Automating treasury management for commercial real estate with Nordkap

Transcript

Nordkap is a Swedish treasury management company. Thanks to its exclusive dedication to the commercial real estate segment, the business has captured 80 percent of the market in its home country, and is now bringing its expertise to the UK. Fredrik Eriksson, Nordkap’s Head of International Sales, explains how the company’s cloud-based automation software can remove the friction of manual entry and error checking, giving treasury departments 15 percent savings in time alone, and growing alongside commercial real estate companies as their risk and debt management needs become more sophisticated. You can also watch the second half of this interview with Fredrik Eriksson, where he explains how Nordkap’s software can automatically compound the Bank of England’s new SONIA interest rate method.

World Finance: Fredrik, introduce us to Nordkap and the services you offer to your customers.

Fredrik Eriksson: We offer a risk and debt management system for the commercial real estate space. We started back in 2011, and what we see historically is that the people working in the functions of treasury work with a lot of manual entry – keeping track of what debt is maturing, when it’s maturing, and keeping track of all the cashflows that goes on within the debt structure of a portfolio.

What we do is, we automate that process. So interests are automatically updated, so they can easily access reports at their fingertips, with the click of a button. And therefore rather than spending their time entering manual data and searching their formulas for errors, they can focus their time proactively, in strategically managing risk and the business on an ongoing basis.

World Finance: I mentioned your incredible market-share; why do so many CRE companies choose Nordkap?

Fredrik Eriksson: They use us predominantly for a great customer service, they use us for the product support we have in the back. But also simplicity and the ease of use, and user-friendliness of our product.

It’s a SAAS solution, meaning it’s a system that you can log in, you can access the data and everybody has access to the same data. So it’s sort of syncing up in a way that makes it very, very easy. It’s a user-friendly system, it’s intuitive.

And when a CFO leaves, or a treasury manager or a finance director leaves, they usually go to a company that might not have Nordkap, and they bring it with them. So that allows us to broaden our spectrum that way as well. So it’s a lot of word of mouth, and it’s been really, really rewarding.

World Finance: So how much of an impact does working with Nordkap have on these companies?

Fredrik Eriksson: Well, we did some analysis a few years back with a consulting firm, just to kind of validate, you know, how do the companies work, and what is the impact to their business?

And we noticed they save actually around 30 percent in risk, just standalone, using our system. They save about 15 percent in just time savings going from a manual process into an automatic system. And in fact using one of our modules when it comes to swap transparency and so forth, they’ve been able to save roughly one percent in interest rate costs.

World Finance: Yeah, as you say, it is a modular system that you offer, how does this work for your customers?

Fredrik Eriksson: We want to make sure we have a system that works for the customer, that they don’t pay for a bunch of extra features that they don’t use.

We want to work with of course large companies, but we want to grow with the company as they start out in the business. It could be a spin-off, where you have maybe a company that only has three to five buildings; they might not have a very sophisticated need when it comes to the management of the debt, more than keeping track and getting the right reporting, and the right metrics of the portfolio. But over time as you grow and develop over the years, we can turn more and more features on for you, that are more sophisticated, and that they can use as they become larger.

So we can have clients for example that initially when they come in, they don’t have access to the capital market. They might not even use hedging. But over time, as they grow, they can start accessing the capital market, or maybe want to start hedging their portfolio in some ways, and that’s where we really can help.