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Q&A with Colin Mitchell, Director of Risk Management Solutions, USA
Part One

by Don Curren | November 23, 2018

Q. Can you tell us a little bit about yourself – what you did before Cambridge and what attracted you to the company?

A. Originally, I got into foreign exchange after university, working for a company called Custom House. I worked my way up the chain there. I worked in a variety of different field, but primarily as a foreign exchange (FX) trader. I was there through the acquisition by Western Union. From there, in early 2012, I went to HSBC.

My role at HSBC was a little bit different than my role at Custom House – it was a little broader. I worked on the global markets desk in Vancouver, covering mid-market to large corporate clients in the West – from Manitoba west – for their FX hedging needs but also having a broad discussion around interest-rate swaps, and even, for some of our customers, precious metal hedging.

I had to cover all aspects of global markets products for our customers, so although FX was the focus, we had to have discussions around interest rate swaps and money market products.

To answer the question about what brought me to Cambridge. It was the only non-bank provider I was interested in going to for a variety of reasons – one being the growth that had taken place. Also, from a competitive standpoint, they are the largest non-bank FX company in North America with a broad product offering.

A big part of it, really, was working again with some of the people I had worked with at Custom House that I had a lot of respect for and that I had a great relationship with. It makes a big difference when you work well with your colleagues and the trust and respect is there.

Q. Can you tell us a little bit about your outside interests, the kind of thing you do when you’re not at Cambridge?

A. I have two kids, so they keep me pretty busy – I have a four-year-old and a one-year-old. Other than that, I like to be active – running, hiking, basketball – really anything active. Also, a little bit of golf – but not that well. We also like to travel, although vacations have changed a little now with two kids.

Q. How would you describe your role at Cambridge?

A. I’m on the risk management team, primarily covering accounts in North America, but for the most part in Western Canada and the Western US. I’d say my role is managing a book of clients, as I have over the years, but now at Cambridge it’s with a heavier percentage of risk management accounts. Also, I work with sales guys, across North America, trying to close risk-management opportunities. The third part of my role, I’d say, is helping my colleagues in the execution of options – pricing of options, helping the other guys in the Vancouver office – and around North America.

Q. What, in very broad terms, is risk management in foreign exchange? How does it work and why should companies with forex exposure engagement in risk management?

A. Risk management in foreign exchange is trying to mitigate the risk you have in your portfolio. You might be a receiver of US dollars (USD) and all your payroll is in Canadian (CAD), you might have to report everything in US dollars. You’re taking a certain risk that the currency is going to move in your favor. Risk management is hedging against an adverse movement in that currency that would affect your business in a negative way. It’s taking the foreign exchange risk off the table, so you can focus on securing your profit margin, focus on running your business, and not having to worry that you’re going to start incurring a loss if the currency moves against you.

Some of our customers, depending on the industry, have extremely slim margins. For them, it’s very prudent to ensure they’re securing profit on every transaction they make.

One thing I stress to customers if they’ve never hedged before is that people always get wrapped up in getting the best rate, but I think hedging isn’t about that, it’s really about taking the risk off the table and securing your profit margins.

Q. What, in your mind, differentiates the hedging services that Cambridge offers from that of competitors?

A. I would say the biggest difference is that we take a broader approach here at Cambridge, we’re a little bit more in depth. We get involved at the prospect stage, or with a new customer, help them create a risk-management policy, which allows them to be more proactive. You end up getting more ingrained with their business, and pitching them different ideas, as opposed to when I was at the bank, where you have 200 + clients and you’re more reactive.

At a bank, you’d very seldom see a sales person helping with a risk-management policy for a company.

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