Wise: Another Guidance Lift on Strong Net Interest Income

In an industry dominated by banks and low pricing transparency, Wise has adopted a low-cost strategy by focusing exclusively on digital channels. Wise has built meaningful liquidity pools across many global currency corridors, allowing the financial-technology company to circumvent foreign-exchange markets for most transactions processed via its platform. Wise operates local accounts in each jurisdiction it is present, allowing the company to move funds between parties wishing to exchange funds without funds ever crossing borders. As Wise acts as a middleman in this transaction flow, effectively forming a currency exchange settling against its own book, the company can save on fees typically paid to banks that form part of the traditional transaction chain. Wise also continues to integrate deeper into local payment networks, starting out by partnering with a local financial intermediary before obtaining its own direct connection, in an effort to further reduce costs and improve transaction speed.