Cyber attack combined with Covid-19 puts Travelex into administration
PricewaterhouseCoopers (PwC) has been appointed administrator and through what it described as a “complex restructuring deal”, which has seen some of its assets sold, has raised £84m and saved 1,800 UK jobs.
Travelex was held to ransom by hackers in January after a cyber attack forced it to turn off its systems. It took a £25m hit after its systems were encrypted by Sodinokibi ransomware on 31 December 2019.
It was then put up for sale after the international travel industry shut down as a result of the Covid-19 coronavirus pandemic.
PwC said: “The impact of a cyber attack in December 2019 and the ongoing Covid-19 pandemic this year has acutely affected the business.”
There is also increasing competition in the form of financial technology firms (fintechs) offering digital foreign exchange services via mobile phones.
A so-called “pre-pack” administration deal had been reached, which saved 1,800 UK Travelex jobs, according to PwC.
Toby Banfield, joint administrator at PwC, said 1,802 jobs in the UK and a further 3,635 globally have been saved, and the brand will continue. “Unfortunately, as the majority of the UK retail business is no longer able to continue trading, it has regrettably resulted in 1,309 UK employees being made redundant today,” said Banfield, meaning high street shops and airport branches will not reopen.
Foreign exchange business is increasingly going digital with numerous fintechs in this space offering quick money exchange at lower costs.
Travelex offers physical and digital services, but competitors such as fintech Azimo enable people to make cross-border transactions in seconds via a smart phone app at a considerably lower cost than traditional high street money transfer shops.
In February 2020, Azimo said since its launch in 2012, it had served more than a million customers and handled more than €2bn in transfers.
World Bank figures, released before the Covid-19 pandemic, showed that global remittance volumes stood at $642bn in 2018, and forecast they would exceed $700bn by 2021.