Month: January 2022

Electric car
ArticlesFinance

Will Your Bank Account Benefit from You Buying an Electric Car?

Electric car

Thinking of buying an electric car? Great choice. Electric cars are environmentally friendly, provide an improved driving experience, and have lower running costs. It’s fair to say that they are the future of our mobility.

But how much does it actually cost to buy and run an EV, and how does that compare to petrol and diesel fuelled cars?

Here is a breakdown of the most common electric car expenses and how to minimise them.

 

Buying price

It’s a well-known fact that the purchase price for an electric vehicle is quite high. However, that initial investment turns out to be cheaper in the long run. But how much does an electric car cost?

The price will vary depending on several factors: model, make, specifics of the vehicle, as well as whether it’s a new, used, or financed car.

The average cheapest price for a new electric car in the UK is £17,350 and for the most expensive one it’s £138,826. Petrol and diesel cars are significantly cheaper. The average price for a small new car is £14,500 and for an SUV it’s £25,500. In terms of used electric cars, you’re looking at £16,684 for the lowest average cost and £63,870 for highest. Nevertheless, the prices for used petrol cars have soared in the last 17 months, raising the average price to £15,288.

The good news is that EV’s are predicted to become more affordable as new models penetrate the market from 2021, according to ABI Research’s 2021 Trend Report. While up until recently the options were pretty much limited to Renault Zoe, Nissan Leaf, and Tesla Model 3, new more cost-effective models have become available. These include models such as Vauxhall Corsa-e, Fiat 500, and Renault Twizy.

As more European countries transition to green mobility in efforts to combat climate change, governments are implementing new policies that target EVs. The UK, for example, has announced a two-step phase-out of petrol and diesel cars by 2030. This will urge more people to switch to electric cars. According to Statista, there were 175,000 sales of plug-in electric vehicles in the United Kingdom in 2020 (Figure 1), and 104,634 new registrations of battery electric vehicles (Figure 2).

If a new car is not within your budget range, there are many used electric cars available, such as the Mazda MX-30 which you can find at the used Ford Bolton dealership. Moreover, the UK government is offering an electric car grant which pays 35% of the purchase price of a new model, up to £2,500. This is part of the government’s attempts to encourage people to switch to EVs by 2030.

 

Charging costs

Electricity is cheaper than petrol or diesel, which means that you’re winning on the charging cost when it comes to EVs. The cost depends on the battery size, the manufacturer, and the location of charge points.

An electric car’s battery capacity is measured in kilowatt hours (kWh), and it’s made from lithium ion. According to Electric Vehicle Database, the average battery capacity is 61.3 kWh. The biggest one belongs to Tesla Cybertruck Tri Motor which has a capacity of 200 kWh. On the other hand, the smallest capacity is attributed to Smart EQ forfour at only 16.7 kWh.

There are three ways to charge an electric car: at home, at the workplace, or at a public charging point.

 

Electric car charging at home

Home charging is the most convenient and cheapest of all. You can either use a domestic 3 pin socket or a dedicated home EV charger. The latter typically delivers about 7kW of power and will cost you about £800, and a 3 pin socket delivers about 2.3kW. This power will affect the time it takes to charge your EV.

So how much would it cost you to charge your electric car at home? For example, if the battery capacity is 54kwH, the electricity tariff is 17p/kWh, then it will cost you about £9.20 for a full charge. Use the following formula to calculate how much it will cost you to charge your car at home: Tariff (e.g. 17p/kWh) * Battery size (e.g. 54kWh) / 100 = Cost to fully charge (e.g. £9.20).

 

Electric car charging at work

Most workplaces offer free charging, others offer a time-based tariff. Alternatively, you might receive some other type of deal as an employee incentive.

 

Electric car charging at public points

Public charging points are available at most motorways, service stations, supermarkets, and car parks. The cost between these can vary. Some places offer free charging while places like Lidl charge about 26p/kWh. If we take the example of a car that has a battery capacity of 54kWh, the calculations will be as follows: Tariff (26p/kWh) * Battery size (e54kWh) / 100 = Cost to fully charge (£14.04).

The electric cars charge point network is well-developed. According to Statista (Figure 3), there were 27,222 publicly available slow electric vehicle chargers (EVSE), and 6,248 fast EVSE chargers in 2020 in the UK.

 

Petrol or diesel fuel costs

On the contrary, to fuel a car with petrol or diesel, you’re looking at paying much more, especially with the increasing fuel prices. The current petrol price in the UK is £1.45 per litre. This means that if a car has a 50L tank capacity, the price to fill a full tank is: Fuel price (£1.45 per litre) * Fuel tank capacity (50L) = Cost to fully fill (£75.50).

 

Insurance and Tax

The cost of your electric car insurance depends on the model of your car, your driving history, years of experience, and the type of cover you wish to take out.

Traditionally, electric car insurance has been quite costly, but it’s also seeing a decrease due to the rising demands for EVs in the UK.

Based on recent data collected by MoneySuperMarket, the average cost to insure an electric car is £612.95. This is about £5 cheaper than that of a diesel car and slightly more expensive than a petrol car insurance which averages at about £574.50.

Tax-wise, electric cars require a £0 vehicle tax, while the vehicle tax of a petrol car is about £155.

 

Maintenance

Electric car engines consist of very few moving parts compared to their fossil-fuelled counterparts. This means that they are cheaper to maintain than petrol or diesel cars.

Nevertheless, EVs still need to be serviced regularly, and that could cost you around £5,000. Luckily, most electric car manufacturers offer an eight-year warranty or a warranty for the first 100,000 miles.

For a standard petrol or diesel car, the car service costs average at about £270 a year, but that can vary depending on the required repairs.

Electric cars present you with an initial costly investment which turns out to be more sustainable and cost-effective in the long run. So, the answer is yes, your bank account will definitely benefit from you buying an electric car, alongside the environment!

Financial Pitfall
ArticlesFinance

Four of the Most Common Financial Pitfalls to Avoid in 2022

Financial Pitfall

With the new year finally here, now’s a good time as any to start being more financially responsible. Even if you’re an avid saver, falling into a financial pitfall is much easier than you may think. This is why it’s important you take the necessary steps to prevent losing control of your finances. It all starts by knowing what kind of issues there are to avoid. Here are four of the most common financial pitfalls to avoid in 2022.

 

Frivolous Spending

You’d be amazed at how much money people spend for no reason. Perhaps you’ve even done it yourself by seeing that once in a lifetime deal or something you wanted caught your eye and you just couldn’t resist. Some people even spend money just to be a part of a buzzing trend. Either way, needlessly spending is a surefire method to drain yourself of valuable funds.

Sure, the occasional splurge here and there is completely fine. Everyone does need to treat themselves every once in a while. However, there’s a difference between treating yourself and wasting your money. Don’t let the temptation fuel impulsive decisions. You’ll be surprised at how much money you can save by simply looking the other way.

 

You Don’t Have a Budget Set in Motion

Budgeting is a skill everyone needs to know. A budget is a financial plan you set for yourself by going over your monthly income and expenses. How it works is that you calculate the total amount of money you earn and subtract various costs from it to see how much you’re left with. These expenses can include:

∙ Mortgage payments or rent

∙ The utility bills

∙ Groceries

∙ Insurance payments

∙ Car payments

∙ Paying for gas

∙ Eating out

Another expense involved in your budget are student loan payments. Student loan payments can cost more than your average expense, which can leave you with very little left over. To prevent yourself from being depleted of savings, a great option is to refinance your student loans into a new one through a private lender. A private lender is ideal when it comes to refinance student loans. They can lower your lower interest rates and usually offer better repayment terms overall.

 

Not Putting Savings into a Retirement Account

Eventually, your duty in the workforce will come to an end. When that happens, you’ll lose your main income stream, which is why putting money into a retirement account is imperative. While you can start putting money into the account at any time, it’s highly recommended you start doing so at your earliest convenience. You can even open a retirement account as young as 18 years old.

 

Not Having Emergency Funds

Perhaps the most impactful financial pitfall is not having emergency funds to help protect your assets and to fall back on in a time of need. You never know what can happen in life. You or a family member may need extensive medical care or you may find yourself not having enough of your primary funds to pay bills. This is where your emergency funds come in. The recommended amount of emergency savings should be at least three months of your monthly income.

Articles

Top 5 careers in accountancy


An accountancy career is, generally speaking, a stable and lucrative one, regardless of which accounting area you go into. With that being said, there are certainly some accounting jobs that have a higher scope for career development as well as a higher average salary. Many of the top accounting jobs require extensive training and certification, as well as at the very least a bachelor’s degree, if not a master’s degree in accounting. But they are well worth the time and effort put into obtaining them and accounting graduates are in a good position to obtain the best accounting jobs. Some accounting jobs will involve working in financial departments of large organisations, whereas others will see you working for an accounting firm with clients (individual or companies). Let’s take a look at the top five accounting careers.

1) Chief financial officer

A chief financial officer (CFO) is the highest financial role available in a company and the third-highest role overall. The CFO is responsible for the financial health of the company, business strategy, risk management, as well as financial and business decision-making. Rachel Dooley from Auditox Accountancy once had this title before going solo and her role was twofold. She was ultimately responsible for the financial management and financial reporting of the finance team, and this can include ensuring that financial reporting is compliant and accurate. She was also responsible for communicating with the board of directors and department heads to advise about business and financial matters.

The average salary in the UK for a CFO, according to Payscale, is £52, 000 – £172,000, and can include a base salary as well as bonuses and profit-sharing in the company. This is arguably the most lucrative of the accounting careers, which of course makes it extremely competitive to get into. A typical route into becoming a CFO would be a bachelor’s degree and a master’s degree in accounting, as well as becoming a certified public accountant.

2) Financial controller

A financial controller is a senior manager in charge of the accounting department. Their role can vary depending on the size of the company, but they can include ensuring the compliance of financial records and financial statements, overseeing the accounting activity of the accounting department, and in some cases using financial data to advise about strategic business decision making. Using an SEO company that has a CFO as an example, the financial controller will report directly to them. And becoming a financial controller can be a stepping stone into becoming a CFO. In a smaller SEO company, a financial controller might be involved in preparing financial reports, as well as to prepare budget reports and cash flow statements, and they may also be responsible for ensuring that tax returns are accurate and compliant.

The average salary in the UK for a financial controller, according to Payscale, is £31,000 – £77,000 and can include a base salary as well as bonuses and profit-sharing. A relevant degree in accountancy, maths, business, or finance is required to become a financial controller, as well as an accountancy qualification.

3) Financial accountant

A financial accountant is responsible for preparing financial statements and financial reports to demonstrate the performance of the company and to help manage finances. They also take an active role in the company’s financial accounts and financial records and often will also be tasked with ensuring that financial practices within the company are as efficient as possible.

The average salary of a financial accountant, according to Payscale, is £27,000 – £56,000, including bonuses and profit sharing. To reach an accounting career as a financial accountant, you will usually need to have a chartered accountancy qualification.

4) Financial analyst

Financial analysts are accounting professionals that are tasked with the role of analysing financial reports and data and applying that financial information to advise about financial strategies and financial decisions within a company. They may also analyze budgets and help to develop strategies to make them more efficient. Financial analysts can work for any business company, but they are also often hired by financial institutions, and they are often involved in investment decisions and advising about financial risks and benefits of business decisions.

The average UK salary of a financial analyst, according to Payscale, is £23,000 – £57,000, including bonuses and profit sharing. A bachelor’s degree in a maths or finance-related field, as well as a master’s degree, can help to get a job as a financial analyst, as can a certified accountancy qualification.

5) Tax accountants

Tax accountants are specialised in advising companies about their taxes. This can include tax compliance as well as tax liability. They are often tasked with ensuring that the company, or individual, isn’t paying tax that they aren’t liable for, and for ensuring that all tax records are compliant with relevant tax laws. Tax accountants can help their clients to make financial decisions by informing them of their tax liability, and they tend to be busier during the tax period of the year. Tax accounts can be attached to an organization’s accounting department or they can work for accounting firms that have private clients.

The average UK salary for tax accountants, according to Payscale, is £17,000 – £49,000, including any bonuses. To become a tax accountant, an undergraduate degree in accounting is desirable as well as an accountancy certification.

Other top accountancy jobs

Forensic accountants
Financial manager
Accounting managers
Forensic accountant
Accounts payable specialist
Public accountant
Cost accountant
External or internal auditors

The bottom line

There is a huge variety of accounting careers in all areas of the financial industry. Deciding on which accountancy career is for you depends partly on where you want to go in terms of academic qualifications, what your own necessary skills are (including soft skills), and how much you think you would be fulfilled by the role itself. For most accounting jobs, you will need to have relevant qualifications but these can be obtained through a variety of different routes.

Bank Fraud
ArticlesBanking

Confirmation of Payee for Bacs Is a Welcome Upgrade, But It Could Go Further

Bank Fraud


More than 4.5 billion Bacs payments are made in the UK every year, representing
roughly 90% of all regular monthly payments via direct debit transactions. But until now, this vital payment system was not secured by Confirmation of Payee (CoP), a payment verification service that Pay.UK first rolled out in 2020. 

 

By the end of 2021, all the SD10 banks will offer CoP, which already protects CHAPS and Faster Payments. The addition of CoP to Bacs represents an important step in the industry’s battle against fraud and will provide more confidence during payment transactions.

 

However, in its current form, CoP is not yet the silver bullet that will defeat fraud. To realise the full potential of CoP, it requires further development to improve user experience and offer improved protection against crime.

 

Ozone API already offers a CoP solution that provides more information about a payee before a transaction than the standard CoP check. Ozone’s founders developed the Open Banking standards that are now used around the world and delivered the sandbox and reference implementation for the UK Open Banking Implementation Entity (OBIE).

 

It has now issued a call for the industry to expand CoP by incorporating different forms of identifying data and improving user experience.

 

“The addition of CoP to Bacs payment is a welcome move that will make life more difficult for criminals,” said Huw Davies, Chief Commercial Officer of Ozone. “However, the framework is rudimentary at this stage, meaning that the developing CoP is a long way from complete.

 

“CoP is supposed to add friction when risk is high and reduce friction during ‘safe’ transactions. Yet the way that CoP has been implemented by some banks is confusing and cumbersome, sometimes showing dramatic fraud warnings even after the payee’s details have been verified, causing the payer to worry that their payment will be misdirected, or worse, lead to apathy about the messages.

 

“The continued evolution of CoP and extension of its use cases is good to see. But we’re still at the beginning of this journey and must continue to think about how to move forward with its development.”

 

 

 

 

The evolution of fraud

 

Fraud prevention is one of the areas in which CoP plays an important role. Criminals are changing their tactics, sparking a huge rise in authorised push payment (APP) scams in which fraudsters trick victims into transferring money directly into their accounts.

 

During the first half of 2021, the losses caused by APP fraud soared by 71% to £355.3 million – overtaking the amount of money stolen in card fraud. In 2020 alone, losses totalled £479m, with the actual figure likely to be much higher due to underreporting.

 

Earlier in 2021, the Payment Systems Regulator (PSR) reported that SD10 banks and other PSPs had confirmed that CoP has “improved security and strengthened customer confidence when making a payment to a new payee”. Its data also showed a reduction in the number of APP scams experienced by CoP-enabled PSPs.

 

“With regards to APP fraud, it is likely that CoP has prevented what would otherwise have been a larger increase in scams,” the PSR wrote.

 

There is cause for optimism in the PSR’s statistics, but the fact that APP is still growing shows that further action is needed.

 

Chris Michael, Ozone’s Chief Executive Officer, said: “CoP has the potential to combat APP fraud and offer businesses and consumers the reassurance they need when making payments. Unfortunately, the current framework is not complete yet. We need CoP to be much more than just a simple algorithm. The extension of CoP to Bacs is a good move that points to a better, more secure future of payments. But there is still a long road ahead.”

 

 

The state of COP

 

CoP was initially mandated for six banks but optional for others when introduced in 2020. However, earlier this year, the SD10 firms (a group of major banks made up of Lloyds Banking Group, Bank of Scotland, Barclays, HSBC, NatWest, Nationwide and Santander) wrote to the PSR to offer a commitment to deliver a new Confirmation of Payee role profile by the end of 2021.

 

There is another important date coming in 2022. Phase 1 of CoP will be retired in 2022, with PSPs expected to complete migration to Phase 2 by March 30.

 

Phase 2 is “aimed at broadening participation in CoP to all account-holding PSPs, not just those that operate accounts with a unique sort code and account number”, according to the PSR. In the first phase, a PSP offering COP was required to be enrolled on the Open Banking Directory, which then allowed them to identify each other and send CoP messages.

 

The second phase will allow PSPs that do not have full Open Banking membership to access the Open Banking Directory, allowing a wider range of organisations to offer COP as well as offering reduced set-up and running costs.

Phase 2 also includes technical enhancements that will allow PSPs to send and receive Secondary Reference Data (SRD), which is more information than a sort code and account number that allows for account identification.

Ozone believes the expansion of the data available to CoP is a welcome addition to the framework.

Freddi Gyara, Ozone’s Chief Technology Officer, said: “CoP can be improved by adding further capabilities to the Open Banking frameworks which provide additional information when a payment request is made. Ozone’s API solution already allows banks and businesses to draw on a wider range of data, offering greater certainty during a payment transaction.

The evolution of CoP is only beginning. In the future, it will use much more than just a payee’s name, sort code and account number. External validation data from other data sources (such as Companies House or social media profiles) could more accurately help to verify the identity of a payee. Other methods of verification could include biometrics or phone number matching.

 

“When the framework is complete, it will be a powerful weapon against fraud and remove unnecessary fear or friction from payments.”

Man in business attire checking the cryptocurrency market on his tablet with computer screens moitoring other investments in the backgorund
ArticlesFinanceFundsInfrastructure

How To Utilize Cryptocurrency In Your Business

Man in business attire checking the cryptocurrency market on his tablet with computer screens moitoring other investments in the backgorund

 

Cryptocurrencies are digital or virtual coins or tokens that use cryptography to secure their transactions and to control the creation of new units. Cryptocurrencies are decentralized, which means they are not controlled by governments or financial institutions. Bitcoin, the world’s first cryptocurrency, was created in 2009. Since then, a number of new cryptocurrencies have been introduced.. Cryptocurrencies hold a variety of potential applications, from providing a more secure means of payment to facilitating cross-border transactions. As the popularity of cryptocurrencies grows, so too does the importance of understanding what they are and how they work. This blog post will provide an overview of cryptocurrencies, discuss some of the key features that make them unique, and how to utilize them In your business.

 

Why Consider Using Cryptocurrency in  Business?

Bitcoin is used by more than 2,300 businesses in the United States. A growing number of firms all over the world are making use of bitcoin and other digital assets for a variety of investment, operational, and transactional purposes.

The usage of cryptocurrency in business presents a slew of possibilities and challenges.

There are both unknown perils and powerful incentives. That is why organizations that want to use crypto in their operations need to have two things: a clear understanding of why they are doing it and a list of questions they should think about.

 

What can crypto offer your business?

Cryptocurrencies are still a relatively new phenomenon, however, let’s take a look at some of the benefits that crypto can offer your company:

  • Transparency in Transactions: Cryptocurrencies are public, unchangeable, transparent records of value transfers that may be recorded and kept in a public ledger. They are verified, and they can’t be easily hacked or controlled. This assures that cryptocurrency transactions are safe and secure.
  • Low transaction fees: Banks add transaction fees and taxes to every digital payment. It’s easy to understand since they have to pay their workers, rent the buildings, and pay utility bills. Transactions using cryptocurrencies and blockchain technologies are not the same. Because they commence on online platforms, they have lower transaction costs, which makes them more popular and profitable among firms.
  • You can take cryptocurrency anywhere: Cryptocurrencies can be kept in a digital wallet (wallet) that you may manage from your computer or smartphone. This wallet allows you to take your cryptocurrency with you wherever you go, making it more convenient for your business.
  • Protected customer privacy: The problem of cybersecurity is still one of the most significant drawbacks of digitalization. We hear about major data breaches that expose people to identity theft and financial loss. The buyer can choose the type and amount of information they provide in a cryptocurrency transaction, which makes it extremely anonymous. Offering crypto as a payment option makes it more appealing to customers who place a high value on their data privacy.

 

How can you earn passive income?

Earning a passive income is the goal of many business owners. But, what is a passive income and how can you earn one? A passive income is an income that you earn without actively working for it. You can invest in dividend-paying stocks, rent out the property, etc. But there is another easy option to earn passive income is to stake your cryptocurrency. This is the best way to earn crypto staking rewards. By holding onto a certain amount of tokens in a specific blockchain network, you can earn rewards for participating in the network’s governance. So if you’re looking for some new investment opportunities, consider staking your cryptocurrency and earning rewards.

 

Is It Possible To Pay Employee Salaries With Cryptocurrency?

In recent years, the cryptocurrency market has exploded in value, with Bitcoin and Ethereum becoming two of the most valuable digital assets in the world. Due to this meteoric rise, many businesses consider using cryptocurrency as a form of payment. There are certain advantages of paying employees salaries in digital currencies:

  • Speed: Bitcoin, Litecoin, Ether, and other digital currencies can be sent up to 95% faster than traditional wire transfers.
  • No Boundaries: More and more organizations are operating remotely these days. Cryptocurrencies may be sent and received around the world with ease. That is why, for businesses with workers working from other nations, crypto payments may be a more convenient option for a worldwide workforce.
  • Attracts Better Talent and New Clients: Crypto is drawing the interest of the most forward-thinking and tech-savvy employees since it is a young, rising sector. Crypto is drawing the interest of the most forward-thinking and tech-savvy employees since it is a young, rising sector. When future employees choose a company to work for, one of the most important aspects will be payroll provider. When you begin paying employees in digital currency, you gain the attention of other crypto firms and startups, possibly attracting new customers and partners.

 

Conclusion

As you can see, there are many benefits that cryptocurrency has to offer. Whether it’s for your business or personal use, the advantages of using cryptocurrencies like Bitcoin, Ethereum, and other digital currencies should be considered as an investment opportunity. With all the information we have provided in this article, hopefully, now you feel more confident about investing in a new form of currency!

Cryptocurrency
ArticlesMarkets

Dos and Don’ts with Cryptocurrency

Cryptocurrency


If you are looking to get started with cryptocurrency and either invest or buy and sell coins, you will want to understand the basics and what to look out for. Depending on what your needs are, you may be wanting to invest in a cryptocurrency and see how the price performs in the long term, or you may want to get straight into buying and using digital currency to purchase goods and services. Either way, here’s a short guide to some of the dos and don’ts with cryptocurrency to keep in mind.

 

Don’t put all your investment in one place

In the same way an investor will approach the stock market, you’ll want to diversify your portfolio and choose a range of different cryptocurrencies to buy. As the market can be volatile, you’ll want to have plenty of options to see growth. It’s a good idea to look beyond the well-known cryptocurrencies such as Bitcoin or Ethereum and diversify with altcoins. There are many thousands to choose from, each with its own different outlook, such as Floki that is combining the power of memes to be the people’s cryptocurrency, offering its own NFT metaverse and marketplace. This is part of the memecoin revolution that saw Dogecoin experience huge growth in a short space of time. Diversifying also ensures that if prices fall with some, you could still see success with others.

 

Do research and lean on insights

If you are not experienced with using cryptocurrency, you’ll want to be cautious before spending your real-world money. Keeping up to date with the latest cryptocurrency trends, news and insights can quickly provide an understanding of what’s happening presently, historically and what’s upcoming. It can be confusing, so it’s recommended to speak to experts or those who have been using cryptocurrency for a while. Consulting with those experienced with trading and spending digital currencies can be very helpful if you are a novice. You’ll also make sure that you make an informed choice with a cryptocurrency, as not all can be spent in the same way. If there is something in particular you want to purchase using cryptocurrency, you’ll want to make sure they accept your chosen coin. As it becomes more mainstream, businesses and retailers will be open to many more cryptocurrencies outside of Bitcoin, Ethereum and the most well-known choices.

 

Don’t fall for scams

As with any emerging or popular market, there can be those looking to take advantage and bad actors who will make false promises. Being able to spot the scams before parting with your money is crucial, with imposter sites that look like the real thing or new currencies that draw you in with guarantees of a high return. Being vigilant with anything to do with your personal finances is important, so ensure that you have researched fully before buying a chosen cryptocurrency and that you check the URL of the exchange you are using before proceeding. There are also phishing scams relating to must-buy digital currencies that can reach you via email or text.

 

Do own private keys

Once have a cryptocurrency balance, you’ll want to store them privately rather than on a public exchange. By having your own private keys, only you can access your coins and stay as secure as possible. A hardware wallet is a good way to achieve this as it is offline and away from any potential hackers or data breaches. Just like a USB memory stick, you can store your balance away from your computer or tablet and access it when you want. If taking this step, you’ll need to make sure you don’t forget your password and use encryption or 2FA to ensure it’s secure to you only.

Managing finance
ArticlesFinance

Year-Round Advice for Managing Financially During Seasonal Holidays

Managing finance


Throughout the year, there are plenty of seasonal holiday to celebrate whether it be Christmas, Easter, Thanksgiving, or New Years. Depending on your individual beliefs, you may have additional times of celebration. Often, these times are for eating, drinking, and celebrating with loved ones.  However, these times of year can also prove to be quite stressful financially. Especially, if they call for gift-giving or organising an event like a family party. Whatever the occasion, there’s plenty of ways to keep on top of things financially for these times without the need to over spend.

 

Plan Ahead

When seasonal events occur during the year, the last thing you want is to fork out a payday loan to cover the expenses. A top piece of advice would be to plan of yourself to avoid such financial pressures. Invest in a calendar to you can pinpoint all the important dates during the year. This way you can remain mindful of how much potential money you will need to spend, whether you need to buy gifts, and it also provides you with an opportunity to budget. It’s important not to leave things to the last minute. Take advantage of seasonal sales too. That way, you can save yourself time and ease the stress when these events come around.

 

Party Hard but Party Money Smart

Whether you’re celebrating Easter, Christmas, New Year or Thanksgiving, whatever the occasion there is no doubt going to be a party with friends and family. We know full well that the more partying to be had, the more opportunity to spend money increase. Whatever the occasion, let your hair down but be mindful of how much you’re spending. When it comes to spending money at social events throughout the year, one piece of advice would be to set aside budgets for this. Taking a calendar, you can look ahead of yourself and create social budgets at the beginning of each month and work from there. In some cases, looking two months ahead of yourself would be more organised.

 

No Need to Be Extravagant

When social events occur throughout the year, particularly the more special occasions, it’s easy to spend. Whether you’re spending money on a new outfit, hair, make-up, shoes for yourself or buying gifts to mark the occasion. There’s nothing wrong with learning to be a bit more frugal since these times are all about having fun. When it comes to dressing up for occasions, why not haul your local charity shops to find a second-hand outfit at a fraction of the cost? Plus, gift-giving doesn’t need to cost the earth. Some of the most thoughtful gifts are the ones that are handmade or bought with sentimental intention.

 

Don’t Try and Pay for Everything

Hosting parties and events throughout the year can add up. Even having the family round for a Sunday dinner every week cuts into your monthly food budget. Let alone the idea of hosting lots of celebrations. If you need help easing the financial pressures, don’t be afraid to ask for it. Even if we have loads of space in our home, it doesn’t always mean we have loads of money. If it’s a dinner you’re hosting, you could ask each guest to bring a dish with them. Not only does this ease your wallet, but also makes dinner more interesting. Family occasions, whatever the celebration, are a team effort.

 

Take Time Out

For some of us, the year can be filled with all kinds of social events to look forward to. Remember to take time out for yourself, especially around the bigger events. If you have any paid annual leave, take advantage, and get paid while you have some fun. Each month, set aside small budgets for self-care so you can look after yourself all year round while having fun with family and friends.

ArticlesSecurities

Top Cyber Threats Facing Financial Services Firms

With the advancement of technology, different types of cyberattacks have emerged that invade computer systems and can cripple the operations of an entire organization within minutes. Among all the industries, financial services firms are among the top targets of cyber attackers due to the sensitive data firms deal with, leading to possible financial gains attackers can receive. The cost of cybercrime in the financial services sector is $18.3 million, the highest among other industries. Thus, it is imperative to know which cyber threats financial firms are highly vulnerable to. The article discusses the top five cyber threats facing financial services firms and how you can prevent them.

 

Ransomware

Ransomware is a form of malware that invades a computer system through various means. Often disguised as messages from legitimate users, ransomware mainly invades a system through phishing emails, spear phishing, drive-by downloads, and social media messages. Once ransomware infiltrates a computer system, it will encrypt the files making them inaccessible.

Ransomware attacks have become a very common and costly cyber threat worldwide. In 2021, the cost of damages due to ransomware was $20 billion, which was 57 times higher than it was in 2015. Therefore, every financial firm needs to be on high alert establishing robust security mechanisms to prevent ransomware attacks.

For ransomware attack prevention, financial firms can take the following measures:

  • Provide the necessary employee training on how to avoid ransomware attacks.

  • Ensure that employees always check with the sender when they receive a suspicious email, text, or social media message and avoid clicking on suspicious links.

  • Keep a regular backup and recovery plan

  • Keep their system software up to date to mitigate ransomware attacks through software vulnerabilities.

  • Maintain systems for endpoint protection and email protection for added security.

 

Data Breaches

A data breach occurs when an individual’s or an organization’s sensitive, private and confidential data get exposed to unauthorized parties. For financial firms, the data can be from users’ personally identifiable information to critical data such as bank account numbers and passwords that could lead to severe financial losses for individuals connected with the firm.  Data breaches can happen either due to human error, stolen devices, weaknesses of the security technologies or bad actors inside and outside the organization. The cost of a data breach is increasing every year. In fact, in 2021, the average cost of a data breach was $4.24 million, up from $3.86 million in 2020.

There are many actions financial firms can take to ensure the security of sensitive data. The best approach for data breach prevention will be encrypting data with a robust encryption algorithm so that unauthorized parties cannot see the content of the data. Keeping your software and servers up-to-date also ensures your data are not vulnerable to data breaches from outsiders. Establishing strong security and access policies that meet regulatory compliances, including multi-factor authentication and introducing tight security policies for BYOD, also provides strong protection against possible data breaches.

 

Phishing and Social Engineering

Social engineering is a common cyber-attack method where attackers use human interactions to invade a computer system. In a social engineering attack, attackers are often disguised as legitimate persons who can even be employees. The attackers can get information from various sources required to infiltrate a system.

Phishing is also a type of social engineering where attackers use malicious emails or websites to invade a computer system disguising themselves as a legitimate and trustworthy person or an organization. For example, the email sender can act as your organization’s help desk, asking you to reset the password by providing a seemingly unharmful link.

To prevent phishing and social engineering, advise your employees not to open any emails if they do not know the person who has sent the email, even if it appears legitimate. Always enforce multi-factor authentication of logins to prevent account compromises if an attack occurs. Also, keep your software up-to-date and use strong antivirus software on your computers, keeping them up to date with automatic updates.

 

DDOS attacks

A distributed denial-of-service (DDoS) attack happens when attackers exhaust a server or a network by sending many requests at once. It means the network or the server suddenly gets an unexpected network traffic spike which is more than what it has been configured to handle. The sources of attacks can be multiple systems that attackers exploit. The exploited computer systems can have multiple servers and include IoT devices. Research suggests that by 2022, the DDOS attacks can rise up to 14.5 million.

There are several ways financial firms can prevent DDOS attacks. One is rate-limiting or limiting the number of requests the servers can handle. Using a web application firewall is another way to mitigate the effects of DDOS attacks, which can filter requests based on defined traffic rules denying entry to unwanted traffic. Another way is using a black hole to route traffic that can prevent routing traffic directly to the network or the system by routing into a different path.

 

Insider threats

Insider threat is another popular form of cyberattacks in which a malicious person inside the organization deliberately or unknowingly steals sensitive and critical information. Typically, an insider is an internal employee of the organization who can access critical information. Some insiders become pawns of other bad actors who unknowingly expose critical information. Also, the insider can be a mole, who is an outsider of the organization but somehow manages to gain access to the organization’s network.

The best way to protect your organization from insider threats is by enforcing strong security and access policies with strict access control mechanisms. Also, always protect your critical information through encryptions and data backups. Monitoring and keeping records of the critical data access by the users is also a good practice that can identify potential malicious insiders within an organization.

 

Conclusion

Cyber-attacks are an ever-increasing phenomenon worldwide that financial firms are highly vulnerable to. This article discussed the top 5 cyber-attacks that can harm financial organizations leading to loss of revenue and reputation. As prevention is always better than cure, financial firms need to establish prevention mechanisms described throughout the article.

Bad Credit
ArticlesFinance

Improving Your Finances with Bad Credit

Bad Credit

So, you have bad credit. While credit doesn’t make up our finances, it plays a significant role. When you have bad credit, it can be because you don’t have enough money to pay back the money you owe. If you don’t owe anyone anything and still have bad credit, it’s necessary to get whatever small loan or credit you can to start building your score. Improving your finances with bad credit isn’t impossible. If you continue reading below, you will be able to find out how you can improve your finances with bad credit.

 

Pay Back What You Owe

The most important thing to do is pay back that money you owe. When you have debts to a bank, creditor, or another type of lender, the most important thing to do for your financial well-being is to give the money back. Not only will it increase your credit score, but you will also be able to avoid high-interest rates. You might need cash now but paying back your debts is imperative to living a healthy financial life. To improve your finances, it is pivotal to pay who you owe.

 

Take Out a Loan

If you have paid back the money you owe and still have bad credit, it might be a good idea to take out a loan. You are probably hesitant to get a loan for obvious reasons, but you must build your score somehow. Luckily, there are many different types of loans that you can take out when you have bad credit.

Of course, the most important thing is to pay back the money immediately to increase your credit score, but if you can pull it off it’s a way to kill two birds with one stone. Applying for a loan can provide funds and increase your credit score at the same time. For example, if you have a mortgage a HELOC with bad credit is a loan that refinances your mortgage by using the home as collateral. It’s a way to improve your credit and keep more cash.

 

Get Approved for a Basic Credit Card

With bad credit, you might think you can’t get approved for a credit card. This may not be the case. You should try to get a basic credit card with a small limit and low-interest rates. You can put purchases on the card and pay it off to build your credit score. Getting approved for a credit card is a great way to get your hands on some funds and boost your credit score while you’re at it. Be careful not to put too much money on the card, though. If you can pay off the money immediately, you will be able to improve your financial standing.

 

Make an Investment

Whether you have good credit or a bad score, you can make an investment in something. It doesn’t matter if you are investing in a business, yourself, a property, or something else, making an investment is something you can do for your finances with bad credit. If you have a little money and want it to work for you, investments are a great way to do that. It doesn’t matter what your credit score is, businesses and people will take your money for an investment. Your credit score doesn’t come into play when you are giving someone money.

 

Create a Financial Plan

Whatever your financial situation is, you should create a plan to get your finances in order. Your financial plan should include building your credit score and standing. It doesn’t matter where you are at now, if you have a plan to improve your financial situation and life overall you will be a lot better off. Creating a financial plan is integral to your economic well-being. It doesn’t matter where you’re at. What matters more is where you’re going.

Improving your finances can be difficult, but if you remain steadfast and do your best to put a concise plan into place you will be a lot better off. Credit doesn’t necessarily determine your prosperity, but it is an indicator of how you are doing when it comes to money. Whatever your situation, putting in the time and effort to both raise your credit score and improve your finances will pay off in the end. You won’t regret alleviating the stress that comes with it.

Alternative Investment Markets
ArticlesMarkets

Finding Alternative Investment Opportunities In Markets

Alternative Investment Markets

For many, the global stock and bond market is complex, confusing, and challenging to navigate. Add to those challenges the uncertainty centered around the pandemic, job insecurity, and the general economic instability in the U.S. can make financial decisions much more anxiety-riddled. 

There are a variety of investment opportunities, each with its own risk, that you can consider. The investment boom is fueled by people’s desires to make and earn a passive income, add to retirement funds, and provide a level of financial stability that traditional jobs may lack. 

Finding hidden gems, alternative investments like NFTs, cryptocurrencies, and other opportunities to consider are excellent strategies to minimize your risk while having the potential for positive earnings. The point of the strategy is to consider a mix of short-term aggressive exposure (and potential gains) versus longer-term investment that takes time to mature and earn.

 

Types of Investment Vehicles Worth Considering

There are countless investment opportunities to consider, from Bonds to traditional stocks, cryptocurrency, and more. So how does the average investor make sense of all the options available? Investing isn’t easy and comes with some risk, but by taking a diversified approach, you should meet some of your goals while simultaneously lowering your exposure to risk. 

Below we offer three suggestions of what to invest in to maximize your potential. However, it’s important to keep in mind that this is a suggested strategy and not a guarantee to any particular outcome. You should always be sure to invest only with capital you can afford to lose, and always do your due diligence before making any major moves.

 

Cryptocurrency

Several factors have led to the crypto boom, ranging from the “boom” cycle of the investments, the rising popularity of the currency with celebrities and athletes alike, and the rise of social media as a primary form of information gathering. However, the primary benefit of crypto is the decentralized nature of the currencies. Being a decentralized currency means that its value is based on the demand of the currency rather than acting as a regulated form of legal tender. 

In turn, this gives rise to the vast “booms” we are seeing. Nonetheless, one possible downside to this type of investment is that it comes with volatility that turns many traditional investors off. The risk associated with volatility is that the value can see wide swings daily, leading to significant earnings and losses in a single swing. 



Traditional Stock Market

In traditional stock investing, you’re purchasing a share in a company that is anchored to the company’s value. As the value of the company increases, so too does the stock. As a result, there is some volatility in the stock price. Still, the swings in the value we see in cryptocurrency are not nearly as expected. There are regulations and safeguards to prevent the “boom-bust” daily cycle that crypto may experience. 

The advantage that the traditional stock market has over cryptocurrencies then is stability around minor fluctuations. However, a downside to conventional stocks is that it requires a much more significant investment to see sizable gains. Furthermore, it also takes much longer to see the value and return on the investment. 

 

Alternative Options: Penny Stocks with High Growth Potential

To diversify your investment strategy, you need to include a plan mixed with aggressive investments (such as cryptocurrencies) tied with more stable, long-term assets (such as traditional stocks). One way to make your investments more attractive and potentially secure higher profits in the shorter term is to consider looking at alternative options from the FANG and other blue-chip assets, such as penny stocks or out-of-the-mainstream investments. 

For example, the move from internal combustion engines, gas-powered, to more hybrid and electric vehicles will cause a demand for the various components and materials that make up the eclectic vehicles. Some demand for electric vehicles stems from popular decisions. In contrast, others are generated from governmental action and incentives, such as those recently passed and signed into law by the Infrastructure Bill of 2021.

The bill is expected to have a positive economic impact of over $15 billion for investments and development of EV charging stations, tax incentives, and more. For electric vehicles, that means critical infrastructure is being provided by federal, state, and local government and private industry has more than enough incentives to move away from gas and toward hybrid and fully electric vehicle production.

These developments mean plenty of opportunities for an intelligent investor to find a penny stock with a high ceiling. For example, electric vehicle batteries are made from nickel and other precious metals. As such, nickel mining companies stocks are a hidden gem with tremendous growth potential and should be included in any investment strategy. 

Of course, there is no guaranteed “safe” strategy to investing, but taking a slow approach with a long-term plan is the best suggestion for you to consider, especially as you start. This strategy doesn’t differ from ones suggested for Boomers to Generation Z, but the earlier you begin, the longer you have to accrue and recover from fluctuations in the market toward your investments. 

Debt Provision
ArticlesBanking

New Solution to Taking the Guesswork Out of Bad Debt Provision

Debt Provision

Almost a third (30%) of credit managers ‘guess’ their bad debt reserve requirement 

Less than one in ten (9%) are given any steer/model by their auditors 

Businesses seeking to take the guesswork out of bad debt provision at Financial Year End could benefit from a new free service being provided by Debt Register, a global payment accelerator. 

Loading a company’s five largest outstanding debts onto the automated Debt Register collections platform, with a very high chance of collecting those debts, could significantly improve the accuracy of bad debt provision. This will in turn improve the visibility and accuracy of a company’s true financial position and its bottom line, with all the inherent advantages this brings in terms of access to future lending and credit. 

The proposal follows research that suggests that almost a third (30%) of credit management professionals guess at a figure when assessing the level of bad debt reserve they require at Year End, while less than one in ten (9%) are able to look to any financial model provided by their auditors. More than a third (35%) opt for generic, age-based percentages to arrive at a figure while a quarter (26%) look to their experience of similar debt. 

Gary Brown, Founder of Debt Register, believes the survey proves what he has long thought: that the current process of providing for bad debts is invariably guesswork: “Speaking to firms and accountants, many companies have no clear picture of how collectable or otherwise certain debts are, and make provision simply by taking a best guess,” he says.  

“By passing the five oldest or longest-standing debts through our platform, however, there is a very real chance that those debts will be settled. This means the actual bad debt figure being provided for will be more accurate. because there would be no need to reserve for those invoices at all. 

“Indeed, even if the money is not collected, then that also helps takes the guesswork out of the process and gives the company and the auditor something more tangible to refer to than a vague model. Either way, Debt Register gives companies a tool that supports a more accurate financial position.” 

Real case scenarios with current Debt Register clients have already proven the point and the age of the debt appears not to be a barrier to its collectability. One customer uploaded a debt that was 888 days overdue, and the debt was settled in 27 hours. In a more remarkable example, an uploaded debt that was 1499 days overdue was paid within 45 minutes.  

Debt Register is, first and foremost, a global payment accelerator that enables a business to identify late invoices on their ledger and allow the platform to do the rest. This includes validating the customer contact’s email against a database of some 90 billion addresses to a 93% degree of accuracy. The platform contacts the debtor automatically and in the appropriate language, requesting that the payment is settled, and ensuring the invoice is correct and not in dispute.  

By leveraging its relationships with leading credit reference agencies (CRAs) to report unpaid and overdue debts, debtors are encouraged to settle any overdues promptly to avoid their credit scores being negatively impacted. In short – there is now a tangible and direct consequence for those companies should they continue not to pay an undisputed, overdue invoice. 

Along with shortening the timeframe of remittance, Debt Register provides a series of tools to credit managers including auto-translation for use within multiple territories. The system is intelligent, recognising different time zones, working days and cultural nuances including national holidays or religious festivals, and schedules the dispatch of any communications accordingly. 

To date it has successfully recovered debts in 71 different countries and six out of the seven continents  

“Using the free service means a business has nothing to lose and everything to gain,” Gary concludes, “and converts a guess into something closer to the truth.” 

Card Payment
ArticlesFinance

Navigating Through A2A Payments

Card Payment

Account-to-account (A2A) payments are an evolution of the ever-changing payments landscape. The solution enables to cut out third parties and transfer payments directly from customers’ bank accounts to the merchant. By helping to carry out payments at speed and low costs, the technology encompasses the vast potential for businesses of any size or industry.

The framework’s potential seems to be backed up by the success of Open Banking startups, focusing on refining it further. Although only gaining momentum, A2A payments could potentially greatly reshape the market as we know it—a change payment service providers (PSPs) have to be prepared for.

 

Facilitating customer journey

On the face of it, it is one of the most primitive forms of transferring digital funds. Let’s say, User A has an account in Bank X and wants to transfer funds to User B. When User A agrees to exchange funds for services, provided by User B, they are immediately transferred directly from User A’s bank account to User B’s, hence the name account-to-account.

However, the real potential of A2A payments lies behind the customer’s journey. Let’s go back to Users A and B. Traditionally, in order to make payment, User A would need to first get a hold of User B’s bank details, such as company details, bank account number, sometimes a short code, bank details, an 8 or 11 character code called BIC, SWIFT and a payment reference number, which can either be a number or text, sometimes a bit of both.

The process does not end here—the person then has to log in to his online bank, input all aforementioned details, authenticate, and then—find a way to prove to User B that he has actually made a payment.

Some banks now offer an option to print a completed transaction slip as PDF immediately, others require more effort to get some sort of proof. Usually, these PDFs have no signed authorization by a bank employee, hence, they can be easily forged; unless one goes the paper route, which is a bit on the dear side. Thus, User B will need to log in and verify whether the funds have really hit the banking account.

While local payment schemes like ‘Faster Payments’ in the United Kingdom or SEPA Instant in the European Union provide the convenience of getting the funds virtually instantly, not all banks are part of this scheme, and funds might only arrive 3 hours later, or even the next day; in some cases, such delay could have direct consequences. Hence, a merchant is faced with a dilemma—to trust a PDF, that might be forged, and send the goods or provide services anyway, or delay the service until funds really hit the account.

A2A payments enable to streamline the cumbersome process, and cut off hours of waiting.

 

Rivaling long-standing card dominance

It is no wonder why, for a long time, cards have dominated online commerce. Even though they require a much more elaborate communication mechanism than an A2A payment, it was actually the trust framework, provided by major card issuers and processing centers, that made it so attractive to use.

Card schemes verify that user A has enough funds and instruct the bank to freeze the agreed-upon amount as well as inform User B that they will be deposited into User B’s account. In addition, User A knows that, in case the seller sold something different than was agreed, s/he could get the money back—the dreaded “chargeback”—so user B is kept honest.

Let’s go back to the transaction between User A and B, however, instead of a traditional account-to-account transfer or a card payment, let’s utilize what is called Payment Initiation Service (PIS) in Europe; then, at the checkout page, s/he sees a list of banks rather than fields to input a myriad of payment details.

Once the bank at which User A holds funds is selected, s/he is taken to an authentication page, where login details and authentication is needed. What happens next is the gist of A2A—instead of having to enter details of User B account, User A already sees all details pre-filled, and s/he only needs to verify the payment, which is completed in several seconds.

Since an intermediary—PSP—has guided User A who made a payment, it can confirm to User B that payment has successfully been executed, even if funds have not reached user B account; the same way card schemes do.

Thus, if cards have been working for decades, why the rise of A2A?

 

Benefits for merchants

From a merchant’s perspective, A2A payments can bring tremendous benefits. First and foremost, they are much cheaper. In comparison, card acquiring will set you off at least 0.85% or more, depending on the deemed risk of your operations, while A2A can cost as little as 0.25 EUR, like a typical bank transaction.

Moreover, depending on the product one is selling, card chargebacks can become truly troublesome. If merchant witnesses a case of fraudulent use of cards, and his/hers ratio of chargeback goes over 1%, the seller will automatically be deemed high-risk by card issuers and get completely different rates—or might lose the ability to collect via cards altogether.

With A2A, fraud is more difficult, as one would need to acquire not only the login to an online banking platform but also to the device used for 2-factor authentication, usually a phone and two passwords—one used for logging in and another one for payment authorization. Some banks might still use SMS for a one-time password, but this is getting rare.

Finally, the speed. A2A is a simple bank transfer and 60% of European PSPs have already joined the SEPA-INST scheme, all banks and building societies in the UK have joined the Faster Payment scheme, which means funds sent via A2A usually arrive in seconds. This means funds are available to merchants quicker and, given how difficult cash management might be for a small business, A2A transfers might help avoid costly credit lines or factoring.

 

Drawbacks of A2A payments

From a consumer’s (User A) perspective, there is not much of a difference. One could argue that this is, in fact, the biggest drawback why A2A payments have not replaced traditional card acquiring. In fact, it would be great to see an account-to-account solution that requires fewer steps than paying with a card, especially with the advent of 3D Secure 2.0, a new authentication protocol for online card payments.

A2A has largely been enabled by banks opening up their infrastructure to fintechs due to Open Banking regimes that called for the right of bank users to share their account information with 3rd parties. But the quality and the methods in which different banks and banking groups are providing access to their bank account holders’ information is incredibly diverse, often complicated, and sometimes—simply does not work.

The second biggest drawback is consumer protection. While traditional card schemes have offered almost unparalleled ability to request your funds back at any hint of dishonesty or simply distaste, one will have to prove fraud, or be at the mercy of the merchant, to get an A2A payment reversed. This is due to the fact that standard bank account payments were built with traditional banking in mind—paying salaries to employees or vendors for commonly used services, e.g. carpet cleaning; not something like herbal pills that help to concentrate or sleep better, from a company in Seychelles.

 

Future of A2A and the role of PSPs

A2A payments have a few great advantages over traditional card acquiring for merchants, however, there are a few potential risks to consumers that need to be considered; though, from a consumer’s perspective, the process is about the same. Even though A2A transfers are more difficult to exploit by criminals, users will need to cover additional steps if s/he sends funds to a shady merchant of their own will.

To summarize, the future looks bright for A2A payments—the in-the-works integrations that some banks currently have are bound to become more refined, as the myriad of fintech players keep encouraging them to create a more functional flow. Some big banks themselves are starting to offer A2A collections for merchants, as they do not want to see their profits seeping through the holes of open banking directives. There are markets, for instance, the Netherlands, where A2A payments already dominate and make up more than 60% of all online transactions, so it is not a question of if, but rather when.

Once key players saturate the market, A2A will become a commodity payment and PSPs will again need to concentrate on what matters most—easy and personalized customer experience and value-added services to merchants.