Finance Derivative Magazine Issue 4

Dr. Herbert Wigwe GMD/CEO, Access Bank Plc.

www.financederivative.com

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FROM THE CEO

CEO and Publisher Mehtab Chisti Editor Mara KI Head of Distribution Stefan Stavic

Greetings and A very warm Welcome to all, It is officially been 4 Years of Finance Derivative. We thank you all the Outstanding and young supporters who keep us inspired to bring this edition to you each time.

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Finance Derivative Awards is established

With this issue we bring a lot of exciting topics covering the Sustainable Banking, Cryptocurrencies, Digital Invoicing and Fintech. Placing a great example of Sustainable Banking 2022. Here we come with Mr Herbert Wigwe discussing the Vision and Mission of Access Bank Nigeria. It is exciting to talk about the future, about what is new, but sometimes a mature product can surprise and delight.

When it comes to sustainability and environmental impact, one might assume that a digital payment has a significantly lower environmental impact than cash, but a new paper, ‘Cash: a roadmap to sustainability,’ challenges that perception.

Read more to have an insight.

Speaking about Cryptocurrencies, This is without doubt, a new asset class and one that will increasingly gain acceptance and the participation of institutional investors as time goes on. We would expect investors will consider a range of valuation methodologies to estimate future value. This is, however, not risk free.

The pandemic has been a catalytic moment for businesses when it comes to digital transformation, especially for financial services. Volatility has been one of the defining features of the finance sector over the last 18 months. To navigate the challenges of such a rapidly changing consumer landscape, companies have had to utilise the right digital solutions to remain competitive.

When financial services look to accelerate their digital transformation plans in a post-COVID world, they must quickly recognise the importance of hyperautomation and the benefits it provides , refer inside for more.

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

Check our online publication at

www.financederivative.com

As we enter 2022, Let us not forget that the past year has been challenging for many. There is no doubt that the pandemic has cast a shadow over much of the year, but the resilience and innovation of so many fantastic entrepreneurs has shine through. Its is been an absolute privilege & pleasure to work with so many great people this year.

Hope you will enjoy reading this issue of Finance Derivative.

Wishing you all success, health and happiness for upcoming year 2022.

Enjoy the Read !

Mehtab Chisti Director

3

Inside....

BANKING:

76. Natural gas or green hydrogen heating? It’s not that simple

34. Network visibility: how banks can transform their IT and security

72. Bank guarantees: levelling up in the new digital age.

82. “Everyone can be a fintech”. Behind the Banking-as-aService Boom.

FINANCE: 10. Digital Currencies:

The next big financial experiment?

12. Is cryptocurrency the new ‘digital gold?’

16. Unlocking the Power of Hyperautomation in Finance

BUSINESS: 7. Business sustainability: is it too late for a business to

29. How digital invoicing can help offer a better e-commerce experience

have an impact

40. Cash industry on road to sustainability

20. Transforming the reporting process for success

48. Why should financial services choose cloud native?

46. Automating business processes is essential to digital

66. How European Merchants can take advantage of QR Code

transformation

4

Payments

WEALTH MANAGEMENT:

50. The rising importance of software quality assurance in

9. Sustainable investing. Can social aims and financial aims

fintech

32. How to embed ESG into your M&A deal

Old Roles

go hand in hand?

58. The importance of the CFO in investment and raising capital

68. How to grow wealth by using the stock market

TECHNOLOGY: 14. Delivering an Effective Cybersecurity Strategy

60. The Fintech Revolution - How New Tech Can Transform 63. How virtual reality and digital twins are transforming tunnelling

80. Why the future city is AI

SPECIAL FEATURES: 22 Interview with Dr. Herbert Wigwe,GMD/CEO, Access Bank Plc.

36. The five tenets of an effective cybersecurity programme

52. Finance Derivative || Global Award Winners 2021

42. Why technology is the key to improving agility for retail

78. CI Asset Management

banks

5

Business

BUSINESS SUSTAINABILITY: is it too late for a business to have an impact

Hristiyana Bochkova Fantastic Services 6

T

he past 18 months have been hard on humanity. Despite the seemingly desperate situation that the world is facing, one thing was made clear. With people staying home, commutes being reduced to almost zero, nature had time to breathe and rejuvenate itself.

That has shown us that it is not too late.

The damage done is not irreversible and, despite a joint effort from every human is required, there is hope for the future. That is precisely why every business - small or big, local or international, LLC or corporation- has shifted its focus on sustainability.

As a representative of an International Company, I have witnessed firsthand how a business can impact thousands of people and, at the same time, how a single person can completely change the focus of a business. The idea of living a better, healthier life is embraced by everyone who has been introduced to it.

The lockdown has allowed people to focus on the essential part of their existence their future.

What does sustainability in business mean, and why it is important The World Commission on Environment and Development, a United Nations initiative, defined the concept of “sustainable development” back in 1987. Sustainable development means actions.

In business, the concept refers to the effect the business has on both the environment and society. The goal, of course, is to create a business strategy that contributes to those areas without any harm.

A study from 2019 showed that eco-oriented companies have a 40% better employee retention rate and are more likely to be chosen from new candidates. Another study in 2020 showed that 95% of the 27 000 UK residents interviewed strongly believe that sustainable living is one of the three most important things they need to focus on.

Business That said, society is pushing companies to take more responsibility for their actions and invest in sustainability. Research shows that companies with sustainability initiatives are winning public support, helping them improve their financial performance.

Where to start from Just like every great idea, you need to make a small step. A company must focus first on the goals, the priorities and what is considered ethical. Small steps, small changes are the ones leading to significant change.

But what can these goals be? Sustainability encourages the business to focus on climate change, income inequality, human rights, gender inequality, pollution, racial injustice, fair working conditions, and depletion of natural resources.

One of the most popular decisions made by companies, as well as the one I work for, is to start using only green vehicles by 2030. Cutting emissions will help companies fight climate change.

Sustainability, of course, is not limited to only saving the planet we inhabit. It also means we care for others and offer our help. Involving a company’s employees is an essential part of the process. Gathering them together for different activities like cleaning the beach, organising charities, organising meetings where people can talk about their struggles and receive help, introducing the “reduce, reuse and recycle” policy to the office. The options are endless.

The big picture Sustainable business models are about resilience. A study in 2019 found that 73% of consumers worldwide are willing to change their consumption habits in order to lessen their negative impact on the environment. Another, at the beginning of 2021, showed that eco-friendly products are in demand now more than ever, and companies are taking action.

With consumers’ firm belief that big corporations hold as much responsibility for positive change as governments do, the demand for businesses to commit to preserving the environment is stronger than ever.

That said, it is proven that people do not mind spending more money on products containing sustainable ingredients. With people paying more and being eco-oriented, it is not hard for a company with sustainable initiatives to increase its profits.

But, of course, sustainability is not about making money. It is about the future. The global impact. It will show what a business’ vision for the world is. That there is a much bigger picture than the short-term self-interest.

Is the business going to reduce waste or create a whole franchise model that will give job opportunities to many? Or is it going to include eco-friendly uniforms or completely change its operation and make appointments online only because phones create too many CO2 emissions?

Every step, every decision have to lead to a better future. To a more sustainable one.

Conclusion This is only the beginning of a global change. The sustainability project is one of the fastest-growing and globally adopted ideas worldwide. Every change starts with a small step of a person. Having a business means you have many small steps of many people - the employees, the customers. Business is an influential factor.

Some businesses are even more powerful than some governments. Companies that embrace sustainability sooner will contribute to a better future and will experience higher long-term profits. Why not use this power for good?

Source: 1 https://www.fastcompany.com/90306556/most-millennialswould-take-a-pay-cut-to-work-at-a-sustainable-company

2 https://www2.deloitte.com/uk/en/pages/consumerbusiness/articles/sustainable-consumer.html

3 https://nielseniq.com/global/en/insights/analysis/2019/anatural-rise-in-sustainability-around-the-world/

4 https://www.businesswire.com/news/

home/20211014005090/en/Recent-Study-Reveals-MoreThan-a-Third-of-Global-Consumers-Are-Willing-to-Pay-Morefor-Sustainability-as-Demand-Grows-for-EnvironmentallyFriendly-Alternatives 5 https://www.fantasticservices.com/sustainability-policy/

7

Wealth Management

Sustainable investing.

Can social aims and financial aims go hand in hand?

8

Wealth Management

But does green, sustainable or impact investing mean a less profitable outcome for investors? Well, there is now a large body of research proving that social aims and financial gains can go hand-in-hand.

“

Investors are more

focused than ever on “net zero”, that is massively reducing emissions by the mid-century through the phasing out of coal, switching to renewables and speeding up the switch to electric vehicles.

Investments such as innovative battery technologies, green hydrogen projects and renewable infrastructure financing are big on investors’ radars. According to Morningstar, investments in sustainable funds reached $477.4bn in the first nine months of this year, compared to $366.6bn in the whole of 2020.

Finance has become a central focus of COP26. Financial institutions are pledging to become carbon neutral and it has also highlighted the role that private investment can play in decarbonizing the economy. The profile of investing with an ESG (Environmental, Social, and Governance) or SRI (Socially Responsible Investing) mindset has finally gone mainstream.

Morgan Stanley’s 2019 ‘Sustainable Reality’ concluded “We found that sustainable funds provided returns in line with comparable traditional funds while reducing downside risk.

What’s more, during a period of extreme volatility, we saw strong statistical evidence that sustainable funds are more stable”.

And in the GIIN Perspectives: Evidence on the Financial performance of Impact Investments: “Impact investors seeking market rate returns can achieve them.

Across various strategies and asset classes, top quartile funds seeking market-rate returns perform at similar levels to peers in conventional markets. In many cases, median performance is also quite similar.”

Investors need to be aware however and carry out their due diligence when it comes to finding the right fund. This is mainly due to the exploitation of the green movement and potential ‘greenwashing’ of funds.

Boring Money’s Sustainable Investment Report found that greenwashing was one of the biggest concerns for financial advisers when it comes to ESG. Seven in 10 (69 per cent) said it was a concern for their business, with one in five (20 per cent) saying they were very concerned about the risk, and half (49 per cent) saying they were somewhat concerned.

more information about how environmental, social and governance factors are incorporated into their investment processes.

In response, the Treasury has published a roadmap outlining future standards for environmental reporting to “weed out” greenwashing and support the transition to a greener financial system.

Until clear benchmarks or standards exist, we recommend carrying out due diligence on any sustainable investment, not only to ensure its’ credibility but also to be confident that it aligns with the personal objectives of the investor. Look at the fund strategy and methodology. They should always be very transparent. For example, the strategy at Boundary Capital is that ‘we only invest in high growth private technology companies that will positively impact millions of lives’.

That strategy statement and how it fits with an investor’s motivations should be an investors first filter. The second filter is the methodology. The best methodologies are ones which generate actual values in their process, so allowing different types of investments to be compared on a level playing field. The key point here is to find funds with clear scientific methodologies and avoid ones where subjectivity can creep in.

So, with clear objectives and a bit of homework, the UK is providing strong investment opportunities that target the same returns with less volatility than traditional investments whilst meeting personal responsible agendas. Investors really can have their vegan cake and eat it.

The main issue is there is no set of central standards for sustainable or green investments leading watchdogs to call for a set of clear credentials.

“We can’t let this greenwashing persist and risk the flow of much-needed capital to help secure our futures,” Nikhil Rathi, chief executive of the UK’s Financial Conduct Authority, said at COP26. The FCA has recommended that investment funds labelled as sustainable should carry “concise and accessible” language and disclosures for investors.

They also want asset managers to provide

Dan Somers, Managing Partner of Boundary Capital Source: 1 https://www.morganstanley.com/ideas/sustainableinvesting-competitive-advantages

2 https://thegiin.org/research/publication/financialperformance

3 https://www.boringmoneybusiness.co.uk/reports/ sustainable-investing-2021/

9

Finance

Digital Currencies: The next big financial experiment?

T

he mid-1990s saw Britpop emerge as an upbeat form of music to underpin a shortlived phenomenon, known as Cool Britannia. In the 2020s, cryptocurrencies are the phenomenon du jour. The response from the UK Treasury and the Bank of England (BoE) is perhaps seeking to achieve some degree of coolness for Central Bank Digital Currencies (CBDCs) with the term Britcoin: a potential digital currency backed by the UK’s central bank reserves. The Bank’s governor, Andrew Bailey, recently told a House of Lords (HoL) committee that a reserve-backed digital currency could result in 20% of commercial deposits shifting to Britcoin.

Bailey’s committee address followed hot on the heels of another recent announcement by the BoE: that it is set to launch a consultation on a digital pound. Such a move would certainly herald a significant financial experiment for the UK. Through a consumer-focussed lens, we increasingly see digital banking as becoming a dominant and necessary force in our dayto-day lives, as well as in the activities of companies, both large and small.

None of this should come as any surprise given the surge of interest and uptake in digital banking during the pandemic.

Nevertheless, the BoE is cautious, as central banks tend to be. It is acutely aware that while a digital pound would create significant opportunities, it may also pose equally significant risks – for both individuals and businesses – as well systemic risk thanks to the volatile nature of crypto assets. But in theory, the concept of a Britcoin would eliminate such risks since it would be underwritten by the central bank as the lender of last resort.

Developing a digital pound, and creating 10

an environment in which it can operate safely, will take time. Through understandable prudence, the BoE is therefore not minded to move rapidly. In starting a consultation next year on plans for launching a Britcoin, the Bank has cautioned that no such central digital currency would be available before 2025. Before then, the groundwork has to be laid which guarantees that stability and certainty will prevail.

Inevitably, the centrepiece will be a legal and regulatory framework which can provide both of these things. Accordingly, there will be a slew of new policy proposals that need to be stress-tested before they can be implemented. Beyond changes in policy development, a significant body of regulation will also be needed to passed in order to counteract the potential and very real risk of fraud, money laundering, and hacking.

Regulators worldwide have been busy cautioning their citizens over the inherent risks of crypto assets. In the US, the SEC chairman, Gary Gensler has not minced his words in a variety of speeches, invariably concluding that the crypto market will not mature without regulatory oversight. In more understated language, The Financial Conduct Authority (FCA) recently launched a campaign aimed at investors designed to help them understand the risks associated with digital currencies.

Internationally, there have been a number of interesting developments. Nigeria recently launched the eNaira, becoming the latest country to launch a digital currency.

Meanwhile, China has launched a trial for the eYuan and an electronic Euro is expected to be launched by 2025. More controversially, El Salvador has short-circuited the entire CBDC process by adopting Bitcoin as legal tender, i.e. a legal national

currency. BoE Governor Bailey described this decision as “a concern for consumers” in view of its volatility.

Despite the obvious risks, not least the inherent volatility, digital currencies do offer a distinct upside that make them attractive to consumers and corporates alike, providing them with an efficient and low-fee option for domestic and international payments.

Much effort is being made to develop a new financial infrastructure in London, which currently bisects Silicon Valley at the top and New York in third place when it comes to the number of FinTech startups. This is part of the engine room which continues to drive London, and by extension, the UK, as the dominant financial services player in Europe. Although the European Central Bank (ECB) would have to regain approvals from all EU Member States in terms of Britcoin, the UK would continue to position itself at the forefront of financial innovation should that happen.

It is arguable that the past two years of frenetic crypto growth have exposed central bankers: they have been caught sleeping at the wheel and not doing enough to keep pace. Looking ahead, they need to act quickly to introduce CBDCs if we are to have any hope of maintaining democratic control over our money and the banking system which ultimately underpins it.

Manoj Mistry, Managing Director, IBOS Association

11

Finance

consider it as genuine form of payment as a result.

Now, we can see major banks testing the crypto waters as they’re simultaneously entering the race to set up their crypto-related operations.

Amongst these are the likes of Morgan Stanley and Bank of America launching their own crypto-focused research divisions. State Street revealed their dedicated digital finance division to the public, and following this, JP Morgan and Goldman Sachs have started rolling out their own crypto trading assistances and services.

F

inancial institutions and investors alike have been divided on the topic of whether cryptocurrencies should be considered as an asset class.

This isn’t surprising considering that throughout the course of recent history cryptocurrencies went from regarded as 12

a channel for money laundering to becoming a serious proposition for investors very quickly. It now is not just for the opportune amateur investors that’ve got caught up in the media hype as even big businesses and knowledgeable entrepreneurs including Elon Musk have their eyes on the digital currency and many

Our traditional understanding of an asset in finance terms is generally anything of worth to an individual or company, or more specifically it can be regarded as a resource ‘of value’ that can be, in turn converted into cash. Typically, an asset can often generate cashflows. For instance, stocks can provide dividends, bonds can provide coupons, loans can provide interest, etc.

However, there are assets in existence that don’t tend to produce cashflows, but they’re still regarded as an important asset class. For instance, this can include assets such as gold, wine, and even art.

Gold is widely considered to be an important asset class by many. This is the

Finance

case considering, It has limited industrial use doesn’t generate cashflows. The collective thought is that gold is valuable, and this is what provides the value to the asset; an inflated artificial value that we give to a shiny lump of metal.

In matter of fact, this can in turn apply to any fiat currency as money is only a credit that a currency’s user gives to the issuer. Thereby, for a currency to prosper, belief and confidence is the most important factor for its success. The issuers of fiat currencies are sovereign entities which are deemed to be the most trustworthy. If an economic crisis occurs that leads to governmental distrust, the value of the fiat currency has the potential to drop substantially.

In the past, financial institutions and investors have primarily recognised only “traditional” asset classes. They regard cash and equivalents, bonds, and stocks as the big three. However, since the rise of cryptocurrency (a decentralised means of digital currency) in our society many have questioned whether also be regarded as asset class. This debate more important now, than ever before, especially as legislators and policymakers have continued to ponder upon taxing cryptocurrency in line with other assets.

Professionals must now begin to change their outlook on cryptocurrency and adapt processes to enable investors to deal with cryptocurrency more effectively. Gone are the days of solely dealing with traditional assets.

There is a broad consensus that Bitcoin is the most valued—and thereby appealing—cryptocurrency on the market.

Experts have largely accredited this to its scarcity, Bitcoin in particular benefits from investor confidence because of its snowballing popularity. Just as people in

society believe in the value of diamonds because others believe in it, Bitcoin shares this artificial value.

Bitcoin was the first scarce digital asset ever created. Societies have always based the price of a currency on this concept of scarcity, which is why precious metals have been the pillar of many economies for centuries. Bitcoin supply had low inflation built in from day one. To ensure that the issuing of bitcoin would eventually cease completely, its creator Satoshi Nakamoto encoded a way to halve Bitcoin’s mining reward roughly every four years; the bitcoin supply will thereby never exceed 21 million coins.

But what is driving that faith? And what is underpinning the huge increases in the value of cryptocurrencies? This is more to do with its ability to store worth relative to other asset classes. Widespread social adoption, together with their privacy, security, and transferability, make cryptocurrencies an significant asset class to store values.

Cryptocurrencies do not follow the same rules as fiat currencies, or even secured assets; instead matters tend to get complicated. Given that a cryptocurrency does not generate or support cashflow, it needs to be valued against potential and —critically—future prices. That then opens the door to several different valuation methods and guess what—our old friend gold is back. Amongst the differing valuation models now available—the stock-to-flow method, institutional participation method, and high-net-worth participation method—we find the gold valuation method.

But let’s not forget this is a new asset class, so we would expect investors will consider a range of valuation methodologies to estimate future value. This is, however, not risk free. It is a new asset

class, and one that does not exist physically. It is not gold, as we have repeatedly said. Risks do exist and they are well known, and some would argue, substantial. We are therefore firm believers that the financial industry needs to address— and support—government initiatives around regulation.

The key questions remain: Should institutional investors dive in, and is this in fact a dedicated new asset class?

El Salvador became the first country in the world to adopt Bitcoin as its national currency, allowing people to use a digital wallet to pay for everyday goods. Many countries are considering issuing their own central bank digital currencies. All these developments tell of cryptocurrencies’ future potential in line with an asset class.

The primary reason why some do not regard cryptocurrency as an asset class is because of its unclear regulatory environment and high volatility. However, more and more institutional investors use cryptocurrencies to hedge against inflation and currency debasement, and to diversify their portfolios in the pursuit of higher risk-adjusted returns.

This is without doubt, a new asset class and one that will increasingly gain acceptance and the participation of institutional investors as time goes on.

William Je of Hamilton Investment Management Ltd 13

Technology

Delivering an Effective

STRATEGY

C

ybersecurity continues to be a major challenge for companies across the UK with as many as four in ten business-

es (39%) reporting cyber security breaches or attacks in the last 12 months. Whilst many have struggled with security issues for decades, the COVID-19 pandemic has compounded such problems. The shift to remote working has made company devices and critical business activity vulnerable to unsecure home networks which exist outside of the scope of traditional security operations teams. This has resulted in many IT teams struggling to safeguard their data and adjust their security practices over the last year.

14

Whilst many saw the pandemic as a catalytic moment for digital transformation, there’s no reason why the same can’t be said for cybersecurity. However if companies are going to revolutionise their security practices, they must rethink the way security is communicated across the business. Here are three vital components that make up an effective cybersecurity strategy in 2021.

Sync cybersecurity with strategic goals A successful cybersecurity strategy should be in sync with a company’s strategic goals and must avoid hindering business performance or productivity.

Historically, cybersecurity measures have made it harder for employees to carry out their day-to-day operations, with restrictions in place that strangle operational effectiveness. However, if cybersecurity measures restrict workflow this will lead to frustration among employees and limit the amount of staff adhering to necessary security procedures and even driving them

to circumvent security controls.

Cybersecurity must also act as an enabler to the overriding strategic aims of the business, rather than setting the agenda itself. Rather than focusing on security first, start outlining the digital objectives of the company and then layer these with security measures that safeguard company data and information. In other words, companies should start with what they wish to achieve and then the security measures will become clear afterwards.

Furthermore, serious problems can arise when information security teams aren’t included in the design of solutions. Without continued communication and collaboration, information security teams can be blindsided with potential security risks that they have no choice but to isolate and secure. This creates the reputation that the information security team is the ‘big bad wolf’, rejecting digital initiatives and arbitrarily enforcing roadblocks that hinder progress. In reality, if information security

Technology

is integrated into the design and planning stages of digital initiatives throughout, this can foster a better working relationship so that when initiatives are launched they already have the security features required to get the green light.

If this level of collaboration is maintained, then over time digital teams will also become more aware of how to make initiatives secure from the outset. This process requires a cultural reset by which an entire company recognises that information security objectives are shared with the business objectives of the wider organisation, and are required to protect against regulatory, financial and reputational risks inherent to operating technology.

Sharpen up training Cross-collaboration and harmonising security procedures with digital initiatives and strategic objectives is just the first step. Upholding a high standard of cybersecurity relies heavily on the successful communication of such procedures. Not every employee needs to be an expert in cybersecurity best practices, but the better prepared each and every staff member is, the less likely they’ll risk exposing company data to cyber criminals and hackers.

must be communicated through gentle reminders with tangible incentives.

Furthermore, information security teams will put their colleagues in the best possible position by ensuring the most secure approach is also the ‘easiest’ approach.

This will mean everyone selects the ‘path of the least resistance’ and therefore adhere to security by default. Adopting this structure will act as a safety net alongside the regular training sessions put in place.

teams aren’t attuned to the needs of the organisation, prioritising collaboration helps to combat this perception and lower the risk of shadow IT. In fact, embracing an open-source approach that breeds a culture of collaboration will serve companies well in their quest for good cybersecurity.

The ‘Trust but Verify’ model is a great example of cross-collaboration between teams. It means that information security teams train end users and trust them to do the right thing but deploy automation Adopt a collaborative approach to shadto verify that the work they are doing comow IT plies with relevant policies. This empowers end users to remain autonMaintaining due diligence when it comes to omous and make decisions cybersecurity training will ensure employees quickly whilst still knowing remain as vigilant as possible to the threats of there is a verification model cybercrime, such as phishing and ransomware that will protect their company from any potential mistakes. attacks. Yet there will inevitably always be a

risk, often in the form of shadow IT. This has been a recurring problem for companies in recent years, however it’s certainly now of greater concern because the risk of exposure through shadow IT has risen several notches due to the rise of remote working over the last year.

Internal cybersecurity training is the fundamental bridge between a company’s team of security experts and the wider workforce. It’s therefore crucial not to get it wrong. Security training is more effective if it is short, concise, interactive and fun. A succinct 25 minute training session every quarter is going to be much more impactful than a long, five hour session every year.

It is now much harder for IT teams to track which software staff are utilising when the entire company is operating from remote, disparate locations. The trick to countering this issue though is to start saying “yes” rather than defaulting to “no”.

Making a concerted effort to understand why teams have deployed unapproved tech fosters a more collaborative culture, and once you have this understanding you can drive towards the win-win situation to help them in the area that they are trying to help themselves.

It’s also important to avoid ‘blanket’ security training and embrace tailored sessions specific to certain job roles. This is best achieved by adopting various tiers of security training that offer individuals the information they need in order to keep company data safe. In addition, training

By being more open and honest, companies are encouraging employees to come to their IT department with requests for help in implementing secure solutions rather than making the initial problem far worse. Most complications around shadow IT come from the perception that IT

Security teams exist as an extension of the business and enable productivity, rather than hinder it. This shift in mindset relies on the successful communication of best practices, effective training and the merging of cybersecurity initiatives with the wider strategic goals at the heart of the business. If companies can implement these measures successfully then 2021 can become a catalytic moment for cybersecurity, just as it was for digital transformation 12 months ago.

Richard Slater, Head of Managed Services at Amido Source: 1 https://www.gov.uk/government/statistics/cyber-security-

breaches-survey-2021/cyber-security-breaches-survey-2021

15

Finance

Unlocking the Power of Hyperautomation in Finance

T

he pandemic has been a catalytic moment for busiThe key to success is actionable integrated data. Fragmented nesses when it comes to digital transformation, esdata and isolated systems are the enemy of hyperautomation, pecially for financial services. Volatility has been one and data lake technologies don’t put the data that they hold inof the defining features of the finance sector over the to the hands of your employees in the workflow. The ability to last 18 months. To navigate the challenges of such a rapidly integrate rapidly to modern and old systems, bringing together changing consumer landscape, companies have had to utilise process-related data into one place where intelligent automathe right digital solutions to remain tion technologies can be effectively competitive. applied is the key to delivering acIT leaders must therefore recognise tionable automated workflows and that hyperautomation is crucial to When financial services look to acsuccessful outcomes. Too many celerate their digital transformation financial services organisations achieving business outcomes. It plans in a post-COVID world, they continue to deploy a ‘sticking plasempowers people and businesses must quickly recognise the importer, hybrid-technology approach’ to to delegate the authority of decision tance of hyperautomation and the achieve their automation goals, inbenefits it provides. In April, Gartner advertently creating yet more techmaking to intelligent applications, predicted that the worldwide market nical debt and islands of data. physical robots and software service for technology that enables hyperautomation will reach $596.6 bilDelivering intelligent automation assistants. Once technology that lion in 2022. Hyperautomation is no enables hyperautomation has been The financial services industry is longer a choice, rather a condition of full of complex processes, transimplemented then financial services survival. actions and payments connecting organisations will begin to enjoy Defining hyperautomation customers, buyers, traders, regtangible benefits. ulators and other stakeholders.

Hyperautomation brings togethAutomation is crucial for firms to er capabilities including machine deliver a seamless customer expelearning, process mining, RPA, API integration and intelligent rience, but legacy systems complexity often leaves high levels workflow orchestration to replace high levels of complexity with of human-dependent process management, while tradition80%+ automation of the delivery of services to customers. al business process management technologies, RPA and low 16

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Finance code app development continue to contribute to a sub-optimal fragmented systems landscape. In these firms, engineers have traditionally wrestled with complex architecture and integrations trying to join systems that were never designed by vendors to work seamlessly together.

Hyperautomation can empower these organisations and reduce manual input while ensuring high-quality results on front and back-end processes. The combination of RPA with ML and AI is the core enabling technology behind hyperautomation and the reason behind its intelligent automation. It allows companies to automate in places that weren’t previously possible, namely undocumented processes that rely on unstructured data inputs.

For instance, if a bank’s customer requires a refund of a direct debit that should not have been paid, they contact the bank to recover the funds from the vendor. Hyperautomation streamlines the tasks involved within this request by automating data validation, making the processes quicker, more consistent, and less prone to error. Not only will this speed up digital processes but removing human intervention will dramatically reduce operating costs in the longer term. By combining hyperautomation technologies with redesigned operational processes, businesses are predicted to lower operational costs by as much as 30% in the next three years.

Upgrading customer experiences Streamlining back and front office processes will inevitably lead to a much more efficient customer experience. Removing human intervention not only speeds up the delivery of customer requests, such as refunds or complaints, but also eliminates any chance of human error through automated workflows.

Firms which embrace hyperautomation can create a simplified platform environment that is natively integrated, integrates quickly to other systems and combines the best that humans and machines have to offer in the ultimate delivery of service to customers. They monitor and adapt their processes in real-time, evolving quickly depending on changing customer and business demands. Bringing data together in one place has the added benefit of effective fraud monitoring, a single view of the customer and the ability to apply predictive analytics to spot patterns and avoid issues before they occur.

Hyperautomation can also create customised products, tailored services and highly responsive omnichannel customer services that are available 24 hours a day. By removing cumbersome, repetitive tasks, employees can focus their time on tailoring their products and services for their customers.

Additionally, more time and opportunities can be opened up for new innovation and digital transformation, which are crucial components for organisations to stay competitive and agile, particularly amid the pandemic.

Analysing data in real-time If business agility is the marker of success, then real-time data analytics is the key to this. Businesses often fail to identify where their inefficiencies lie due to a lack of data analysis, which is particularly frustrating in the financial sector given the vast amount of transactional data available.

Hyperautomation can help IT decision makers unleash the true potential of data by deriving insights that enables them to understand current business trends and make predictions about future outcomes. This means they are well placed to refine their automated processes and make the necessary course corrections. Companies can therefore adapt in real-time and evolve depending on the changing consumer landscape.

Furthermore, banks can utilise the AI algorithms and ML technologies built into hyperautomation to efficiently monitor all monetary transactions and proactively identify any fraudulent activities. Machine learning predictive models built with advanced modelling techniques can predict the probability of fraudulent transactions, minimising risks for customers.

Automation built for the future Given the abundance of operational business benefits available, it’s difficult to overstate just how important hyperautomation will be for financial services over the next few years. Rather than just automating manual tasks, it will take a company’s ecosystem of technologically advanced tools and merge them to create a truly interconnected workflow solution.

Hyperautomation was created so that low-value tasks can be performed with automation tools, advanced AI and ML, so that outputs can be created automatically and run productively with virtually no human input. It is designed to grow alongside a business and will create a working ecosystem that is constantly educated, agile and ready to utilise data and insights for quick and accurate decision-making. Hyperautomation will deliver intelligent automation that is built for the future, especially as financial services look to keep competitive in a post-COVID economy.

Keith Pearson, Head of Financial Services GTM, ServiceNow Source: 1 https://www.gartner.com/en/newsroom/press-releases/2021-

04-28-gartner-forecasts-worldwide-hyperautomation-enablingsoftware-market-to-reach-nearly-600-billion-by-2022 2 https://www.gartner.com/en/newsroom/press-releases/202104-28-gartner-forecasts-worldwide-hyperautomation-enablingsoftware-market-to-reach-nearly-600-billion-by-2022

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Business

Transforming the reporting process for success

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rganisations’ financial reports need to be able to withstand critical observation from stakeholders.

The data within these reports must be consistent and trustworthy.

This is crucial in both financial and ESG reporting – increasingly intertwined given the European Commission’s proposals for a Corporate Sustainability Reporting Directive (CSRD). Here, the integrity of both financial and non-financial data included in reports is critical given it impacts the value, perception of, and trust in a business.

Yet achieving consistent, trustworthy reporting can be a challenge. Changing reporting requirements require data from multiple departments within an organisation. Involving a wider group of disparate teams – from HR and operations through to legal, risk and compliance – inevitably brings strain and increases the risk of errors.

Despite these challenges, there are practical steps companies can take to achieve more efficient, transparent reporting.

Build out one dynamic, central report listing Reports are worked on by various teams who save them to different locations around the business, depending on what is most convenient to them. This process doesn’t lend itself to consistent reporting, and makes life difficult for financial teams who need to know where to locate reports.

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One way to maintain consistency is to create a single dynamic, central report listing which offers easy access to the various reports underway at any time. This central report listing becomes a collaborative spreadsheet that includes metadata like data sources, timing, contributors’ deliverables and file locations.

Long standing team members with years of experience at the company will likely know the ins and outs of every financial reporting process conducted each month, quarter, year and so on. When building out this report listing spreadsheet, they should input direct links to examples of these processes, i.e., the reports created with each type of reporting process undertaken.

Having a single core listing within a centralised cloud platform linking to all reports is a great way to have up-to-date transparency into the location of these reports.

This is particularly helpful for obtaining business insights quickly in response to customer queries.

It is one simple step to streamline the process of turning around an overview of all a business’ ongoing reports quickly for ad-hoc requests while providing clear project oversight.

Move to the cloud and automate processes Version control can be a challenge when collecting data from various departments and updating many different reports. This increases the likelihood of errors, the need for report corrections and creates trust

issues with the data being put forward.

Transparent streamlined reporting allows teams to work with one single version of the truth.

To meet both current and future reporting mandates, financial teams should be aiming to establish a single source of truth for all financial and non-financial information.

Automation plays a key role here. Moving to the cloud and integrating automation means teams can ensure that when a data point is updated once, it is updated in every relevant report for consistency. For example, after locating a file that needs to be copied into multiple reports, the file should be linked so that when updated in one, the update is replicated across all reports.

Combining process integration in the cloud with automation is vital, but does require teams to pinpoint where data crosses over reports in the first place.

Business

Work together to identify the best approach Setting up integration processes and enabling real-time collaboration may require financial teams to collaborate with their colleagues in IT, as they will have more experience here.

Every business will have its own unique reporting requirements. By working closely together, financial teams can gain insights into the best ways to approach bringing data into a centralised system, automating processes, and ensuring everything is correctly tracked and linked. Once all the work can take place across integrated processes and within one central location, the various teams involved in reporting can start to collaborate in the same workspace in real-time and ensure better data consistency.

Ultimately, by collaborating with IT, financial teams can develop a more effective data integration approach that provides the best security posture and works best for the business.

Meet the reporting requirements of today and tomorrow Any reporting roadmap needs look to the future. In particular, it should consider the new regulations and mandates which will continue to come into force. Planning ahead requires a roadmap to be adaptable and offer more than just one route to success.

Financial teams can begin with a small roadmap exercise. Once the trust and buyin from other teams involved in reporting is secured, this can be expanded into a longer-term, more flexible roadmap to guide them on transforming future processes to continue achieving consistent, trustworthy reporting.

This is key to not only addressing the

‘now’, but also future-proofing reporting processes in anticipation of future expectations.

Short-term pain, long-term gain Solving the common challenges within financial reporting is not an immediate task.

However, taking gradual steps to address them will result in long-lasting solutions.

Over time, businesses can create streamlined processes which not only make reporting more efficient but set them up for success as the regulatory landscape around reporting continues to evolve.

The time spent preparing both people and process will deliver strong returns, ensure efficiency and make the best use of technology investments. It will lead to fewer errors, greater employee satisfaction,

improved transparency, and will drastically shorten the reporting cycle.

Now is the time to ensure that you have the tools and structures you need to report data that can be trusted. This will be critical to a business’ success, as investors, consumers, and stakeholders continue to demand greater transparency and trust in reporting.

Andromeda Wood, Vice President of Regulatory Strategy, Workiva

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SPECIAL FEATURE

Finance Derivative Magazine

INTERVIEW

with Dr.

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Herbert Wigwe

GMD/CEO, Access Bank Plc.

SPECIAL FEATURE

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Can you please elaborate more on how you are delivering growth to the Nigerian market while ensuring sustainability?

Since 2002, we have applied the triple bottom line focus to our operations, which means that beyond profit, we are very keen on measuring our environmental and social impact. Quite often, this sustainable approach to business ultimately boosts business performance.

About Access Bank Access Bank is a leading financial institution headquartered in Lagos, Nigeria. It is driven by strong core values that enable it to continue to deliver strong and sustainable performance.

The Bank is in business to help its customers build a sustainable future by offering bespoke products and solutions using a highly-skilled workforce across Sub-Saharan Africa, the United Kingdom, and Asia.

The Bank is licensed to provide international banking services and is renowned for its comprehensive range of financial products and service offerings. The key business segments of the Bank are Corporate and Investment Banking, Commercial Banking, Business Banking, and Personal Banking. Its key customer segments include Telecommunications, Beverages, Manufacturing, Construction, Oil & Gas, Parastatals, High Net worth Individuals, Middle-Income Professionals, and Financial Inclusion Customers.

It takes immense pride in its ability to add value to clients and leverages its unique value proposition to provide innovative solutions across the economic value chain. In deploying products and services, Access Bank adheres to responsible business practices and readily commits resources to social investments in fulfilment of its corporate social responsibility objectives.

The Bank is present in all major commercial centres and cities across Nigeria and operates nine subsidiaries within West Africa, East Africa, South Africa, and the United Kingdom.

Access Bank also has business offices in China, Lebanon, and India, while Access Bank (UK) Limited operates a branch in the United Arab Emirates.

Sustainability is at the heart of our business, and we will continue to focus on Environmental, Social, and Governance (ESG) goals because we recognise our role in preserving the environment in which we operate. Our overall ESG strategy aims to impact society and our business conduct positively through responsible investment. To enable the success of the strategy, we developed an ESRM (Environment, Social, and Risk Management) credit review process and a governance structure.

Based on our understanding of impact investment and the role it plays in addressing social and environmental issues, expanding our market share, and building goodwill, we have prioritized our CSR focus areas to include Health, Education, Sport, Arts, Environment, and Social Welfare. Over the past five years, we have invested about N22 billion in various CSR efforts reaching 1,316 communities, impacting 30,075,356 lives and 793 NGOs. Employees of the Bank have committed over 2.7 million hours of their time and resources through our Employee Volunteering Scheme, with more than 500 communities impacted across the six geo-political zones in Nigeria.

As a result of our commitment to ESG, we have emerged a key player in the Nigerian Sustainable Banking Principles (NSBP) Steering Committee, the United Nations Principles for Responsible Investment (UNPRI), the Equator Principles (EP), amongst others. In addition to driving real change through social investments over the years, we have been able to consistently identify and create roadmaps that have increasingly delivered long-term sustainable development in investment and financial transactions.

Through our lending and investment activities, coupled with our procurement practices, we have made significant indirect sustainability impacts whilst aiding the development of economies.

With the understanding that climate change will have a social and economic impact on our customers, Access Bank ensures that we properly manage risk while capturing new markets. We imagine the endless possibilities that the future holds. Hence, with creativity, innovation, and speed, we are making vital contributions to creating a truly sustainable future while delivering value to all stakeholders.

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SPECIAL FEATURES

2

3

Yes, the increased penetration of mobile banking applications will significantly grow the market for digital banking in Africa.

As Andrew Smith once said, “People fear what they don’t understand and hate what they can’t conquer.”

Undoubtedly, COVID-19 has had a huge impact on almost every aspect of life, and financial services have been especially hit throughout this crisis. Consumer behaviour has been forced to change due to the risk of infection, which has shifted the old dynamics in terms of communication and access to traditional services.

The constant evolution of the digital banking processes coupled with the low level of financial literacy in the African market explains why many individuals may still be apprehensive about the adoption of digital banking services.

Do you believe that mobile banking application penetration will grow the market for digital banking in Africa faster?

In the past, African markets experienced steady economic growth. The International Monetary Fund (IMF) projected in 2020 that Sub-Saharan Africa would witness an economic growth of 3.6%. However, since COVID-19 struck, the outlook has been less than favourable, with an economic contraction estimate of 1.9% in Sub- Saharan Africa in 2021.

Despite the declining projections, results over the last 24 months have shown that the financial inclusion barriers have been slowly, yet steadily improving in Africa, thanks to the democratisation of financial services. Mobile device penetration in Africa has been increasing exponentially in the last few years, and according to GSMA reports, in 2020, 80 percent of the 800 million people living in Sub-Saharan Africa have a mobile device, partly due to the strides mobile banking had had in the region.

Although digital banking had once been streamlined as a platform for the younger African generation, consumers of all ages have since embraced the idea. This has ushered us into the greatest acceleration of digital banking in history and Africa isn’t left out.

During the pandemic, Access Bank accelerated the execution of its digital strategy and delivered optimised and uninterrupted services to customers during the period. The Bank delivered unparalleled and uninterrupted digital banking services through its various channels leading to a spike in the volume of digital transactions. Similarly, the Bank experienced an unprecedented increase in the onboarding of new customers.

In H1 2021, Access Bank’s gross revenue grew by 14% YoY to N450.6 billion, comprising 71% in interest income and 29% in non-interest income. This strong and diversified revenue growth was driven by extensive retail banking growth. There was the increased velocity of transactions, well-executed trading strategy, optimized value chain of wholesale banking customers, priaccessbankplc.com/sustainability oritized margin growth through efficiencies, just as customers were delighted at every touchpoint – including delivering bestin-class services through our digital platform, Access More.

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What are the possible reasons in your opinion for people still being apprehensive of digital banking? Can you talk about your digital product AccessX?

In a bid to provide top-notch digital service to our customers and demonstrate the best of innovative solutions through self-service banking, Access Bank Plc launched AccessX, or as we refer to it, our experience centre.

This experience centre is a one-stop technology hub where all our customers are taken on a digital tour spanning from Artificial Intelligence to Robotics and Smart Data. AccessX is an additional touchpoint that provides us an opportunity to demonstrate the best of our innovative solutions through self-service banking.

The digital hub allows customers to address all issues concerning login access, PIN issuance, limit maintenance, channels set up and onboarding, device compatibility as well as One-TimePassword (OTP) generation. Users can also make enquiries on digital banking setup, Bank Verification Number (BVN) maintenance, transfer charges, and related issues. In addition, AccessX enables customers to get a speedy resolution to all debit card or ATM issues, especially as it relates to withdrawal, blockage, and activation of damaged, lost, or stolen cards.

Unique to AccessX is the ‘Queue Management System’ – a unique service that aims to improve service turnaround time and overall customer experience. The centre achieves this by using an artificial intelligence system that informs the engineer how many customers are in a queue and calculates the time each employee at the experience centre spends attending to a customer.

4

Can we get some insight on initiatives aimed at supporting women entrepreneurs within and outside the Bank?

At Access Bank, we recognise the importance of maintaining and increasing the diversity of our workforce. Our people and culture are crucial to the success of our business, and it is our ambition to be the most accessible, inclusive, and sought-after employer.

SPECIAL FEATURES

We want Access Bank to be a workplace where everyone is valued as an individual and has equal access to opportunities.

We work to ensure that colleagues are welcomed, respected, supported, and able to be their authentic selves. To this end, we have set up various initiatives which include mentoring, training, and networking events under the umbrella of the Access Women Network (AWN) – formed to support, develop, promote, and retain female employees in the Bank. We understand that gender equality can only be achieved with a focus on both genders. AWN provides a support network especially to all female employees, ensuring gender equality through policies such as the human rights policy, paternity leave, 6 months’ maternity leave as well as leadership programmes.

Access Bank through the “W” Initiative, our banking proposition for women, has provided over 1 million women with opportunities to benefit from our financial and non-financial offerings like market access, capacity building programmes, access to discounted health and business financing. We are using our “W” Power Loan to bridge the financing gap in women’s businesses, giving over 1,200 women access to $30 million in financing so far.

Over the last 14 years, the initiative has developed a strong presence in Nigeria, Ghana, Rwanda, and Zambia with an array of offers tailored to meet the diverse career, business, and lifestyle needs of over 16 million diverse female customers. In the wake of the pandemic, a virtual desk (W Cares) was introduced to manage gender-focused complaints and enquiries. To help facilitate women’s access to discounted finance, we stimulated economic expansion by partnering with ESG (Enterprise Sustainability Group) to simplify loan application processing and tracking for women-in-business. This resulted in over N8 billion ($20 million) debt financing investment in more than 1,700 women-owned enterprises and N18.8 billion ($47 million) growth in lending to 750,000 female customers.

Leveraging initiatives like the Womenpreneur Pitch-a-ton Africa – which in its second year recorded 39,982 applications spanning 8 African countries. The Bank provides business capacity building for female entrepreneurs by giving them access to internationally recognised education and funding for economically viable ideas.

Our leadership is actively involved in the initiation and implementation of strategies, policies, programmes, and resources for diversity and inclusiveness. We remain focused on improving gender diversity at all levels, focusing on the workplace, marketplace, and community. Through participation in several external partnerships, we consistently promote quality across the industry and wider business environment.

5

What benefits does an individual get while associating with the Access Bank Group network exclusively?

At Access Bank, we understand the unique banking needs of our business clients and we are fully committed to providing them with world-class, innovative, competitive, and flexible banking solutions to support their business goals.

Access Bank, by establishing footprints across the major trading corridors on the continent, is an unrivalled partner for stakeholders looking to trade more efficiently. Our robust portfolio of product offerings guarantees increased business efficiency by reducing manual processes. We focus on optimising our digital offerings to help us administer our core operational infrastructures more efficiently. This means that our customers have access to the widest range of financial offerings on the continent.

6

What areas do you see growth in the next 5 years for your Bank?

Over the next 5 years, Access Bank will be the clear-cut digital leader in Africa even as we move closer to becoming Africa’s Payment Gateway to the World.

As we continue to expand our retail banking across major trading corridors in Africa, we will consolidate our earnings across all income lines, driven by a strong focus on consumer lending, payments and remittances, digitisation of customer journeys, and customer acquisition at scale. Furthermore, the Access Bank Group looks forward to another decade of growth as we begin the process of evolving into a holding company (HoldCo). The non-operating HoldCo, to be known as Access Holding Company Plc, would serve as the parent company for the Group – Access Bank and our many subsidiaries. The new structure would facilitate the Bank’s growth and expansion across Africa, ease consolidated financial strength, expedite capital and liquidity growth, provide flexibility to accommodate leverage with minimal risk to regulatory rations, and help to unburden the Bank from oversight functions and responsibilities of managing the subsidiaries, thus focusing on our core operations.

This is in addition to the Bank’s existing commitment to sustainable business practices and demonstration of our ability to re-engineer the face of Africa. This, we intend to achieve by engaging in transactions, processes, and partnerships that enable future generations to meet their needs. Access Bank is well on its way to establishing itself as the world’s most respected African Bank.

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accessbankplc.com/sustainability

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Finance

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Finance

How digital invoicing can help offer a better e-commerce experience With peak season upon us and no sign of the E-commerce boom settling down anytime soon, it’s no surprise that E-commerce businesses are struggling to keep up with demand. Paired with increased consumer expectations, and challenges such as supply chain problems and driver shortages, working smarter and not harder has never been more pivotal. As many e-commerce businesses look to streamline their processes to keep up with demand, one element that may have been forgotten about is digital invoicing.

Digital invoicing is a modernised way of payment being reconciled against an invoice and reduces the time and costs associated with creating, sending, and receiving invoices. It also removes the need for paperwork, as this process lets you send and receive invoices electronically, directly into your and your supplier’s accounting software.

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Finance

As you win new customers either as an online retailer or third-party logistics (3PL) provider, you may have noticed greater challenges in how you invoice for services. From tiered rates for split consignments, pick surcharges, and the ability to bill for oversized products and handling shipping carrier and consumables charges, invoices have changed dramatically in the last few years. But how can you tell if it’s time to make the transition into digital invoicing? If you notice you are spending a lot of time on invoicing and are prone to errors because of having to rush through them, it’s probably time to consider digitising your process.

Mistakes can be costly and can also affect your relationship with your suppliers if they’re made frequently.

Having the ability to send prompt (and accurate) invoices to suppliers and clients not only keeps them happy, but means faster payments for your business by speeding up the overall billing process.The process of digital (or automated) invoicing also offers more accuracy and improves efficiency by removing the risk of duplicated data entry by human error.

DIGITAL INVOICING

According to a study from The Economist Intelligence Unit (EIU), more than 60% of CFOs lack complete visibility into transactions within their organisations. It is extremely difficult to achieve a holistic view of your supply chain, determine where to cut spending, and where to scale up without the correct reports, records and metrics. Switching to digital invoicing will also allow you to keep records of previous invoices for tax and budgeting purposes and manage late payments from customers using detailed files.

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One of the most time-consuming aspects of manual invoicing for 3PLs and warehouses is billing for shipping costs. Creating and printing courier labels can be a time-consuming task, but the use of an OMS simplifies this process, allowing you to get it sorted in just a couple of clicks by sending your clients calculated invoice data to your accounting software of choice.

There is also the option to create customised reports and invoices, in line with your client’s branding. From shipping to storage costs, you’ll save hours of admin time every month by automating your billing and accounting.

E-commerce businesses rely on invoicing for various areas of their businesses – whether it be to charge customers for products, to work out costs for storage and pick and packing of clients, or to pay couriers and other suppliers used. If you use technology such as an Order Management System (OMS), invoicing is

made even easier as you can connect your accountancy system with other channels such as marketplaces, couriers and warehousing systems using API integrations. Taking control of your finances is made easy with the ability to manage everything from one centralised platform. Once the order is confirmed and paid for, the platform sends the data to the inventory management and accounting software to update inventory levels and process payments.

Final thoughts In a time where customer expectations are heightened, delivery costs are increasing and competition is high, you can’t afford to not make simple tweaks to your processes. Those that don’t look to implement digitised processes are at risk of falling behind larger organisations as well as peer-level competitors.

If administrative tasks are taking over and not allowing you to spend time focusing on other aspects of your business, using digital invoices can help to save a lot of time. Automating the invoice process is an efficient way to communicate with clients about payments and keep a record of your income – whether you’re an online retailer, third party logistics (3PL) provider or warehouse. In short, digital invoices help with accuracy, metrics and saving both time and money.

C

M

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CM

MY

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Using API integrations within your OMS makes this process even more streamlined, by allowing you to connect your accountancy system with other elements of your business – from inventory to shipping and online marketplaces.

Ben Kaye, E-commerce and OMS Expert at Mintsoft Source: 1 https://www.basware.com/en-en/resources/whats-now-andnext-for-finance-and-procurement/

2 https://www.mintsoft.co.uk/order-management/?utm_ source=referral+&utm_medium=outreach&utm_ campaign=financederivative

3 https://www.mintsoft.co.uk/integrations/?utm_

source=referral+&utm_medium=outreach&utm_ campaign=financederivative

CMY

K

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Wealth Management

HOW TO EMBED ESG INTO YOUR M&A DEAL

I

mpact investing has been around for a long time – people putting money into businesses doing good things. Investing in ‘doing good’ often creates value, through increased market share or operational benefits in terms of cost reduction, as well as reducing risks. Less attention has perhaps been paid to date on the role of Environmental, Social and Governance (ESG) in M&A deals, but it’s starting to gain momentum.

international standards, UN Sustainable Development Goals, and peers in your sector.

In a LinkedIn poll conducted recently by KPMG, 54 percent of respondents said ESG is now involved in every or most strategic deal-making decisions, with only 18 percent saying ESG wasn’t part of their key criteria. I have witnessed first-hand businesses becoming increasingly aware of ESG metrics in terms of valuation, risks and value creation opportunities. Buyers are switching on to the fact fast that a business’s future earnings will be impacted by ESG. The last two M&A integrations I have led have had ESG front and centre as opposed to what I have seen in the past, which is it’s a component part to be managed.

o Environmental measures: eg carbon emissions, sustainability of resource use, management of waste

So how do you embed ESG into your deal-making activity and avoid it becoming a box ticking exercise? There are three areas of focus and my learnings in each.

1. Deal scan with your own ESG strategy in mind • Start with your own ESG strategy (as part of your broader corporate strategy), examining both strengths and areas to develop so you can determine where targets may help you accelerate in certain areas.

• Benchmark ESG performance against 32

• Challenge your M&A team to consider targets that advance the organisation’s pursuit of ESG goals and make it a key part of your acquisition criteria.

• Take a broad view on the types of measures to look at. These may include:

o Social measures: eg supply chain risks, product safety and quality, labour practices, diversity and inclusion o Governance measures: eg fraud and corruption, fair trade, business ethics and governance and transparency

2. Make ESG an integral part of your deal due diligence • Find targets that help improve your ESG profile in areas where you have the largest gaps to close.

• Screen targets for their ESG credentials and assign financial values to ESG factors. Price ESG factors into determining the valuation.

• Benchmark a targets ESG credentials against their closest competitor set - there is to date no standard to identify the relevant metrics to measure each and every ESG factor, but a combination of different measures can be pulled together.

• Ensure you have access to tools and data to help integrate and analyse a targets

Wealth Management

ESG credentials and future risks and opportunities.

• Get a broader set of perspectives on targets – industry analysts, behavioural economists and academics. You may want to think about engaging multiple specialists on different aspects of ESG. • Consider how ESG credentials impact your exit potential.

• Assess how it impacts your value proposition to customers and how to ‘bring best of both’ companies together.

• Consider your sources of capital to fund deals - ESG factors are increasingly important for unlocking capital (debt and equity) and are becoming on a par with EBITDA, P&L and overall performance.

3. Make ESG a pivotal part of your integration efforts • Consider how the overall business profile has changed and what are the most material risks and opportunities, best practices and roadblocks to manage.

• Have a dedicated ESG integration workstream addressing the above areas which works closely with all workstreams, including procurement, risk management, people and culture, and leadership.

• Build ESG into your integration playbook and toolkit as an integral component.

• Ensure that the credentials you identified in due diligence are not being lost in the integration of the business through synergy delivery.

• Make ESG measures a critical component of your integration scorecard, tied to the financial objectives.

• Use it as an opportunity to improve recording and reporting against ESG criteria, and consider how this might need to change and evolve with the addition of the acquired business.

• Prioritise areas of joint ESG improvement for your corporate scorecard.

• Make ESG part of integration communications across the business – highlighting the joint benefits to employees and stakeholders and use it as an internal education opportunity.

Companies in my experience will often now be using M&A to enhance their ESG credentials, improve their supply chain, innovate their business and operating model, and create value through margin improvement or through identifying additional revenue generating opportunities. I have found that, by taking the above three steps, you make a positive move away from just looking at ESG through a risk mitigation lens to a value creation lens.

Karen Thomas-Bland, Founder of Intelligent Seven 33

Banking

NETWORK VISIBILITY: how banks can transform their IT and security

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inancial services have undergone rapid digital transformation, and continue to do so as a result of the pandemic. It is no surprise the traditional set-up of silos and legacy IT no longer helps firms to adapt to the new business environment. And it is essential that financial services continue to modernise processes and focus on delivering frictionless, digital experiences, if they want to keep up with new market entrants.

One of the ways financial services have responded to the increasingly digital world, is through the adoption of cloudbased solutions. However, the latest State of the Cloud report from Flexera has found that security and the management of cloud spend remain the top challenges for organisations working within this environment. Therefore, unless the cloud is optimised, it can create more issues than it solves – making it difficult to improve ROI and protect against the evolving threatscape. Through improving observability into all data, organisations can address the digital challenges faced by the industry and build resilience to drive business performance and success.

Budget versus efficiency For business leaders navigating the challenges brought on by the pandemic, weighing up technical priorities with budget constraints has been essential. Investing in solutions, such as network visibility, is one way to increase profitability and improve digital capabilities. Observability in particular enables organisations to optimise network tools and continue to grow and innovate whilst on a reduced budget.

The use of legacy technology and reliance on systems of record limits the growth and efficiency of financial organisations. A recent study highlighted that 68 percent of insurance organisations named legacy systems as the greatest barrier to digital transformation, and silos are often cited as the enemy of changes within any industry. These issues can be best addressed by monitoring all systems and devices through one ‘single pane of glass’ and gaining a holistic view of all IT environments, from on-premise to the cloud.

By investing in digital capabilities and optimising current tooling, organisations are able to increase ROI and network efficiency, which in turn will drive additional value and better service for customers.

Improving customer experience Cloud migration and network optimisation becomes more of a challenge for NetOps teams when they do not have a clear view into traffic. This can then cause a rise in application performance problems. Addressing the ‘visibility gap’ common in hybrid environments allows tools to filter out low risk or duplicate data, freeing up bandwidth to help improve digital services. However, if the lack of visibility is left unmanaged and negatively impacts the user experience, revenue will ultimately decline, putting greater pressure on IT professionals who are left with an overly-complex and underperforming network to manage.

Customers want to interact with their bank in the same way they do with Google, Apple or Amazon – through seamless digitally-enabled experiences. Without this digitisation,

Source: https://info.flexera.com/CM-REPORT-State-of-the-Cloud?lead_source=PPC&utm_source=google&utm_medium=cpc&utm_campaign=Branded&campaignid=45250988&adgroupid=132614208624&utm_term=flexera%20state%20of%20the%20cloud%20report&https://info.flexera.com/CM-REPORT-State-of-the-Cloud%3Flead_source%3DPPC&_bt=538674931107&_bk=flexera%20state%20of%20the%20cloud%20report&_bm=p&_bn=g&_bg=132614208624&gclid=CjwKCAiA4veMBhAMEiwAU4XRr6rwm7JeAZJMvB8USHlaRWbfJIxMM4VKPVxx82dAL5GrQtN57NmbmRoC_FcQAvD_BwE 2. https://www.genpact.com/lp/assessing-digital-impact-across-insurer-and-channel-operations 3. https://www.pwc.com/gx/en/banking-capital-markets/publications/ assets/pdf/pwc-new-digital-tipping-point.pdf 4. https://www.agcs.allianz.com/news-and-insights/expert-risk-articles/financial-services-risk-cyber.html 5. https://www.bloomberg.com/news/ articles/2020-11-24/ anks-see-billion-dollar-cyber-costs-soaring-even-higher-in-2021

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Banking

banks will be on the side lines watching as their market position fades in favour of new digitally-enabled competitors.

If they fail to begin their transformations now, they are likely to lose customers. Furthermore, with younger generations citing digital as an important factor in their financial service provider decision, it is crucial that financial institutions act now and invest in network optimisation, if they want to continue attracting new customers.

crucial in ensuring applications, traffic and users are all being monitored thoroughly. If done correctly, this can help security teams mitigate cybersecurity vulnerabilities and be better prepared against future attacks. With total observability, SecOps teams can respond to data breaches proactively, which could be the difference between a minor and major breach. And a large enough event could undermine the organisation and its reputation.

Optimising security

For financial services organisations, undergoing vital digital transformation successfully without full visibility will be a challenge. To succeed in the long term and mitigate risk, it is fundamental they invest in gaining a full and singular view into their entire IT infrastructure. Advancing network visibility will improve an organisation’s cybersecurity drastically. It will also help to optimise IT tools and teams, which in turn will propel ROI. All of these elements are key to consider, as while we adapt to the post-pandemic world, financial services must continue to integrate new digital banking solutions in order to stay competitive.

Since the start of the pandemic, the number of cyber-attacks within the sector has risen by over 200 percent. And with such critical data to protect, the financial industry must continue to regularly test the security of their IT infrastructure and processes. Deloitte predicted that the sector will see a 64 percent increase in cybersecurity investment across 2021, however it is important organisations ensure that the right diligence and testing is carried out. Rather than simply investing in a mis-match of point solutions, the tools and solutions implemented should help financial services increase their resiliency to cyber-attacks while also contributing to future growth.

The cloud is often a safer option than on-premise tools, as long as consistent and unwavering visibility is prioritised. It is important businesses implement a security strategy that functions in an ever-evolving environment, whilst also protecting millions of users across multiple platforms. Having a consolidated view of all data in motion on the network is

Anthony Brown, Director, Gigamon

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Technology

The five tenets o

CYBERSE

36

Technology

of an effective

ECURITY PROGRAMME

A

t its essence, security intelligence is the practice of keeping organisations safe through the process of collecting, standardising, and analysing data generated from networks, applications, and other IT infrastructure. This information is then used to develop the enterprise security posture, ensuring that cybersecurity teams always stay ahead of any threats.

While security intelligence traditionally involved the monitoring of networks, traffic, and endpoints – with teams taking action when necessary – recent global-scale incidents have forced the cybersecurity industry to reassess its core concepts and long-held perspectives.

Keeping an enterprise safe in today’s cybersecurity climate requires a total paradigm shift in how security intelligence is collected and used.

The internet attack surface Holistic security intelligence starts with the internet attack surface. The internet attack surface is every manifestation a company may have on the web outside the confines of the corporate network.

This is the main vector of attack for threat actors and is a major avenue for infiltration. By its nature, the internet is an ecosystem that connects enterprises with bad actors who will look to exploit this connection. If a company has an internet presence – which is today unavoidable – then it will always be under threat.

Organisations are particularly susceptible to attacks borne from the web when they lack visibility and situational awareness. When security teams have good visibility into their organisation’s web presence, they can monitor areas of risk and vulnerability, as well as keep

an eye on cyber adversaries. It is visibility that is at the heart of effective security intelligence.

An ongoing battle In this era of constant cyberattacks, organisational cybersecurity is best viewed as a battlefield in that a company’s digital presence can be a crowded, chaotic, and dangerous place. The right security intelligence can cut through the fog of war, illuminating danger wherever it might arise. Similar to a real battle, information is key and those with the best information will be safest.

This being the case, there are five key tenets that organisations can use to direct their security intelligence programme, ensuring that they have the most encompassing information. These five critical areas can help guarantee that security teams are as well prepared as possible 37

Technology

to stay ahead of their adversaries and win the cybersecurity battle.

The five tenets of an effective security intelligence programme 1. Know yourself: intelligence

Attack

surface

Excellent security intelligence must start with a keen understanding of the organisation to which security teams belong.

This must include its composition, and unique placement amid the global attack surface. To ascertain this, teams must have complete visibility into their company’s digital footprint, which is every asset and connection spanning the organisational presence on the web. It is though this visibility that avenues of attack can be recognised and defended.

2. Know your intelligence

allies:

Third-party

The supply chain has become a major area of vulnerability when it comes to cyberattacks. In fact, two of the most widely damaging attacks this year – SolarWinds

38

and Kaseya, which both impacted thousands of companies – were borne from the supply chain. This being the case, security teams must have an excellent understanding of their third-party risks and how a compromised partner might endanger their own organisation.

3. Know your enemies: Cyber threat intelligence Once security teams gain an understanding of their own digital footprint, it is time to look outwards. Like enterprises online, adversary digital footprints are always evolving and must be monitored.

This can be secured through access to real-world observations, insights into digital relationships and internet connections to track threat systems and threat actors. By monitoring threat actors, security teams can develop a profile of how they might conduct an attack and guard against it.

to state-sponsored cyberattacks. This can be secured through enriching core security solutions with extended intelligence to improve investigation and response.

5. Know your weaknesses: vulnerability intelligence Moving beyond an organisation’s internet attack surface, security teams must identify and monitor any specific vulnerabilities that are found. New common vulnerabilities and exposures (CVEs) are announced every day. No matter the level of criticality, teams must closely monitor CVEs because cybercriminals will be well aware of them too.

Once these five tenets are secured, security teams can truly protect their organisation in today’s climate of ongoing cyberattacks. At the heart of all these tenets is visibility – both externally and internally – as it is through information and dispelling the murkiness of the web that threat actors can be prevented.

Companies that do not act now will likely learn the crucial benefits of visibility the hard way at cost to their bottom line and their reputation.

4. Know your ever-changing surroundings: Security Operations intelligence It’s essential that security teams understand the ever-changing topography of the threat landscape and where their organisations lie in it. This will deliver valuable insight as to who might target their company, why, and through what vectors – for example, could they be vulnerable

Fabian Libeau, EMEA VP, RiskIQ.

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39

Finance

Cash industry on road to sustainability Currency & Payment Consultant, Reconnaissance International

working and succeeding in being a ‘good citizen.’

It is exciting to talk about the future, about what is new, but sometimes a mature product can surprise and delight. Cash, coins and banknotes, and the ‘industry’ that makes and supports them is perhaps one such example. When it comes to sustainability and environmental impact, one might assume that a digital payment has a significantly lower environmental impact than cash, but a new paper, ‘Cash: a roadmap to sustainability,’ challenges that perception. It also describes an industry

The paper puts this work in the context of research by central banks into the environmental impact of cash and debit cards which, while confirming that cash does have a higher environmental impact, shows both that the order of magnitude is similar, and the impact is extremely small.

Cash represents 0.009% of the environmental impact of the Dutch economy, for example.

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The paper has collected from 24

organisations 106 examples of what they have done to reduce their environmental impact from the creation of coins and banknotes through their issue and circulation to their destruction. This offers real examples, and inspiration, for others working with cash in particular, and manufacturing in general, about what is possible.

Motivation for change Self-interest. Working with the companies to write this paper, a number of drivers became apparent behind their work.

Clearly profit, the bottom line, matters to

Finance companies and customers. Re-designing printing presses, destruction equipment or ATMs to use less electricity, installing telematics into armoured cash trucks so they use less fuel, reducing water usage in paper mills, inventing processes that mean solid waste no longer needs to go to landfill or generating your own electricity from solar panels on the factory roof benefit shareholders, customers, and the planet.

Community. Read the Portals and Louisenthal paper mill case studies and you see organisations who are investing to use less water, cleaning it to higher standards and looking after their water sources not because of regulations (they meet them already) or to save money but because they are embedded in their communities. Alongside this, many companies are not just reducing their waste, but recycling what remains. For example, CCL and De La Rue – both suppliers of polymer substrates - are moving towards 100% recycling of polymer banknotes, whilst Giesecke + Devrient policies ensure that no production waste goes to landfill.

‘On a mission.’ If you read the work done

by Oberthur Fiduciaire, a French printing company, Vaultex, a UK cash processing company, or Loomis, a Swedish Cash-in Transit (CIT) company, you will see a systematic, end-to-end approach to reducing their environmental impact. In fact, to name three is unfair on the remainder of the industry, but it is clear these companies have put sustainability at the heart of what they are doing.

The one group missing here, are customers. Central banks such as the European Central Bank (ECB) are active around sustainability, but it is rare for tenders to require more than those suppliers adhere to ISO 14001. The changes being made by the industry are largely self-motivated.

Importance of staff engagement Staff activity features in a number of case studies. The Royal Dutch Mint and Koenig & Bauer Banknote Solutions, both with new sites into which sustainability

was designed from the outset, introduced innovative changes involving their staff.

Vaultex initiated what it called a ‘Green Pathway’ seeking and achieving staff driven change.

While the paper has examples of largescale projects, solar power, water treatment, red-design products etc., the smaller scale projects are largely staff driven.

They do, of course, provide examples of change which any size company, however thin their margins or small their resources, can do.

Role of innovation Innovation comes in many forms. The Royal Australin Mint funded its solar panel farm through an innovative deal with its energy supplier. De La Rue and Crane Currency, both printers with factories in Malta, reduced the temperature of their buildings, one through a ‘cool roof’ and the other through insulation. Komori separating waste and turning waste into a valuable material to achieve zero industrial waste emissions. The ink maker Luminescence decided to move to laundering cleaning cloths rather than using one-use cloths. The Philippines Central Bank changed its rules so that banks could exchange notes and coins directly with each other rather than shipping them back to the central bank first. The UK’s Post Office found a charity that needed elastic bands and now supplies them with its excess requirement.

Co-operation A particularly interesting example of co-operation is the UK’s Cash Industry Environmental Charter (CIEC) group.

Initiated originally by NatWest Bank, 34 organisations came together to focus on energy, plastics and carbon. Data is, of course, the starting point of innovation and this group has been meeting monthly to share metrics and initiatives.

This highly informal group is driving real change by sharing what they are doing, who they work with and what works and what does not.

Some companies have set out to have a wider impact as part of their environmental work. Oberthur, for example, decided to work with a local supplier to invent a new process to treat its wastewater. For a recycling project it identified a local start-up and worked with them to create a low-tech solution. It has now followed a similar process with other local companies on other projects.

Future Cash must be the world’s most used product. Despite the experience of those living in the developed world, most the world’s population continues to depend on cash.

It will be with us for longer than the digitally enabled think and so it is important that the cash industry continues to strive for sustainability. This paper did not include the plans of the industry to eliminate ‘green washing’ but if it had, the paper would have been twice as long.

While digital payments face the challenge of managing the environmental impact of its ever-increasing numbers of digital transaction, cash is steadily working to be a good citizen.

Last word Professor Frédéric Fréry from ESCP Business School wrote an article ‘Climate change is a technological challenge’ recently for this magazine. In it he called for technology to be applied to saving the planet and suggested capitalist ecology as a force for good in the sustainability battle.

This paper demonstrates an industry living Professor Fréry’s dream.

• A copy of the full report can be found here: https://estore.reconnaissance.net/ cn-cash-roadmap-sustainability/

John Winchcombe

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Technology

WHY TECHNOLOGY IS THE KEY TO IMPROVING AGILITY FOR RETAIL BANKS

42

Technology

Mark White, Senior Manager of Financial Markets and Fintech at Telehouse Europe, explains why banks need to take steps to improve their agility now or risk losing their competitive edge.

Innovation in banking has always been driven by customer expectations. And while digitalisation is far from new, escalating levels of demand, driven heavily by Generation Z, have triggered a notable shift in gear for retail banks. Born between 1996 and 2010, Generation Z is the first to have no experience of life before the internet and mobile phones. Digitally native yet rooted in the physical world, in 2019 they accounted for 32% of the global population. That’s 2.47 billion people, making them the largest demographic on the planet.

With stratospheric confidence in digital’s ability to deliver, Generation Z expects instant responses, advice and processing of products and services. And there’s no doubt they will be the first to completely drop cash and cards in favour of mobile and e-wallet payment services. However, it’s not just this generation banks need to worry about. According to EY, COVID-19 prompted a 34% increase in contactless payments by all demographics, along with a 57% fall in cash usage. So, banks simply cannot afford to stand still.

This change in user behaviour and preferences is forcing banks to once again rethink systems and technology to future-proof their business. They need the agility to flex systems and services and that means finding a practical approach to overcoming the technology barriers posed by legacy IT and reshaping infrastructure once and for all.

“

The switch to digital

The biggest challenge many retail banks are facing is the need to urgently adapt to the fast-changing requirements and behaviours of their customer base. With more physical branches shutting (Lloyds is the latest to announce it would close another 44 high street outlets), the focus for many is on bolstering their online offerings and capabilities and this requires changes to both operating models and IT infrastructure.

The problem is that many banks have typically been slow to respond to change, held back by the need to ensure compliance with an ever-expanding array of regulations.

Despite having the appetite to change, banks have often struggled to make meaningful progress. Their legacy systems have held them back from taking effective action quickly.

However, with newer, digitally-native players threatening to cement their competitive advantage, banks know they cannot afford to wait any longer. They need the agility to flex systems and services and that means finding a practical approach to overcome any technology barriers and reshape IT infrastructure.

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Technology

Making better use of data Accepting the status quo is no longer an option for these banks. As customers’ digital knowledge and skills increase, the race is on for the industry to embed the necessary agility to adapt. This has, in turn, triggered some deep thinking about what the market will look like in a further ten years, where the demand will come from and, crucially, how can banks gain a competitive edge.

Making better use of data will be a key element of this. Data is the new gold and harnessing its value will remain central to the future of banking. To become agile, banks are reviewing what data they hold, where it is stored and how they can apply analytics to mine it for insights and to deliver new services.

There is a raft of potential use cases.

Banks could use data to increase agility, inform their strategy, launch new services quickly and inform decision making for digital transformation. They could leverage artificial intelligence, and more especially machine learning, to deliver operational enhancements such as credit granting and fraud control capabilities.

Ultimately making good use of data is key to enabling banks to do everything from meeting customer demand for more connected, relevant and personalised experiences right through to simplifying their business and operating model to increase efficiency.

The key for success for banks is to embark on a detailed planning and thought process around data and how they want to use it before evolving their infrastructure. Ultimately, it will be these choices that will determine how effectively data should be managed, processed and stored. And with cost a key consideration,

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it’s important banks don’t invest in areas of innovation that then fail to deliver the competitive edge required due to insufficient infrastructure.

Rethinking IT Infrastructure With growing pressure to deliver the connected, personalised experiences today’s consumers need, banks need to look for ways to increase bandwidth, simplify operating models, reduce cost and unlock and analyse data to improve efficiency. And the starting point is their IT infrastructure.

Newer entrants will have built digital banks from the ground up, with cloud-native strategies - a route that has proved successful in mature fintech markets such as Asia. However, incumbents are likely to be more dependent on legacy systems; tried and tested infrastructure models that are embedded within the organisation and its culture, with many resistant to change.

But legacy architecture poses many limitations including high cost and lack of scalability and flexibility.

To future-proof their business, retail banks need an IT infrastructure that facilitates fast and seamless connectivity between the cloud and internet service providers, enabling them to ingest and process data at speed and maintain competitive advantage. A hybrid approach is likely to prove the dominant choice, consisting of a mix of colocation and cloud.

also leveraging fast and secure interconnections to cloud services, enabling them to control the migration process, keep on top of regulatory demands and keep a lid on costs.

More importantly, by deploying a combination of cloud and colocation strategies, banks can create a resilient and secure foundation for growth. This will enable them to flex and scale operations when building new services and innovations to meet future demand, while also ensuring they provide their customers with a responsive and high-performing service.

And by choosing a colocation facility in close proximity to the organisation, banks can benefit from reduced latency and faster data processing to enable real-time big data analysis.

Ultimately, by embracing a hybrid approach to cloud and colocation, banks can benefit from the enhanced capability they need to drive agility, while minimising costs. But it is also the case that having the right infrastructure partner, one that can provide the security, resilience, and low-latency connectivity required to enable transformation will be critical to their ongoing success.

Mark White, Senior Manager of Financial Markets and Fintech at Telehouse Europe

Using colocation as an enabler

Source: 1 https://www.ey.com/en_gl/banking-capital-markets/four-

By hosting their IT infrastructure in a colocation data centre, retail banks can benefit from enhanced agility and flexibility, while

2 https://news.sky.com/story/lloyds-shuts-44-more-branches-

ways-covid-19-is-reshaping-consumer-banking-behavior with-customers-moving-online-12339992

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Business

Automating business processes is essential to digital transformation

I

nformation management, business processes and business systems need to come together and align to deliver efficiencies, improve customer experience and put content in context. At its heart lies the need to digitise document intensive processes, which in turn enhances customer experience and drives your competitive advantage. Furthermore, a digital workplace not only supports process owners, but it helps compliance teams, partners and users focus on core business tasks.

Digital transformation is here to stay. According to a survey conducted by McKinsey, the pandemic prompted companies to accelerate their digital journeys, speeding the adoption of digital technologies that support customer, supply chain and internal operations by three to four years.

For businesses to truly embrace digital transformation, they need to unify their back and front office operations.

Customers want a seamless experience regardless of contact channel or person.

No matter how they are interacting with the business – ordering goods, filing complaints, or requesting information – the customer wants a positive service experience.

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Business

This is only possible by automating processes and removing silos between customer service applications, customer data, and related documents and content.

Digitising business processes not only automates existing processes, but it can also lead to reimagining processes. The best way to handle a process might not be to just transfer the formerly manual process to a more automated process. It can call for a total rethink.

The number of systems and applications within a business keeps growing. For example, a recent report from BetterCloud suggested that SaaS applications make up today some 70% of total company software use. No single system can deliver all the functionality required. To make transformation possible, information management must step up to support it.

Bridging the gaps between individual, siloed applications is the key element of digitisation. Improving customer experience, gaining cost savings, expediating efficiency, and improving compliance are typically correlated with how information management processes work. Furthermore, intelligent information solutions enable employees to find and use the information they need with the context that matters to boost productivity and drive better business outcomes.

Often when workflows and processes are digitised, it is done by adding more single-use systems and applications.

This is problematic because it results in increased information chaos as these applications remain siloed. That said, end-to-end instead of single use workflows ensure that documents are always correctly routed from one person to the next as needed, which heightens collaboration. Furthermore, metadata-driven permissions and access controls provide secure collaboration in turn.

Smart usage of information, based on a 360-degree view of all data stored across all systems and

repositories, is necessary to gain business efficiency. This is dependent on employees having both assurance that they are working with the latest version of a document as well as access to all relevant information needed to support improved decision-making. There is no place for siloes; employees need easy access to pertinent information when they need it.

Afterall, information – and access to it – needs to support their working processes.

Businesses are today inundated with information – including content created internally as well as documents and files received from customers, partners, and suppliers. Employees that spend less time searching for documents or focusing on manual, repetitive tasks, do indeed, have more time to dedicate to billable hours.

Without an information management framework, time is wasted searching through file folders and various disconnected business systems for critical documents. This is often compounded by a proliferation of multiple versions of the same file, which results in errors and repeated work.

The use - and archiving – of information can be more efficient by automating user and access rights, information categorisation, version control and archival.

Additionally, the inefficiency of manual work can be removed by automating information workflows that support business processes. Manual work takes time, creates costs and is prone to human error.

It is very instinctive to want to stick to familiar ways of working. Therefore, information, and how to access it, needs to support a change in employee behaviours.

This behavioural change is a vital element of any potential business transformation.

Employees will only accept new ways of working if they understand the need for change and feel involved in that journey.

Additionally, the systems used to digitise business need to be easy to use. This will enable the employee to embrace new ways of working.

By removing these barriers and silos, there is more potential for increased productivity, improved regulatory and legal compliance and a bestin-class customer experience.

Enterprises across the globe are today exploring opportunities for modernisation and digital transformation — be it mobile applications, e-commerce functionality or the integration of data analytics solutions – all of which are based on business rules and processes.

To maximise the impact, organisations should centre their efforts on opportunities based on their value in delivering improved experiences for customers and employees, greater cost efficiencies, productivity and business growth.

Automation represents the golden goose of digital transformation. Ultimately, it is what every organisation is striving for.

Automation enables the rollout of new digital strategies to deliver cost savings, improve customer service and generate new sources of revenue.

Leading organizations are turning to intelligent information management solutions that enable employees to access and use content anytime, anywhere and on any device. Today’s solutions go way beyond managing documents. They provide the levels of automation and capability required to improve navigation and security, whilst addressing the constantly evolving regulatory environment, delivering improvements to both document search and collaboration.

Colin Dean, Director, Western Europe at M-Files Source: 1 https://www.mckinsey.com/business-functions/strategy-

and-corporate-finance/our-insights/how-covid-19-haspushed-companies-over-the-technology-tipping-point-andtransformed-business-forever 2 https://www.bettercloud.com/monitor/saas-statistics-2021/

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Finance

WHY SHOULD FINANCIAL SERVICES CHOOSE CLOUD NATIVE

?

48

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I

nitiated by the pandemic, numerous organisations throughout nearly all sectors have rapidly migrated to cloud native technologies and facing new cybersecurity risks to mitigate. The cloud native movement is an area which is always rapidly changing and can be daunting for organisations and authoritative parties that are struggling to keep up. Organisations within the financial services sector have also made this rapid transition at the risk of experiencing especially large losses if faced with a cyberattack.

With this, Kubernetes and Docker have grown in popularity by DevOps (development operation) teams as revealed by a recent Stackoverflow survey which discovered that more than 55 per cent implemented Docker within their teams. On the other hand, the use of currently running Linux container technologies, which security teams become dependent on, have only left them at a significant disadvantage and lagging behind. For cybersecurity throughout the financial sector to be effective new methods must be applied in new ways for security departments to implement new practices to better safeguard their environments.

Evaluating the risks When considering implementing any cloud native technology there are five key risks that organisations should evaluate beforehand: • Blurring the boundaries: Availability, Confidentiality, Integrity are straightforward concepts to identify within conventional models. However, with cloud native technologies, these boundaries and definitions are easily blurred – making the segregation of duties model a more complex task. The leaves access control functions and deploying protections for data assets much more difficult to define • Internet exposure – a real concern to this computing model is the level of internet exposure that is risked. Even if done accidentally, a simple error in judgement can expose vital systems and information

to potential cyberattacks. This along with the rapid advancement of cyberattacks methods means that reinforcing all security weaknesses and improving information asset management tools need to be addressed as soon as possible • Problems with GDPR – as cloud based systems are being increasingly adopted on an international scale also brings the overlap of GDPR regulations within and throughout different countries. What may be a requirement to GDPR compliance in one country could possibly be a violation to GDPR compliance in another • Generic protections – to ensure overall ease of use by all end users, many cloud native applications are developed with basic security capabilities. This leaves unaware users with generic default settings that are incapable of maintaining critical applications effectively. Instead, the focus should be towards setting up proper controls early on in development to reinforce these generic settings • Incompatible new systems – organisations should first consider if their current security operations systems can be integrated with newer ones before investing in a conventional SaaS platform, as it may not have the integration points needed for security control and monitoring functions Mitigating the risks Education is fundamental to appropriately mitigate the risks that come with transitioning to cloud native. Arming security teams, owners, and system developers with the knowledge to correctly react and adjust their tactics is they best way to guarantee the safe and proper use of the technology. Combining this approach with CNAPP (or cloud native application protection platforms) is what organisations will need to develop the suitable controls that can accommodate design and development of current cloud native applications.

In addition, altering the management of secret information (credentials and API keys) as applications are distributed to

ephemeral containers should be done before the transition to cloud native to prevent any credentials be stolen which could possibly result in changes within the system. Though there are definite hurdles to overcome caused by this paradigm shift, there are also a number of valuable advantages which may help to make their role of security teams a little simpler. One way to achieve this is storing away all information within a computing environment by moving to “infrastructure as code”, this is where systems and the applications within them are defined in an encrypted language. This method allows for practices such as static analysis to recognise vulnerabilities through re-evaluating the data to and allocate it to a control database.

Cloud native computing can also be used to reinforce security measures by implementing an “immutable infrastructure” which are designed for system administrators to frequently replaced instead of being altered in an ad-hoc approach. This operation model allows for defenders to accurately identify a lateral movement attack within an environment.

The rate and global adoption of cloud native technologies is due to bring with it new changes for the financial services sector to keep up with. Cybersecurity and ITOps teams must be proactive in keeping with these constant changes and that they are in the best position possible to benefit from the changes. By modifying their systems and procedures to meet these oncoming waves of change is the way to handle all the risks that come along with it.

1. Rory McCune, Cloud Native Security Advocate Aqua 2.Rory Alsop, Head of Cyber Security at Tesco Bank 49

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T

o say that the fintech industry is booming would be an understatement, with 64% of global consumers adopting fintech. The uptake in digital solutions across the financial sector has seen significant growth during the pandemic in an effort to keep up with changing consumer behaviours. People and businesses alike are now using fintech services more and easier than ever. One thing is clear: the pandemic has advanced attitudes towards fintech by a few years in just a few months.

Yet, among new digital innovations, there are a lot of expectations surrounding fintech software. From providing a seamless experience, quick and efficient solutions and countless requirements, these applications are under heavy scrutiny and have no room for errors when it comes to protecting sensitive financial data.

Afterall, the financial sector has been a long-standing target for cybercriminals for a number of years.

Investing in software development for these fintech processes ensures users are getting the most out of its capabilities, improving usability and experience. In this article, I’ll delve deeper into how we can apply software quality assurance to this process and the many benefits that come with it.

Understanding quality assurance Quality assurance (QA) is a concept commonly used interchangeably with software testing, which is actually incorrect. In fact, QA is an assortment of practices and activities that are much more profound, despite the conduction of software tests. In QA, much more emphasis is placed on the far-fetched automation of tests and their large scale. The QA engineer is required to display knowledge of various technical aspects of software development to a much higher degree. The most common activity of being a QA engineer is test automation, which requires not only testing knowledge but also having programming skills. In fact, automated tests give a big advantage, because they can detect errors and shortcomings that were not detected both by the developer and the manual tester.

Quality assurance in fintech QA is not only an effective way of preventing mistakes and defects, but also a complex process that includes non-functional testing of applications. In particular, fintech companies need to ensure that the processes used to develop their products and solutions are fully secure, functional and reliable. One way QA can be ensured here is through investing in software development.

Properly trained and dedicated software engineers run countless tests to ensure that any software development products and solutions are to the highest standards.

In a competitive environment, fintech firms need to consider agility and enhanced customer experience as key reasons for 50

The rising im software qual in fin

mportance of lity assurance ntech

Technology

success. The ability to move quickly to cater for market niches and meet new consumer behaviours is crucial for the industry and with the help of QA, fintechs can prevent costly errors. However, testing in fintech requires a much more thorough and voluminous test suite than many other types of software. In other words, what is sufficient for many IT processes is simply not enough for a fintech company.

Benefits of quality assurance The benefits of investing in QA are endless. Apart from time-saving, the elimination of errors and shortcomings at the early stages of a project, allows the shortening of realisation time. What’s more, QA allows fintechs to save money. Where detection of errors occurs in the early stage of production, the necessity of introducing profound changes in the architecture of the programme in the later stages is reduced, for example writing entire components from scratch.

Perhaps one of the most important benefits of QA lies with increased satisfaction of the customer and the end-users. Within fintech, the fight over obtaining clients is extremely competitive and therefore having your end-users experience in mind should be of utmost importance. In turn, overall company reputation as well as the morale of the entire team is due to improve.

Outsourcing to nearshore software development In an ever increasingly competitive environment, fintechs must make sure to offer their customers the best service possible. QA is a great way to achieve just this, while also saving time and money. A simple concept, but a complex task, software developers are the best option in undertaking the process of QA. With extensive knowledge and experience, a nearshore software development company can become an extended arm of the company while slotting right into the various processes installed in the business.

The future of QA adoption across all industries is only set to increase. Small mistakes within current software processes are no longer sufficient. It’s now up to fintech companies to evaluate their current software quality and provide better services to their customers.

Stefania Dąbek, Quality Assurance Engineer, Future Processing Source: 1 https://www.ey.com/en_uk/financial-services/eight-ways-fintech-adoption-remains-on-the-

rise#:~:text=FinTech%20has%20become%20globally%20mainstream&text=of%20global%20 consumers%20have%20adopted%20FinTech.&text=In%20the%20six%20markets%20 surveyed,almost%20100%25%20every%20two%20years.

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Global Award Winners 2021

2021

AWARD WINNERS LIST Winners

52

Award Title

Aafiya TPA Services

Best Customer Service Insurance Provider UAE 2021

ACB Asset Capital Business Inc.

Fastest Growing Forex Trading Company UK 2021

ACB Asset Capital Business Inc.

Most Customer Centric Service Provider 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

Alizz Islamic Bank

Best Islamic Banking Brand Oman 2021

AsiaPay

Best Payment Solution Provider Asia Pacific 2021

AvaTrade

Best Forex Broker Ireland 2021

Axia Investments

Best Regional Forex Trading Platform MENA 2021

B.Grimm Power Public Company Limited

Most Leading Sustaibility Investment Company Thailand 2021

Banco de Fomento-BFA-Angola

Best Commercial Bank Angola 2021

Banco de Investimento Global

Most Trusted Investment Bank Portugal

Banco de Investimento Global

Most Leading Corporate Bank Portugal

Banco de Investimento Global

Fastest Growing Retail Bank Portugal 2021

Banco Industrial, S.A.

Most Effective Issuing Bank Guatemala 2021

Banco Santander Chile

Best IR Team Chile 2021

Bank Dhofar

Best Mobile Banking Application Oman 2021

Bank Dhofar

Best Commercial Bank Oman 2021

Bank Dhofar

Best Investment Bank Oman 2021

Bank for Investment & Development of Vietnam-BIDV

Best SME Bank Vietnam 2021

Bank of Ayudhya – Krungsri

Best Consumer Digital Solution Provider Thailand 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

BlackStone Futures (pty) ltd

Most Preferred Forex Broker South Africa 2021

BPI Capital Corporation

Best Investment Bank Philippines 2021

Bualuang Securities Public Company Limited

Most Trusted Securities Firm Thailand 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

Chinggis Khaan Bank

Best Investment Bank Mongolia 2021

Global Award Winners 2021

Winners

Award Title

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

Cumplo

Best Collaborative Financing Platform Chile 2021

Dai-ichi Life Vietnam – Sacombank

Most Trusted Bancassurance Provider Vietnam 2021

DLM Capital Group

Best Securitisation House Nigeria 2021

easyMarkets

Best Crypto Innovation By Broker UAE 2021

Ecommpay-UK

Best Payment Solution Providing Company UK 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

First Bank of Nigeria Ltd

Most Customer Trusted Bank Nigeria 2021

First Bank of Nigeria Ltd

Most Innovative Retail Banking App Nigeria 2021

First Capital Bank Botswana

Best Forex Rates Botswana 2021

First National Bank-Zambia

Most Admired Financial Services Brand Zambia 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

GLS Gemeinschaftsbank eG

Best CSR Bank Germany 2021

Gold-i Ltd-UK

Most Influential Fintech Company UK 2021

Greenstone Equity Partners

Best Advisory Service UAE 2021

Greystone Wealth Management

Best Discretionary Fund Management Group Great Britain 2021

Homes 4 Life Real Estate

Best Real Estate Residential Brand UAE 2021

HotForex

Best Client Services Company Global 2021

Inter-Horizon Securities

Most Trusted Advisory Services Provider Zimbabwe 2021

Intouch Holdings PLC

Best Technology Public Company Thailand 2021

InvestChile

Most Leading Investment Promotion Agency Chile 2021

Investment One Financial Services Limited

Most Innovative Financial Services Nigeria 2021

JFD Group Ltd

Best Forex Broker Europe 2021

Joyalukkas Exchange

Most Innovative Remittance App UAE 2021

KCB Group

Most Socially Responsible Bank Kenya 2021

KCB Group PLC

Most Outstanding Leadership in Sustainable Finance Africa 2021

KCB Group PLC

Best Customer Service Bank Kenya 2021 53

Global Award Winners 2021

Winners

Award Title

KDEDEC CONSULTANCY AND TRAINING COMPANY

Most Leading Consultancy And Training Company Turkey 2021

Khan Bank of Mongolia

Best Retail Bank Mongolia 2021

Krungthai – AXA Life Insurance PCL.

Best Companies To Work For In Asia 2021

LegacyFx

Most Innovative Forex Broker South Africa 2021

LegacyFx

Most Competent Trading Professionals Middle East 2021

LegacyFx

Fastest Growing Broker Europe 2021

Liquid Telecom-Kenya

Best Telecommunications Company Kenya 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

MauBank Ltd

Most Leading SME Bank Mauritius 2021

Maybank Kim Eng-Singapore

Best Institutional Broker Singapore 2021

Maybank Kim Eng-Singapore

Best Retail Broker Singapore 2021

Maybank Kim Eng-Thailand

Best Retail Broker Thailand 2021

Megaworld Corporation

Best Real Estate Developer Philippines 2021

MREIT,INC

Most Trusted Real Estate Investment Trust Company Philippines 2021

MetLife Emeklilik ve Hayat

Most Leading Life Insurance Company Turkey 2021

Metropole Property Strategists

Best Property Investment Consultants Australia 2021

Natal Joint Municipal Pension-Provident Funds

Best Retirement Fund Managing Company South Africa 2021

National Bank of Kenya

Best Digital Customer Service Providing Bank Kenya 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

One Asset Management Limited

Most Leading Mutual fund Management Company Thailand 2021

Pacífico Seguros

Most Leading Insurance And Reinsurance Company Peru 2021

Pangaea Securities Limited

Best Mergers & Acquisitions Advisory Firm Zambia 2021

Petronas Dagangan Bhd

Best Corporate Governance Malaysia 2021

Petronas Dagangan Bhd

Best IR Team Malaysia 2021

Petronas Dagangan Bhd

Best Oil & Gas for Retail & Marketing Malaysia 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

Proshare Nigeria

Most Reliable Financial Intelligence Services Providing Firm Nigeria 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

QInvest LLC

Most Trusted Investment Solution Provider Qatar 2021

QInvest LLC

Best Islamic Fund Managers Qatar 2021

RIF Trust Investments LLC

Best Global Citizenship & Residency Advisory Firm UAE 2021

Sberbank of Russia

Most Leading Financial Institution Russia 2021

56

Global Award Winners 2021

Winners

Award Title

SeABank

Best Digital Transformation Business Vietnam 2021

Shorooq Investments PLLC

Fintech Investor Of The Year UAE 2021

Stanbic IBTC Asset Management

Best Non Pension Asset Management Company Nigeria 2021

Stanbic IBTC Bank PLC

Most Leading Commercial Bank Nigeria 2021

Stanbic IBTC Pension Managers

Best Pension Fund Administrator Nigeria 2021

Standard Bank-Malawi

Best CSR Bank Malawi 2021

Steward Bank

Most Innovative Bank Zimbabwe 2021

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

THAI UNION GROUP PCL.

Best Group CEO Thailand [Food Industry]-Thiraphong Chansiri 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

Yapi Kredi Bank

Best Private Bank Turkey 2021

Zeepay

Best Mobile Payment Platform Ghana 2021

CALL FOR ENTRIES 2022 INVITING Financial Organizations

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Submit Your Nomination to Awards@financederivative.com OR Submit online at www.financederivative.com 57

Wealth Management

THE IMPORTANCE OF THE CFO IN INVESTMENT AND RAISING CAPITAL

T

he role of the CFO is comprehensive and complex, involving acute financial awareness combined with the flexibility to understand the contributions of each business department. However, where CFO’s are arguably the most valuable is in raising capital through investment. In any industry, the CFO will need to have the skills and creativity to translate data and metrics into an attractive business model that will attract investors in multiple stages of business development.

What is the role of the CFO in preparing for fundraising?

The CFO is the driving force behind fundraising efforts, providing the information and strategy necessary for raising capital.

They must meticulously study the financial reports of the company they are representing, ensuring that they are choosing

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the best possible fundraising strategy and planning an ambitious yet achievable future. The CFO will have a significant impact on the success of both investment pitches and general networking carried out by the company, as their credibility and capabilities will be considered a reflection of the business itself. The better the CFO is at the practical management of business finances and the presentation of the business in pitches, the higher the chance of securing investment.

How does a CFO raise investment?

There are numerous methods that a CFO can use for raising investment. They are a financial leader who needs to be able to add value to the company it represents through not only effective financial management, but also by creating a clear vision for the company’s future. The CFO is also heavily involved in the process of

planning and delivering pitches to potential investors. As a result, they need to also have exceptional presentation and communication skills, alongside their ability to assess the potential development of businesses in the future.

What are the differences between funding rounds in investment?

There are five main funding rounds in investment – Pre-seed, Seed, Series A, Series B, and Series C. Sometimes there will also be Series D and E, that aim to accomplish similar goals to Series C. Pre-seed: Pre-seed funding is usually sourced from the personal resources of the business founder(s), such as personal savings, loans from family or friends, or crowdfunding campaigns. However, more local angel investors may also become involved

Wealth Management in this stage of funding if they see significant potential.

Seed: The Seed round of funding comes after the initial business idea is backed and has enough momentum to start preparing and carrying out the logistical side of the business. This is the first official round of funding, and it is usually most attractive for local angel investors and equity crowdfunding. Some venture capitalists may also become interested in this round depending on the prospects of the business in question and its financial projections.

Series A: During Series A funding, investors will be seeking out established businesses that can demonstrate early success and have ambitious goals for the future. They need to prove that their business has an established customer base, consistent revenue, and a plan for the generation of long-term profit. Series A funding stages are more likely to involve venture capitalists, alongside some angel investors. Many companies are now choosing to involve equity crowdfunding in this stage too.

Series B: Series B funding is concerned with taking a business beyond the development stage and into the growth stage. Investors are seeking well-established companies in this stage, with higher valuations and clear strategic planning. In this stage, a new category of venture capital firms who specialise in later-stage investing will also become involved.

Series C: Series C funding is directed towards businesses that have already found success and need funding for expansion into new markets, new products, or even for the acquisition of other companies. Investors help companies to scale their vision for the future. There can sometimes be additional rounds D and E which aim to accomplish similar goals.

in particular, faced several rapid challenges, including changing its systems, processes, and technology in an overhaul aimed at facilitating a dramatic increase in delivery services and online purchasing. These companies now need to build the ability to rapidly adapt as one of their core functional capabilities as the world starts questioning what post-pandemic challenges we will face.

Investing in the core functional capabilities of a business requires effective financing.

The CFO should already have an established understanding of how the different departments in a business function – they need this information to create comprehensive reports and pitches for investors, so are in the best position to direct this capability growth.

How can a CFO help build core functional capabilities in a business?

Capability building has become a more important role for CFOs, particularly in the wake of the Covid-19 pandemic which destabilised many businesses. Food retail,

Mohamed Chaudry, Interim CFO Seajet Systems

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Technology

- How New Tech Can Transform Old Roles

T

he advancements in technology and digitisation across all sectors of business have come on tenfold during the last decade. Gone are the days of manual finances, heralding an era of automation, technological advancements, and digitisation.

Finance digitisation can revolutionise any finance or accountancy department, and one of its many benefits is that it can transform individual roles. One of the things we have been seeing in recent

years is a sea-change in the types of jobs that are coming to market and the duties they have to perform. After all, jobs such as app designer, blogger or UX designer didn’t exist a few decades ago. Within finance, a similar revolution has taken place. Given this seismic change in job roles and emergence of new finance considerations, it’s worth taking a look at how digitisation can aid finance departments and the wider business.

- what is it?

What we’re really talking about here is the widespread adoption of technology in finance and in particular web 2.0 and SaaS (Software as a Service) systems.

Twenty years ago, you would have been hard-pressed to find any company using a system delivered through a web browser with standalone, best-in-class apps.

Typically systems would need users who had been specially trained, system man-

agers to keep them up and running and expensive upgrades if you wanted to do anything outside of the standard.

60

However, over the past decade or so, SaaS systems have become the norm and now, it is difficult to find businesses that host their own finance software. Solutions now tend to emphasise user-friendliness, integration and more of a participatory culture. So when businesses talk about finance digitisation, they’re really looking at the impactful moments that technologies such as SaaS, Apps, and mobile devices have had on accountancy and the wider business.

Technology has not only changed the systems we use, it has also transformed the way many people do their jobs - and finance is a perfect example. Let’s dive deeper into some of the roles that have been forever changed and how these roles could continue to transform in the future as we continue to innovate.

The expenses clerk The expense clerk’s role is one that may either exist exactly the same as before or may have disappeared entirely, depending upon the level of finance digitisation a company has committed to. In the 2000s, almost every company was using a paper-based expense process. Some of them may have utilised a ‘fancy’ spreadsheet to send it through to finance, but you can bet that it would have been printed out (with receipts attached) and then manually entered into a finance system and payments processing portal.

Still sound familiar? Don’t worry, many companies are still using this method even though there are now technology-based alternatives. In fully digitised finance teams, this role often no longer exists, or has been absorbed into another job role and completed through a dedicated application. In many cases,

Technology any file maintenance has also been eradicated simply because everything is held online and with modern integration, the payments go directly into the system.

This is one area where technology in finance has totally transformed a role, and the ‘expenses clerk’ of today is much more likely to be focusing on higher-level tasks rather than the manual, repetitive roles they may have previously been used to. However, many companies haven’t adopted a tech solution for expenses through a common misconception that it will be too expensive, or complicated to implement.

physical statements long after they were really needed. Many would argue that the emergence and competition from digital-first challenger banks was the driver

The sales manager You wouldn’t expect finance digitisation to have any significant effect on the sales manager, but you would be surprised. With today’s technology solutions, rules can be applied to ensure that the sales manager only ever has to deal with things that are outside policy.

For example, they aren’t now having to spend their time checking that someone has booked a room, paid for a meal and taken a train if all of these are within policy limits. Instead, it is far more efficient for the manager to only look at items that are either outside of the company set limits or, use integrated reporting to spot trends and issues. This allows their time to be freed up so that they can manage their sales team, rather than acting like a parttime expenses clerk.

Bank reconciliation clerks Any traditional accountants reading this will know exactly what this person did and may well be thinking back to a time when they carried out this role in the past. A bank rec clerk would have been responsible for taking paper bank statements, matching up transactions on the main system and ensuring that the bank accounts matched those shown on the hard-copy statement.

Compared to other organisations, traditional banks are generally recognised as slow adopters of finance digitisation and many persisted in sending out

that forced the highstreet firms to really grab a hold of digitisation. That said, this transition has known slow progress.

Over time, we reached the stage where companies could download a statement, however this was typically a simple PDF or CSV file with no real application. Next, software appeared that would allow the file to be uploaded and matched to the main system. Now, intuitive SaaS systems invariably offer bank links that download transactions and automatically enter items where they match predetermined rules. This has paved the way for a more paperless model and much of the filing and reconciliation work has disappeared.

Of course there will always need to be a human eye to manage exceptions and anomalies, but to a certain extent, AI is capable of taking that way.

that significant amounts of this manual labour has now disappeared, leaving teams to be leaner but also able to concentrate on the things that really matter to the business. Some roles have almost disappeared, some have been radically altered and some are brand new, but what’s clear is that so many roles have been changed for the better by technology in finance.

And one thing that is guaranteed – there are more changes to come!

Changing for the better There’s one theme that runs through all of these examples and that is the reduction in manual processing. Previously, people used to spend hours obtaining information, keying into systems, and then formatting reports so that managers could do their jobs. Finance digitisation has meant

Yannick Van Looy, Territory Manager UKI & Nordics, Rydoo.

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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.

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Check us out at: www.legacyfx.com 62

Technology

HOW VIRTUAL REALITY AND DIGITAL TWINS ARE TRANSFORMING TUNNELLING

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ew tunnelling technology company hyperTunnel is revolutionising an industry which has seen little in the way of fundamental change in 130 years. Through technology transfer and digital transformation, this British startup is completely changing the way underground spaces are built, maintained, enlarged, and monitored. As a result, tunnelling projects are set to become more sustainable, less expensive, less time-consuming and commercially less risky – significant advantages when the world’s growing population has increasing need of underground transport and utilities infrastructure. hyperTunnel’s innovative new approach is made possible by adapting technologies from industries such as Formula 1, mining, oil and gas, chemistry and surveying. This lateral thinking comes directly from the company’s leaders, who possess expertise not only in civil and structural engineering, but also a broad range of other industries.

In fact, hyperTunnel co-founders Steve Jordan and Jeremy Hammond first saw the need to modernise tunnelling when jointly exploring a new approach to tidal-range energy. My professional experience encompasses nearly 20 years in top-level motorsport, working with the most advanced race car simulations, building digital twins for vehicle development and race strategy. And the chair of hyperTunnel’s technical board, Peter O’Riordan, led development of London’s Crossrail 2 scheme, the London section of the HS2 project, and the redevelopment and refurbishment of London’s St Pancras Station as part of HS1.

The founders and staff majority-own hyperTunnel. Following a successful convertible loan note (CLN) offering earlier this year, the company is seeking further large-scale investment to develop the business globally.

Swarming hyperBots hyperTunnel’s most radical departure

from convention is perhaps also its most surprising: whereas the age-old approach is to dig a hole and then build the tunnel, hyperTunnel first builds the tunnel, then digs the hole. The tunnel’s structural shell is constructed by sending hyperBots (semi-autonomous robots) into horizontal direction drilled (HDD) bores, where they perform tasks including data-gathering, drilling, spoil removal, and the deployment of composite construction material in an additive manufacturing process using the same principle as 3D printing.

By using swarm construction techniques, hundreds or even thousands of hyperBots can work simultaneously at different locations, with the ability to pass each other to move freely. They work to a construction plan created by Artificial Intelligence which provides all key construction data, such as material strength, chemical volume, and location.

This radically new approach results in extremely high productivity.

VR and a digital twin All this is made possible by first gathering data to create a digital twin of the tunnel. This twin can be viewed in great detail and high-resolution through virtual reality (VR) on computer screens. And by using augmented reality (AR), it could be possible to attend a meeting in a room thousands of miles away from the tunnel to view its interior and see live data about the condition of the structure and surrounding geology. But we’re getting ahead of ourselves, because VR’s greatest value is in the preparation phase, and there’s nothing more important. As I learned in motor racing: ‘Remember the 63

Technology

Five Ps: prior preparation prevents poor performance!’

Preparation entails acquiring a detailed understanding of the ground through which the tunnel will run: what the geology is, how and where this changes, and where there might be fissures, voids or water. Such information is traditionally obtained by dropping vertical boreholes along the planned tunnel path up to 500 metres apart – but because geology can change over such a distance, this method forms an incomplete picture, putting the project at risk of unanticipated difficulties and delays.

With the hyperTunnel method, however, multiple parallel core geology samples are taken along the entire path, by locating HDD test bores at the centre of the tunnel. Additional data is gathered by running a proprietary 3D ground-penetrating radar (GPR) system along the bores. Seismic, tomographic and thermal imagery data can also be meshed together, where necessary, to enhance VR visualization.

This comprehensive, multi-layered information-gathering means it is now possible, for the first time, to form a complete, data-rich picture of the tunnel’s proposed

64

path. This data can be interrogated in the virtual world by ‘visiting’ the tunnel’s digital twin. The VR can also be used for training operatives, eliminating the cost and risk of learning tasks such as spraying concrete linings or injecting exactly the right mix of ground-stabilising chemicals along every centimetre of the tunnel’s path. This is important because tunnelling is a low-margin business which cannot afford mistakes.

The digital twin later serves another important function, as a ‘single truth’ database of construction details which will enhance asset maintenance and management. Through AR and VR, engineers will be able to see not only the tunnel’s construction and surrounding ground, but also the precise location of hidden service facilities such as cables and wires.

tunnel construction and repairs for the maintenance and improvement of railway infrastructure, which includes approximately 650 Victorian-era tunnels across the UK. hyperTunnel’s methods are expected to bring significant cost and delivery-time improvements, as well as greatly reducing inconvenience for passengers. hyperTunnel expects its IP-protected system to become a core part of how the world’s biggest tunnel builders and maintainers operate. The company currently employs a team of more than 30, mostly engineers, at two sites in Hampshire, England. One of these sites, the hOLE (hyperTunnel Outdoor Learning Environment), is currently conducting scaled concept testing. Work is expected to start on the company’s first completely new tunnel build by the end of 2022.

Maintaining older tunnels too It is not only the building of tunnels that hyperTunnel’s methods will improve. The maintenance and refurbishment of tunnels will also become more efficient - valuable, when you think how many old tunnels are in use around the world. Earlier this year, hyperTunnel won a contract to work with Network Rail on non-disruptive

Patrick Lane-Nott, Director of Engineering, hyperTunnel

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Finance

How European Merchants can take advantage of QR Code Payments uch of the focus in Europe’s payments space has recently been directed towards QR codes, given their broad implementation in restaurants and bars during the pandemic. However, QR - ‘quick response’ - codes are all but new and the value they can add for businesses ranges far beyond the possibility of reading a menu on your phone and interaction-free ordering in the hospitality sector.

From East to West QR codes function in a relatively simple way: the black squares and dots together represent certain pieces of information, for example, a URL. After scanning it with a smartphone, the code will trigger an action on the device which redirects the user to a portal or landing page where they can make a payment. Alternatively, and as has been common through platforms such as WeChat Pay for roughly a decade now, the QR code initiates a payment against a stored card, bank account or wallet balance and funds this to the merchant account. This method of making direct payments through QR codes is already common throughout Asia. But QR code payments have only recently been deployed in Europe, primarily as a means of directing users towards a digital checkout experience where customers pay using a mobile wallet, card, or alternative payment method such as PayPal.

How will QR codes be used in the future?

QR code deployment in Europe has predominantly been as a vehicle to initiate digital checkout experiences from a mobile 66

device – rather than the payment method itself. So, it’s unlikely that QR codes will serve as the predominant payment method over cards or digital wallets, but rather they will continue to be employed more broadly as a payments mechanism, allowing users to complete a checkout experience and select their payment method of choice. For instance, a small business owner without an in-store POS terminal could use QR codes to host the payments experience on the customer’s own device, redirecting them towards an online or inapp checkout experience.

Nevertheless, this doesn’t mean that QRs will never be deployed as payments methods themselves in Europe – in fact they already are. Rising numbers of Asian students and tourists throughout Europe present businesses with a growing opportunity that cannot be overlooked. Their favour – and consequently larger shopping baskets – can be won by presenting them with the option of QR code-based payments through the major Asian ‘super-apps’. As a result, we are increasingly witnessing shops and vendors in principle European cities displaying small WeChat Pay or Alipay QR code tiles in order to offer these users’ preferred checkout experience.

Additionally, technological improvements in point-of-sale hardware offer an insight into how businesses are developing their methods of accepting transactions. Until recently, the majority of Europe’s POS terminals were of typical Ingenico or Verifone make, featuring small screens and a physical keypad. However, nowadays merchants are moving towards the adoption of android-based terminals with large touch screens - ideal for easily displaying and scanning QR codes. These

enhanced visual displays present new opportunities for small businesses to use QR codes to offer expanded in-store options for customers, such as BNPL (Buy Now Pay Later) and even Open Banking. That being said, it is vital to strike a balance here, since offering too broad a selection of payment channels could negatively impact the positive checkout experience by confusing the customer.

Finance Improving business adaptability SMEs will witness drastic changes in their ability to adapt to a plethora of circumstances by allowing the processing of digital payments with limited facilities.

Small enterprises such as street vendors will no longer be dependent upon POS hardware, or even electricity, as they will easily be able to manage payments through the use of a smartphone, or even a simple printout presenting the QR, as is becoming common practice across India with street vendors increasingly accepting Paytm. This will vastly improve businesses’ versatility, making them adaptable to almost any setting, with instant portable payment solutions being readily available, and access to a smartphone on both sides of the transaction being the only condition.

Owing to the extraordinary adaptability and applicability of QR codes, their

expansion outside of hospitality and into a variety of industries is highly anticipated.

One particular example of this innovation is Aer Lingus, which now offers QR code payments for customers paying for extra luggage at the gate. Some universities are now even including QR codes on student letters through which they can pay their tuition fees. The opportunities appear to be endless, and since consumers are becoming more comfortable with their use, businesses are presented with a chance to tap into new possibilities.

allowing consumers to pay the way they want to and enable adaptability to different environments. This will empower businesses to expand their payment offerings whilst complementing existing options, providing ever more efficient payment experiences for their customers. Businesses that successfully deploy QR code payments will enjoy increased flexibility and more opportunities to win customers via the increasing number of digital revenue streams.

New and improved customer experiences QR code payments are a revolutionary step towards tailoring the customer experience that businesses can provide.

QRs will lead the way for businesses to further customise their checkout options,

Alan Irwin, Head of Product and Customer Solutions at Global Payments

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Wealth Management

W

hether it’s building wealth or any other area in life, you have a choice. You either do it by trial and error and waste a lot of time, effort and money, or you educate yourself and save a lot of time and pain. Some people like a bit of pain to push them into action but think about it when learning to drive. You don’t take driving lessons before taking your driving test. Without any lessons, you will most likely crash at some stage. When you educate yourself, you minimise the risk of a crash and make success a lot more likely.

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The same goes for investing in the stock market. Most people start stock market investing without knowing the basics. They buy, hold and pray without any real rules or research of when to enter or exit an investment. They invest with no understanding of how or even where to start. I was no different. But of course, I didn’t know that.

And, of course, I thought I knew better. So, I ended up £100,000 in bad debt sleeping on my brother’s floor for six months. Only instead of buying, hold and praying, I did something much worse. I defied the two golden rules of trading, which are:

1. Cut your losses short 2. Let your profits run

Wealth Management Instead, I decided to cut my wins short – I was so happy to make a profit I took them immediately. When I was in a losing position, I didn’t enjoy the feeling and was paralysed, hoping that it would turn around, long enough to let my losses run.

So basically, I managed to do the exact opposite of what I was supposed to do. But without education, how was I supposed to know this?

Why is it that we think we can just put some money into a broker account and instantly make money? Imagine if we did that with driving. “Hey Mum & Dad, I’m sixteen today, so can I borrow your car to drive on the motorway?” It would never happen. Why do we think we can do this with our investments? Why do people go to university for 3-4 years, study to become a doctor or dentist for 5-7 years or an accountant for four years … and yet we expect to be a Stock Market wizard within days or weeks without ANY education?

There are rules to any endeavour. You need to know the rules, and you need to follow the rules. With driving, you need to understand how to accelerate, decelerate, indicate and steer, manage the gears, look in several mirrors and know the highway code and signs. I just realised how much simpler trading & investing is in comparison.

Where to invest – are you interested in stocks, precious metals, commodities or Cryptocurrencies? If stocks, which Stock are you entering and why? If Crypto, do you know enough in such an unregulated or volatile asset class? Is it on a technical basis where you like the chart pattern or a fundamental basis where you think the company has long term growth potential?

myself to do the right thing when the Stock is falling. That’s why I prefer entering with an automatic order below my entry point, called a ‘Stop Loss’ or ‘Limit Sell Order’ in some cases, to minimise my losses. Left to my own devices, I might very well watch the investment fall, hoping that it would turn around.

How much to invest – this is part and parcel of keeping risk low. I ensure that by the time the stock price falls to my predetermine stop loss, I will only be risking 1% of my portfolio. So, if I have £10,000 to invest, I would only risk 1% or £100 on any one trade. It’s a mathematical equation EVERYONE should know before they start trading, and very few people know this equation, and even fewer utilise it.

When you ask most beginners what they are looking to achieve, they will tell you about the profits they want to make. When you talk to any professional investor, they will tell you about the money they want to keep safe, i.e. the risk management. Keep losses small, and the wines will take care of themselves. So, if I am risking 1% of my portfolio, how much am I looking to make?

Any profitable trader knows that the Risk:

Reward ratio generally starts with a 1:3 Risk-Reward Ratio. That means you risk 1% to make 3%. That means that for every 100 USD I’m risking, I will potentially be able to make 300 USD. That is how you trade. It is all about probabilities. And if you learn how to do this properly, you can do this all day long and the rest of your life.

So that means you can, with a little bit of education, learn how to trade and invest in a very safe way. That is why education is key to growing your wealth and your personal finances.

With the investing world now taking advantage of Cryptocurrencies, education couldn’t be more important.

I have benefited greatly from Cryptocurrencies, and I have gained, in some instances, tens of thousands of percentages on some of my Crypto positions. But, I am educated, and I have been

What price to get in at – I prefer buying low, so I set an order in advance and allow the price of the Stock or Crypto to fall to my entry point. Sometimes I will wait weeks, even months, for this to happen.

But I wait because those are the rules.

When to exit with a profit – I know in advance when I am exiting the trade or when to exit with a small loss. But I don’t trust 69

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Wealth Management doing this for over 21 years now. I stick to the rules I set for myself, and I do not deviate from the above key points.

What most people forget is that everything worthwhile takes a bit of time. The problem I see is most people are looking to get rich quick. I know trading and investing in the Stock Market, and now the Crypto Market, you will get “rich”, but not quick (in most cases). And do not let this Cryptocurrency hype take over you either. You will hear all the success stories, but no one is talking about the horror stories of people buying ‘Meme Coins’, like Dodge with credit cards and then when it crashes 50%, they sell and lose it all, and now in even more debt!

Trading and investing can change your life, and as for many of our clients, myself included, I can live from my trading and investing; I don’t need anything else. Now we can choose what we do with our lives, and that gives us freedom and choice. This is what financial education is all about. Learn how to grow your money, learn how to take care of your finances, and you will never need to worry about money again.

About Marcus de Maria Renowned stock market and wealth educator, investor, and entrepreneur Marcus de Maria is the founder of Investment Mastery, one of the world’s leading investment and trading education companies.

A sought-after keynote speaker on wealth creation who has shared the stage with some of the world’s leaders in business, success and philanthropy, Marcus has gained mutual respect from many high profiled individuals including Richard Branson, Robert Kiyosaki, Tony Robbins and Brian Tracy.

Marcus is also the author of three books including The Lunchtime Trader, a guide on how to build indestructible wealth by trading stocks for just 20 minutes a day.

After experiencing financial difficulties, Marcus went from being £100,000 in bad debt and sleeping on his brother’s floor to taking control of his financial future and learning strategies to become financially fit, building multiple pillars of wealth for security. He now uses all he has learnt to help others follow this path of wealth creation.

Marcus de Maria, CEO Investment Mastery.

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Banking

BANK

levelling

B

anks are investing heavily into new digital channels and platforms and corporates for the most part have been adopting these new and inno-

vative solutions more readily.

Whilst the pandemic has been the main initiator of these changes, countless corporates are still trapped in laborious, manual and paper-based processes whilst sacrificing transparency, efficiency and the agility that comes with the use of innovative digital solutions.

Some of the main instruments relevant to treasuries; letters of credit (LCs) and bank guarantees including standby LCs and rental guarantees have been for the most part paper-intense despite their ubiquitous use across all business verticals and to this day use a lot of these antiquated processes.

In this piece, we will address how corporates today are able to modernise their communications with their banks moving away from the existing manual processes and leverage modern initiatives that allow them to streamline and manage their entire workflows and working capital efficiently.

What are bank guarantees used for?

Although letters of credit and bank guarantees serve different purposes, their fundamental difference lies in the fact that a letter of credit ensures that a transaction goes ahead as planned, whereas a bank guarantee reduces any loss incurred if the transaction does not go to plan.

Bank guarantees are commonly used in trade finance. They offer numerous benefits, protecting both importers and exporters in cross-border trade transactions. Chief among the benefits of using bank guarantees is that they grant an absolute guarantee of performance and payment to the exporter in international trade deals.

Traditional risk-related business activities can be taken care of by taking out bank guarantees. The importer is much more likely to negotiate favourable deal terms as the exporter no longer bears any payment default risk.

Bank Guarantees are often used in trade financing when buyers and sellers are purchasing and selling goods to and from overseas

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Banking

K GUARANTEES:

g up in the new digital age.

customers with whom they have no established relationship, in which case a bank guarantee is designed to reduce the risk which is borne by each party to a transaction.

Different types of guarantees are used by different industries.

And some corporates can issue multiple types of guarantees using one bank account. Let’s examine some of the different types of guarantees: A performance bond is an agreement under which the issuer guarantees the fulfilment of obligations that the other party in the agreement has to meet. It’s also called a contract bond and is typically issued by a bank or an insurance company to make sure a contractor completes designated projects.

For large scale infrastructure projects, we have another type of guarantees called bid bonds. This is often used to guarantees compensation to the bond owner if the bidder fails to begin a project.

Some of Bolero’s MNCs also take advantage of rent guarantees which principally protects landlords against loss of income if a tenant falls behind or defaults on rent payments. Landlords typically pay for the premiums, though it is also possible to require the tenant to pay for it instead in extra rent or if the lease specifies it in writing.

Standby letters of credit are often used to facilitate international trade between companies that don’t know each other and have different laws and regulations. Standby LCs guarantee a bank’s commitment of payment to a seller in the event that the buyer–or the bank’s client–defaults on the agreement. In this case, both the buyer and seller receive their goods and payments respectively, however Standby LCs do not guarantee that the buyer will be happy with the goods.

What is the current process of application?

Treasurers are finding it exceedingly difficult to continue to use manual and, in some cases, multiple complex workflows that 73

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Banking involve various systems and many points of contact. This is especially true in the management and optimisation of credit lines and bank guarantees with multiple Banks.

Let’s look at the steps involved in the issuance of a bank guarantee: Step 1 – Agreeing on the text of the guarantee The parties involved in the transaction need to make sure the text of the guarantee is vetted and agreed between the partied. This usually involves Multiple stakeholders both within and outside the bank to agree on the guarantee text.

This is now mostly done via email and phone calls.

Step 2 – Applying for the guarantee This is an antiquated step that requires a physical visit to the bank involving many paper documents and physically signatures.

Most Banks do not have portals that digitise these processes for their corporates as the cost of implementation for is usually prohibitive, usually in the millions.

Step 3 – Document pre-checks This is another long drawn out process which usually is a rate limiting factor as availability is often time limited involving Customer existence, KYC status, Guarantees text checks.

Then you have intensive checks involving multiple stakeholders – trade advisors, limit management, front-office, relationship manager and most of the communication here is mostly manual via email and phone calls.

Step 4 – Processing & Delivery In order to process the bank grantee, the process once more is extremely manual involving data entry and verification and when done, printing the said documents and delivery through couriers.

space become increasingly popular as the pandemic has put tremendous strains on the supply chain. Here at Bolero for example, we have been supporting many corporates leverage the true power of digitisation by allowing them to manage their transactions across the supply chain, reconciling all their transactions (usually handled by multiple banks), streamlining communications with their banks, and consolidating their guarantees on a regional or even global scale.

With the increased adoption of digital trade finance solutions by banks across the globe as well as the improving interoperability between these solutions, corporates can easily communicate with all their banks and finally move away from antiquated paper processes and multiple communication channels.

Throughout the entire process, communication between the various different stakeholders is disjointed and Reconciliation of funds becomes extremely difficult to track.

Improving the process by digitisation Over the last 18 months we have seen the adoption of technologies in the trade

Jacco De Jong, Head of global sales, Bolero International.

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Business

Natural gas or green hydrogen heating? It’s not that simple - Darren McMahon, Market Director, of heating systems manufacturer, Viessmann 76

G

iven that almost 40% of global energy-related greenhouse emissions stem from buildings and nearly 30% of those from heat and power, it’s clear that cleaning up the way we heat our homes and workplaces is an urgent priority. How that should happen, though, is a topic that continues to stimulate robust debate.

There are many different approaches and technologies that are either already available or under development which promise to bring substantial benefits.

The danger is that this plethora of options brings analysis paralysis. Governments, industry and consumers may be tempted to delay taking certain decisions now, for fear that this may preclude another, more impactful course of action a little further down the line.

But we don’t have the luxury of being able to wait to see which green technology proves the most effective in the long term.

Our climate goals are necessarily urgent and ambitious; Germany, for example, has committed to reducing its heating sector emissions by a further 40% on current levels by 2030, compared to 18% over the last decade, while the UK’s recently published Heat & Buildings Strategy aims to achieve substantial carbon reductions from heat in buildings during this decade in order to reach net zero by 2050.

Success depends on our ability both to get people on board and to optimise the whole energy system; a narrow focus on sectors or heating technologies in isolation is a cul-de-sac. At the same time, we really need to understand the issues in full, within the context of the entire energy system. Partial analyses and isolated measures, for example focussing on enduse energy efficiency of products alone, are unhelpful.

The built environment is heterogeneous; there are no general-purpose solutions.

A one-sided focus on switching to electric heat pumps, for example, ignores the technical and economic hurdles involved, as well as the overall load imposed on the energy system. In Germany, where the

Business electricity supply is transitioning from coal and nuclear to wind and solar, it has been shown that a mix of electrons and green molecules offers the best solution for heating. This is despite the fact that, on paper, heat pumps have a better enduse efficiency than a boiler run on green molecules.

One reason for this is that each heat pump adds load that must be covered by the electricity system, including in periods of low wind capacity. Energy demand in the heating sector is characterised by seasonal variations when winter energy demand will be three to four times higher than summer, plus rare periods of extreme cold (‘1in-20 winters’). While gas infrastructure is designed to meet peak demand, seasonality represents an enormous challenge for national power supplies once heating is electrified, even if efficiency is optimised.

It is therefore better to reinforce gas and electricity infrastructure in tandem, rather than remove gas connections to buildings in favour of electricity.

We need a balanced mix of energy sources and technologies to meet the current and future needs of all users, while also ensuring we move forward on all fronts rapidly and simultaneously. In practice, that means a combination of decarbonised electricity and decarbonised heating fuels, including hydrogen. This clean gas requires fewer adaptations to infrastructure and appliances than other green fuels and has the potential to be entirely carbon neutral. It’s also relatively easy to transport and store, meaning it can be exported from regions with the right climatic and geological conditions to generate the renewable electricity used to make green hydrogen, and carried to the consumer via existing gas pipelines. And it can be blended with natural gas for use in conventional boilers.

Using existing gas infrastructure in this way means hydrogen can reduce the total cost of heating decarbonisation, reducing financial burdens on households and governments and making it more accessible to low-income groups.

For all these reasons, hydrogen can make a significant impact on greenhouse gas emissions from heating almost instantly, with minimal expense and disruption. And, on the other side of the coin, the heating sector can provide immediate security for investments in hydrogen production, transport and distribution, bolstering its ramp-up in other industries. In Germany, the gas grid can already directly absorb about 70% of the government’s 2030 volume target for domestic production of renewable hydrogen. Governments everywhere should today consider mandating boilers that can accommodate a minimum 20% hydrogen element in the gas they burn.

Renewable hydrogen is now widely recognised as a crucial building block for achieving climate goals, complementing efficiency measures and other renewable energies. And the ramp-up of the H2 economy is gaining pace: the EU and UK alone currently plan to generate more than 115 GW of electrolyser capacity for clean, electricity-based hydrogen by 2030 - and this is just the start.

Given the rapidity of developments around green hydrogen in recent years, it is perhaps unsurprising that there are still some unknowns around its overall costs and potential impacts. More research is urgently needed. However, it is already clear that policy makers should be seeking to provide flexibility to optimise the hydrogen value chain and the overall energy ecosystem. That means keeping our technology options as open as possible and remaining mindful of all the numerous, evolving and occasionally counter-intuitive factors at play.

Viessmann is developing a gas-condensing boiler capable of operating with 100% hydrogen.

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SPECIAL FEATURE

I

n recognition of CI Capital Asset Management success in the Egyptian markets, and for the fifth consecutive year, we are honored to receive this annual award that recognizes organizations and individuals who have achieved outstanding success in specific areas.

Amr Abol Enein, CEO of CI Capital Asset Management, commented: “Receiving the highest votes for the fifth year in a row, reflects our continued competitive presence in Egypt’s investment management space achieving the highest returns on all categories of products”.

Abol-Enein added “We are very proud of this new achievement, which came as a result of CI Capital Asset Management’s team of professionals and the company’s ability to achieving continued real value added over the years to its customers and its business partners. These awards and international recognitions come as a result of the efforts exerted by CI Capital Asset Management’s team of professionals and the company’s ability to manage all types of portfolios and mutual funds and to introduce newly developed and diversified financial instruments in the Egyptian market with continuity and consistency of achieving the highest returns on all categories of products, outperforming the market indices and peer funds’ performances in terms of returns and rankings, in addition to achieving continued real value added over the years to its customers and its business partners”. we are very proud of the continuation of the unprecedented and superior achievement in the history of mutual funds in the Egyptian market as we strive to maintain our top unmatched performance, increase our market share and total assets under management, as well as continue to introduce innovative products.

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Technology

Why the future city is AI

T

he world around us is getting smarter every day. From the way we work to the way we travel, from our homes to our offices, technology can be found both at the forefront and in the background of our day to day lives. As this continues to evolve, what does it mean for our future cities?

However, flexibility will be key for this promised land of efficiencies and technology to run smoothly, as authorities continue to support the needs of a developing population while staying on budget.

In Edinburgh, for example, CGI is working with the council to develop a smart city system that utilises AI, Internet of Things (IoT) and analytics technologies to support the services and businesses within the community.

Business and citizen experience of the smart city

Simply put, the future is smart. Smart cities are soon to become the norm to offer a more efficient and connected environment for citizens, visitors, residents and employees alike. And what’s more, artificial intelligence (AI) is playing a huge role in how these cities will function.

What would an AI-driven smart city mean for business? The smart city can interact and support various businesses, from shops to cafés, offices to restaurants - and everything in between. While this may sound simple, when you consider the vast and varying needs of one business, then multiply that by dozens on one street, then by dozens of streets, and you begin to build a picture of how diverse and complex a network that is needed.

The smart city affords organisations a smoother process by harmonising interconnected aspects such as transportation and logistics. Our intelligent transport solutions, for example, work to improve customer service and loyalty and reduce customer churn and costs.

From mitigating public transport delays to redirecting traffic to improve parking situations, a smart city should work to harmonise the environment around it.

Local authorities across the UK want to unlock the value of future-thinking and sustainable smart cities and connected communities. This can be achieved through a range of solutions which help them to make step changes in citizen centricity, increase improvements in operating cost and productivity, and establish innovative business models and improve environmental outcomes.

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However, the role of AI and machine learning (ML) in supporting businesses can go beyond the expected. Utilising factors such as gamification can increase footfall, direct customers, and encourage loyalty from clients will all support and expand the smart city concept.

What’s more, for the environmentally-conscious citizen, the integration of business and smart cities can unlock further emission reductions by utilising smart tech such as AI and IoT to limit waste. From issuing immediate back-office processes such as invoices to better storage through the cloud, an organisation looking to reduce waste and emissions can be more eco-savvy in a smart

Technology

environment. Our digital ecosystem is designed with our physical ecosystem in mind. By using more tech, there is an increased drive for technology and an increased opportunity to increase the move to green and renewable resources.

The foundations of change: AI and ML On a more granular level, it’s important to consider what AI and ML can do to support the individual. AI and ML have the power to keep learning, adapting, and evolving, which is why they are integral in creating smart cities.

As the needs of a population grow, the offerings of a city begin to shift. I’m sure most of us have encountered outdated infrastructure in our time, so we all understand how frustrating this can be.

As our wants, needs and demands become more immediate, a slow city with an unusable infrastructure can go from inconvenient to outdated and unusable, and fast.

By utilising AI and ML as a baseline

function early on in the creation of smart city infrastructure, you can embed a certain level of flexibility – essentially allowing the city to breathe and turn more comfortably in its natural direction as it begins to change. What’s more, AI and ML can be integrated with several other technologies to provide more specific services, meaning they can be built upon and improved continuously as and when needed.

Benefitting the end-user Creating an infrastructure with this level of flexibility goes a long way in supporting the citizens who live and work there. It creates a smart environment that meets the needs of those in it and ensures they are supported through efficiently operating services. This also ensures that plans can be applied to different towns and cities in a tailored way, creating a blueprint that can be implemented in a simple and straightforward way.

A smart city should always be designed

with the end-user in mind; it’s critical to keep their needs and wants as a priority, while ensuring businesses and key infrastructure are catered to seamlessly. The goal is to develop and nurture an ecosystem by creating an efficient process for everything from public transport and council services to the shops and offices we spend our time in.

AI and ML have a huge part to play in the future of our cities and our communities.

As the world gets smarter, these tools allow flexibility for our cities to grow, and the tools needed to support everyone who uses it.

Sumant Kumar Director of Digital Transformation CGI 81

Banking because they want to enter the industry, but because it’s a natural extension of their product offering. Take Tesla Insurance for example. Through their new insurance extension, Tesla can offer auto and insurance customers a frictionless buying experience. Partnering with BaaS providers also opens new revenue streams - something very valuable post-pandemic.

BaaS allows non-banks to migrate to a business model which integrates digital banking services directly into their product offerings. This enables them to diversify their offerings and reach more customers as a result. When systems communicate via APIs and webhooks, customers can access digital services through any app or website they’re using.

“Everyone can be a fintech”.

Behind the Banking-as-a-Service Boom.

I

n the age of modern business, nearly everyone is becoming a tech company. We’re all familiar with this idea but increasingly, we’re operating in a world where most organisations can become a fintech too.

Covering a range of specialties, fintechs can be defined as any entity which provides the offering of financial institutions to the hands of everyday people.

This term is growing beyond traditional banking providers as we are seeing non-financial companies open up their doors to financial services - and to great success.

So how did we get here?

FINTECH

To meet consumers’ growing search for financial convenience, it became key for services to become more accessible. Cloud technology helped drive this. More specifically, its emergence has allowed banks to service their banking licenses to non-financial companies or non-banks. Banking as a Service (BaaS) was spun out of the possibilities that were brought about by cloud technology and is now booming.

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This is blurring the boundaries between sectors as companies surge towards delivering frictionless and convenient customer journeys. BaaS models push banking services into consumers’ hands through different industries, meaning those operating under this structure can offer the accessibility that consumers desire. Mambu’s recent study shows that 24% of global banking consumers are driving this growth. Termed as “convenience cravers”, they want all-inone services and pay little attention to who provides them.

Whether you’re a bank or a non-bank, consumers simply want easy-t0-use services at the tip of their fingers.

A direct tell of this demand is illustrated through bank branch closures across Europe. Financial services are moving online and this tells us exactly what matters to consumers.

Who provides these services has become less important. As such, forward thinking players are capitalising on the appetite for embedded finance services. In Germany, Raisin Bank does this by offering a marketplace showcasing a range of saving account offerings. Powered by a cloud-native BaaS model, they now can offer customers deposit and savings accounts at extreme speeds. In the Nordics. digital consulting firm Knowit connected its loan application programme, Dploy, with a cloud model in order to streamline the customer journey. Now customers can benefit from the flexibility and security of the platform.

But, this is just the beginning of this service.

The ever growing $12.2 billion market opportunity of BaaS

The race across sectors to deliver integrated user experiences

BaaS is becoming a huge opportunity for most. When using such a service, non-banks can expect to see new revenue streams and an expansion of their customer base post-pandemic.

Consumer behaviours are driving the growth of BaaS because of their desire to access financial services when and where they need them. Non-banks are utilising BaaS not

At a time when consumers’ attention is split and marketing expenditure is increasing, we are seeing customer acquisition costs shooting through the roof. Often, financial

Banking

institutions are not using their existing technological assets to their full potential. Hence, adopting the BaaS model allows for such companies to migrate towards digital banking, tap into non-bank customer networks, and decrease cost per acquisition. This integrates modernity into their DNA whilst distancing themselves from players of the past.

For the non-banks, BaaS opens up a whole new revenue stream. By offering a wider variety of services, these companies can capitalise on cross-selling opportunities and expand their brand recognition. Not only that, it significantly improves the customer experience. By providing the right offering at the right moment, the cloud native BaaS model deepens the relationship with customers.

the cloud technologies used by modern financial institutions allow for streamlined and automated customer journeys.

Because of the real time flexibility offered, time-to-market for new products are boosted without compromising on the customer experience.

This will be the deciding factor for banks and non-banks of the future. Whoever develops a frictionless customer experience that is integrated with personalised and unique offerings will take the throne. As it stands, traditional banks are falling behind whilst non-banks are stealing the crown thanks to BaaS, proving once and for all that “everyone can be a fintech”.

Those using BaaS models are set up to challenge neo banks and give them a run for their money.

Going toe-to-toe with traditional core banking providers Cloud-native technology has thrown down the gauntlet for non-banks as traditional banking providers remain stuck in the mud with their legacy systems. Such systems are incapable of being reactive. Thus, non-banks leveraging cloud-native core platforms are becoming the best option for consumers looking for flexibility and speed in financial product offerings.

Though traditional banks might have grand customer bases,

Bent Winkel, Nordics GM Source: 1 https://www.mambu.com/disruption-diaries-financial-tribes 2 https://www.raisin.bank/en/ 3 https://www.mambu.com/insights/press/nordic-saascollaboration-set-to-challenge-core-banking-providers

4 https://www.profitwell.com/recur/all/how-is-cac-changingover-time

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