Finance Derivative Magazine Issue 3

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FROM THE DIRECTOR A very warm welcome to all of you to the Mid Year issue of Finance Derivative. The year started with a fresh hope of vaccine for all of us to fight the pandemic and that’s when the second wave hit a wide part of the world again. While we hope and pray all of this passes away soon, the life moves on.

CEO and Publisher Mehtab Chisti Editor Mara KI Head of Distribution Stefan Stavic Project Manager Emma Bakker Business Consultants Lena Thomas, Aaron Menon, Blair, Allan Mendez

Business Analyst Rachel Thomas, Amalia Rubio Graphic Designer Sachin MR Digital Marketing Mithun Gowda Web Development and Maintenance Sonu Kumar Advertising Phone: 0031208943644 Info@financederivative.com FM. Publishing Kuipersstraat 48 1 1074EM Amsterdam Netherlands Phone: 0031208943644 Email: info@financederivative.com Finance Derivative is the trading name of FM. Publishing Company Registration Number: 71674233 VAT Number: 39843998 ISSN 2666 6715 Image credits: https://www.rawpixel.com https://pixabay.com

With this issue we bring to you a vast range of articles covering how important protecting the customer data is for any financial institution, how women own a large chunk of world’s wealth to the impact of AI in the finance sector.

With Covid 19 hitting the world, people who resisted online banking are also forced to make the shift, hence it has become tremendously important for the banks to ensure customer data is protected. While few businesses such as e-commerce have raised to new heights there have been smaller businesses and retail outlets that got affected. With many companies now allowing their previously office-based teams the option of working from home either parttime or permanently, what does that mean for expense policies?

Industry 4.0 is the next big thing for the traditional financial institutions. There is much need for banks to re-prioritize their offerings, streamline their existing systems to face the fierce competition.

With mobile and digital banking fast becoming the new normal, there is much to consider in terms of creating the best experience for current and prospective customers. Digital banking is more than just virtual banking, it means empowering customers to bank when, where, and how they want to.

I hope you will enjoy the reading this edition of Finance Derivative.

Wishing you all success, health and happiness for 2021.

Finance Derivative Awards is established with the aim of honoring excellence in performance and rewarding Companies across different domains of business & financial world.

Our award honors companies and their key players who have performed extraordinarily well

Enjoy the Read !

Mehtab Chisti Director

and who strive for fineness & provide a platform for recognition.

Be sure to check out our online publication at

www.financederivative.com

BANKING

CONT

Open banking – what does the future hold?

By Dima Kats,CEO, Clear Junction.

Billions of Personal Interactions

By Simon Axon

Building better customer relationships

By Garry Hamilton, Group Chief Growth Officer, Equator

The digital corporate bank: the secret weapon for the UK economy?

By Jayakumar Venkataraman, Partner, Financial Services and Insurance, Infosys Consulting

Building banking services - the value proposition for more data

By Iain Chidgey, Vice President EMEA, Sumo Logic.

The great banking battle to secure customer data

By Matias Madou, Co-founder And CTO, Secure Code Warrior

Closing the Innovation Gap

By Andrew Dellow, Director Strategic Account Sales

The rise of the virtual banking branch

By Nick Barnes, Practice Director, Financial Services & Customer Success at JRNI.

FINANCE Protecting your finance transformation projects

By Ray Welsh,Head of Product Marketing, FISCAL Technologies.

Biggest Payment security challenges faced by Service Providers

By Narendra Sahoo, Founder and Director, VISTA InfoSec

Women own a third of the world’s wealth – how can the finance industry better engage them?

By Jessica Robinson

When temporary measures turn to policy: how to moderate home working expenses

By Kenny Eon, GM and SVP EMEA Emburse

Shifting the conversation beyond skills to future-proof our economy

By Mark Creighton, CEO, Avado 4

TENTS What comes after the death of cash?

By David Maisey, CEO MultiPay Global Solutions

TECHNOLOGY Do You Know What Your AI Is Doing?

By Scott Zoldi, Chief Analytics Officer at FICO

Python: the technology your finance team didn’t know they needed

By Maciej Dziergwa, CEO, STX Next.

How the Artificial Intelligence of Things (AIoT) is Affecting Finance

By Amanda Greenwood, Myriad Associates & Tax Cloud.

BUSINESS The path to true customer-centricity

By Andy Campbell, Global Solution Evangelist FinancialForce

Open For Business: How Open Banking Is Driving Competition Around Customer Experience

By Greig Johnston, CEO,Vidatec

How To Improve Financial Management at Your Business?

By Stefano Maifreni, Founder, Eggcelerate.

How invoice financing can help businesses thrive in a post-Covid world

By Ian Duffy, CEO, Accelerated Payments.

WEALTH MANAGEMENT Why the boom in online trading is here to stay

By Jay Mawji, Managing Director, INFINOX.

What Investors need to know about ESG investing

By Ian Ramsey, Chief Investment Officer, AHR Private Wealth

UK at Forefront of FX Management Change

By Richard Eaddy, CEO, Hedgebook.

LIST OF WINNERS

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– what does the future hold? pen Banking is changing the way we bank in the UK and the rest of the world. Consumers can allow third-party providers to use the financial data held by their bank to develop new products and services that improve their daily tasks. The way we think of banks and our expectations of them as consumers is constantly changing and Open Banking could be seen as the next frontier for the financial sector.

According to a recent report, Open Banking users grew from 1 to 3 million over the last 12 months. Given Open Banking’s potential to revolutionise the finance sector thanks to the implementation of Application Programming Interface (API), this growth is incredibly exciting. Open Banking APIs allow financial institutions to respond to the growing demand from digital natives by providing fast, secure, and digital-first services.

The rapid growth of Open Banking.

Open Banking has seen rapid growth as it enables consumers to share their spending data, including everything from larger bank transactions to everyday payments they make and companies they buy from.

This information is then shared with authorised providers. A prime example of Open Banking accelerating market growth is budgeting apps; consumers share their spending data in exchange for a summary of where they spend their money, with both sides gaining value from the data exchange.

According to a report from PWC, by 2022 an astonishing 64% of consumers will invest in the concept of Open Banking after gaining a better understanding of the wide-ranging benefits. Open Banking is already revolutionising the way we manage our finances and could potentially disrupt financial services while simultaneously accelerating market growth. Businesses and consumers

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ulti-asset trading specialist, LegacyFX, is a world-renowned and award-winning brokerage firm. Established in 2017, it now owns transatlantic branches with over 200 employees and clients worldwide. Being substantially regulated enables LegacyFX to operate out of various regulatory jurisdictions such as the Republic of Cyprus, Vanuatu, South Africa, and Belarus. Overall, the company is owned and managed by a core team of professionals with vast experience managing investments in forex and other assets.

EDUCATION AND TRAINING “The LegacyFX Academy” was created from the desire to empower trader, providing free education and making trading possible to everyone. The company offers educational videos, tutorials, webinars, ebooks, special sections for beginners and advanced traders, as well as one-on-one training sessions. Additionally, the company introduces a bespoke Webinar Training series designed for high-net-worth individuals with limited spare time.

OFFERINGS LegacyFX has the continuous development of its clients’ investment knowledge at the top of its corporate philosophy through ongoing training in investment strategies and the most updated trading tools: Continuous development of the clients’ knowledge in Investment Trading Management.

Providing zero overnight swaps.

Providing free trading signals, copy trading, and Algo-trading.

Free access to Autochartist premium tools, TradingView charts, MTE videos, and Market Research.

TRADING PLATFORM LegacyFX is using the “state of the art” Trading Platform MetaTrader 5 on CFDs Trading on Forex Currencies, Stocks, Indices, Commodities, and Cryptocurrencies to support the increased needs of its Retail and Professional Clients. The Platform features new and extended characteristics, which makes online trading even more professional and precise.

Check us out at: www.legacyfx.com 8

BANKING

want fast, secure, and efficient payment solutions that can save them time and reduce costs. The accumulated data from businesses and consumers’ habits have propelled Open Banking to the forefront of financial innovation.

initiative beyond banking directives. These capabilities need access to premium information beyond regulatory mandates that give banks an opportunity to tap into new revenue streams and provide better services to their customers.

Fintechs and financial solutions providers are leading this innovation. Gone are the days of in-branch banking and queues to cash cheques. Over the last decade, consumers’ habits have shifted to mobile and Open Banking.

Simultaneously, artificial intelligence (AI) and automation have improved risk and liquidity analytics and forecasting within treasury management systems. The digitalisation of trade and supply chain finance has been accelerated by blockchain and distributed ledger technologies. To maintain growth, financial institutions need to acknowledge that the future of finance is decentralised, and that they must integrate AI into their wider digital transformation strategies. Capitalising on the opportunities new technology brings in terms of incomparably higher speeds and lower costs will allow current players to remain a central part of market innovation.

It’s an exciting time for the financial industry, as key players deliver ground-breaking products that significantly improve the banking experience for consumers and merchants alike. Open Banking has seen immense growth over the last decade, and it shows no signs of slowing down as we enter a new, post-covid era.

What the future holds for Open Banking According to the World Retail Banking Report, 78.3% of banks are relying on APIs to improve the customer experience. APIs are the gateway for innovative Open Banking solutions. In the future, APIs will develop to provide more extensive options in response to the growing consumer demand for digital solutions that legacy financial institutions can’t provide. Open Banking APIs have the potential to extend beyond traditional banking. Financial players that ‘open up’ their APIs to global web developers will position themselves as revolutionary partners at the forefront of innovation.

A recent Economist Intelligence Unit report found that 87% of countries have some form of Open Banking API in place. APIs are often the foundation for growth and success, but for Open Banking to succeed and remain sustainable it must retain consumer confidence.

This move to APIs is being fuelled by Open Banking regulations, such as the European Union’s Revised Payment Services Directive (PSD2). PSD2 requires financial players to release data in a secure, structured, and standardised form, which is readily shared online between authorised parties. Additionally, smart personalisation and corporate banking are driving this

The future success of Open Banking will depend on banks embracing an end-to-end digital architecture.

This requires modern banking platforms that are founded on open APIs, driven by AI analytics, scalable, and highly secure. While major changes in the financial industry usually take time to fully evolve on a global scale, the pandemic has accelerated the digitisation of the financial market and there is no doubt the Open Banking trend is growing. It is clear that Open Banking is on course to revolutionise the financial industry for billions of customers worldwide.

Dima Kats, CEO, Clear Junction.

Source: 1 https://www.openbanking.org.uk/news/three-years-since-

psd2-marked-the-start-of-open-banking-the-uk-has-built-aworld-leading-ecosystem/ 2 https://www.pwc.co.uk/financial-services/assets/openbanking-report-web-interactive.pdf 3 https://worldretailbankingreport.com/ 4 https://www.temenos.com/insights/white-papers-reports/ new-economist-intelligence-unit-report-open-bankingrevolution-or-evolution/

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Why the boom in online trading is here to stay

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ot all of the pandemic’s legacy is as visible as face masks and half-empty commuter trains.

While lockdown living has changed the way many people – and their employers – feel about the need to travel into city centre offices every day, other equally fundamental shifts are less obvious.

One of these is the surging demand for 10

online trading. As recently as a decade ago, investing in individual stocks or trading forex was the preserve of a wealthy elite.

But the arrival of online trading put the world’s financial markets within reach for everyone. Meanwhile the evolution of Contracts for Difference (CFDs) – a cost-effective financial instrument based on the price movements of an asset – allowed investors to gain market exposure for a more modest initial outlay.

Coupled with rapid improvements in both technology and trading infrastructure, the popularity of trading has grown steadily over the past few years.

Pandemic provides perfect storm for trading But the trend was supercharged by the arrival of the global pandemic in 2020.

COVID-19 triggered a ‘perfect storm’ of

WEALTH MANAGEMENT

markets into a period of intense volatility.

Rapid falls in asset values were followed by equally sharp rises – and this yo-yoing created opportunities for investors keen to capitalise on market gyrations.

At the same time, lockdown restrictions forced millions of people to stay home – simultaneously placing time and disposable income in their hands as there was no scope to go out and spend.

With interest rates cut close to zero in many countries as central banks sought to stimulate reeling economies, the lack of return on cash led many aspiring investors to try their hand at trading for the first time.

Transformative technology The platforms that capitalised best on this rising demand offer a seamless user experience across multiple devices – desktop, tablet and smartphone – and access to live price data and charting analytics.

The best platforms tend to run on the MetaTrader 5 multi-asset trading software developed by MetaQuotes.

This enables users to trade forex, exchange instruments and futures instantly and easily, and offers a huge suite of tools they can use to inform their decisions.

With no fewer than 35 indicators to pore over, traders can try both technical and fundamental analysis of market trends before making their investments.

factors that together prompted a spike in demand for online trading.

INFINOX recorded a 61% jump in revenue and a 28% increase in trading volumes during the course of 2020. By the end of the year, investors had traded $553bn of assets through our platform – and demand is showing no signs of slowing in 2021.

The surge began as the first wave of the pandemic plunged equity and currency

The software can also be used to trade automatically by using trading robots and trading signals. It comes in both desktop and mobile versions – and can even be accessed via a web browser without the need to download software.

is as vital as it is invisible.

Often described as the ‘white label’ partner of brokers, liquidity providers are wholesale platforms that ensure there’s enough liquidity in the markets – in other words that there’s enough volume of trading so trades can be done seamlessly.

Liquidity providers like IX Prime keep the market functioning, by buying from those wanting to sell and selling to those who want to buy. This cycle creates market liquidity, which is especially vital in forex.

Currency pairs can be volatile, and often change by the second. Therefore any delay in the time it takes to execute a client’s trade can cost them money. A large market maker will have high forex liquidity which will eliminate the risk of lag.

The mechanics of a liquidity provider also mean that prices can be competitive.

When demand is high and supply is low, the price increases and vice versa. Market makers have the power to adjust prices based on supply and demand, allowing traders to not only get better quote prices but also better price margins.

Razor-thin margins in forex trading can make the difference between a profit and a loss, meaning market makers don’t just underpin the trades of millions of blissfully unaware investors – they may also make their trades more profitable.

The unique set of pandemic-related factors that sparked the current boom in online trading may not be repeated in a hurry.

But the technology and market innovation that enabled it are here to stay, and with a new cohort of investors taking their first steps in trading, their future is bright.

The power behind the scenes While software governs the way the trader interacts with their chosen broker platform – and is instrumental in shaping the user experience – the infrastructure behind it

Jay Mawji, Managing Director, INFINOX. 11

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PROTECTING YOUR FINANCE TRANSFORMATION PROJECTS

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inance teams have witnessed dramatic change over the past 18 months, with digital acceleration taking place on some processes, while broader transformation projects were placed on hold. But as we emerge out of the other side of the pandemic, business and economic confidence is rising, meaning finance teams are picking back up on their paused transformation projects.

What has been learnt over the past 18 months is the need for resilience, adaptability and agility, and many organisations have these factors on their priority list for the next few years. Resilience provides the ability to recover from difficult conditions, adaptability enables adjudgment to new conditions, and agility is the understanding to move quickly and easily.

But, the missing piece here, that’s often overlooked is protection, despite the fact A recent report from Deloitte discovered that change always introduces new risks. that the number of CFOs across Europe In the 12 months to 23rd March 2021 who are optimistic about their company’s alone, we discovered through analysis of financial prospects vastly outnumbered 104 of our customers that the number of those who aren’t, with 77% of CFOs sayrisks detected rose year on year by an aving they expect revenues at company erage of 20%. This was in part due to the level to increase by 25% over the next 12 changes taking place because of the panmonths . In addition, the economy was demic - such as working from home and less damaged than was expected by the removing paper from finance processes pandemic. For example, it’s now thought due to not being in the office. In addition, that unemployment will peak at 5.8% this with plenty of government schemes to aid year, compared to the 8-9% that was forebusinesses through the difficult times, ficast in 2020. The economy is now prenance teams were dealing with changes in dicted to grow at 6.8%, as opposed to the cash flows, changes in funding, which all 5% that was forecast in January of this need to be included in the financial plans year. And finally, 2021 Q1 economic as they grow. Where there performance fell 1%, not the 3-4% are different operations, When we therefore previously forecast . there are different risks. think about the increase in risks It’s great to see this optimism, experienced last year which will in-turn result in not only There are many differorganisations re-igniting projects based on smaller changes or digital ent possibilities of what that were halted, but many initiating acceleration, it a finance transformation new projects too. becomes clear that project will include, but no With this in mind, it’s critical that the broader-impact matter what the project finance leaders build protection in finance transformation is, because these are by from the outset. I often compare projects will present definition new systems transformation projects to open ever higher risks. and processes, they will heart surgery because it’s imperative that while projects are being executed, everything is still running as normal in the background and that every precaution has been taken to prevent unwelcome interruptions. However, too many teams are still not considering protection at the early stage that it’s required at.

present new risks. Existing controls are based on existing systems, processes and known risks. It is normal for a risk assessment to be carried out when a new system is put in place, but this will only pick up visible, known, and the more obvious risks.

Risks that have not been seen before are unlikely to show up in a risk assessment so you need to ensure you have protection in place to detect the symptoms of unchecked exceptions and anomalies occurring, not just the known causes, in order to effectively safeguard your working capital and reputation.

So, what risks should you be aware of?

This depends on the transformation project you’re undertaking, but can include anything from duplicate invoice payments to increased risk of unnecessarily high processing time and costs, unused credit notes, or P-card to AP invoice duplication.

In order to protect yourself from these risks, you should therefore employ a solution that is not specific to any system or process, which runs independently and in parallel to your systems, checking for errors and exceptions, whatever their origin.

Ultimately, before finance transformation projects take place, finance teams must take a proactive approach in order to mitigate the known and unknown risks if they are to fully succeed in their digital transformation projects.

Ray Welsh, Head of Product Marketing, FISCAL Technologies.

Source: 1 https://www2.deloitte.com/uk/en/pages/finance/articles/ deloitte-cfo-survey.html

2 https://www.ey.com/en_uk/growth/ey-item-club

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BIGGEST PAYMENT SECURITY CHALLENGES FACED BY SERVICE PROVIDERS When it comes to an online business where money is involved, criminals are always around the corner looking to exploit situations. Especially in today’s digital world where there is an increasing number of online businesses mushrooming each day, the demand for digital payment transactions is also on a rise.

With this, there is a growing concern about the payment security and privacy of sensitive payment data in the industry.

With the increasing demand for convenient payment options, service providers are pushed to provide payment solutions beyond traditional banking models to facilitate cashless purchases. Such transactions are often complex and automated processes, involving multiple payment methods like credit/debit card payments, e-wallets, mobile payments, prepaid payments to name a few.

However, with the advancement in the payment industry, it has also opened doors for hackers to exploit situations.

While the industry is constantly witnessing a spike in cybercrimes, online merchants and consumers are looking for an easy, efficient, and safe environment for online payment transactions. This is when implementing PCI DSS Standards and various payment security controls come into the picture. Elaborating more on this, we have covered some of the security challenges faced by service providers in the online payment industry. Below is a list of security challenges in online payments and the best techniques to overcome them.

Common Threats and Payment Security Challenges faced by Businesses E-commerce or online businesses are 14

often exposed to several threats including hacking, misuse of personal data, phishing attacks, credit card frauds, etc.

Let us understand more about these threats and learn ways to tackle them.

Financial Frauds- Financial fraud has forever been a major concern in online businesses since their inception.

Hackers are often seen performing fraudulent activities like making unauthorized transactions and wiping out the trail costing businesses huge losses. For instance, gaining unauthorized access and filing requests for fake refunds or returns. Refund fraud is a common financial fraud where businesses refund illegally acquired products or damaged goods.

Phishing- Phishing is one of the most common security threats faced by online businesses where hackers mask as legitimate businesses and send emails to clients and trick them into revealing their sensitive information. They do so by simply presenting the clients with a fake copy of a legitimate website or any proof that allows the customer to believe the request is genuine and comes from the business. This technique works when the client believes and follows through with the action and provides them access to their login information or other personal data. Gaining access to sensitive data allows the hackers to exploit the situation and perform financial credit card frauds.

Malware- Attackers attempt to gain access to the code of the website, and insert a line of their own malicious code or modify the code. So, when a visitor visits the site the malware latches on to their visitors and exploits to gain personal

information and sensitive data on their devices. This is known as malware. Card skimming is often the result of malware attacks and is amongst the most popular criminal activities affecting e-Commerce as an industry. Cybercriminals are also seen uploading malware on the point of Sale (PoS) systems that allow data-stealing from cash registers using key loggers, RAM scrapers, affecting millions of consumers.

Ransomware- Ransomware is a targeted approach to control the victim’s website, systems, or networks and locking the files until a ransom is paid to the attacker. Ransomware remains one of the biggest cybersecurity issues today.

Bots- Bots are often recognized as a good technique that crawls the web and helps businesses rank in Search Engines. However, fraudulent actors create malicious bots to scrape websites for their pricing and inventory information, installing malware, or trigger phishing campaigns.

DDoS Attacks- Distributed Denial of Service (DDoS) attacks and DOS (Denial of Service) attacks aimed at disrupting the online business operation on the website and affecting the overall sales.

This technique involves the attackers flooding your servers with thousands and even millions of requests until the website completely crashes. This leaves your customers unable to access the site, resulting in a dip of sales. This attack is also used to shut down DNS servers, and firewalls to launch “daisy chain” attacks.

Brute Force Attacks- Brute Force attack

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typically targets online stores to get access into the admin panel. Hackers can attempt to log into the account by using brute force to crack passwords. They may use a bot to connect to the website and try every possible combination of letters, numbers, and symbols to crack your password.

Trojan Horses downloaded on their systems from underground websites, porn sites, and cracked software and sometimes even packaged in Word and PDF files. Attackers use these Trojans to swipe sensitive data from their devices.

The sensitive data is then used by them to perform other fraudulent activities.

SQL Injections- SQL injections are the most common cyber-attacks performed by hackers to access your database by targeting query submission forms. They inject malicious code into the database, collect sensitive data for further exploitation and other fraudulent activity.

Ways to tackle challenges

Trojan Horses- Trojan Horses are one of the worst network security threats faced by businesses online. Here the admin and customers might have unknowingly

payment

security

Antivirus and anti-malware softwareAnti-virus and anti-malware software are essential for ensuring payment security in online business. While this definitely a no-brainer we still prefer mentioning it for those who are not aware of its functionality and use. These programs use sophisticated algorithms to monitor transactions and flag any suspicious

activity, enabling businesses to take quick action and ensure all transactions are legitimate.

Firewalls- Installing firewalls simply adds an additional layer of protection allowing businesses to regulate traffic to their website. So, with this, only trusted traffic will be enabled to your network and prevents threats like XSS and SQL injections.

HTTPS Protocols- HTTPS which is far more safer than HTTP, protects sensitive user information, such as credit card data, entered on the website. Businesses must not just use it, but also regularly update it as most modern browsers can flag insecure websites, prompting potential customers to avoid your business website.

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Payment Gateway Security- Online businesses often store credit card details of customers for an easy re-ordering process. However, it is important to understand that the database is a liability and should be avoided. Even in case if you wish to store the details you must ensure that your business is PCI DSS Compliant.

Tokenization- Another secure way of ensuring safe online credit card payment is by using the tokenization technique.

Tokenization is a process wherein the sensitive payment card data is replaced with a sequence of randomly generated numbers known as a token. The process of Tokenization is pretty complicated and makes it impossible for a hacker to hack.

Two-factor authentication- Two-factor authentication / Multi factor authentication is a very popular and sophisticated level of data protection technique. It is an added layer of security that helps confirm whether the person trying to gain access to an online account is the authorized person. This technique includes security questions, SMS messages, OTPs, etc, for verifying the individual trying to log in.

It is best if businesses use third-party gateways that help minimize payment security risks.

CVV verification and address verification system- Having in place Card Verification Value (CVV) works as an added layer of security. So, even if a fraudster acquires credit card numbers from victims they will not be able to use them and the transaction will be flagged as fraudulent.

Encryption- Encryption is a very popular and effective technique to prevent data breaches or theft of sensitive information. Encrypting data will conceal the information with a string of codes that appears as random data. So, decoding the data becomes difficult without the decryption keys. Encrypting data is essential for it to ensure the safety and security of transmitting data. Common encryption techniques used in e-commerce businesses include Public key encryption and Symmetric key encryption.

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Secure Socket Layer (SSL) - Secure Socket Layer is the most widely deployed security measure that provides security over internet communications. It supports security protocols like Encryption, Authentication and ensures that the requested and submitted data actually gets delivered. SSL certification can help secure all types of online transactions be it credit, debit card, online banking, etc.

The SSL security measure is designed to prevent online payment security breaches while transmitting data online. Due to the severe security risks, all encryption using the SSL algorithm are discarded and the minimum requirement is to use TLS 1.2 or above.

Secure Electronic Transaction (SET) Secure Electronic Transaction is a collaborative security initiative by MasterCard and VISA. It ensures the safety of all entities involved in electronic payment transactions. They are known to handle critical functionalities like cardholders and merchant’s authentication, ensures the confidentiality of payment data, and defines electronic security services and protocols.

Conclusion As the industry continues to grow and evolve in an advanced digital environment, businesses are pushed to revisit conventional security measures and update their cybersecurity programs. Online payment security measures today need to be reworked and updated taking into consideration the adoption of the latest technology and trends of online shopping and payment process. The onus of securing payment transactions and preventing incidents of breach lies on the service providers. So, data security and privacy are crucial for online businesses dealing with credit card payments. More so, when the financial regulators of the industry are now particular about the security of sensitive data, businesses are also expected to comply with online payment security standards like the PCI DSS Compliance. So, dealing with the growing challenges by implementing strong security measures is something that businesses must seriously look at if they wish to sustain their business and secure it against any potential threats.

Narendra Sahoo Founder and Director VISTA InfoSec

Source: 1 https://www.vistainfosec.com/service/pci-dss-auditcertification-service/

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Women own a third of the world’s wealth – How can the finance industry better engage them?

Source: 1 https://moxiefuture.com/financial-feminism-book/ 2 https://moxiefuture.com/understanding-female-investorsreport/

3 https://www.crowdfundinsider.com/2020/10/167482-

report-says-global-fintech-founders-dominated-by-men-butwomen-founded-startups-are-raising-more-money/

Jessica Robinson is a leading expert on sustainable finance and responsible investing, and author of Financial Feminism: A Woman’s Guide to Investing for a Sustainable Future.

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omen are truly economic powerhouses. They create, they direct, and they influence a huge amount of wealth. Recent estimates put a third of the world’s private wealth under the control of women. And perhaps, even more importantly, this wealth is increasing at a faster rate than ever before.

However, despite this increasing economic power, women remain largely underserved by the finance industry. Research continually confirms that too many financial institutions rely on broad (and often incorrect) assumptions about what women are looking for when it comes to money and investing. The result is that many women feel disengaged with the industry and with financial products, services, and communication that just doesn’t hit the mark.

With women representing a critical and growing client base for banks and wealth managers, we must ask ourselves - what can be done to turn this situation around?

What can the industry do to better engage with their female clients?

Let’s start with the finance industry itself – more women at the helm As of now, the finance industry is not doing a good job at connecting with women.

For example, many report feeling patronised or talked down to by (mostly male) financial advisors. Perhaps one of the most important steps we can take to address this is to encourage more women to work in the industry itself.

Better gender balance is vital because diversity of thought, experience and action are core components of what the finance industry needs to be fit for the future. More women working within financial institutions will hopefully bring about products and services that are better aligned with the needs of their female clients.

It’s all in how we communicate When it comes to money, research indicates that the media, as well as the finance industry itself, often portray women

as excessive spenders, in need of guidance to help them save and restrict. The comparison with how we communicate with men is stark - men are encouraged to ‘dare to invest’ and defined by the glories of financial success.

Is it any surprise then that many women hold the self-perception that ‘investing is not for them’? We can do a much better job at the way we communicate with women about finance and investing, building their confidence and encouraging engagement through sensible and intelligent messaging that accurately reflect their situations and needs.

Understanding women’s financial priorities – sustainable investing One thing we know for sure is that many female investors are concerned about impact and sustainability. Across the globe, women care about where their money is going. For example, research from Moxie Future found that 83% of women surveyed care about where their money is invested, while 69% of women surveyed feel a sense of urgency to invest responsibly.

Doesn’t this tell us that it’s time to listen more carefully to what women are thinking about when making investment decisions? Women want to understand the environmental and societal impact of the companies and sectors they invest in. They want to be able to support businesses that are aligned with their values.

They want to be able to make a difference in the world.

This is where sustainable investing comes in – thinking beyond just financial returns and looking to achieve certain positive impacts in societies and our environment.

Sustainable investing is a lever of change and financial institutions can do more to engage with women in terms of their sustainability priorities – whether this be combatting climate change, cleaning up the supply chain or working with local communities.

The role of tech

Technology can also play a critical role in supporting the finance industry to better engage with women. Through leveraging technology to broaden access to financial services, we can find new pathways to connect and communicate with women in different ways from the past. However, to get there it is imperative that we employ a female lens, in particular, when designing tech-based investment solutions.

The harsh reality is that men dominate the fintech industry – a recent report from Deloitte revealed that fintechs with female founders or co-founders comprise only 12.2% of the total start-ups. Fintech solutions run the risk of being largely designed by men, for men, possibly leaving many female investors out in the cold. For this reason, we need to customise techbased investment products and services that fit best for what women are looking for today.

The COVID-pandemic and how this is driving change As we look ahead, one good thing to come out of the pandemic is that many women are more focused on their financial futures. For example, a survey on women and money from UBS found that 63% of women felt that COVID has affected how they think about money, and they’re more likely to discuss issues such as financial reviews and investing with their spouses and children. In a study by Fidelity Investments, 67% of women interviewed said they are more engaged in managing their money and have expanded their efforts to help shore up their finances.

These shifts in attitude and the broader rise in financial feminism is certainly exciting – but addressing it isn’t just about financial equality or simply rebranding products for a female audience. It’s more nuanced and requires deeper thinking about how women think and interact with their wealth. Put simply, ‘pink-washing’ will not cut it. As women’s wealth is set to grow at a rapid pace, the time is now for the finance industry to sit up and take note.

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BANKING

Billions of Personal Interactions Many hark back the ‘good ol’ days’ of branch-banking when the Bank Manager knew each of his customers and provided highly personalised service and advice.

Whether or not these halcyon days ever existed, it is difficult to see how these analogue relationships could scale to the digital world. Recent research found that at some banks over 90% of all customer contact now takes place over the phone, internet or smartphone. With more and more customers choosing digital-first interactions, creating that personal touch in digital relationships at scale is the new challenge. Expectations also change in the digital world. Fast response and instant decisions are the norm, whichever channel is preferred. To meet evolving customer demands, whilst not only remaining profitable, but improving cost-income ratios, banks must find ways to manage billions of hyper-personalised interactions at low cost. This demands the right technology, but also the right operating model to leverage data analytics to save money and grow revenue.

Marketers have long espoused the concept of marketing to a segment of one.

Treating every customer as an individual, and matching products and services to their exact requirements in the moment is now possible in ways that never were in face-to-face branch interactions. With 3.6 billion digital banking customers by 2024 and the ability to collect data at every touchpoint capturing data is no longer the problem. But, whilst many banks now have effective digital interfaces with their customers, many back-office processes still require heavy manual interaction. These kill any chance of intelligent, real-time conversations with customers over digital channels. More fundamentally they drive cost.

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Operationalising automation To deliver personalised service and reduce costs banks need to operationalise automation from end-to-end removing human interaction from the vast majority of tasks. Creating models that leverage data to make fast, accurate and auditable decisions 99 per cent of the time freeing humans to deal with more complex tasks and exceptions.

Modelling and automated decisioning systems are becoming the pillars of lowcost, highly personalised banking. It is where fintech innovators and ‘big tech’ have created an advantage over traditional banks – not by having more or better data but orchestrating the data they do have to support predictive analytics at scale. Every click on the PayPal website, every interaction with the app triggers thousands of models that determine in milliseconds the best next action. That could be a risk mitigation action to prevent fraud, or a new marketing interaction to cross or upsell a service. Either way, an automated decision has saved or made some money. No humans are needed to make these decisions which is why Neo banks and other data-driven financial service providers have cost income rations of around 40% compared to the 60-70% of traditional banks.

Not only have these new entrants started with ‘green-field’ technology and avoided the data silos that plague traditional banks, but they have created operating models that put predictive analytics at the heart of operations. For them it is not replacing the branch and the bank manager with an algorithm but building an entirely new business model based on thousands of algorithms. They link multiple digital channels into consistent customer

journeys supported by thousands of automated decisions driven by predictive analytic models. And, to a large degree, these run themselves.

Order of magnitude shift By contrast, traditional banks struggle to create and deploy handfuls of predictive models across their business. The demands of finding, joining, and preparing data to provide useful insights is hard and time consuming. Even when built the challenges of operationalising models means that almost 80% fail to deliver the intended value.

This has clearly got to change. To meet the evolving demands of customers and drive down costs, banks need to be deploying thousands of models to automate interactions with tens of millions of customers. Leading banks are beginning to orchestrate their data and create predictive model factories to do just this. It’s a conceptual leap as much as a technological one. Using a single data platform provides the framework for data science teams to industrialise their approach. Teams can collaborate to create models that cross product and organisational boundaries to focus on customer journeys. Models, features and data sets can be shared and reused to deliver maximum value – the efficiency and ROI on data science can be dramatically improved as they shift from creating 10’s of models to 1,000’s each year.

This is the scale of the challenge. The industrialisation of data analytics within banks to support hyper-personalised digital decision-making at speed for tens of millions of customers. Creating change

BANKING

of this magnitude can only be done from the top. Creating a few models to help a line of business, or specific products is not enough. Banks must prepare to build data factories that can build, test and deploy thousands of analytics models that deliver value along the whole customer lifecycle.

CEOs and other senior leaders need to set the direction of travel and be ready to transform. Speed and agility will be key to win in the age of hyper-personalisation as we’ll see in the next blog.

Simon Axon Source: 1 https://www.spglobal.com/marketintelligence/en/news-

insights/latest-news-headlines/uk-banks-speed-up-plans-toax-branches-and-switch-focus-to-digital-63761687

2 https://www.juniperresearch.com/press/digital-bankingusers-to-exceed-3-6-billion

3 https://blogs.gartner.com/andrew_white/2019/01/03/ourtop-data-and-analytics-predicts-for-2019/

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TECHNOLOGY

Do You Know What Your AI Is Doing?

- Scott Zoldi, Chief Analytics Officer at FICO

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TECHNOLOGY

Scott Zoldi, Chief Analytics Officer at FICO confirms that “State of Responsible AI” report from Corinium and FICO finds that most companies don’t—and are deploying artificial intelligence at significant risk Responsible AI has been one of my big topics for a few years now, so how are companies faring in adopting Responsible AI, making sure they are using artificial intelligence ethically, transparently, securely and in their customers’ best interests?

The short answer: not great. Our latest report released with market intelligence firm Corinium, entitled: The State of Responsible AI, finds that most companies are deploying AI at significant risk with 65% of respondents’ companies unable to explain how specific AI model decisions or predictions are made. The study also found only one-fifth (20%) actively monitor their models in production for fairness and ethics and 73% have struggled to get executive support for prioritizing AI ethics and Responsible AI practices.

The report, the second annual executive research effort focused on Chief Analytics, Chief AI and Chief Data Officers examines how global organizations are applying artificial intelligence technology to business challenges, and how responsibly they are doing so.

In addition to a troubling widespread inability to explain how AI model decisions or predictions are made, the study found that 39% of board members and 33% of executive teams have an incomplete understanding of AI ethics.

With worldwide revenues for the AI market (including software, hardware and services) forecast to grow 16.4% year over year in 2021 to $327.5 billion, companies’ reliance on AI technology is heading in only one direction: up. The report’s findings point to an urgent need to elevate the importance of AI governance and Responsible AI to the boardroom level; organizations are increasingly leveraging AI to automate key processes that, in some cases, are making life-altering decisions for their customers. Not understanding how these decisions are made, and whether they are ethical and safe, creates enormous legal vulnerabilities and business risk.

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TECHNOLOGY

The Urgent Need to Fight Bias What can businesses do to help turn the tide? Combating AI model bias is an essential first step, but many enterprises haven’t fully operationalized this effectively; the study found that 80% of AI-focused executives are struggling to establish processes that ensure responsible AI use.

Businesses recognize that things need to change, as the overwhelming majority (90%) of respondents agree that inefficient processes for model monitoring represent a barrier to AI adoption. Thankfully, almost two-thirds (63%) believe that AI ethics and Responsible AI will become a core element of their organization’s strategy within two years.

Who’s Responsible for Responsible AI? Despite the embrace of AI, what is driving the lack of awareness of its responsible use? The study showed that there is no consensus among executives about what a company’s responsibilities should be when it comes to AI. As an example, almost half (43%) of respondents say they have no responsibilities beyond regulatory compliance to ethically manage AI systems that make decisions which may indirectly affect people’s livelihoods. In my view, this speaks to the need for more regulation, if the designers of AI largely don’t see their responsibility as being more than what existing regulation enforces—or, in most cases, don’t enforce.

To drive the responsible use of AI in their organizations, senior leadership and boards must understand and enforce auditable, immutable AI model governance. They need to establish governance frameworks to monitor AI models to ensure the decisions they produce are accountable, fair, transparent, and responsible.

Executive teams and Boards of Directors cannot succeed with a ‘do no evil’ mantra without a model governance enforcement guidebook and corporate processes to monitor AI in production.

In their capacity, AI leaders need to establish standards for their firms where none exist today and promote active monitoring.

Only 20% of respondents actively monitor AI in production today.

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It’s clear that the business community is committed to driving transformation through AI-powered automation. However, senior leaders and Board of Directors need to be aware of the risks associated with the technology and the best practices to proactively mitigate them. AI has the power to transform the world, but in my view, as Spider-Man learned, with great power comes great responsibility.

You can download the report at www.fico.com/en/latest-thinking/ market-research/state-responsible-ai-2021..

TECHNOLOGY

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BANKING

BUILDING BETTER CUSTOMER RELATIONSHIPS Despite the fallout from the 2008 financial crisis, many customers stuck with their chosen bank and continue to remain loyal today. The aftermath of the COVID-19 crisis along with the tech giants’ long-awaited threats have now exposed new challenges for banks. Some of the FinTech challengers are quickly establishing themselves with stable balance sheets and an ever-growing user base.

With banks sitting on poor customer reputation statistics, outdated hardware, and an expensive legacy of branches and staff, it can be easy to compare them negatively to the likes of Apple or Amazon. However, this overlooks their place in society and indeed the possibility for change.

So, what can banks do to fight back and keep customers from flocking to challengers?

Creating better customer experiences If there is one thing that most big tech brands have in common, it is platforms

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with well-honed and slick interfaces that enable better customer experiences and deliver high conversion rates. One glimpse at banks and building societies and it’s clear that CX takes second place to systems-oriented design. Platforms come with limitations and procedures, built around the needs of the bank rather than the customer.

Influenced by their experience with other consumer products, when it comes to banking, consumers now want straightforward and quick functionality. Multi-page, ten-minute account opening procedures or loan signups requiring a 24-hour approval are obsolete. Thankfully, streamlining signups and other bank account processes is possible – the technology exists. Only legacy and cost stand in the way.

The major tech brands are renowned for great CX. When they directly enter the banking space, they will already be ahead, meaning there’s no time to waste for banks in finding fast paths to a better customer onboarding and management experience.

Joining up services and products Tech giants have something else in common, which is their journeys towards being an omni-platform. In banking, however, the so-called super app doesn’t yet exist.

Typically, banking apps only display current, savings and credit card accounts in a single interface. Mortgages, pensions, investments, or bonds remain orphaned.

There’s work to be done to catch up.

What’s more, only a few brands have tooled their platforms up with Open Banking (XS2A) functionality to allow for third-party products to be viewed in one place.

From dashboards that consolidate all financial wealth into one place to competitive foreign currency and cryptocurrency transfer and management services, the opportunities here

BANKING

are endless. Loyalty programmes that help save money on higher-ticket items, timely augmented information on inheritance tax implications and even easy set-up of trusts for future generations are just some of the features that can be made available to banks to help them better serve customers.

Creating efficiency with automation In addition, Robotic Process Automation (RPA) promises huge increases in efficiency. As a technology set, RPA is the fastest growth area in banking, capable of handling several repetitive, often mundane tasks and creating functional outputs.

While core banking systems, including contemporary platforms, remain large, complex, and somewhat impenetrable, the joins between them and the end-user can be rapidly improved with RPA. From simply augmenting data on spreadsheets to end-to-end rules-driven personal loan approvals, RPA looks to cut out manual process and replicate rules-based decision making. These approaches reduce manual effort, improve accuracy and compliance, reduce overall risk and speed up processes, further improving the customer experience. Benefits of employing

process automation include automated report building, rapid customer onboarding and account opening as well as automated lending and loan processing. And this is just the tip of the iceberg.

all. It is only AI that can hope to virtualise appropriate customer service and meaningful advice, from detecting loan defaults before they occur to guiding customers through reducing their outgoings in case of furlough and offering alternative or additional products at appropriate points.

Tapping AI for personalisation Finally, one area that banks are ahead of the game is in their intimate knowledge of their customers. They know their spending and saving patterns, and they alone have a sufficiently deep enough relationship to have meaningful insights.

But the tech giants are coming and with years of experience in AI, adoption is critical for banks. Whilst the concept of AI can seem daunting and complicated, it has moved from the laboratory to the real-world at a staggering pace. Many FinTech organisations offer their AI services to help augment banking with machine learning capabilities, automation, and personalisation.

And as banks continue to shut branches and consumers move to digital servicing, that need for personalisation becomes starker. Customer service has long stood as the high street bank’s stronghold after

Conclusion With big tech zeroing in on the industry, doing nothing is not an option. Banks have to modernise or become a thing of the past. Of course, the transformation required is not only an IT issue but a large cultural and political shift, one that has to be driven from the top of an organisation.

Banks survived the 2008 crisis. But the threats they’re facing now will make or break them.

Garry Hamilton, Group Chief Growth Officer, Equator

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BANKING

The digital corporate bank: The secret weapon for the UK economy?

It’s no secret that SMEs play a significant role in the UK economy. As of 2020, there are 5.9 million SMEs in the UK, contributing about 50% of its GDP. It goes without saying that the pandemic has put SMEs in a precarious position. Empowering them to grow again will be vital to the UK’s recovery – they hold the key to our GDP, the job market and to their communities. But for SMEs to play their part in the nation’s economic recovery, corporate banks will need to play theirs.

While accessing and managing our money has become increasingly easy for individuals, thanks to the retail banking sector’s rapid digitalisation, the same is yet to be seen for corporate banking. Access to credit is a major issue for SMEs, often pushing them towards self-financing or costly other options. This not only leaves a gap in the market for digital disruptors such as eBay to fill, putting banks on the back foot, but critically it also leaves SMEs in the lurch.

Quicker, more efficient access to credit will be the main driver of SME growth – but corporate banks as we know them now simply can’t provide this at the pace the economy needs. Instead, banks need to completely rethink the way they operate, taking a leaf from their retail siblings’ books – and there’s no better time than now.

The uncoiling of the spring With restrictions being slowly but surely eased, the UK is on its way back to normality. Most people are desperate to get back to restaurants, shops, and social events.

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Add this to the build-up of unspent cash due to the lack of socialising, travelling and other leisure expenses, and we have a potential windfall on the horizon, thanks to pent up demand for spending.

It’s useful to picture the economy as a coiled spring, ready to uncoil and exert a significant amount of energy and demand into the banking system in just a matter of weeks. SMEs are looking to capitalise on this growth – creating a very real and even more immediate need for banks to offer them easier and faster access to credit.

This process has traditionally been long-winded. Corporate banks have been digital laggards. However, whether out of necessity or renaissance, the sector is slowly but surely moving in a more efficient, more digital direction.

The only way is digital Corporate banking has always been a relationships game. The pandemic forced the move from face-to-face, paper-intensive banking to a remote, digitally empowered system – a tough pill to swallow initially.

Digital banking features, such as instant transactions and digital signatures, now provide customers with a more efficient customer experience (CX), replacing in-person interaction with speed and simplicity.

Corporate banking needs to move from sluggish to seamless. Currently, many customers are stuck in a digital limbo – with some banking services available online, whilst others continue to demand in-person or telephone appointments.

Even before the pandemic, customers preferred the convenience of digital-first service provision – it just wasn’t always an option for corporate customers. Today, however, customers expect the ability to choose from a menu of digital banking options as standard – from credit applications to instant transfers. Corporate banks need to watch and learn from their retail counterparts, where successful CX is entirely joined up and connected, if they want to keep customers satisfied.

More than a bank Each business is unique. It’s vital that banks take the time to understand them, their revenue streams, and their aspirations. However, lenders can’t be expected to recognise the potential, or risk, associated with the many varied and innovative business ideas of today. Corporate banks need to leverage the power of customer data to accurately assess each business’ prospects, needs, and credit risk in a time-efficient manner. Using the understanding gleaned from predictive customer data to actively advise customers is a natural progression and will be a differentiator in the marketplace.

This is especially crucial as many SME customers aren’t getting the personal relationship from their bank that they want and need as the economic springs uncoil.

This isn’t the fault of the individual – an account manager typically has 30-40 clients.

When spread so thinly, it’s easy for businesses to slip through the net. To avoid this, artificial intelligence and machine learning solutions can help banks to better manage their diverse range and growing

BANKING

volume of customers, especially as more businesses knock on the door. With these technologies on side, customers can gain personalised recommendations on the current opportunities, products, and services best suited to them.

Creating an ecosystem To really solidify their value in the SME market, corporate banks will need to think outside the box. Anyone who is involved in the running of an SME will know – it’s far from easy. This process is made harder by the long list of separate vendors needed to keep the cogs turning.

From corporate banks for credit, to insurance and pay roll providers, to accountants – there are many moving parts. This inefficiency poses a significant opportunity for the forward-looking corporate bank. Through the power of open banking, and the appropriate authentication, it is possible to consolidate these services. By streamlining business processes, customers can focus on the core of their business – while banks smartly position themselves as the valuable enablers of this ecosystem. Again, this is taking a leaf out of retail banking’s book. But more than that, it’s simply going where customers want and need their bank to go.

The next era In this post-COVID era, we’re sure to see the continued emergence of the digital corporate bank. This won’t just be a bank that offers loan applications online and digital documentation, but one that offers seamless CX, a deeper understanding of the customer, proactive, data-driven consultancy, and a connected business ecosystem of products and services to solve every potential problem.

Source: 1 https://www.bankofengland.co.uk/-/media/boe/files/fintech/ open-data-for-sme-financedf?la=en&hash=FD4BC43BBD61E DEC5F8460C6BB7488EFDE647581 2 https://www.ft.com/content/7149172d-30c1-4bc7-b5a05439a500c285

The imminent rise of the digital corporate bank can only be a positive thing – for banks, their customers, and for the wider economy. Going forward, the priority must be reducing friction: if it’s easier to get credit, it’s easier to start or grow a business, and then hire, spend, and offer your services to others. In turn, the UK economy will prosper – and the SMEs that make up its backbone will live to see another day.

Jayakumar Venkataraman, Partner, Financial Services and Insurance, Infosys Consulting

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FINANCE

WHEN TEMPORARY MEASURES TURN TO POLICY: HOW TO MODERATE HOME WORKING EXPENSES

C

OVID’s impact has been felt acutely within the world of work. According to a recent survey, adherence to government guidelines has led to more than half of UK employees working from home over the past 12 months. Now, thanks largely to the success of the national vaccination programme, talk has turned to returning to the office. Many businesses are adopting a hybrid approach – for the short-term, at least – with employees splitting their time between home and the workplace.

The conversation around new working practices extends to more than just location. The transition to home-working saw

traditional business expenses transform into requests for office hardware such as monitors and keyboards, phone and internet reimbursement, snacks, and wellbeing support. As a result, leadership has had to assess how to best align processes and policies to suit this different way of working, and consider how a finance team’s time can be used most effectively when handling these expenses.

With many companies now allowing their previously office-based teams the option of working from home either part-time or permanently, what does that mean for expense policies?

Setting up at home An employee who is permanently working from home can justify the spend on a comprehensive home office - especially given the savings they will generate by not being in the office - what about someone who may only spend a day or two a week at home? Given the need to balance employee productivity with controlling cash outlay and the proper capitalisation of assets, it’s important to consider just what equipment purchases are necessary to establish a viable home office. Similarly, should someone who could return to the office but chooses not to, be eligible for phone or internet reimbursement?

The sudden shift to working from home saw a rise in the approval by line managers of home office equipment purchases without any particular limits. While this was necessary to maintain business operations, it was both frustrating and concerning for finance teams. To address this, it would be prudent to mandate pre-approvals for any equipment purchases that exceed a company given threshold. This will allow finance teams to keep major equipment purchases on their asset table, ensuring they’re tracked for proper depreciation, and retained as company property when the time comes for employees to return to the office.

Office supplies Major equipment purchases, such as laptops, are just the beginning. Before long, tools such as highlighters, Post-Its, and

printer paper become part of the home office set-up. At this point, employees will look to finance teams for guidance on what can and what should be purchased.

The issue here is that, when employees make such purchases individually, organisations won’t benefit from the discounts typically applied when buying in bulk.

Cost controls should be established, with finance teams setting a monthly or quarterly spend limit across all office supply purchases, per person. Extending the timeframe for that spend limit will allow employees the flexibility to make occasional, more expensive purchases, when necessary.

Travelling to the office Many companies with London headquarters saw employees move away from the South East, to take advantage of lower house prices and more space. They may still be allowed to work from home, but

when time comes for a team meeting back at HQ, who should be responsible for the burden of travel and accommodation expenses? Should the employee pay, as they made the choice to move away and are likely benefiting from a lower cost of living. Should the employer pay, as they are benefiting from the lower cost of not having an office-based employee? Is there a certain distance within which people should be expected to cover their travel costs as a commuter would?

Communication of these policies is key. A proactive message to employees notifying them of the budget available or the parameters for reimbursing travel will empower them to make more thoughtful purchase decisions, and feel they have a stake in affecting the company’s overall financial performance.

Reducing the burden A new approach to managing expenses will result in a change in a finance team’s workflows. If a company doesn’t already have pre-authorisation or purchase requisition workflows in place, the use of smart expense and accounts payable solutions are an ideal to automate and ensure compliance with these important processes and to reduce the administrative burden. Using solutions that harness machine learning as well as human auditors, saves time, ensures compliance

and reduces fraud. A company could also earn some goodwill by funding authorised purchases on a pre-paid virtual card, ensuring employees don’t have to wait for their expenses to be reimbursed.

COVID has changed the way we work.

At the start of the pandemic, businesses everywhere were forced to quickly adapt to a new way of working. And, while the future is beginning to look brighter, it’s clear that things aren’t going to return to the way they were for some time yet. As long as employees continue to choose to work from home, businesses need to consider the difference it makes to managing their expenses, and the impact this can have on their finance operations.

Careful policy considerations by the CFO, clearly implemented and well-communicated, can make all the difference, creating a culture of inclusion, minimising unnecessary cost exposure, and improving the overall efficiency of finance teams.

Kenny Eon, GM and SVP EMEA Emburse Source: 1 https://voxeu.org/article/working-home-revolutionising-uklabour-market

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BUSINESS

THE PATH TO

r e m o t s u c e u tr y t i c i r t n e c -

With the growth in the services economy, customers have more autonomy and more options than ever before, and thus there is an increasing need to focus on methods that can improve customer experience. Subscriptions, renewals, and repeat customers depend on delivering both immediate value and a differentiating experience, as it is so easy for one bad experience to drive a customer to a competitor.

Finance leaders in particular must step outside of their traditional roles and understand and involve themselves in operations relating to the customer, such as service delivery, support and other postsales functions in order to make suitable decisions that will fully meet customer needs and deliver the kind of experience for a customer that drives long-term customer loyalty.

Tearing down the silos Lop-sided digital transformation initiatives across the years have left many organisations handling disparate and unequally distributed technologies. Adding to this, digital investments have often been made in a piecemeal fashion to address tactical problems and opportunities, with the majority of these tactical investments being in the front office, while the back office systems have suffered from a lack of automation. As a result of this, sales, service delivery, customer success, and finance have ended up disconnected, using different generations of incompatible technologies and locking up key customer information within certain departments in the process.This causes a messy systems landscape.

Businesses which can engage customers directly, in a personalised way and at every touchpoint they have with the business - across both the front and back offices - will come out on top. This is easier said than done, however, and while many businesses will style themselves as customer-centric, the quality of the experience they deliver doesn’t measure up.

This of course has a negative impact both on decision making and customer experience. If services margin data resides in one application whilst product margin is in another, it’s not possible to evaluate the performance of existing offerings or monitor the lifetime value of the business’ customers. With disparate data sets like this, it becomes difficult to understand what’s creating positive or negative outcomes for customers and the business.

If a business wants to walk the walk when it comes to customer-centricity, there are a few fundamentals that they’ll need to tackle first and foremost.

This issue only becomes more prominent when it’s front and back-office data that’s siloed. For example, consider the situation where a sales person is trying

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to secure new business, whilst a finance manager is simultaneously chasing the same customer for a significant outstanding debt, not an ideal scenario. Bringing sales and finance together also enables organisations to understand the cost to serve customers much better, improving margins and optimising pricing strategies and discounts. However, this intelligence is only of value if it actually makes it to those who need it in the next stage of the customer journey (i.e. the professional services team) in an actionable fashion to help with the implementation.

If it doesn’t get where it needs to be, the professional services team ends up asking the customer the same questions. If the same happens for the customer success team, who must rely on the customer and professional services to fill in the gaps post implementation, it only creates frustration, lowers utilisation rates and wastes time and money.

Only by tearing down silos and operating from a single dataset across the business can leaders ensure that all its departments and teams are synced up and pulling in the same direction for delivering the best customer experiences and outcomes.

A single lens across the business If a business is truly looking to support customer-centric practices, it must be able to manage the entire customer

BUSINESS

lifecycle on one single system to prevent losing critical data and insights.

Modern ERP solutions can seamlessly connect the front office (i.e. CRM systems) and back-office. This unifies data across customers, operations, services and finance, providing that single, comprehensive view across the breadth of a business, with a master customer record at its centre. In this way, all customer interactions and transactions are accessible from one place.

By having this single point of information, the issues around identifying customer profitability and lifetime value mentioned above are solved. Employees who need the information can view a single account record, know exactly what is going on, and drive positive engagement.

More advanced offerings can consolidate key customer information from each stage of the customer journey, providing different perspectives into the health of a customer. For instance, being able to view a customer’s impact on revenue and profitability from all revenue streams, whether

they be product, services, or subscriptions.

This kind of feature set provides real-time understanding of customer lifetime value and customer management.

With a unified system, teams also use the same reporting and analytics tools and can align everyone around customer success metrics, such as product adoption rates, project status, usage rates, and service call patterns. This helps teams better understand and predict future rates of renewal, churn, and expansion, so teams are better equipped to step in at the right time to remediate any issues.

Only through unlocking customer insights from within their silos and establishing a master customer record can businesses accomplish their ambitions for true customer-centricity. With a 360-degree view of the business’ customers,

employees can not only understand where churn might occur, but know when, and how to step in and solve the issues. This, in turn, enables teams to create personalised and rewarding experiences for customers and maximise customer lifetime value.

Andy Campbell, Global Solution Evangelist FinancialForce

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BANKING

Building banking services - the value proposition for more data Building modern applications

Iain Chidgey, Vice President EMEA, Sumo Logic.

T

he market for fintech investment has grown over the past year. According to Innovate Finance, around $44 billion of funding went into new and existing fintech companies worldwide to put together new digital services. At the same time, banks are investing more into their data and analytics approaches to compete with these new market entrants and to cope with the impact of COVID-19. According to the Bank of England, around 50% of banks surveyed reported increases in the importance of data science and machine learning for future operations.

With the COVID-19 pandemic continuing to impact how banks offer support from branches in-person, implementing new digital services is essential to keep up.

Banks and fintech suppliers are turning to data in order to create new services and support for customers. Industry developments like Open Banking have made customer account data into something that can be used and consumed within applications and services provided by a range of companies, rather than just by a customer’s bank.

In order to develop these modern applications based around data, new approaches are needed. For many teams, using microservices to design these applications can speed up how quickly they can be delivered. This breaks up monolithic applications into smaller components connected with APIs and that can fulfil specific needs. This can include the new services components like analytics for recommendations or displaying recent transactions, as well as infrastructure components for the application like API gateways, security and logging. This model helps software developers in fintech and banking IT teams innovate more quickly to build what they need and combine other sources or third party data applications to produce the application or service.

This also involves making use of new application deployment methods like software containers and serverless computing. Software containers make it easier to build microservices as they encapsulate all the necessary components for an application in one unit that can then run in multiple locations. Containers are useful for applications and services that have to scale elastically and that will run for long periods of time. If you have ongoing analytics and data services running all the time, then containers can be the way to go.

Serverless computing provides functions that can be called when they are needed.

This is very useful for fintech companies as they can build their services based on a “pay as you go” model rather than

having to implement and run infrastructure continuously. Serverless is useful when you want to supply the service on demand, rather than running all the time.

For apps that use data based on specific customer requests, this can be an effective approach.

However, in order to build and manage these new applications, you have to understand how they work and how they interact with each other. This means looking at the data that these new application components create and how it evolves over time.

Bringing new data, infrastructure and applications together To make the most of these new application infrastructures, you have to look at your observability data. Observability is based on the combination of application logs, metrics and tracing data in order to get a complete picture of what is taking place across your application and cloud services. Getting this data from your existing applications and any new implementations involves some consolidation work, but it should provide you with more insight into where you can improve.

However, building observability into your new applications is not simple. Each approach to running applications - from more traditional existing applications through to modern applications built on cloud, containers and / or serverless - will have its own forms of data that have to be collected and organised. This process can be difficult, especially around the complexity of microservices-based applications. If 35

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you are not careful, your software development and DevOps teams can end up making compromises by splitting visibility across tools, settling for insecure platforms, or leaving data out entirely because of the licensing costs of analytics.

Instead, it is important to look at how to aggregate and analyse all this data in one location, as well as examining the economic model for handling all this data over time. Consolidating data from multiple services and platforms is important as there will be a range of services and application components in place.

This can help with a range of requirements around performance monitoring, user experience monitoring and following transaction speeds and service levels. If something dips below what is expected whether this is a user experience metric, an internal service level or an application availability metric - then you can investigate quickly. Alongside this, getting a single coherent and consistent view across different applications helps your security and compliance efforts be more effective.

Delivering modern banking services with data Alongside your modern application development process, you can also consider how to use this data to deliver new services. Banks and fintech companies alike have access to customer account data that can be used in various ways. For banks, helping customers see their account data in one place can be an effective way to maintain a customer relationship, even when those accounts may be held with other banks or building societies.

For fintech companies, taking account data and building new services based on analytics can help them innovate faster

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and gain customers. In analysing customer data at scale, it’s possible to create new products that customers will value based on securely aggregating data, as well as looking at specific personalised services for each customer that is willing to share their data.

A good example of this in action is Snoop, a consumer application that uses customer bank account data for personalisation and recommendations. Snoop uses open banking data and analysing patterns of behaviour which can then be turned into recommendations around new products that would fit the customer’s interests.

Similarly, Snoop can suggest changes in their utility services that can provide great savings for customers over time. Snoop built its fintech app stack based on serverless computing from AWS alongside continuous intelligence data from Sumo Logic for its security and operations.

Snoop’s approach meant that it could build its operations quickly and scale up as customers came on board, rather than estimating resources needed and having to spend more during its launch phase.

Using serverless computing, the DevOps team at Snoop could scale up based on demand levels as they came in. More importantly, it could differentiate its service in the market and provide customers with recommendations based on their data in a secure way. The team has so far expanded to more than 140 million transactions analysed, covering more than £9 billion in spending.

Over time, more fintech and banking teams will want to achieve more with customer data. Delivering this will depend on a range of factors - faster application deployment and development, easier handling of data, and improved security monitoring over time. Bringing this insight together in one place will help your teams be successful.

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E ECO FINANCE

Shifting the conversation beyond skills to future-proof our ECONOMY

NOM O 38

O

f

The financial sector is a massive contributor to the UK economy. But to sustain this position long-term, one thing is clear: businesses need to take stock of their capabilities and put training strategies in place to fill the capability gaps.

This was made clear in our research about the UK skills gap, which found that it is already far too wide to support a healthy recovery. In fact, what we are dealing with now is much more severe. The skills gap has widened to become a capabilities gap, and there is a vast imbalance between capabilities businesses need, compared to those they actually have.

Our Beyond Skills report examined the state of the skills gap through the lens of 500 C-suite and 500 HR leaders. The research found that 71% of businesses that saw growth over the last year had invested in employee development during 2020.

Businesses that prioritised investment in their people set them apart from their competitors, ultimately positioning them to sustain growth during the most turbulent of times. Yet for financial services, 51% of those surveyed said they had made cuts to their learning and development

FINANCE

budgets. It was, therefore, less of a surprise to learn that this sector experienced the weakest growth of any surveyed. The sector chose survival over building capabilities by a significant margin (68%). This not only left the industry unable to deal with challenges associated with new ways of working, but also caused concern about the future implications of their organisation’s skills gap. These findings were striking, particularly for a data-driven sector that prioritises operational efficiencies and digital transformation.

Building capabilities for those already in-house is the most effective long-term strategy. It is also the quickest way to grapple with changes to new applications like blockchain and artificial intelligence, which accelerated within a matter of weeks during the pandemic. This left major cracks in the skills and capabilities businesses needed to thrive. And this is where many organisations have turned the wrong corner, leaning on recruitment to bandage these missing links. In reality, though, this is an expensive, short-term solution that will not solve the tremendous problem we have in front of us. By reducing learning and development budgets, and leaning on other solutions like recruitment, the additional strain was placed on those already in the industry. So much so that nearly three-quarters of respondents in the financial sector reported concern about the lack of capabilities, such as digital skills, on staff mental health.

MY

The knock-on impact of the capabilities gap on mental health is not difficult to see.

The impact of workplace-related stress

has been widely reported, but little has been said about the impact of a lack of capabilities on employee well-being. This is an issue that must be addressed now, with over 65% of respondents expressing worry. We’ve survived a pandemic, and now businesses need to turn their attention to supporting their people who will help drive the return of a healthy economy. Without a doubt, this will require engaged and motivated employees who feel confident in the capabilities they have to carry out new and demanding tasks. Investing in these skills will build confidence and restore a sense of stability for the workforce that is necessary for the financial sector’s contribution to the UK economy.

At Avado, we see a need for a capabilities revolution – a complete overhaul of the skills system with much more focus on building people and business capabilities to close the rapidly widening gap. This cannot be done by just one organisation. The conversation must shift beyond skills with more attention on the detriment these gaps will have on our economy, but most importantly, the people bringing it back to life.

Mark Creighton, CEO, Avado Source: 1 https://www.avadolearning.com/beyond-skills/

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TECHNOLOGY

Python: The technology your finance team didn’t know they needed

Finance is a complex world, now more than ever. You’ve got blockchains, hundreds of cryptocurrencies, NFTs, simple retail trading and much more. It’s a crazy, complex world with a lot of data. Financial bloggers are calling it the craziest market ever. How can you make sense of all this?

Well-established and secure

You learn, you stay on top of trends, and you find as powerful tools as you can. And in finance, Python is one of the best tools, for finance specialists as well as developers building finance software.

• Comply with international and local laws and regulations

If you’re not a seasoned Python expert, you might be thinking what makes Python so great for finance. There are a few key aspects: • Effective for complex operations on large amounts of data • Mature and secure • The syntax lets you swiftly translate business requirements into code Let’s explore what all of this means.

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In an industry like finance, software needs to: • Meet stringent architecture, quality, and security requirements

risk tolerance. But when it comes to software, nobody tolerates software that’s risky to use.

In finance, you get one chance to build software that’s secure and safe to use.

If somebody loses money because of a bug in your programme, you’re finished.

A tarnished reputation in finance would be very hard, if not impossible, to regain.

• Offer a reliable, trustworthy user experience.

First released in 1991, Python has been gradually improved and optimised for 30 years. The great thing about established technologies is that developers know exactly where they might fail. It’s easier to predetermine the weak points of software, and fix them before they become a problem. It’s like doctors say—prevention is better than cure.

Finance is all about risk. Risk is there when you invest in crypto, buy insurance, manage your wealth, even when you save up for retirement. Everybody has a different

The relationship between Python and complex projects Python has a rich academic background.

It has been a favourite for many researchers and scientists from all domains, not just computer science.

This is thanks to Python’s human-readable syntax, but also because it’s perfect for performing complex calculations with a lot of data. If you need proof, it should be enough to know that Python is the main language of the majority of machine learning and AI developers. And those

TECHNOLOGY

developers deal with large amounts of data.

What makes Python so good for data and scientific calculations? The academic background mentioned above is a big part of it. Because it’s been the scientist’s favourite programming language for so long, Python has a vast ecosystem of packages that are specifically made for data processing and computations with large amounts of data. Simple example: Matplotlib. This is a rich library for creating data visualisations.

Now, to the third aspect of why Python is good for finance—the syntax.

The Python syntax translating business requirements into code

• Python is built around the idea of finding one right way to solve a problem, and sticking to it. This means programmers don’t have to reinvent the wheel every time.

• The syntax of Python is similar to English.

It uses words where other languages might use symbols. Thanks to this, Python code is easily readable even with minimal knowledge about the language.

Final words on Python and finance

learning and AI are still evolving and this evolution is almost completely driven by Python.

As ML and AI evolve, they’ll be taking over more and more business processes, which will probably create even greater demand for Python developers to manage data, maintain algorithms and take care of models, especially in finance. But maybe that’s too wild of a guess - what we know for sure right now, is that Python is a highly valuable technology with a wide range of uses in the world of finance.

Python is not just useful for developers, but also for non-programmer specialists who want to automate and optimise their everyday work.

For professional programmers, Python makes it a bit easier to design business logic compared to other popular programming languages.

Finance is especially ripe for disruption with ML and AI technologies, so we could make a wild guess and say that maybe, one day, finance specialists will need to know Python in order to work in the industry?

There are two things that contribute to this:

After all, Python will most likely keep growing in popularity, given that machine

Maciej Dziergwa, CEO, STX Next.

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BANKING

The great banking battle to secure customer data Matias Madou, Co-founder And CTO, Secure Code Warrior

“

Challenger banks and fintechs are shaking up the traditional banking landscape and driving rapid change within the industry. Unlike traditional banks, challengers are agile enough to decipher some of the complexities surrounding financial products and the industry.

Despite this, around 40% of Brits admitted to still not trusting challenger banks, with over half (54%) of respondents concerned that the technology would put their data at risk. For many consumers, it would seem attitudes towards digital banking are not evolving as rapidly as the technology underpinning it. As consumers are becoming increasingly aware of data privacy, it’s not just challenger banks that will need to take action.

“

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Why are customers placing more importance on cybersecurity?

In January, some of Britain’s biggest banks were reported to have “concerning” software vulnerabilities that were potentially leaving their customers exposed to fraud.

With vulnerabilities being unearthed and data breaches being reported more and more frequently in the media, it’s no surprise that consumers are starting to become concerned about their personal data. A PwC survey found that 85% of global consumers wish there were more companies they could trust with their data and 86% believe it to be the responsibility of businesses to protect consumer data. Given the sensitive nature of the data that customers share with their banks, it’s understandable they would be even more wary of breaches when it comes to banking compared to other sectors moving online.

However, COVID-19 has somewhat thrown a curveball. It’s forced many, including those who may have previously resisted online banking, to make the shift, resulting in an accelerated consumer uptake of digital payment services. For example, a Capgemini report found that a third of consumers discovered new ways to make payments during lockdown, with many using large tech companies and challenger banks. Therefore it’s absolutely essential that banks are doing everything they can to secure their customers’ data.

How can banks keep their data secure?

As the world slowly recovers from the pandemic and the UK lies in wake of Brexit, consumers have never been more in need of the reassurance and knowledge that their data and assets are secure. This is a clear indication that a strong cybersecurity posture has now become a key marketing

BANKING

message for banks and is a differentiator in the eyes of consumers.

To ensure that their customers’ data remains as secure as possible, banks and other financial organisations need to address security issues at the root of the problem; insecure code. The rapidly increasing reliance on digital platforms and the software behind them has only worsened pre-existing security issues. Secure code is the first line of defence for banks to protect themselves and most importantly, their customers, against common security bugs that can lead to large breaches if undetected. A 2019 study found out of 32 web applications, 82% of vulnerabilities were located in the application code itself. Failing to address this will result in an organisation’s infrastructure being at risk, which could lead to large scale data breaches. The reputational damage and the customer trust lost as a result could have a catastrophic impact.

Alarmingly, a survey of 400 security professionals across financial services found that only 43% of organisations impose cybersecurity requirements on third parties involved in developing financial software and systems. If security training for developers was a requirement within banks and other financial organisations, a lot of risk could be mitigated.

There can be a reluctance towards training developers on how to write secure code due to a misconception that it will take them away from their primary purpose; building features. However, this doesn’t have to be the case. Secure coding training offerings can demonstrate how security can seamlessly fit into developers’ current coding practices. Hands-on training that mimics the code they would see in the real world is likely to be the most successful form of training. Hyper-relevant gamified learning platforms which are integrated with day-to-day tasks will enable developers to demonstrate best practices in

the future without taking them away from their job.

As the frequency of cyber attacks continues to worsen and consumers become ever more concerned about their personal data, we should expect to see a push by both traditional and challenger banks to prioritise the safety and security of their customers’ data. The first step to ensuring software security is through emphasising secure coding from the start of the development process, and naturally, this begins with training developers.

Source: 1 https://www.cityam.com/challenger-banks-yet-to-overcomebrits-lack-of-trust-study-finds/

2 https://www.telegraph.co.uk/money/consumer-affairs/

concerning-online-security-flaws-found-britains-biggestbanks/

3 https://www.pwc.com/us/en/services/consulting/library/ consumer-intelligence-series/trusted-tech.html

4 https://worldpaymentsreport.com/

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leading the charge

for a greener and healthier environment

accessbankplc.com/sustainability

WEALTH MANAGEMENT

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WEALTH MANAGEMENT

What Investors need to know about

ESG investing.

Environmental, Social and Governance compliant investing (ESG) has become a real focus in recent years with the impact of global warming meaning many are now keen to ensure their financials are not fuelling companies that could be worsening the environmental state of play. In fact, according to Morningstar, money invested into ESG funds rose to $71.1 billion between April and June 2020, pushing the total invested in these funds to over $1 trillion globally.

- Ian Ramsey,

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T

he global pandemic, growing evidence for the severity of climate change, as well as increased calls for international social change such as the BLM movement, have enticed an entire market of investors to rapidly ‘future-proof’ their investments with sustainable companies.

What is more, ESG has recently been outlined by leading asset manager Larry Fink, as a fiduciary responsibility for investors and is rapidly becoming a necessary consideration for funds looking to benefit from a lasting positive reputation as well as weather short-term downturns.

However, while the principles of this type of investment strategy seem clear – to prioritise sustainability, social responsibility, and ethical standards – just how to invest in accordance with those aims is much less transparent. That is because there is not yet a standard measurement for ESG performance, which has led to significant variation in just how socially responsible some investment opportunities really are, opening the door to greenwashing.

Investing in this new and rapidly expanding sector is not without its risks. There are two primary pitfalls that prospective investors would be wise to bear in mind: the credibility of an ESG company or its data rating and the wider concern of a potential ESG market bubble.

Evaluating environmental and social impact as part of an investment strategy has the potential to produce higher financial performance and yield better risk-adjusted returns for investors, with sectors such as sustainable energy production offering promising long-term returns. However, investors need to be wise to the realities and work with specialists to find genuinely ESG adjusted opportunities.

Purpose-led investments are increasingly becoming an integral part of diversified strategies with more investors recently re-evaluating their objectives in line with social and economic values on the back of the pandemic. As companies and funds come under increased public scrutiny with climate awareness being pushed to the fore, the robust performance of ESG funds has also led investors to put their money into environmentally and socially responsible pots, to the point where some have even speculated that a price correction may be needed due to the overvaluation of these assets.

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Getting ESG right.

ESG ratings are neither uniform nor universal. There is no standardised rating of a company’s ESG performance and the many nuances to what exactly makes a company more or less sustainable compared to another make evaluating tricky.

For investors, it can become difficult to navigate the sector and understand the credibility of a fund’s environmental, social and ethical credentials.

How can Financial Advisers help?

As with most specialist fields, ESG investing can be a maze of jargon and challenging terminology for newcomers. Financial advisers can be a valuable guide in deciphering the inaccessible aspects of ESG investing, helping clients to understand more about their intended portfolios and, ultimately, see a better return on their investments.

Separating the credible from the unsustainable or even illegitimate is crucial in creating a portfolio which is made up of true ESG companies. A passive fund which simply tracks and follows ESG data may hold companies which sport a good rating but are, in reality, guilty of well-publicised ‘greenwashing.’ According to the Financial Times, one third of climate funds sold in the UK are invested in oil and gas companies which mean unaware investors can unwittingly end up supporting the very companies they chose to take an ethical stand against.

They face falling into the trap of ‘Greenwashing,’ where funds seek investment opportunities on the attractivity of an ESG model when they are in fact piggybacking on the unprecedented growth of the market. On the surface, funds can have a good ESG data rating while practicing unscrupulous environmental and social methods or failing to exercise their due diligence on ESG principles.

Engaged financial advisers can help prevent this accidental slip and opt for an active strategy to assess the long-term suitability of a portfolio tailored to the investor’s demands. By providing time and effort into distinguish between genuine and faux ESG opportunities, a financial planner can investigate funds in detail to assess their ESG compliance with the required expertise and in turn guarantee a truly sustainable portfolio that will generate reliable returns.

Additionally, the large influx of capital to the ESG market through such a short period of time has the potential to over-value stock price on ESG investments, which may lead to a downturn further down the line. This has created speculation over the likelihood of positive returns from these funds.

Ian Ramsey, Chief Investment Officer, AHR Private Wealth

WEALTH MANAGEMENT

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FINANCE

What comes after the

David Maisey, CEO MultiPay Global Solutions

T

he death of cash has long been predicted. Now thanks to the pandemic we are seeing it in action, as while cash is unlikely to completely die, for most consumers, it is not the chosen way to pay. Data from Finance UK shows the scale of the decline. Back in 2009, over half (58%) of payments were made via cash. 10 years later in 2019, this number had dropped by more than half to just 23%. The drop in usage has naturally left a void that needs filling by other payment solutions and led to the rise of credit and debit cards.

As cash disappeared, consumers quickly switched to card payments due to the

50

convenience, ubiquity, and ease of use that they offered. Debit cards in particular, have seen rapid growth making up 42% of all payments in 2019 alone. Yet, the success of cards and their position as the number one option could be short-lived as consumers look to switch to mobile payments.

While not a new form of payment with Apple Pay arriving in 2014 and Google Pay in 2015, they are now growing at a great pace in adoption and usage. With global smartphone penetration at around 78% and well over 99% in many developed countries, it has emerged as the new wallet for younger consumers. Already over 10 million UK adults have registered for mobile payments, with much of this adoption coming in the Gen Z and millennial demographics. Representing one of the largest groups of consumers with disposable income, their influence on payment trends is already having an impact, and will only grow in the years to come. The payment and finance sector then need to respond and quickly to these changes if it is to help clients in the retail, hospitality,

travel, and tourism sectors meet consumer demands.

The fact is that the growth in mobile payments is good news for consumer-facing businesses as it creates new opportunities to interact and understand customers and their habits. For instance, by combining payment with apps that can be used in stores, pubs, bars, and restaurants, businesses can gather additional information on preferences and habits. Using this information, restaurants for example can offer customers new features such as one-click ordering. This feature then allows customers to quickly reorder their last food and drinks choices, reducing the time it takes for them to order and boosting the customer experience.

Retailers too have looked to take advantage of the increasing desire for mobile payments by combining them with self-service apps. Sainsbury’s is one business that has been quick to adjust to this emerging trend with its new scan and shop app. By removing the need for a specific scanning device, Sainsbury’s has

FINANCE

made it easier and with COVID, safer too for customers to shop in-store. Going a step further though and connecting scanning apps with mobile payments and loyalty cards, retailers can provide customers with useful insights and suggestions on products or offers they might be interested in. Then when it comes to making payment, these apps can automatically recommend a customer’s preferred mobile payment method and limit the number of clicks needed to complete a purchase.

Offering this type of experience has the advantage of both speeding up and increasing the level of personalisation customers experience. As a result, they are more likely to return and stick with the business that offers them the best experience.

This is just the start too. In the future, we can expect to see apps that not only include scanning and payment processes but also act as a guide for customers when in store too. For example, an app can take customers around a store in the most efficient route possible based on their shopping list, reducing the time spent

walking around hunting for a particular product. Once they have filled their trolly or baskets, customers can quickly and seamlessly pay in the same app too. This is an experience that would be impossible however without businesses focusing on mobile payments.

Focusing on mobile payments will require a review of existing payment infrastructure. Imagine, if a particular payment method was left unsupported or required a customer to use a payment terminal and not the app experience. This change will immediately take them out of the experience they have been enjoying and risks denting the enjoyment of interacting with a particular brand. Businesses consequently need to ensure they have payment solutions that provide a seamless experience and can accept any payment, anywhere a customer decides to pay. With payment technology now available that can be tailored to a business’s unique requirements, shifting towards a mobile payment first approach is easily achieved.

While the death of cash has been a long time coming, businesses now need to begin preparing for what comes next. Cards may currently be the leading payment method, but their days to are numbered.

Instead, businesses must shift to a mobile payment first approach and begin to leverage it to create new and improved experiences for customers. Those that plan and get ahead of this change now, will be best placed to win and retain customers in the future.

Source: 1 https://www.ukfinance.org.uk/system/files/UK-PaymentMarkets-Report-2020-SUMMARY.pdf

2 https://www.ukfinance.org.uk/system/files/UK-PaymentMarkets-Report-2020-SUMMARY.pdf

3 https://www.apple.com/uk/newsroom/2014/09/09AppleAnnounces-Apple-Pay/

4 https://android.googleblog.com/2015/09/tap-pay-done.html 5 https://www.statista.com/statistics/203734/

global-smartphone-penetration-per-capita-since2005/#:~:text=Smartphone%20penetration%20 worldwide%20as%20share%20of%20global%20 population%202016%2D2020&text=Global%20 smartphone%20penetration%20rate%20is,global%20 population%20of%207.8%20billion.

6 https://www.ukfinance.org.uk/system/files/UK-PaymentMarkets-Report-2020-SUMMARY.pdf 7 https://www.statista.com/statistics/824464/ mean-disposable-income-per-household-by-ageuk/#:~:text=During%20the%20year%202019%2F20,those%20 aged%2085%20and%20over.

8 https://help.sainsburys.co.uk/help/products/smartshop-faq

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TECHNOLOGY

How the Artificial Intelligence of Things (AIoT) is Affecting Finance

We

all

know what a Tesla can do: Its windscreen wipers can automatically start when it’s raining. Its internal heaters can automatically switch on when it’s cold. Its navigational system can automatically suggest lane changes and alternative roads to optimise your route.

But do we know how a Tesla can do these things?

Through R&D, innovation and the Artificial Intelligence of Things (AIoT).

What is AIoT? How does it work? How does it affect the world of finance? Ready to find out?

What is the AIoT? In its simplest form, the Artificial Intelligence of Things (AIoT) is a combination of Artificial Intelligence (AI) and the Internet of Things (IoT). “While the IoT connects ‘dumb’ devices to the internet, artificial intelligence gives them a ‘brain.’” – Electronic Design It’s a connected set of devices, systems or computers that collects data and builds algorithms so that the tasks we would normally do manually, can be performed automatically by machines.

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TECHNOLOGY

How does the AIoT work?

With the AIoT, the AI part makes it possible for intelligent decisions to be made, and the IoT part tuns those decisions into actions.

Basically, a machine or system will repeatedly perform a task, collect and store behavioural data from that task and then build a set of algorithms for that task. It’s these algorithms that enable intelligent decisions to be made without human interference.

These intelligent decisions are then passed to a set of connected IoT devices or systems which are embedded with sensors that allow that decision to be actioned, without the need for human intervention.

Aside from Tesla’s, you can see the AIoT in action in the retail sector. Smart shops use connected cameras and facial recognition technology to identify customers, collect data about their shopping habits and make informed decisions on product development, marketing and purchasing.

Or with smart offices where connected devices collect, store and analyse data, and algorithms are created to automatically control the heating, lighting and security of the building.

How the AIoT is impacting the finance industry The intelligence and capability of the AIoT brings several benefits to the finance sector specifically. For instance, the AIoT can allow financial institutions to: AIoT benefit #1: Saves time According to research, the AIoT reduces the time it takes for a human to perform mundane, repetitive tasks by up to 90%.

The time saved on data entry or administrative type tasks can be used elsewhere to focus on the bigger, more strategic tasks that can push the business forwards, or provide more value to the customer.

AIoT benefit #2: Improves quality

Human error is unavoidable. I hate to say it, but this is because we, as human beings, aren’t perfect. Although machines can still malfunction and catch bugs occasionally, they’re still far more reliable, 100x more accurate and will always make fewer errors than us. So, the AIoT means tasks will not only get done quicker but they’ll get completed to a higher standard, with fewer mistakes.

learning models can now collect data from thousands of customer transactions, spot abnormalities and flag concerning behaviour without any human interaction or lengthy, complex set-up. This enables financial companies to take fast action to stop fraud and make customers feel safe and secure.

AIoT benefit #3: Increases competitiveness

Whether they’re completing or conducting them, auditing can be rigorous, time-consuming and often fraught with human error. This is why the AIoT is the perfect replacement for traditional, manual auditing. AI-enabled systems can monitor documents and perform thorough analysis against a set of rules and laws. It can then identify patterns and establish what’s “normal” and what’s ‘’not normal’’. It can then flag any anomalies as issues that the auditor can then review or fail.

The increase in efficiency and quality that the AIoT brings has the potential to give companies a clear lead over their competitors. But it’s the data and analysis that sits behind the AIoT that provides the real competitive advantage. It allows companies to make more informed decisions around their customers and the business and push themselves ahead of their competition.

AIoT benefit #4: Boost’s recruitment The AIoT not only makes the company more attractive to its customers, but it also turns them into a more appealing employment option for the tech-savvy millennial and Gen-Z recruits coming up through the ranks.

The 3 big trends for the AIoT in finance Research shows that around 80% of financial enterprises will implement the AIoT in some way by 2022. But what type of AIoT are we talking about and what type of tasks and projects will be automated?

Quick, fuss-free and accurate auditing

Conclusion The Artificial Intelligence of Things is set to transform the financial industry. Companies that develop or invest in innovative AIoT tech that removes time-consuming manual tasks, reduces the potential for human error, and provides the opportunity to employ the best people will beat the competition with frictionless customer experiences informed by data intelligence.

Automation of repetitive, manual tasks Robotic Process Automation (RPA) can complete repetitive tasks and processes based on a set of if/then rules. So mundane tasks such as sending emails, updating documents, or inputting data into spreadsheets can now be done automatically.

Detection of fraudulent behaviour Fraud costs financial institution thousands of pounds each year. Machine

Amanda Greenwood, Myriad Associates & Tax Cloud.

Source: 1 https://www.myriadassociates.com/services/rd-tax-credits/ 2 https://www.electronicdesign.com/technologies/iot/ article/21122431/how-the-artificial-intelligence-of-thingswill-change-the-world-as-we-know-it

3 https://bernardmarr.com/default.asp?contentID=1929 4 https://www.ishir.com/blog/9375/the-top-12-artificialintelligenceai-trends-to-watch-out-for-in-2021.htm

5 https://www.myriadassociates.com/services/rd-grants/

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UK at Forefront of FX Management Change

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he UK is front and centre in a global increase in foreign exchange hedging as both Brexit and Covid have shaken the pot. The once steady and reliable Pound is increasingly volatile. Add to this more UK companies needing to source both suppliers and customers from ‘offshore’ it is easy to see why FX hedging has come to the fore.

for risk and that comes in all shapes and sizes. Even doing nothing is a legitimate approach, provided the decision is made consciously and not just through hope and crossing fingers. Having an FX policy in place enables faster and better decisions to be made but also ensures you are acting within your current appetite for risk.

This has put the spotlight on the importance of faster, more accurate FX hedging and highlighted the changing landscape for FX management in the UK over the past year. There are four key areas of change all of which are the direct impact of increased volatility. The UK’s previous relatively stable Sterling enabled many to put FX hedging off the priority list. But that is no longer the case.

Cashflow forecasting just got harder

FX risk management policy FX hedging must be part of any importer or exporter’s risk management tool kit.

Just as you need to have risk management policies for managing other key parts of the business, now you need a foreign exchange policy as well.

Companies need to identify their tolerance 54

Forcing a more pragmatic approach is concurrent with the increased complexity in cashflow forecasting. Once reliable supply chains are anything but. It makes forecasting – which has always been a challenge – exponentially harder. If the cashflows are in a foreign currency, you’ve just added another multiplier to risk and difficulty.

If you are managing foreign currency cashflows then your hedging will need to be dynamically changing at the same time.

Whereas you might have covered 100% of every committed forecast previously, now you might be reducing that or buying insurance through FX options.

You need to build need some flexibility into your forecasting so if an order doesn’t eventuate, or gets pushed out longer than

Richard Eaddy, CEO, Hedgebook.

WEALTH MANAGEMENT

expected, your FX hedging can be adjusted accordingly.

FX management frequency increasing All of this has accumulated in the third insight; FX risk management is no longer a monthly or quarterly activity. To manage both the currency volatility and the increased risk, companies are reviewing their hedging positions far more frequently, particularly in the UK. The increase in risk has driven much closer monitoring. There is not only a greater uptake in tools to manage FX risk effectively but an overall increase in their use.

The majority are reviewing their FX positions are being reviewed multiple times a month which certainly wasn’t happening a year ago, with many accessing their position on a daily basis.

No longer in the boardroom Finally, lockdown spurned another

challenge for those managing FX risk.

Conversations could no longer be held behind closed doors, with the relevant information presented over the table.

Instead, the information now needs to be securely accessible to all, no matter where they are located (including your bank and currency broker).

It also needs to be one version of the up-to-date truth as managing multiple versions adds an unacceptable layer of risk. Spreadsheets are no longer fit for this purpose. Even if your treasurer is an expert and can do the multi-faceted calculations required it just isn’t current, or secure, enough to be viable when working remotely.

And this isn’t going to change. We have lived with remote working for so long now that most believe a hybrid of working from home and working in the office will remain for the foreseeable future. In our world – it means FX hedging decisions will continue to be made with remote engagement which supports a higher cadence of FX

management.

Banks slow to change However, banks, currency brokers and auditors are still very much part of this equation. And while audit firms have rapidly come on board with moving to digital solutions, banks and currency brokers are disappointingly slower to change.

This isn’t just a UK phenomenon as around the world customers are starting to push banks hard for online FX risk management. It is surely in everyone’s interest to be operating off the same information, including the modelling of different options and attributed risks.

While it was once a monolithic job to install a treasury management solution, cloud technology has considerably changed that. Banks and currency brokers need to move faster on this or their customers really will leave them behind.

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Open For Business: How Open Banking Is Driving Competition Around Customer Experience

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For the financial services sector, maintaining the status quo is as good as falling behind. Innovation has always been at its very heart, and those that fail to push the boundaries of what’s possible soon fade into obscurity. The introduction of Open Banking has widened those boundaries considerably, putting customers firmly in the driving seat while businesses compete to offer the most tailored and convenient experience. In this article, we’ll explore open banking in detail; what it is, how it originated, and the impact it’s had on banks, insurers, wealth managers, pension providers and the fintech startup space in general. We’ll also touch on how Open Banking has revolutionised the customer experience, and what businesses need to do to stay relevant.

“

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Before 2018, financial services companies had complete control over their customer data. If a consumer chose to do business with a certain insurer, bank or pension provider, those companies would have full jurisdiction over that data, effectively making them a one-stop-shop for customers who had very little choice or control in the matter. The idea of a financial services company giving up its customer data to a third party for the benefit of its customers was completely unheard of, it would have been seen as holding the door open for the competition.

Then everything changed. On January 13th 2018, a new Payment Services Directive known as PSD2 was introduced following pressure from the Competition and Markets Authority (CMA), which forced financial services providers to share data at their customers’ request. Now, any business providing a financial service has to provide provision for third party access.

The intention was to encourage innovation and allow customers to take a more ‘modular’ approach in how they handle their finances by utilising other services built on top. If a bank didn’t have a decent money manager or budgeting tool, a customer could simply go to a third party such as Yolt and, thanks to the miracle of an open-API ecosystem, get the best of both worlds. Yolt allows customers to connect the service to their bank accounts and use it to control spending, round-up purchases to save money and so on. This is the new customer-centric playing field of open banking, and while challenging, it’s also creating incredible opportunities for providers of financial services.

staggering rate of 24% year-on-year, and is expected to be worth more than £31 billion by 2026. Empowering customers and encouraging market competition might have been the initial driver behind PSD2, but to their credit businesses have run with it.

Fintech start-ups in particular are finding easier routes to market, creating carefully curated, modular tools that add value to a customer’s financial journey. To enter this marketplace, once a start-up has a killer idea it needs to find a tech partner that has the capability to deliver on the APIs and data layer integration needed to get involved. This wouldn’t have been possible a few years ago. Today, if a start-up sees a gap in the market for a particular tool, it can simply create an app that fills that gap, and the customer now has the option of enlisting that app as part of their financial toolkit.

Take pension providers, PensionBee, in the UK for instance. Open Banking (PSD2 directive) has allowed them to create a money app where users can get an overall view of their pension balances all in one place. Very useful for people that have hopped around from job to job with various ‘pension pots’ scattered around.

Users of the PensionBee app can even scan their savings for wealth traps and ‘bad contracts’ and move their money from pension to pension. This is something that would have required a lot of leg work on the part of the customer prior to OpenBanking, as their pension providers would have kept their data close to their chest. This is the transparent, API-driven ecosystem that OpenBanking has created, and the opportunities are seemingly endless. But what about data privacy? Do customers trust Open Banking enough to embrace it?

bank, pensions and savings accounts to third-party apps in exchange for an important value-added benefit. That’s a 1.5 million increase on 2020’s figures and remember that OpenBanking has only been in play for a little over three years at the time of writing this piece. The truth is, Open Banking is a consent-based ecosystem, so a customer’s data is only shared with a third party if they themselves decide they want that third party’s help.

“

More than 2.5 million customers in the UK have now connected their bank, pensions and savings accounts to third-party apps

“

Open for business

It therefore falls to third parties, like many of the business leaders perhaps reading this article, to earn customers’ trust and loyalty along with providing a unique and useful service. If, by harnessing APIs and the “open door” afforded by PSD2, you can persuade customers to share their data in exchange for a service that will add value to their financial world, your fintech company might just become the best thing customers never even knew they needed.

Greig Johnston, CEO, Vidatec

Source: 1 https://www.prnewswire.com/news-releases/open-banking-

Driving innovations in customer experience

Consumer trust in Open Banking

Today, the Open Banking industry has exploded. As of 2021, it’s growing by a

More than 2.5 million customers in the UK alone have now connected their

market-size-to-reach-43-15-billion-globally-by-2026-at-24-4cagr-says-allied-market-research-301171734.html 2 https://vidatec.com/industries/financial-services/ 3 https://www.openbanking.org.uk/about-us/latest-news/ open-banking-adoption-surpasses-one-million-customermark/

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Closing the Innovation Gap

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eI n p

ndustry 4.0 has seen innovation disrupting industries in many different sectors. From banking and lending, to retail, travel and employment services, organisations have upped their game, prioritising efficiency, productivity, and customer experience, all powered by tech.

In this competitive landscape, established brands in financial services and the wider e-commerce space are facing challenges from more agile, tech-savvy entrants.

These brands now risk falling behind in the race to attract customers and retain market share in their relative sectors.

For traditional financial institutions such as banks and building societies, Industry 4.0 is proving to be a ‘do or die’ moment.

They must look to re-prioritise their offerings, streamline their systems and close the innovation gap between them and the young, fast growth trailblazers that are proving to be fierce competitors.

Challenges for banks and building societies Customer expectations are rising and this isn’t a surprise. From planning travel, to paying bills and managing money, processes and services are becoming increasingly quicker, easier and more efficient.

The issue for traditional banks and building societies is that they often have a legacy of inflexible internal payments infrastructures. As one CEO of a large regional building society recently put it, they have “great people stuck behind shocking systems”. Even simple services designed to complement core payments have presented difficulties – such as delivery of Confirmation of Payee (CoP) and integrated Payment Initiation Services (PIS) utilities from within institutions’ websites or

mobile apps. As well as pushing customers away and into the arms of disruptors, these entrenched ways of operating are compromising return on value.

There are also considerable hidden costs and operational inefficiencies linked not only to the hours upon hours lost to manually tallying payments, but also to responding to customers who haven’t seen transactions go through instantly.

Added to this, COVID-19 has accelerated the global shift to digital-first, and as a result digital payment volumes are soaring. The urgency for banks and building societies to innovate has never been more pressing, with customers unable to make physical payments or visit branches in person for over a year.

expectations, banks and building societies should implement a solid API framework into their payments architecture.

API-enabled payment processes are easily integrated and provide companies with faster and more reliable ways to move money. Through a powerful API, businesses can automate payment flows, embed payments and build entirely new payment products and services, managed in real-time, all the time. This will enable banks and building societies to get with the times and offer their customer bases products fit for the 21st Century. Ultimately, by embracing API technology, they can benefit from reduced operational costs and an improved customer experience.

Become digitally ambitious Closing the innovation gap There are ways banks and building societies can catch up and compete with the competition. New payment services can create new revenue streams and fresh customer-bases and traditional financial institutions should tap into payments innovation for service differentiation.

Just look at neo-banks and retail FinTechs.

They’re winning over consumers through innovative savings and app propositions and services which transform loose change into incidental savings. If legacy systems present a barrier to introducing such changes, this could be the perfect opportunity to consider an infrastructure refresh.

Negative customer experiences are generally a by-product of slow, manual, and disjointed processes. But this problem can be solved by implementing a digital infrastructure that mitigates friction and enhances the customer experience. To really meet and exceed growing customer

In Industry 4.0, customers expect instant experiences with immediate information and instantaneous reconciliation of transactions.

With solutions readily available, an inflexible payment infrastructure mustn’t be the reason businesses fall behind the competition and don’t push forwards. It’s time for banks and building societies to become digitally ambitious and carve out a new path and close the innovation gap.

Andrew Dellow, Director Strategic Account Sales Source: 1 https://www.modulrfinance.com/blog/why-the-instant-

economy-made-your-payments-experience-a-whole-lotharder 2 https://www.modulrfinance.com/blog/how-agile-andcustomer-focused-banks-are-reducing-operational-costs 3 https://www.modulrfinance.com/blog/10-ways-to-improveyour-customer-experience-in-the-age-of-digital-banking 4 https://www.modulrfinance.com/platformfeatures?feature=easy-api-integration

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How To Improve FINANCIAL MANAGEMENT at Your Business?

Financial management is essential to businesses of any size. Whether you’re a new business owner or have been in business for a while, it’s vital to have the proper financial management in place.

For small business owners, understanding your financials is a vital part of running your business. However, it is easy to get bogged down in managing the day-to-day operations of your business and neglecting the financial side of things.

Don’t let this happen to you! Here are some of the most important things you need to know and some tips about improving financial management at your company.

Your business is like a living, breathing entity. It needs proper care and feeding to keep it running smoothly. However, while managing a business is a 24/7 job, it doesn’t mean you should always be thinking about it! One way is to manage the company finances properly.

Financial Management First and foremost, it’s essential to have a clear understanding of what “financial management” means – and the best way to do that is by understanding the three main components of the process: Financial Planning, Budgeting, and Reporting.

Financial planning is about understanding 60

how much capital your business (or any initiative or project) would require, how much it would return, and how to finance it. Budgeting is the process of defining how much to allocate for any project or initiative in the forthcoming financial year, essentially bringing to life the Financial Plan. The Financial Plan and the Budget are tightly linked to your strategy.

Finally, Financial Reporting is about tracking where your money goes and use this evidence to have, on the one hand, more control over it and, on the other, to make changes during the year or even review your budget.

I have listed the three components of financial management by a sort of “logical” order: you define your strategy first, then consider various initiatives to execute upon it, select the best ones and budget for it, and finally, you track and report.

However, there is a catch-22 to solve first, as planning and budgeting require a good knowledge of how you’re currently spending your money. Furthermore, you surely can’t stop the business to plan and budget, and while a company runs, money keeps flowing.

So, what’s the best place to start?

I always recommend starting with the basics, which means beginning with

Financial Reporting.

You need to control your finances and make sure you are doing everything you can to make sure your business is prospering.

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Start monitoring and reporting the monthly spending and income for your business.

It is a straightforward way to gain visibility and control over how you spend your money. You can learn how much money you’re making on the various income streams in your business and how much you’re spending on each one. When you know how much money you are spending on each area, you can make more rational decisions when investing in the next project or initiative. It will help you understand your overall expenses and adjust accordingly. But it’s not just about managing the income and expenses.

The Importance of Financial Management Because of the importance of your business’s finances, you need to keep track of things throughout the year. It means remembering to pay your suppliers, putting money aside for taxes, and keeping track of your expenses. And although it may seem a little overwhelming at first, tracking your finances isn’t that hard. It’s just a matter of breaking your finances down into easy-to-follow categories. You can do this by creating lists of every bill you pay

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every month and looking at your bank account online every so often to check your spending. If you want to streamline your financial management process, you can automate certain aspects of your cash flow.

Whether you run a microbusiness or an established SME, there’s plenty of tools you can use from a spreadsheet - everyone’s original sin! (Please avoid if possible) - to easy-to-use accounting software, to ERPs that help you implement all the company’s processes and financial implications.

It’s crucial to proceed in steps. For example, one of my Clients in Manufacturing quickly moved from a very shallow knowledge of income and expenses to monitor the profitability of each customer every month. You can imagine how powerful this is to drive, e.g. price and commercial decisions, or to spot sudden increase in cost and take timely actions.

What to do to improve your financial management Financial management provides you with information to assist you in making decisions that are necessary for your business to run smoothly. It includes how much money you have coming in, how much is being spent and how much you need to raise to pay the bills and remain profitable.

As your business grows, you will naturally have to raise money from your friends and family. Or do you? There is a way to

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grow a business by wisely managing the cash flow.

Everyone knows that “Cash is King”.

However, not many manage the so-called “cash operating cycle”: what payment terms do you apply to your customers, are these longer or shorter than the terms applied to you by your Suppliers, how much cash is tied up in your stock? In other words, is your business generating cash and is that flowing through?

Suppose you don’t manage the cash operating cycle. In that case, you might end up with the constant feeling of running out of cash and a negative effect on your propensity to spend: as you don’t have the sense of control, you avoid spending – that could be self-harming and limit your expansion.

My view is that company should spend better, not necessarily less. It might be tricky to approach your customers and tell them, ‘hey, you know those 60 days payment terms? It’s 30 days now’: it might ruin the relationship or force you to concede a discount.

I’d instead start with assessing what you buy: are there products you buy in large quantity? Can you renegotiate with two/ three key suppliers? Are there recurring purchases, those you always purchase even in small amount – can you create a process to keep, say, 3-6 months of inventory of those products? Can you find at least one alternative supplier for whatever you buy? Do you have something lying forgotten in your stock that you might resell?

In this way, you could improve your margin, keep your suppliers in fair competition against one another without putting the relationships at risk, reduce the stock, free some cash, and even increase turnover in a short time frame.

Conclusion Making your finances work is all part of the game when it comes to running a successful business. So, be on the lookout for these financial management tips and see how you can incorporate them into your business so you can get more out of it!

Stefano Maifreni, Founder, Eggcelerate.

BUSINESS

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BUSINESS

HOW INVOICE FINANCING CAN HELP BUSINESSES THRIVE IN A POST-COVID WORLD While global corporate powerhouses like Amazon have surged in value over the pandemic, small businesses – who historically grapple with cash flow challenges at the best of times – have experienced unprecedented disruptions to their operations throughout the Covid lockdowns.

At the beginning of 2020, one survey showed that UK businesses alone were chasing more than £50bn worth of late payments even before the pandemic hit, with the average small business chasing five outstanding invoices at one time. Covid-19, as well as changes to business due to Brexit, have only served to exacerbate the issue meaning that many small or medium enterprises (SMEs) don’t have enough liquid cash to survive while waiting for payments to be settled, which can take as long as 120 days.

In fact, European credit insurer Atradius calculated in November 2020 that 56% of businesses were paying invoices late, compared to 32% before the Covid crisis. This resulted in a 25 day longer period time to payment, which is critical to small businesses looking to scale – just as good cashflow keeps a business afloat, poor cash flow can sink it. While many small businesses may be primed for growth with viable demand for their services, the cash they need for more staff, stock or new machinery is held up in their customer’s bank accounts.

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Across Europe, SMEs are experiencing similar anxieties when it comes to cash flow– which is worrying given they make up 99 percent of European businesses.

According to pre-crisis figures, they produce more than half of Europe’s GDP and employ about 100 million people. We simply can’t wait around and watch them fail.

As government loans come to an end in the post-Covid era and businesses continue to be turned away by traditional loans and providers, alternative financial providers are stepping up to help – especially those specialising in invoice financing.

by 10% in the past three years, with the overall advances of asset-based lending growing at a consistent rate, standing at £21.2 billion at the end of Q3 in 2019. Of that, £9.1 billion was advanced to approximately 40,000 SMEs. And with technological improvements to the invoice financing process, including using algorithms for approval processes and blockchains for keeping records, you can expect these figures to continue rising.

Cloud-based financing platforms are enabling small b u s i nesses to overc o m e liquidity problems with flexible, quick and easy access to advance payments. As a lesser known aspect of financing, business owners are not always aware of the alternative options available to them, and particularly how invoice finance providers can ‘vaccinate businesses’ from negative cash flow problems. While bank loans can take anywhere up to 90 days, invoice financing funds can be released in as little as 24 hours.

With invoice financing, your business’s age, credit standing, or size matters less.

The focus instead is on your buyers or debtors. And despite the lasting impact Covid has had on the economy, it has provided the all-important support to underpinning small business growth.

What is invoice financing?

Although it’s been around for a while, many business owners are not aware of what Invoice financing is all about – and how it can help them during their scaling journeys.

Simply put, invoice financing allows companies to draw advances against unpaid invoices that a client owes to a business.

Typically, invoice financing companies buy newly-issued invoices and pay around 90% of the invoice upfront to the SME. When the invoice is paid by the buyer, the business receives the balance of the invoice minus agreed fees or discount.

This financing option allows businesses to get paid immediately for work completed, managing their cash flow effectively and dissolving potentially fatal bottlenecks.

According to research, cashflow worries keep 69% of small business owners up at night, and what’s more, a further 32% struggle to pay their vendors, bills and staff due to this.

While invoice financing has existed for a long time, new solutions that bypass traditional financial institutions have emerged in recent years as finance options available to businesses have increased. At the end of 2019, a report by Business Finance Review showed that the number of businesses using invoice financing has grown

But why is invoice finance particularly well-suited to small and mid-size businesses? Well, there are several benefits that apply to SMEs. Invoice finance provides small businesses with working capital they need without having to take on further debt, because they’re able to borrow money they’re owed on an invoice-by-invoice basis. It also improves their ability to plan, frees up time from chasing payments, and enables them to take advantage of potential opportunities in the future.

And as SMEs scale, they can borrow more as they grow. As sales increase, so will the amount of finance available, which makes it perfectly suited to small, fast-growing companies.

While Brexit poses a different, potentially longer-term challenge, businesses are looking for invoice finance to help them sell to growing markets abroad, including the US, Canada, India, and Australia. So as extraordinary measures taken by the government– including the Coronavirus Business Interruption Loan Scheme – come to an end, there’s a tangible opportunity for invoice finance providers to continue supporting small businesses in new and innovative ways.

Ian Duffy, CEO, Accelerated Payments

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The rise of the virtual banking branch

Nick Barnes, Practice Director, Financial Services & Customer Success at JRNI.

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ith mobile and digital banking fast becoming the new normal, there is much to consider in terms of creating the best experience for current and prospective customers. Digital banking is more than just virtual banking, it means empowering customers to bank when, where, and how they want to.

This definitely doesn’t mean physical branches are dead, however. Many customers still want to bank at branches, but COVID has changed their banking experiences and banks will need to adapt. Like so much of the world, the way people and businesses operate will never be the same. Banks and building societies need to consider the full end-to-end customer journey.

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So, what is a virtual banking branch?

While physical branches are being reimagined, the concept of a virtual branch – one where customers can still get the same dedicated, personalised service they’d receive in person – is a great way to provide the banking options people are looking for. Many banks, building societies, and other financial institutions have embraced a full appointment strategy to meet the needs of their customers.

During the pandemic, customers grew used to the safety and convenience of remote banking appointments, and more people than ever adopted mobile and digital banking.

Here are some ideas to consider on how banks and building societies can create a virtual branch to reap the benefits: 1. Invest in a bank appointment scheduling solution To maximise operational efficiency at a virtual branch, it’s crucial to have an appointment scheduling solution in place.

Unlike a traditional bricks-and-mortar location where customers can come in during business hours, a virtual branch will operate most smoothly with an appointment scheduling software where

customers can choose a time that is most convenient for them.

The possibilities are endless to exceed your customers’ needs by operating outside of normal business hours with a virtual branch and appointments. The after-hours availability could significantly increase customer loyalty. Additionally, having more convenient hours and ways to connect with customers and opens up doors to those who may not have the ability to meet during traditional business hours.

Focusing on creating a virtual branch where staff and customers are located in the same time zone for easy connection is ideal. This makes it seamless for customers and staff to manage their calendars and shift appointments as needed.

Virtual queuing – It’s also useful to implement a virtual queuing solution, allowing customers to join a queue (either a single queue at a virtual branch or a queue based on service type) and they can meet with the appropriate staff member once they are available. This is a great way to provide instant service and gratification to customers who need assistance but didn’t pre-book an appointment. It also

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guarantees they’ll meet someone with the background and training to address their questions.

Seamless technology integrations – Finding an appointment scheduling solution that seamlessly integrates with all of your technology to enable a virtual branch is key. From Microsoft Office 365 to your CRM system, you need a holistic look into your business.

Technology investment – If you haven’t considered investing in appointment scheduling technology yet, now is the time. In fact, according to Deloitte, “The [pandemic] has served as a litmus test for banks’ digital infrastructure. While institutions that made strategic investments in technology came out stronger, laggards may still be able to leapfrog competitors if they take swift action to accelerate tech modernisation.”

A scheduling solution that can scale up, provide top-level security, be accessible to all customers, and integrate seamlessly with a bank’s tech infrastructure is fundamental to the virtual branch’s success.

2. Reallocate bank staff to optimise your workforce Next, in order to provide a seamless experience across all channels, banks and building societies need to focus on optimising their workforce to best serve the

customer. By creating a virtual branch, or multiple virtual branches, teams can easily reallocate staff to make it easier for customers and staff members to connect.

With certain financial restrictions and mandates, the right staff can be available for the specific services a bank or building society provides. For example, for a virtual mortgage appointment, it might be necessary to have two staff members on the call during the signing of the paperwork. Additionally, to serve more customers outside of traditional business hours, banks can work with staff to determine their ideal working hours and provide customers a greater range of hours. This is also great for staff, who can take on more appointments, build stronger relationships with their customers, and have a schedule that best suits them and their lifestyles.

3. Rethink your physical bank branches for cost savings By reducing the number of brick-andmortar branch locations, banks will see immediate cost savings on rent and upkeep. Through a virtual branch strategy, financial institutions can analyse which locations are most successful, which are seeing the most traffic, and continue to educate customers on the digital and virtual appointments on offer.

4. Focus on improving customer experience and efficiency When financial institutions provide a customer-led culture, the customer experience is unparalleled. When creating a virtual branch strategy, customers need to be number one. Banks need to consider what services they provide, and how it affects customers personally. How can banks humanise these engagements, providing top-level service while also building trust with customers? It starts with the relationships staff members build with customers, and from a virtual appointment standpoint, it means providing a frictionless yet engaging experience.

Another benefit of virtual branches and appointments is reduced appointment length. One top 10 bank has cut their appointment times in half with virtual branch appointments. Customers are getting the same level of exceptional service via a virtual appointment in half the time – so it’s not only empowering them to bank where it is most convenient for them but also makes everything more efficient. On the staff side, there is more time to prepare in between appointments, see more customers throughout the day (or night), and more easily manage schedules. It empowers everyone, all the way around.

Virtual banking experiences matters With virtual offerings available to both customers and staff from the convenience of their homes or wherever they choose – the benefits are undeniable.

A better customer experience, a better staff experience, and less reliance on physical branches means customers can receive the personalised financial experiences they now want.

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LIST OF WINNERS

2021

AWARDS WINNERS LIST Winners

Award Title

Aafiya TPA Services

Best Customer Service Insurance Provider UAE 2021

ACB Asset Capital Business Inc.

Fastest Growing Forex Trading Company UK 2021

Access Bank Group

Best CSR Bank Nigeria 2021

Access Bank Group

Best Mobile Banking App Nigeria 2021

Accra City Hotel

Best Hotel Financial Controller West Africa 2021 – Mr. Divine Matey

Accra City Hotel

Best General Manager West Africa 2021 – Mr. Roman Krabel

Ahli United Bank B.S.C.,

Best Private Bank Bahrain 2021

Ahli United Bank B.S.C.,

Best Retail Bank Bahrain 2021

Al Hilal Life

Best Life And Health Insurance company Bahrain 2021

AsiaPay

Best Payment Solution Provider Asia Pacific 2021

AvaTrade

Best Forex Broker Ireland 2021

Axia Investments

Best Regional Forex Trading Platform MENA 2021

Banco Industrial, S.A.

Most Effective Issuing Bank Guatemala 2021

Banco Santander Chile

Best IR Team Chile 2021

Bank for Investment & Development of Vietnam-BIDV

Best SME Bank Vietnam 2021

Bank Of Mauritius​

Best Public Financial Services Institutions Mauritius 2021

Bao Viet Securities

Best M&A Advisory Firm Vietnam 2021

Being She

Best International Women Empowerment Organization UAE 2021

BPi Capital Corporation

Best Investment Bank Philippines 2021

Cellcard (CamGSM Co Ltd)

Most Reliable Telecom Operator Cambodia 2021

China Asset Management Company

Best Fund Management Company China 2021

China Asset Management Company

Best Asset Management Company China 2021

CI Asset Management

Best Money Market Fund Company Egypt 2021

CI Asset Management

Best Asset Manager Egypt 2021

CM Trading

Best Financial Broker Company Africa 2021

Commercial Bank of Ceylon PLC

Best Trade Finance Bank Sri Lanka 2021

Commercial Merchant Credit (Pvt)Ltd

Most Trusted Micro Financial Service Provider Company Sri Lanka 2021

COSCO SHIPPING Ports Ltd

Best Port Operator Hong Kong 2021

COSCO SHIPPING Ports Ltd

Best CSR Company (Port Sector) Hong Kong 2021

ČSOB Private Banking

Best Private Bank Czech Republic 2021

Dai-ichi Life Vietnam – Sacombank

Most Trusted Bancassurance Provider Vietnam 2021

Enobytes

Most Outstanding Food & Travel Blog US 2021

Fast Cover Travel Insurance

Best Travel Insurance Company Australia 2021

Fine Hygienic Holding

Most Innovative Mask Manufacturing Brand MENA 2021

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LIST OF WINNERS

Winners

Award Title

First Capital Bank Botswana

Best Forex Rates Botswana 2021

Forex Masters

Best Forex Trading Technique Company Africa 2021

Fosun Hani Securities Limited

Fastest Growing Investment Bank Hong Kong 2021

Fosun International Limited

Best Corporate Communications Hong Kong 2021

Fosun International Limited

Best Innovation-driven Consumer Group Hong Kong 2021

FundCalibre

Best Fund Research Firm UK 2021

FXPRIMUS

Best Partners Programme South East Asia 2021

FXTM

Best Education Provider Nigeria 2021

FXTM

Most Trusted Broker Nigeria 2021

GCM Yatırım Menkul Değerler A.Ş

Best Forex Broker Turkey 2021

GCM Yatırım Menkul Değerler A.Ş

Best Online Broker Turkey 2021

Genero Capital LLC

Best Private Equity Investments Firm UAE 2021

GFH Financial Group

Best Islamic Investment Bank Bahrain 2021

Greenstone Equity Partners

Best Advisory Service UAE 2021

HotForex

Best Client Services Company Global 2021

JFD Group Ltd

Best Forex Broker Europe 2021

KCB Group

Most Socially Responsible Bank Kenya 2021

KDEDEC CONSULTANCY AND TRAINING COMPANY

Most Leading Consultancy And Training Company Turkey 2021

LegacyFx

Most Innovative Forex Broker South Africa 2021

LegacyFx

Most Competent Trading Professionals Middle East 2021

LegacyFx

Fastest Growing Broker Europe 2021

LOLC Technology Services Limited

Best Electronic Payment Solutions Provider Sri Lanka 2021

Mashreq

Best Smart Retail Bank Middle East 2021

MasterCard

Best Corporate Accelerator Middle East 2021

MetLife Emeklilik ve Hayat

Most Leading Life Insurance Company Turkey 2021

Metropole Property Strategists

Best Property Investment Consultants Australia 2021

National Development Bank PLC

Most Innovative Digital Solutions Provider Sri Lanka 2021

National Development Bank PLC

Best Project Financing Bank Sri Lanka 2021

National Development Bank PLC

Best Commercial Bank Sri Lanka 2021

National Development Bank PLC

Best Banking CEO Sri Lanka 2021-Mr. Dimantha Seneviratne

National Development Bank PLC

Best Initiative Empowering Women’s Market Segment “Sri Lanka Vanithabhimana” Sri Lanka 2021

Pacífico Seguros

Most Leading Insurance And Reinsurance Company Peru 2021

Petsy Pty Ltd

Fastest Growing Animal Insurance Company Australia 2021

PortugalRur

Best Rural Real Estate Brand Portugal 2021

Profile Software

Best Investment Management Software Solutions Provider UK 2021

Profile Software

Best Wealth Management Solutions Provider UK 2021

PVcom bank

Best Trade Finance Bank Vietnam 2021

PVcom bank

Best Card Service Provider Vietnam 2021

PVcom bank

Best Bank for Customer Services Vietnam 2021

Pyramedia

Best In Media And Marketing UAE 2021

RIF Trust Investments LLC

Best Global Citizenship & Residency Advisory Firm UAE 2021

SeABank

Best Digital Transformation Business Vietnam 2021

Shorooq Investments PLLC

Fintech Investor Of The Year UAE 2021

Standard Bank-Malawi

Best CSR Bank Malawi 2021

Steward Bank

Most Innovative Bank Zimbabwe 2021 69

LIST OF WINNERS

Winners

Award Title

Strategic Management Partners, Inc.

Turnaround Consulting Firm of the Year USA 2021

SUBIC BAY METROPOLITAN AUTHORITY

Most Influential Women Philippines 2021 -ATTY. WILMA T. EISMA

Taipei Fubon Commercial Bank Co., Ltd

Best Mobile Banking Application for Micro and SME Taiwan 2021

Taipei Fubon Commercial Bank Co., Ltd

Best Micro Finance Bank Taiwan 2021

Taipei Fubon Commercial Bank Co., Ltd

Best Risk Governance and Intellectual Anti-hacking Initiative Taiwan 2021

Taipei Fubon Commercial Bank Co., Ltd

Best Intelligent Information Security Management Taiwan 2021

Taipei Fubon Commercial Bank Co., Ltd

Best Trade Finance Bank Taiwan 2021

Taipei Fubon Commercial Bank Co., Ltd

Best Blockchain Enabled Supply Chain Finance Solution Taiwan 2021

U&I MICROFINANCE BANK Ltd

Most Innovative Microfinance Bank Kenya 2021

uab bank Limited

Best CSR Bank Myanmar 2021

Vanguard Life Assurance Company Ltd-Malawi

Best Life Assurance Company Malawi 2021

Vattanac Bank

Best Customer Service Providing Bank Cambodia 2021

Vattanac Bank

Best Bank In Corporate Governance Cambodia 2021

Vietcombank Fund Management

Best Asset Management Company Vietnam 2021

Wema Bank

Most Innovative Digital Bank Nigeria 2021

Wema Bank

Best Digital Bank Nigeria 2021

Xero Capital Markets Ltd

Most Transparent Broker Asia 2021

Yapı Kredi Asset Management

Best Pension Funds Management Company Turkey 2021

Yapı Kredi Asset Management

Best Asset Management Company Turkey 2021

CALL FOR ENTRIES 2021 INVITING Financial Organizations

Banks

Business Leaders

Submit Your Nomination to Awards@financederivative.com OR Submit online at www.financederivative.com

70

Finance Derivative Awards Inviting Banks, Companies and Business Leaders to participate in our Annual Awards Program 2021

Submit Your nomination now to awards @financederivative.com

www.financederivative.com 71