Digital transformation in bullion market

Amidst the digital transformation era, with the rapid rise of fintech apps, neobanks, and advancements in various industries, most bullion market players have embraced digitalization through webshops and related services. However, some new firms that offer tokenized gold lack crucial elements like regional branding, real responsibility, physical stock management, and transparent operations. This absence of trust, infrastructure, and quality services is apparent. Therefore, it is evident that gold dealers must keep up with market development and modernization, driven by the growing customer demand.

Recognizing the need for digital transformation and replatforming, many dealers are considering a solution like Vaulter. Sophie Mercier, Chief Sales Officer at Vaulter, explains that Vaulter provides a white-label platform for retail gold dealers to offer online services to their customers. This includes day-and-night buy/sell options for precious metals, allocated and pool-allocated vaulting at accredited locations, transforming metal balances into bars and coins, VAT-free silver and platinum, saving programs, real-time lending, market forecasts, and more.

The key advantage of using Vaulter for gold dealers lies in its ability to facilitate growth and expansion without the complexities, challenges, and high costs associated with IT development. Vaulter operates as a Software as a Service (SaaS) solution, offering an unparalleled subscription pricing model. This means dealers can introduce online services without significant long-term commitments or hefty investments. The subscription-based pricing ensures that operational costs remain lower than the income generated from trade markups and fees.

Trust is a fundamental pillar in the bullion market, and Vaulter addresses this by providing vaulted bars with clear identification, including a serial number and manufacturer details. These bars are allocated to individual or group investors, allowing customers to monitor their vault’s screen in real-time, showing the percentage they own of a particular bar, its exact storage location, and manufacturer information. In case a dealer has multiple vaulting locations for a metal, customers can choose their preferred location, and the operator aims to fulfill their request for a fee. This level of transparency empowers customers to manage their location preferences and geopolitical risks, as vaulted bullions are explicitly held as the customer’s property.

The Hedge Manager is responsible for handling customer balances during purchases or sales, immediately accounting for any changes to the customer’s right claim. If there is any mismatch in bullion coverage, it is hedged on the FX market. The process ensures that the balance of customer claims and metal coverage remains consistent and equally expressed in net value.

While hedging may temporarily leave a small portion of customers’ metal unallocated, the operator proactively prepares for metal purchases, buying bullions in advance and offsetting them on the FX platform to minimize rate risks on precious metals surplus. Vaulter can also manage currency accounts for customers, enabling purchases or sales using their preferred currency. Foreign currency hedging is similar to metal hedging, with the assets being bank accounts with probable FX positions, allowing for precise settlements and automatic tracking of precious metals transactions’ value on the foreign exchange market.

As the digital transformation progresses, dealers should consider introducing a mobile app once they reach around 5,000 customers. By integrating an online purchasing, vaulting, and home delivery service with a smartphone app, traditional offline dealers can offer a complete and unmatched service worldwide, providing a seamless and efficient experience for their customers.

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