"You cannot be successful on your own": Q&A with Cashwerkz's Hector Ortiz March 2019

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Cashwerkz CEO Hector Ortiz speaks to Industry Moves about how the platform came about and what it can do for both retail and institutional investors. Following a three-decade career in the industry, Hector knows how important it is to listen to clients and credits them as some of the biggest influencers on his career - along with his parents of course.

What was the motivation for launching Cashwerkz?

Cashwerkz was launched to solve the issue of retail and financial planners having to constantly identify themselves, or their clients, for cash investing. We were also driven to include future funding needs for banks in the initial requirements. Today we have broadened that to include an insto element and strong client base.

Our growth has included scaling the business, courtesy of our merger with Trustees Australia (ASX: TAU). Trustees Australia is a 30-year veteran in the trustee and custodian marketplace and owner of RIM Securities – an independent specialist fixed interest business with a 14-year-plus track record of successful dealings with over 35 ADIs. Those ADIs are now all on the Cashwerkz platform.

What is the business model?

The Cashwerkz platform is a secure online marketplace for term deposits and other financial products for investors, whether you are a direct investor or SMSF, middle market or even an institutional investor. Cashwerkz provides a marketplace for investors to research competitive term deposit rates from over 35 different banks and then invest and manage those cash investments. Powerful and innovative identification and management technology is embedded in the platform to streamline the investment operation to a 3-click investment process.

We have taken what was a highly antiquated administrative exercise, that investors found not only time-consuming but frustrating, and we have transformed that in a digital environment. We are a one-stop shop with a highly transparent rate comparison facility that ensures investors are able to research and access market competitive rates from at-call to five year term deposits. The investment process is secure as investors use their own bank account and transfer cash directly to the bank holding the term deposit.

Hector Ortiz It is important to note that money is never sent to Cashwerkz, nor does the investor have to provide discretionary control over any of their accounts. The business model is very straight forward, the Cashwerkz online marketplace acts as an outsourced service desk providing funding to the banks. We are paid a success fee by the banks when funds are placed.

Is there anything like it currently available in the Australian marketplace?

The Cashwerkz online marketplace is unique as it services all investor types. The platform has been developed here in Australia by a team of industry experts with deep knowledge of the technology and financial services sectors. From investing to rollovers to reporting, we have a streamlined service which makes Cashwerkz unique and differentiates it from any segment specific competitors.

What has been the interest from institutional investors compared to adviser/dealer groups?

Our embedded identification process takes care of the regulatory requirements for Know Your Customer (KYC) and anti-money laundering (AML) in an innovative way. Additionally, we have increased the efficiency levels of our clients by reducing the highly manual, up-to-four hour paper-based application process to a three-minute digital transaction system.

Our institutional investor portfolio has recognised the benefits of our approach to workflow and the ability to research competitive market rates in one place, source approvals and audit tracking. We are seeing positive growth from this part of the market and expect this to continue as the benefits of Cashwerkz becomes more widely known.

"Our embedded identification process takes care of the regulatory requirements for Know Your Customer (KYC) and anti-money laundering (AML) in an innovative way."

What drew you to this asset class i.e. cash and fixed income?

By starting with cash and fixed income we have found a way to create a marketplace that can streamline the investment process for a broad range of investors to be more transparent and competitive. In a low-yield environment if you can secure a more competitive market interest rate that adds up to a better return, regardless of whether you are a direct investor or an insto.

The win for the banks is the ability to grow their deposits faster to meet their regulatory requirements. As we manage the identification process, it's a very cheap acquisition cost program for the banks. They win big out of this as well.

What are the goals for Cashwerkz in the next 12 months?

The team at Cashwerkz will be focusing on servicing our current investors and offering a compelling reason to roll-over investments at maturity with our range of partners. We also want to increase the number of banks and financial institutions we partner with on the platform. Plans are afoot to expand our service range for financial institutions and onboard new products such as at-call accounts. Also, Open Banking is something we are actively researching and preparing for.

"I was initially a computer geek with a love for programming which kicked off when I was 15 years old."

What was the impetus for your career in finance?

I was initially a computer geek with a love for programming which kicked off when I was 15 years old. I joined Reuters (now Refinitiv) whilst I was in Stockholm, Sweden and working with some of the smartest investment professionals globally further fuelled my interest in finance, particularly with a focus on defensive assets.

Who, or what, has had the biggest influence on your life/career?

A mix of influencers over the course of my life actually. My mom, for telling me, at the age of 17, that I could do anything. My dad for teaching me my work ethic. A few college teachers, who I am still in touch with today, who provide ongoing support on my endeavours. And my clients over the past 30-plus years, as I listen to them on their needs so I can provide a well suited solution.

What advice would you give your 21-year-old self?

Develop your passion. Travel and work in a foreign country and learn an appreciation of their culture and language. Differentiate yourself in what you do and in your work. Build a supportive network, as you cannot be successful on your own. Have fun along the way!

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