareness. We are seeing certainly good interest around -- sorry, I won't start that again. But we are seeing genuinely good awareness right and good interest in relation to that. We are seeing registrations as well. The thing that we're working very closely with CargoWise now is really deeply taking through some of the clients through. What you don't understand is that this is actually a big change management process for it. So our activation plan is just really helping those folks really understand not just about product but it's understanding how their process is changed, but in a good way, and that's what we're focusing on at the moment.

Just continuing on the WiseTech and CargoWise opportunity, so it's obviously 18,000 customers, which is similar size to your total corporate book. I suppose could you talk through the differences potentially in what the revenue per customer within CargoWise might look like. And I suppose, over the medium term, what the ultimate drivers of wallet share, or activations are out of that 18,000. I mean is it just effective marketing into that? And is there -- do you look for an inflection point once you have a level of activation, or it really takes off?

Yes. So I'd say in terms of the CargoWise client base, it's also on a distribution. So they're not all exactly the same size, they're not all in exactly the same location. So I wouldn't think of them as replicating our corporate client base. There's obviously some that look very similar. And as we talked about when we launched it, one of the advantages was actually some of them were our clients already, so we could get a good feel for that. But what we're actually doing to activate and what we're seeing is that you're getting a bit of a mix at the moment. We're generally picking up through point around registrations, a lot of the ones that are very similar to our existing corporate clients that actually got some much larger clients, and we're adding to some functionality in order to bring on board even more and larger clients. I think in terms of the dimension of the opportunity, the data point that we put out into the market is that we'd expect to generate about $5 million revenue fiscal year '25. But saying that, I definitely would have higher ambitions for it beyond that. Certainly, what the WiseTech team tell us is that they're very deliberate, very thoughtful, very patient about their CargoWise platform, their CargoWise plans, and they're encouraged by where we're at, at this point of the journey. So we'll just keep pushing forward.

And maybe just a question on North America, that 22% for CargoWise, maybe this is for Alfred, but could we just dive into the detail of kind of what you're seeing in the key metrics? Is it largely driven to the back book? And obviously, that's the largest driver of that, but you're seeing increasing speed or whatever that number details of that 22% and what gives you confidence to continue that?

Yes. So maybe I'll take that. But look, in terms of North American revenue, like the rest of the company's revenue, it's pretty well split between consumer and corporate. It reflects the overall corporate profile. And like the rest of the company profile most of the revenue comes from the back books and not the front book. But saying that, what you're seeing on the front book, especially in corporate, is strong new revenue growth, which we typically define as the revenue we generate in the first year. And then what you tend to see is in years 2, 3, 4, you tend to build that. So generally, corporate is going very well on the front book. Consumer is going very, very well on both front and back and corporate is going well on the back book. As Alfred touched on, not yet seeing enterprise revenue out of corporate -- out of North America. And online sellers has been a bit mixed. There's been some okay on the front book and on the back book, you've seen e-commerce generally dip out of the U.S. in the last sort of 6 months. We're doing fine on that, but not as fast as, let's say, the corporate figure that Alfred was touching on. Is there anything else you wanted to add to that, Alfred or Selena?

No, you covered it.

No.

Just one final question, just on risk, obviously, the investment is kind of a continual process. But if you kind of look across the business, where do you think the next step change investment and risk would be? Is it just another product similar to TreasurUp?

No, I don't think it's so much that. I mean, I think in terms of risk management systems, fraud is just such a critical part of your onboarding process. I think the second thing in terms of risk management is cyber. And we haven't had Adam to talk about the technology investment in cyber, but we're certainly increasing that both this year and next, and I would expect those investments to continue to grow. I think probably the third thing is we're constantly looking at transaction monitoring and calibrating those settings, and we'll continue to do that. But in terms of an incremental investment, I wouldn't say that's a massive one that's coming. I think as well when you start to think about the European expansion, we're also investing in some respects in our capability with electronic verification providers over there so to just improve our ability to onboard clients quickly and safely. So those are the major ones.

Shall we go online?

Yes. Is there any other questions? Or we ready go online? Okay. Matti, Yes.

Perfect. Thanks, Skander. Got again a couple of questions online. Firstly, we'll go to Cameron Halkett from Wilsons. Cameron, we've unmuted you, if you could please unmute yourself and ask your question. Thank you.

One, just around Link, first touched on there a little bit around WiseTech in terms of targets in the market. Now obviously, Link had a bit of a speed bump here and there, and the most recent update we've had is that the continuing progress and rethinking the plan there with that particular customer. So I'm just wondering if you can give us an update on targets kind of going forward with that particular customer and where that relationship is out currently?

Yes, the target hasn't changed for WiseTech, which is a nice, easy answer. We're feeling pretty good about where we're at, as Yung touched on, from a registration perspective. Certainly as well, as we look at the portfolio, as I said, enterprise is the fastest-growing segment of all, Cameron. So we certainly have good ambition. And we'll get into more of the detail on what actually happened in the full year results in May. But the ambition is undimmed.

Skander, sorry maybe I wasn't clear, but I was actually talking about the Link partnership rather than WiseTech.

Beg your pardon. So with Link, we're not updating from where we were last time. As you say, there was a little bit of slowness in the Link more to do with neither Link nor OFX, we're able to do the digital wallet that we both wanted to do, which was in the original plan. That said, there's some very good developments with Link, and we look forward to announcing more about that in May. The relationship is strong. As Yung touched on, we've moved into our broader use cases with Link. So we remain very encouraged with the Link relationship.

Okay. And for those of us who have to deal with the old spreadsheet and forecasting, are you still comfortable with the market considering the more medium term or revenue run rate that you perhaps have guided to previously. Just what's changed just the use cases and obviously, the timing?

Yes. It was more -- I would say it's more of a timing than the use cases. The thing about the use cases is they're also going to be dependent on some of the technology investment on the Link side, and that's something that we're working with Link on to make them happen. But there are also new things that Link are doing, which I think will be positive to the spreadsheet.

Great. The next question comes from Lafitani from MST.

Just a range of questions for me. The first one is in relation to North America and a question -- a couple of questions for Alfred. During your presentation, you talked to the 3-year ratio primarily compete on price and services where you've got it going quite well. But you mentioned speed wasn't as good. Can you just go into a little bit more detail around that key cross rate of the USD, CAD? And more specifically, you mentioned that you've got a solution that will speed that upcoming. Can you just talk to how long that may take? And are we talking that you guys will have speed that's instant? And any more color that you could add around that? And also talk to that if it is the case that you will get much quicker payments coming through, do you expect your growth to accelerate on the back of that given it hasn't been a strength in the past?

Okay. Good question. So just to clarify, I was talking about the dollar Canadian corridor. What happens in Canada is when you open up an account with any of the 5 that I mentioned, you have an option sometimes for free, sometimes for a small fee to have a separate account, right, the U.S. dollar account. So for example, RBC would allow their clients to transfer Canadian dollars into their U.S. dollar account within the same ecosystem, and it's almost immediate, right? So that's something that we currently do not offer, but every payment company globally is on a mission really just to be able to get payments from point A to point B as fast as possible, right? And most of our transactions today globally are clearing within 24 hours. As far as timing is concerned, we're in the process of changing our payment infrastructure in Canada, and that should help us in converting more clients in Canada because not only will we be cheaper, but we'll also be nearly as fast as the competition. As I mentioned, we're talking about over 100 basis point difference. So once we're able to catch up on speed for those clients that want something faster than 24 hours will definitely be more competitive.

And the timing for that being in place?

That's currently being assessed, but it's -- I wouldn't say it's long term. It's more of a short to medium-term project.

Okay. So within the next year, would that be reasonable or...

Are you looking there to the size, Skander at, [indiscernible] Mark?

I'm happy to take it. So Laf, you would expect to see Canadian-U.S. dollar payments improve in speed all the time. But that step change that you're referring to, it will not happen in FY '23, but I wouldn't worry too much about North American growth in FY '23 as a result of that. Let me put it that way.

Not a problem. Okay. Got it. Just another follow-up in relation to North America. Obviously, Firma is coming. You touched on a little bit about how that will bring you much expertise in that key market. Can you just talk to if you're aware of how much you guys are willing to divulge, is Firma still tracking as per expectations since the transaction was announced? And outside of the key knowledge, is there any capability that you're bringing to them? Or are they bringing to you looking to capitalize on?

So maybe I'll take that one out, Alfred. So Laf, I've been meeting with the CEO every week. I've now done 22 one-to-ones with members of their management team. We've got an integration team set up and resource hereto OFX traveling over to Canada in a couple of weeks' time with members of the global executive team. So there's been a lot of interaction and it's been good. I wouldn't change any of the assumptions from an OFX perspective. We're very encouraged, let me put it that way, with what we're finding the deeper we dig in Firma, but we won't update on EPS or any of those financial metrics until after close because it would be premature to do so. But I can certainly say there's certainly nothing that we found at this point that would give us cause for concern.

Just a couple of things with that. So one is what you've just answered around the earnings and how that's tracking, but the other is the capability piece. So is there being specific on -- that's within their business that you can help them with or vice versa that you're looking to implement into the store. So is there anything that you see at the moment that may delay the transaction completing?

So what we said when we announced the deal with it, the thesis really from our side on the synergies was, one, we felt we could take their digital journey and accelerate it. You remember that they are -- kind of roughly 7% of their revenue comes from digital transactions, OFX is over 90%, right? And what that means is if you go back to the slide that I talked about, lower bank fees, faster payments, better pricing capability, those types of things, all of those things are proving to be kind of what we're seeing at this point. Again, if you don't have digital transactions, the banks will say, we can complete these transactions, but it will be a while. And then you're going back to Alfred's example, that might cost you $25 for transactions where we might do it for a couple of bucks or cents in a dollar. So those are the types of things that we're finding. Now that all said, what I would also add is, what we like is that the Firma operations team and the finance team and the treasury team are all over it. They understand how these payments are getting made. They understand the value of the digital side. We're having conversations with them about the banking relationships, which are productive. So like I said, we're encouraged. There's nothing that we've seen so far that is a substantial cause for concern.

Okay. Why don't I move on, I've got a question in relation to enterprise now? I think this is a follow-up to the questions around Link. It's not just Link, right? Because you've had a string of announcements of client wins around whether it's the ATO, Pearler, Link, WiseTech. And when you look at the revenue where it's likely to fall this financial year, there's some growth there and it is healthy growth, but it's not really translating to what some of the guidance is around some of those big-ticket names that you've won and what you've put in the market in the past. So how should we think about the ramp-up of not just one, but all of those clients over the coming years in terms of translating to more material uplift coming through.

Yes. So I'd say Laf, the one that has not delivered to guidance is Link, but all of the others so far, we haven't come off guidance, and we're very encouraged. And as I said, it's the fastest-growing segment. The way to think about it over the medium term is that I would expect it to be a substantial part of the company's revenue. If it takes us a year or 2 longer than we expected, so be it, but it's very, very differentiated, had to do very, very valuable. Again, Yung touched on the RBA, ATO. That actually took 4 years. But what has sort of opened up in terms of prospects and the way in which we're able to execute has been incredibly valuable. As you say, we haven't seen that revenue necessarily in the year but it's up vary substantially in FY '22. You'll see those numbers in May, and we expect it to grow again substantially in FY '23 and beyond. And we will -- if we've given guidance, we will update you on what those specific numbers are.

Yes. Okay. I got that. And so one of the things you provided regularly is also the numbers in each bucket in relation to the pipeline. It hasn't been provided today. Is it the case that the pipeline is as big as it was last reported? Is it bigger because there hasn't been that many conversions since the last update?

Yes, it's bigger, and we will give you that update in more specificity at the full year results in May.

All right. Great. One final question, just moving on to the risk side. There's some comments made by Mark in relation to exploring some new banking relationships and that's a live option, banks that you haven't spoken to you previously. Can we just get a better idea or as to the color of those discussions around both price and functionality? Is it just primarily you guys looking to get better price? Or is it to get better speed or get more cross currencies? Can you just go elaborate as to why you're entering those conversations?

Yes. So there's a couple of things. One is, obviously, we like having a good panel of banks. So having other options in our banking counterparties has always been just from an organizational resilience piece in terms of having multiple options. And the second piece is, I guess, a range of factors, right? Price is always important because the more people that we can work with, obviously, the more competitive it becomes, and that gives us some opportunities. But the other thing is also sort of product capability. So a lot of banks are developing up different or new solutions around virtual accounts, which are an important part of our global currency account solution and the support we provide to online sellers and banks provide different options in terms of the support they give us on FX and liquidity and some banks have got different connections into local payment systems, so where we can access sort of faster payments through local payment systems. And the last piece is also around their technology capability. So the banks are all developing their own things like APIs and so forth into their own capabilities at different rates. And we're obviously -- it's an important part of our relationships with those banks in terms of how we integrate with them, and we're doing a lot in terms of our integration to banks that have technologies like APIs, which help us to improve our straight-through processing, which improves speed for both the customers and also the effort from a staff perspective as well. So they are all kind of factors that are in there. I guess the key point was more I guess previously, if you go back 5 or 6 years ago, OFX was very dependent on a couple of banks and losing one of those banks would have been a significant problem for us. Today, we have a good panel of banks and I guess we're probably less concerned about, obviously, you always need to keep the relationship strong and focus on our compliance programs. But we do see that we're not having issues finding banks to support us, I guess, and that gives us options to look at different products or different capabilities going forward.

No, excellent. thanks. I mean, I totally acknowledge the bank -- number of banks, and there has been an issue I guess, or perception issue in the past, and -- but do you have any specific examples of where you've improved the price or the product capability or cross currencies, say, in the last year?

Yes. In the last year, we had a new integration, which supported some exotic corridors where exotic corridors meant that we're no longer having to sort of back-to-back hedge each transaction, and we accessed much better local payout capabilities. So we improved the speed of those payments. So some of those payments go within minutes now instead of sort of 2 to 3 days. And we improved both the price of those payments from a -- in terms of the kind of rates because we're not having to individually hedge those payments. We're able to manage OFX in a more traditional way as well as the cost per payment was lower to us as well. So we've been able to lower our bank fee costs for those corridors as well. So that's, I guess, an example, and we've done that across about 3 or 4 currency corridors over the last year, and we've got an ongoing kind of road map of our banking partners and our key currency corridors, where we're looking at how to improve integration and therefore use that to improve speed, reduce costs, reduce effort.

We've got a couple more questions that have come in via the chat. So the first one is from [ Lackland Wort ]. He asks, how did your product offering compared to Airwallex in the small business and corporate segment?

Yes, it's a great question because Airwallex has been growing very quickly. Airwallex really, I think, provides an outstanding platform product, which is highly digitized, a significantly lower price than OFX. And really, what we've seen in terms of clients, we've lost some clients to Airwallex, but we've also had clients leave to go to Airwallex and come back from Airwallex. And what you're starting to see it kind of talks a little bit to what Yung was talking about around if you've got a platform that is extremely technically led and allows clients to integrate very easily and quickly and cheaply, that's going to be attractive. And we're certainly staying in the small business side, there's a degree of that. But then we're also finding that -- and it's not just Airwallex. I mean, we certainly saw that with Wise, for example, as well. But there's also examples all over the world of those clients coming back to us. And really what they're citing is, yes, I left because the promise was, it was all straight through. It was all digitally enabled. It was very low price, and then something went wrong, and I couldn't talk to someone or getting that resolved was a problem or there was a transaction, size limitation, which didn't work. And so I think what you're going to get competitively is more and more, if you call it, differentiation between players who are saying, it's going to be a great platform at a very low price, but if you move outside anything that we want we're not the provider for you. And so what we have to do is invest in that platform exactly as Mark said, to be faster, cheaper they have for clients as well as the client experience so that we give them a very, very sharp price and a great service, and then we can be different to the just pure tech-led plans.

Great. Thank you, Skander. The final question comes from Nicholas Sundich from Pitt Street Research. He says, do you think the current supply chain challenges will be a threat to realizing the projected revenues from the CargoWise opportunity?

Nick, it's good to see you or hear from you. No, I don't think so. I think what you're actually saying is that from a supply chain perspective, when it gets challenging, yes, there's a bit of an effect on revenue, but it also tends to promote freight forwarding logistics companies to try and figure out how to save money and how to make life simpler. It tends to bring that into sharper focus perhaps than it would be when things are just going great. So if anything, we're pretty encouraged, as you can see from our corporate numbers that a disrupted supply chain would certainly focus clients on what's the simplest, fastest, best value by the complete life cross-border payments in the supply chain world.

We have another question just come in. [Operator Instructions] This question is from [indiscernible] Yang. Please can you provide an update on capital allocation framework given it sounds like M&A opportunities that are more painful for OFX?

All right. I'm going to pass that one to Selena since I've been hogging. Do you mind, Selena?

Yes. So we always work with Board and talk to Board about capital allocation strategy and how we want to deploy that. The good thing about the Firma acquisition is that we use -- we are using 100% debt to fund that acquisition and that actually pays down quickly, will pay down within 4 years. Now depending on what comes up in the future for M&A opportunities, they can vary size and range. So something like the investment that we did in TreasurUp, we still have cash that we can do something like that. If it gets larger depending on where the debt side, it could be a mixture of debt and equity, it could be mixture of other things or just equity, but we always look at what are the opportunities there, what does the capital allocation strategy look like, where are we at when it comes to leverage and how big the opportunity is?

Great. There's one more question from [indiscernible] Yung who asks, can Alfred talk to the enterprise opportunities in North America, specifically white label services to the U.S. regional banks?

You want to take that one, Alfred?

Yes. I have to. You want me to talk about the actual opportunities. So when you're looking at regional banks in the United States, you have the large banks that I talked about, then you have the Tier 2 banks, which would fall into the U.S. Bank, KeyBank, they're not the large gargantuan like Citibank, Chase, Wells Fargo. And then you have a third and fourth tier, which may be something that in the United Kingdom it's called a building society, we call it a credit union. These are banks that really do very well within a smaller geographic region. And in the middle of the United States, apart from the -- for the coasts, a lot of companies of -- you'd be surprised how large they are, they actually bank with a lot of these smaller banks. And these banks know that they're losing business to the Bank of Americas of the world, Wells Fargos of the world. So we have a few in our pipeline that we're talking to that want to keep that revenue in-house and offer more products and services to their clients, but -- as Yung was saying, they aren't interested in hiring the staff and hiring the technology to ensure that they're able to be compliant with the various regulations in the United States of getting more and more expensive if you miss something. So those are the types of banks that we have in our pipeline. But with that being said, we are also going upstream with some banks that are also interested in the revenue side of cross-border payments but not necessarily in the risk that finds them in. So there's a few prospects in those 2 buckets.

There are no further questions. Over to you, Skander.

Fantastic. Let's call it a wrap. But just to close with a couple of key sorts of summary points. One is it's incredibly encouraging to see the momentum in the company. It's a 20-year overnight success story. There's a lot of hard work that's gone into the company and the revenue, the cash, the earnings, they're real. Two, there's still a lot to play for. That market is a huge market, and it's growing. And as I touched on, it is unlocking every single quarter as new entrants come in and provide different options, and we can actually bring the OFX differentiators to play. Three, the investments in the unsexy stuff, stuff like our technology, our risk management, our people, if you like, I just think they're so important to building a great, sustainable company. We have been doing that year in, year out. We'll continue to do that, and you're starting to see the benefits of that. And then you've got the growth drivers. And you heard from Alfred about North America. At some point, you'll hear from Sarah about Europe and Yung from APAC, the regional opportunity is really there, and then you've got the segment opportunity. And I -- taking on board last point, we would love to have a lot more enterprise revenue, but we're delighted with what we have, and we will play this game a long way. We will win these clients one by one. We'll create those earnings, and we'll hold on to them and make sure we've got a really sticky client base. And then finally, like I said, that risk piece is absolutely essential because the risks of this business model are really all around if you get out in front of your [indiscernible] with either your banks or your regulators, you don't understand what you're doing, as Marcus talked about. So we will always invest in that. We think that's going to be even more valuable in a risk-off world. With all that said, I also want to thank my global executive team for really supporting us and doing incredible hard work to make this model and make this year be such a successful one. I want to thank the team at Citadel and Magnus for all the hard work in staging this event, a hybrid event in the middle of COVID and the other OFX who've made this possible and everyone around the world for your support for OFX. Thanks very much. We'll wind it up now, and we'll see you in May. Thank you.