All posts by Akeela Zahair

Finance technology
ArticlesFinance

The History of Finance and What the Digital Future Holds

Finance technology


To understand how the financial world has got to where it is, it’s important to look at the history, in order to gain context. Whilst finance has changed a lot over the years, the broad definition of it has stayed the same.

 

Where Currency First Began

The term of currency is broad, but its roots can be tracked down to the caveman, who could have given someone something they held valuable, such as a shiny rock, for some meat that another had hunted.

In truth, the definition of a transaction has largely stayed the same but has just become more open in what it defines. Eventually, as communities started to form together into bigger groups, such as towns and cities, simple trades wouldn’t really work.

In ancient times it was the Sumerians, one of the oldest civilisations in the world, who realised that they needed another method. This was because of the rise of farming, which meant most people had access to food and had it in abundance, making it pointless to trade. The leaders at the time recognised this need, and invented money to help control how society traded.

 

How the Industrial Revolution Changed Finance

Fast forward a few thousand years, and there was suddenly an abundance of new technologies that were designed to make human life easier. One of the major ones, was steam.

Steam powered technology led to steam trains, which also led to railways and transport that was capable of travelling to different countries much quicker than ever. As you can imagine, this made communication and business more organised, as they could meet quicker and make transactions quicker than ever.

It was around this time that banks started to open their doors for the first time, and with different nations trading more and more, the governments of the world started to mandate and license trading.

 

How Assets Were Important

Physical assets have been important to the financial world for a number of years. When thinking of assets, you can think of gold bars, which are often held by banks and governments in vaults to accrue interest and hold something of value to strengthen their financial capital.

Most people will hold some sort of asset, whether that be something trivial such as vintage memorabilia, or something more concrete, such as property. Property is considered a major asset, as it very rarely declines in value, usually becoming more valuable as work is done and the housing market changes.

One of the worst assets you could hold, is a new car. New cars will lose almost 30% of their value as soon as they drive away from the shop, and after a few years, could lose almost 60% of its initial value. The market of second-hand cars is flooded with stock, meaning new cars offer little value in the financial world.

 

How Digital Assets Have Become Important

Digital assets have become more important to the business world, as it can help them with influencing buying behaviour. These assets can represent a visual product or service, or just be something that you as an individual or corporation hold.

A digital asset can be defined as anything that stores content digitally. Most of the time, it will be something that holds some sort of monetary value, but it doesn’t always have to. For companies, it could be something that is only valuable to them, or it could be something that has nothing to do with them that is used to turn a profit.

Banks often hold many digital assets as of recent years. Previously, they only had vaults of physical cash, but these days they’ve turned their attention towards digital outlets such as cryptocurrencies as they see it as a one-day valuable piece of stock.

You can also get images, photos, videos or any sort of online file or document that would count as a digital asset. Throughout recent history, there have been an emergence of new digital assets. For example, MP3s almost came out of nowhere in the early 1990s, and it didn’t take them long to start dominating the digital space and be shared amongst people.

You can identify a digital asset in three main ways. The first being, it needs to be purely digital, in terms of how you use it and share it. It also needs to be uniquely identifiable in its nature, and not something confusing. Lastly, it needs to hold some sort of value to whoever holds it.

There are many ways you can grow your digital asset portfolio with Unagii and their access to yields across many digital blockchains. Unagii is an automated service, so the hard work is taken off your plate as your organization’s rewards and monetary value is unlocked.

 

Fintech Explained

Fintech stands for financial technology, which as you can imagine, covers a wide range of topics. You could even explain the introduction of Fintech to thousands of years ago, when scales were used to weight money.

Of course, the technology has evolved quite a bit since then, but the core element of it has stayed the same. Aside from other ancient monetary techniques of collecting and counting money, the term became more broadly used in society in the last few hundred years, especially in the 19th century.

This was when money started to be able to move differently around the world, through telegrams or even morse code. This changed the world as it was known back in the day, as it opened up a range of different investment opportunities, and awoke people to the idea of financial technology.

It wouldn’t be long until new financial technologies started to appear in society, through something known as an ATM. Of course, these are very common now, but the first only appeared in 1967, after a switch from analogue to more digital finance.

During the 1970s, the world’s first digital stock exchange opened up known as NASDAW, as well as the society for worldwide interbank financial telecommunications, to help regulate the communication between financial institutions making international transactions.

Digital banking started to appear more commonly from the 1990s onwards, where PayPal was introduced amongst other payment systems. It wasn’t until the financial crisis of 2008, that fintech had to evolve once more.

This is where cryptocurrency was born, and smartphones started to dominate everyone’s life. This meant apps had to be built to help users navigate the financial world, this led to banks creating their own digital banking products and allowed third-party companies to have access to financial data.

The rest, as they say, is history. Contactless payments were introduced and have become a preferred method of payment, through cards, phones and even watches. 

 

What Banking Will Look Like in the Future

With many banks now looking to purchase crypto such as Bitcoin to hold as an asset, you can be sure that banking will look more digital in the future. Of course, global economies were devasted during the recent COVID-19 pandemic, which lost billions across the world due to business closures and lack of cashflow.

This has led to blockchain financial institutions becoming more popular, and this will only continue to expand. Financial technologies are predicted to become smarter, where the ways in which money is collected and managed will change and become more universally accepted across multiple platforms.

Finance
ArticlesFinance

Many UK Financial Organisations are Unprepared to Adapt to Unforeseen Challenges

Finance


Industry research commissioned by nCino surveyed 200 senior executives in financial services on their digital transformation efforts

nCino, Inc. a pioneer in cloud banking and digital transformation solutions for the global financial services industry, today revealed new research on the views of senior executives within financial institutions on their ongoing digital transformation journeys. All surveyed executives plan to increase spend or volume of digital transformation projects over the next 12 months, highlighting the importance for the sector.

“As the banking industry continues to evolve, this research highlights several emerging themes that are accelerating or playing a role in the transformation of both new and traditional financial services,” said Jennifer Geary, General Manager – EMEA at nCino. “We’re excited to see how technology is providing a foundation for change, and that investments are being planned to improve processes that can benefit both consumers and financial institutions.”

 

Transformation to meet customer demands

More than three quarters (78%) of respondents believe their organisation is unprepared to react and adapt to unforeseen challenges. Covid-19 is one such example which the executives surveyed argue negatively affected their ability to service customers. As a result, over one in three (35%) executives are focused on improving their organisation’s resilience to future disruption through implementing new agile technology.

Over half (52%) of consumers now demand a more personalised experience from their bank and, as a result, financial institutions have had to re-evaluate how they tailor the customer journey. However, almost half (47%) of executives say they do not have access to the right information to deliver an exceptional customer experience, with almost two in five (39%) struggling to unify their customer data across platforms and channels.

It is therefore unsurprising that a third (33%) of senior executives expect to increase spend on digital transformation projects that focus on improving customer retention rates. In addition, 31% of executives say establishing a strong customer experience is a significant reason for implementing artificial intelligence and machine learning tools.

 

Investment in transformation set to rise

Transforming their organisation through new agile technology is of paramount importance to all executives surveyed, whereby all state they are increasing investment over the next year.  Investment levels, however, vary. Over a fifth (22%) are looking to increase spending between £1 million and £5 million over the next 12 months. A slightly larger number of respondents (28%) are expecting a £500k-£1m increase. Despite spend increasing across the industry, cost pressures are the main barrier organisations face when looking to implement new technology.

 

Speed at the heart of transformation projects

Improving the speed of delivery of products is the main factor (40%) driving increased spend in digital transformation projects. With customer satisfaction now a top priority and the demand for loans rising during the pandemic, it is paramount that organisations overcome delays in updating their product offerings. For example, when making lending decisions for customers, over a quarter (26%) of senior executives struggle to make timely decisions. The CIBLS loan scheme, which supported U.K. businesses to stay afloat throughout the pandemic, highlighted why it is so important for the loan approval process to be fast to benefit both the economy and customer satisfaction.

 

Transformation benefits are not clear

There is a lack of understanding of the benefits new technology can bring to financial institutions; in fact, 31% of respondents state this is the main barrier for implementing it within their organisation. It is therefore unsurprising that over a quarter (28%) of senior executives feel there is a lack of internal knowledge or expertise around the benefits of new technology and therefore, limited internal desire for new projects.

 

Transform for good

Nearly half (44%) of financial organisations are adopting technology to respond to environmental, social and corporate governance (ESG) trends. In fact, a third of executives (33%) are looking to increase spend on digital transformation to improve their organisations’ ESG efforts. Other areas organisations are focusing on include the reduction of paper consumption (42%), travel (36%), and branches (27%). Over the last year, it has become evident that some financial institutions can easily continue the service provided to customers through replacing paper and regular branch visits with digital channels. This has had a positive impact on the environment and therefore, is being implemented into ESG initiatives. While only 37% of organisations are establishing carbon neutral goals, less than 1% noted they were doing nothing in response to the pressures of ESG.

“Financial institutions need to prioritise between short-term and long-term objectives and work to align their products and services with their clients’ expectations and needs. Having the right strategy is important, but so is having the right partner and technology that can offer the flexibility and agility needed to react, adapt and continue to delight clients through any unforeseen challenges or opportunities,” concludes Geary.

Crypto Bitcoin
BankingMarkets

More than Half the Nation View Cryptocurrency Trading as Form of Gambling

Crypto Bitcoin

More than half (56%) of Brits deem cryptocurrency trading as a form of gambling, according to a new study from Gamban, a software company that blocks access to online gambling sites and apps across all of a person’s devices.
After speaking with 1,007 gamblers throughout the country, the research also found that nearly half (48%) would consider stock trading a form of gambling too.
Previous research has identified that excessive trading can be linked to a gambling disorder. Grall-Bronnec et al (2017) found that addictive-like trading behaviour can be a subset of gambling disorders. Similarly, a study by Mills et al (2019) revealed more than 50% of regular gamblers have traded cryptocurrencies in the previous year and that this was associated with an increased risk for problem gambling, depression and anxiety. 
Jack Symons, CEO of Gamban, said: “The aim of this research was to help us understand whether different types of trading are considered gambling. In a world where the lure of immediate gratification through digital platforms is increasingly tempting, it’s important that we take appropriate steps to ensure our users are protected from any activities that closely resemble gambling.
“Understanding whether the content we block should expand beyond the traditional forms of gambling will allow us to better protect our users. As well as this, we can then begin to provide recommendations on reducing gambling harm.”
In the last few years – and especially during the coronavirus pandemic – online trading, including cryptocurrency trading, has grown significantly (Nefedova et al., 2020) The increase in online trading activity has resulted in the birth of new online trading platforms, larger budgets dedicated to advertising on various social media channels and an increased overall awareness of online trading. Additionally, cryptocurrency trading has seen a significant rise over the last year with many day traders “shifting their attention to more speculative assets” (Financial Times, 2021).
Jack Symons added: “The results of our research, paired with current available literature, indicates that trading and gambling share similar characteristics and that some forms of trading may be closely linked with gambling harm. 
“Problem gamblers may be at risk when exposed to different forms of online trading. More volatile forms of trading, like cryptocurrency and stock trading, are more akin to betting than investing. So as of next month we intend to restrict access to platforms that offer these more volatile forms of trading to benefit the recovery journey of Gamban users.”
Gamban works with the the self-exclusion scheme GAMSTOP, and the leading treatment provider GamCare, giving those experiencing harm from gambling access to their software for free through TalkBanStop.com
Gamban also struck a partnership with Norway’s government-owned national lottery and gaming operator, Norsk Tipping, to provide its software for free to those who self-exclude.
Trading
ArticlesMarkets

Answering the Nation’s Top 10 Trading Questions

Trading

By Annie Charalambous, Head of Communications at ETX Capital

The past year has been challenging on all fronts, the least of which being the nation’s finances. With many furloughed or having lost their jobs altogether, financial stresses are mounting, and getting the most out of our money is more important than ever.

As interest rates sit at historic lows, people are starting to rethink just how and where they invest their savings, and trading is one such avenue that’s seen a rise in activity over the pandemic.

Over at ETX Capital, we know that making an educated decision is imperative to success, and so we’ve looked at Google search data to reveal the most common questions budding UK traders are asking, and answered them.

 

What is stock trading? (9,900 monthly searches)

Stocks, or shares, are fractions of ownership in a publicly traded company, that anybody can buy (or sell) depending on the perceived value of that business. Traditionally, you’d want to get in (buy) at a lower price and hold onto that stock until it appreciates in value for you to make a profit.

 

What is options trading? (8,100 monthly searches)

Options are financial contracts that give their holders the ability – but not the obligation (hence option) – to buy or sell a security for an agreed-upon price on a set date, thus hedging against the risk of fluctuating market prices.

 

What is a CFD? (6,600 monthly searches)

A CFD, or Contract for Difference, is another type of trading contract, whereby you are speculating on the direction an instrument may move in, without owning the underlying asset.

You are therefore trading on the price fluctuation – “buying” if you believe its value will increase over time, or “selling” if you anticipate a decline.

 

What is forex trading? (5,400 monthly searches)

Forex, coming from foreign exchange, refers to the buying and selling of different currencies to profit from the difference in their values. The forex market is the largest in the world, seeing over $6 trillion a day in volume – everyone from holidaymakers to big banks partake in the FX market.

 

What is leveraged trading? (5,400 monthly searches)

Leveraged trading works in such a way that a retail trader can open a larger trade with less capital, with the broker putting up the rest of the balance (i.e., the leverage).

Having larger position sizes means your exposure is higher, resulting in bigger returns and conversely, bigger losses.

 

What is futures trading? (2,900 monthly searches)

Futures contracts work in such a way that two parties – a buyer and a seller – agree to exchange an asset on a fixed future date, with the profit (or loss) realized at the time of exchange.

Your profit or loss is realised at the time of the exchange, depending on how the price has fluctuated since the order was placed.

 

What is scalping? (2,900 monthly searches)

Scalping is the act of placing trades you intend to keep open for a very short amount of time, ranging from a few seconds to several minutes, to capitalize on high volatility or sharp spikes in the market.

While there are brokers that may allow scalping in some capacity, it is a form of market abuse if done frequently.

 

How to trade stocks (2,400 monthly searches)

As with any investment, research is the first step.

From choosing the right broker (you’ll want to consider fees, liquidity, selection of stocks, and of course, reputation) to finding the right markets to invest in, you should always know why you’re investing in a particular stock.

Some factors worth looking at may include analysts’ projections for stock performance, the company’s financial results (or earnings), published quarterly, as well as the dividends it pays out.

 

How are commodities traded? (2,400 monthly searches)

Commodities are, typically finite, physical products that have a fluctuating value. There are both hard and soft commodities, ranging from gold, silver, oil, and other natural resources to the likes of coffee, wheat, corn, and even orange juice.

Their value is dependent on supply and demand and can be influenced by anything from weather to politics.

 

How to trade cryptocurrencies (1,900 monthly searches)

Like forex and stocks, cryptocurrencies can be traded as either CFD products or bought and held in a virtual wallet. While more volatile than other traditional assets, cryptocurrencies can be a profitable investment if, like any instrument, you get in at the right time.

When trading crypto CFDs, you can short or sell, meaning you can profit from the drops and not just a rise in value.

Investment Portfolio
ArticlesFinance

Different Types of Investment Portfolio

Investment Portfolio

Whether you are new to the world of investing or just looking to diversify your holdings, there are a number of key decisions that must be made. One of the first being which type of portfolio is most likely to suit you during your investment journey. Continue reading to familiarise yourself with the different types of investment portfolio and how to choose the right one for you.

 

Aggressive

Aggressive is one of the most common types of investment portfolio. It seeks out large returns and the high risks associated with investing in them and tends to favour capital appreciation over safety. The type of strategies associated with an aggressive investment portfolio will usually allocate a large number of assets to stocks and little to none in bonds or cash-based investments. They are suited to young adults with small portfolios. This is due to the fact that young investors can sustain market fluctuations and losses much more easily than experienced investors with a lot to lose. Most investment advisors only recommend this strategy if it is applied to a small percentage of your entire investments. If you are looking for a high risk portfolio with an equally high return on your investment, it may benefit you to check out the Golden Butterfly Portfolio.

 

Retirement-blended

With interest rates continuing to decline, the traditional retirement portfolio is almost obsolete. Retirees must lay the groundwork and take the appropriate steps towards building a substantial retirement fund decades in advance. With life expectancy rates surging across the globe, this is now more important than ever. If you are an investor nearing retirement age, you may benefit from a blend of both income-oriented and growth-oriented investments. A common example is stocks and bonds. By taking a step back from alternative investments and sharpening your focus, you can generate long-term growth that is much more likely to grow in line with inflation. This increases your chances of receiving a relatively constant return on investment and softens the blow of equity deteriorations over time.

 

Income

When you invest, your returns can be relayed to you through dividend pay-outs or stock price appreciation. An income investment portfolio is the name given to a portfolio that consists primarily of stocks that pay dividends. Income portfolios tend to generate positive cash flow. Examples of investments that produce income include real estate investment trusts, or REITs, and master limited partnerships, or MLPs. A real estate investment trust, in particular, is a great way to invest in real estate without the commitment of actually owning a property outright. A master limited partnership, on the other hand, is a limited partnership that is traded publicly on an exchange. These companies will pass on a large percentage of their profits to shareholders in exchange for positive tax status. Income investment portfolios can be a handy way of diversifying your current income sources and supplementing your existing retirement fund.

 

 

Speculative

If you are looking for a high risk investment portfolio with high returns, a speculative portfolio may be the best option for you. It is commonly compared to gambling and involves a much greater degree of risk than most types of investment portfolio. Speculative investments focus on market fluctuations and movements. Most speculative investors are uninterested in the fundamental value of an asset or the annual income it may generate. They tend to focus on how much they can sell it on for at a later date. Examples of speculative investments include real estate, stocks, currencies, fine art, currencies, commodities, and collectables. They may also include Initial Public Offerings, or IPOs, and healthcare or digital technology firms in the process of developing a cutting-edge product or service. Most investment advisors tend to recommend that no more than 10% of an investor’s assets are used to fund a speculative investment portfolio.

 

Hybrid

As the name suggests, a hybrid investment portfolio involves a combination of a number of different investments. It offers the greatest level of flexibility and versatility compared to other types of investment portfolio and typically includes bonds, commodities, real estate, and perhaps even fine art. As with income investment portfolios, a hybrid investment portfolio may also include real estate investment trusts and master limited partnerships. Typically, hybrid investment portfolios contain both stocks and bonds and are diversified across multiple assets. This allows investors to balance both risk and return and establish an investment portfolio that suits their own individual needs and requirements. It is also a great option for first-time investors as it exposes them to equity and tends to be relatively low risk.  

 

When it comes to investing, there is a lot to learn. One of the first factors to consider is which type of investment portfolio to opt for. From aggressive and retirement-blended to income, speculative, and hybrid, there is guaranteed to be one out there to suit your knowledge and experience of the investment market.

Recovery
ArticlesBankingMarkets

New Global Data on Bank Customer Behavior Shows Travel is Poised to Recover Faster than Expected

Recovery
  • Points transfers from banks into frequent flyer schemes are accelerating and trending ahead of airline passenger recovery
  • US points transfer activity already exceeding pre-pandemic level by 30%
Yesterday Ascenda, the technology company that makes banking rewarding, revealed consumer confidence in travel is returning quickly according to leading indicators from its bank solution TransferConnect, the world’s largest global exchange for frequent traveller miles and points.
TransferConnect facilitates the exchange of rewards currencies between financial services brands and a broad set of major airlines, hotel chains, super apps and retailers worldwide. The network enables banks across 40 markets to connect with 50 major merchants and delivers access to real-time points transfers for 1.2 billion consumers worldwide.
The newly published data is the first of its kind ever released in the industry and showcases how rewards currency exchange volume from banks into frequent flyer schemes has compared against airline Revenue Passenger Kilometers (RPKs) over the past 18 months. The analysis provides unique insight into how the multi-billion dollar bank rewards value chain has been impacted by the pandemic and where travel recovery is heading in coming months.
When COVID-19 first brought global travel to a standstill in March 2020, bank consumers naturally ceased to transfer their accumulated points into frequent flyer miles. Both RPKs and rewards transfers plummeted more than 80% during a 60-day period.
However, customers continued to earn bank rewards unabated on their everyday card spend as the pandemic unfolded, with growing points balances waiting to be redeemed. The year 2021 then brought the turning point, as news of global vaccination progress unleashed pent up travel aspirations and prompted a reinvigoration of bank point conversions into frequent flyer schemes. Since March 2021, that transfer activity has accelerated its recovery materially ahead of passengers carried. The effect is consistent across geographies and especially pronounced in the US market, where the volume of bank points exchanged into frequent flyer miles has actually surpassed pre-pandemic levels from April 2021 onward and is still continuing its upward trajectory.
In addition to these strong signals of returning consumer confidence in air travel, the analysis also reveals that hotel chains have capitalized on the pandemic to sustainably grow their share of global rewards currency transfers. Following the onset of the crisis, transfers into hotel points had naturally gained relative share as consumers were forced to opt for local vacations. Hotel points represented less than 10% of currency transfer volume in 2019, increasing three-fold in March 2020 to 30%. What’s most remarkable, however, is that the behavior change has persisted into 2021, even during the recent months of recovery, indicating that the chains have sustainably grown their level of engagement with loyalty program members.
Sebastian Grobys, Chief Commercial Officer at Ascenda, said: “As the pandemic unfolded, the world’s eyes were glued to plummeting operating statistics published by airlines and travel industry bodies across the world. Since then, there have been many attempts to analyse the slope of the recovery curve and make predictions about the future, for example looking at forward booking patterns. Today we’re excited to contribute a new and unique source of data that shows frequent flier mile transfers are rising significantly in a strong signal of accelerating recovery.”
Fintech Banking
ArticlesBanking

How is Fintech Transforming Banking in Central Asia?

Fintech Banking


By Abdullo Kurbanov and Zuhursho Rahmatulloev, co-founders of Alif

When we think about the markets driving the financial technology (fintech) revolution, London, New York and San Francisco immediately spring to mind. In many ways, it makes sense for these cities to be at the forefront of fintech innovations. Each of these cities accommodate diverse pools of financial and professional service specialists, attract significant investment, and boast world-leading digital infrastructure.

Since 2015, challenger banks and fintech companies have launched in these locations, offering new products and services that seek to transform consumer finance and retail investment. In doing so, they are collectively helping to empower society through digital solutions. 

While it is important to acknowledge the fintech ecosystems in advanced economies, we should not let these overshadow some of the exciting developments currently on display in emerging markets. Regions like Central Asia are on the brink of what we deem to be a “fintech revolution”, led by a new generation of fintech companies. Importantly, these companies are taking an agile approach by addressing localised issues through the creative deployment of technology.  

Tajikistan is one such country in the middle of a profound digital transformation. With the aim of achieving better financial efficiency and inclusion gains, the country’s fintech industry is helping to digitally empower its citizens. Moreover, at the regional level, by applying tech to address the current banking challenges faced by people based in Central Asia, such as remittance payments and Sharia-compliant fintech platforms,  the Central Asian region is set to become a global leader in Shariah compliant fintech.

 

International remittances

Admittedly, a core driver of economic development in the Central Asia region is remittances. Over the years, the mass migration of people to Russia from Tajikistan, Uzbekistan, Kyrgyzstan and some other former Soviet Union countries has resulted in economies that rely on remittances as one of the core contributors to GDP. According to the World Bank, remittances accounted for 33% of Tajikistan’s GDP in 2019 – equating to $2.5 billion. In Uzbekistan, personal remittances received in 2019 totalled 14.75% of GDP.

Remittances do play an important role in supporting domestic households and ensuring countries are positioned to achieve the Sustainable Development Goals. However, the complexity and costs involved in arranging these payments can lead to people paying extremely high fees. Banks and money transfer operators (MTOs) are typically responsible for managing such payments. The costs arise when these operators need to engage with several intermediaries, not to mention the margin on the exchange rate. 

Research by the World Bank concluded that COVID-19 has led to a decline in remittance payments in Europe and Central Asia; a consequence of weak economic growth, currency depreciation and unemployment in migrant host countries.

It is here that fintech models can drastically reduce the costs involved in such transfers while also providing greater transparency over how the payment is managed. It is estimated that if every remittance payment made in 2018 to the Europe and Central Asia region had been facilitated through Fintech models, consumers could have collectively saved US$1.59 billion.

These cost savings arise from the lower transfer costs and fees when compared to traditional operators. The payments can also be arranged instantaneously, which ultimately reduces the chances of individuals looking to informal, high-risk avenues of transferring finance.

Evidently, fintech can have important distributional effects by supporting those who rely on remittances. By making the process cost-efficient and transparent, consumers can significantly reduce the amount of fees and costs paid for any type of remittance transfer.

 

Empowering the region with Islamic fintech

With most people in Central Asia identifying as practicing Muslims, the region is ripe for the growth of modern, technologically enhanced Islamic banking. At the core, Islamic finance is based on the principle that money does not have an inherent value. Instead, it is seen as an instrument used to exchange products and services – things that do have value. Islamic finance also prohibits interest payments. In other words, people should not be able to make money from money.

However, there is so much more to Islamic fintech than simply ensuring the core beliefs of Islamic finance are integrated into fintech platforms. Considering the sustainability and development goals of Central Asia, the fact Islamic finance promotes risk sharing, encourages financial inclusion, and is focused on social welfare outcomes, ensures it can play a positive role supporting the economic progression of the region. The provision of Sharia-compliant banking through fintech solutions not only improves the digital capabilities of the region but contributes to broader social and economic goals.

 

Creating a digital ecosystem in Central Asia

Digital connectivity is a key enabler of economic productivity, growth and market innovation. As more and more services are offered online, there is a need to ensure that everyone around the world is digitally enabled. Despite this, the World Bank estimates that nearly half of all people in Central Asia are not digitally connected. This is a concerning figure, highlighting the need for a long-term strategy which directs investment into the infrastructure and skills needed for the region to have internet access.

Private and public sector cooperation is needed to facilitate this digital transformation. For example through ongoing consultations and meetings between public bodies, and local companies at the helm of digital innovation. A digital ecosystem needs to be created, and fintech companies can assist in two practical ways. 

The first is through the practical deployment of accessible technologies that assist with people’s daily financial needs. From consumer and retail financing, such as buy now pay later (BNPL), point-of-sale financing through to transparent online channels that facilitate cross-border currency transfers, fintech companies are ensuring the development and proliferation of technology that practically address the common needs of those based in the region.

The second way is through education, skills and training. Digital literacy empowers individuals, and this can only be achieved if people are encouraged to pursue education that betters their understanding of technology, particularly when it comes to finance. For growing fintech companies in the region, it makes sense to implement academy programmes to create a skilled workforce. Such education programmes will also provide the inspiration needed to support a new generation of tech entrepreneurs keen to learn how to programme, thereby reducing the factors that might tempt younger generations to move outside of the region.

 

Fuelling growth and innovation through tech

Fintech is naturally positioned to help empower Central Asia and support the digital transformation of the region. From offering an easier and more accessible way of managing remittance payments through to the provision of Sharia-compliant services and financial education, fintech will be integral to the economic advancement of Central Asia. Importantly, fintech companies are heeding the call with companies like Alif applying the latest technology to ultimately improve the way people can manage their finances.

Based on what we are seeing unfold now, Central Asia could establish itself as competitive global hub in fintech innovation through the release of platforms, products and services that support issues typical to the region, particularly when it comes to Islamic finance. For these reasons, we are optimistic about the future prospects of fintech in digitally transforming Central Asia in the coming years.

Abdullo and Zuhursho - ALIF
Abdullo Kurbanov and Zuhursho Rahmatulloev, co-founders of Alif
Investment small business
ArticlesFinance

Investment in Small UK Firms Booms Despite Covid

Investment small business


By Luke Davis, IW Capital.

New data from the British Business Bank has revealed that UK smaller companies received a record £8.8 billion of equity investment in 2020 despite the disruptive effects of both Covid and Brexit. This record growth looks set to continue in 2021, with £4.5 billion of investment reported in the first three months of the year already, while our own research at IW Capital – where we provide vital growth finance for SMEs – reveals that 16% of UK investors are looking to back startups and SMEs in 2021.

The figures come from the British Business Bank who first started to track this form of investment over ten years ago. The Bank was also a key contributor to this record, supporting over 20% of all UK equity in 2020 – the majority of which involved the newly launched Future Fund.

The Fund, launched in May 2020, provides convertible loans, ranging from £125k to £5m to eligible investee companies. Technology and IP-based businesses have so far made up around 40% of the companies receiving investment, with Business and Professional services following at 26% of the firms. This still leaves, however, a significant portion of the market if not uncatered for then certainly under-funded – a chronic problem for UK businesses over the past decade.

SMEs are a vital sector of economies the world over, but especially so in the UK, where firms with fewer than 250 employees contribute over £2 trillion to the economy. They make up 99.9% of private sector businesses and employ around 60% of the workforce, and as such are crucial to the UK economy and its growth. This is a significant portion of the overall GDP and much of it is spent in local communities – something which has come to the fore during the pandemic.

Considered in tandem with the fact that before the pandemic, small firms were hiring at a rate three times higher than large companies, this evidence demonstrates just how powerful SMEs will be in tackling potential unemployment as a result of the end of furlough.

Investment in small firms also almost always comes with advice, guidance and an outside perspective that can prove invaluable to a business looking to grow, scale or simply survive – especially in the current climate. Through angel investment and other forms of private finance, entrepreneurs are offered advice, connections and introductions that can make the difference between success and failure or scale and stagnation.

This investment support comes at a time of record optimism in the SME sector, with three quarters of CEOs expecting overall economic conditions in the UK and Ireland to improve over the course of the next 12 months. The combination of optimism and investment backing could spell a perfect storm for growth in the sector that is so vital to the UK economy.

The economy in 2021 is already heating up, with it set to return to pre-pandemic levels by the end of the year, and its continued growth will be fuelled by the small businesses that provide its foundation.

The record level of investment reported in 2020 is great news and – from our experience through the last year and a half – not at all surprising. There has never been more demand to support SMEs and startups in their growth journey, whether that be through the Enterprise Investment Scheme or any other route to provide funding, and the trend is by no means over.

Our research indicates that a significant proportion of the UK’s investment community are actively investing in these firms. Opportunities in this sector exist not only for great returns but also to make a real difference in the life and growth of a business. something that is becoming more important for investors as they adopt a more altruistic approach.

IW Capital invested in at least six different growth SMEs during 2020 and the majority of them have grown at a rapid pace thanks to our support. The growth of these businesses ranges from sustainable packaging that pivoted to produce plastic-free PPE, to apps making seamless hospitality service possible during a pandemic. The unifying elements they all possess are passion, determination and talent, all qualities that the UK entrepreneurial sector has in spades.

Managing Finances
ArticlesFinance

How to Manage Your Finances More Effectively?

Managing Finances


Even if you think that your salary is not that low, you might routinely discover that for some reason, you have underestimated your monthly spending. Although you are not the only one, it doesn’t mean that you shouldn’t put plenty of effort to ensure that you have some savings that could be much needed when something unexpected happens.

It might be easier said than done, but it doesn’t mean that you are fighting a losing battle. In a moment, we’ll explain how to manage your finances more effectively so that you can live a more stress-free life. It will require a fair bit of self-discipline, but it’s worth the effort.

 

Pay off Your Debts

Once you have determined how much you spend on each category and have set up a budget plan that makes sense for you, make sure that you stick to it and don’t deviate from it unless necessary. If there are expenses that seem unreasonable or unnecessary, try to cut down on them and see how much money could save over time.

If there are any debts that need paying off urgently, then pay them off as soon as possible before they take over your life completely. If the amount you owe is too much for you to repay on your own, you can always consider getting a personal loan, such as the one offered by societyone.com.au. On top of that, consolidating several loans into a single one can help you pay off your debt faster.

 

Track Your Spending

In order to determine your spending habits and see where your money goes, we recommend that you track each and every expense you make. If you are going to use a budgeting app, it will be recorded and calculated automatically. A paper-based system will require more manual work on your part. If you want to be more organized, don’t forget to include recurring expenses such as electricity/water bills, insurance premiums, etc., in your monthly plan.

 

Make a List of Your Expenses

Once you have determined how much you spend on average monthly, you can start making a list of all the things you spend money on. If you are not tracking your expenses, you might have overlooked some of them, while others might appear to be unreasonable. For example, it doesn’t really make sense for a 25-year-old person to spend $800 on groceries every month. This might just be the case if they live with their parents and have a very generous allowance, but it’s unlikely that they earn that much money on their own. Another example is clothing. Let’s say that you spent $500 on clothes last month. If you make $2,000 per month, then this might be a bit excessive.

There are also expenses that you might need to cut down, even if they seem like a necessity. For example, if you spend $100 on coffee every month, it might be time for you to reconsider your priorities or at least reconsider how much coffee you drink every day. Although this is somewhat subjective, we can give you an example of an excellent way to do it. For instance, if you want to cut down on coffee, try to reduce the amount of money you spend on this commodity by a dollar or two each month. Once you have done that for a couple of months, you should be able to stop buying coffee completely. This way, you will slowly start getting used to your new lifestyle, and in the meantime, you will save quite a bit of money.

 

Make a Budget Plan

Once you have determined how much you spend on each category, it’s time to create a budget plan. First of all, we recommend that you try to stick with the same categories as before, but if there are some items that you feel can be moved from one category to another, then go ahead and do it. The second thing that you should do is to look for opportunities where you can cut down on spending without significantly reducing your quality of life.

For example, if you have decided that you don’t need a car because public transportation is sufficient, then think about how much money you would be able to save by not purchasing one. If you are thinking about cutting down on your phone bill, think about how much money you can save by switching to a cheaper provider or changing your plan. This way, it will be much easier for you to stick with your budget plan.

 

Conclusion

You don’t have to be an economics expert to know how to manage your finances effectively. Still, it’s a valuable skill everyone should have! After all, you never know what will happen in the future, and if you spend your money in an unreasonable way, you may be in trouble.

If you want to develop good spending habits, you can start with baby steps. Determining what you spend your money on is a great starting point, and you can use various budgeting tools to help you with that. Ultimately, you can think about establishing an emergency fund and increasing your savings.

Investment market
ArticlesFinanceMarkets

UK Investors Have Their Say

Investment market

Confidence levels are up, Millennials make their mark and interest in ethical investing hits new highs.

Confidence levels amongst UK investors have risen 20 points (62 – 82) in the last 12 months according to new research amongst 1100 UK investors (£10k+).

The Investor Index, now in its second year, is conducted jointly by London-based communications agency AML Group and research agency The Nursery Research and Planning and was launched in April 2020 to assess the immediate impact of Covid 19 on investors and the UK investment marketplace. The first report of its kind to provide an objective overview of the industry based on hard data – the study was welcomed as a barometer of post-Covid investor behaviours.

One year on, and still in the grip of the pandemic, the 2021 study has revealed some significant changes and ‘recalibrations’ amongst investors.

 

Confidence returns – but not to pre-pandemic levels

Over the past 12 months, confidence levels have risen most amongst older investors (55+) up 30 points (54 – 84), investors that are retired up 27 points (57 – 84), those that use financial advisers up 31 points (65 – 96) and investors with a portfolio of £200k+  – up 38 points (55 – 93).

The study has also revealed a disparity in gender confidence levels – with men indicating a 25 point rise over the last 12 months (61- 86) compared to a rise in confidence levels of just 10 points among female investors (65 – 75).

However whilst the results are cause for some degree of optimism – investor confidence levels are still 18 points down from pre-Covid levels.

 

Gen Z/Millennials Vs Baby Boomers – the emerging generational divide

10% of UK investors have started investing since the pandemic began – and of those new investors three-quarters (74%) are under 35s.

It’s a changing landscape with the younger investor bringing different attitudes and priorities to the investor table.

89% of under 35s have changed their investment strategy over the last year vs. 31% of 55+ investors. Younger investors are also increasingly looking to ESG products – with 27% including responsible investments in their portfolio compared to only 4% of investors aged 55 and older. Younger investors are also more focused on the long game – with 30% looking to longer term investments compared to 8% of investors 55+.

When it comes to investment decisions, younger investors are increasingly turning to family (40%), banks (30%) and friends (27%) for advice.

 

It’s a gift – investors demonstrate a change of attitude

57% of UK investors have changed their investment strategy since the pandemic started – with a focus on products offering ‘long term growth’ (46%) over ‘short term growth’ (30%).

Investors are increasingly concerned about their children’s financial security. 70% of investors are aware of the £3,000 wealth transfer allowance with 38% having given £500 or more over the last 12 months – with children the biggest recipients (72%). Indeed the average amount gifted in 2020 was £8087 compared to £5421 pre pandemic (2019) – a 49% increase and a clear indicator of the want for investors to safeguard futures for loved ones.

 

How invested is the UK investor in Responsible Investing?

Investors feel that ethical/socially responsible financial products are more important now than at the same time last year – up 9 percentage points (23% – 32%) with three in ten of those surveyed stating that they believe that these products will be more important in the future – up six percentage points (24% – 30%).

However despite investors acknowledging the importance of ESG/RI there is a continuing perception, despite contrary evidence, that it carries a performance penalty with investors ‘prioritising financial security over wider ethical considerations’ – up five percentage points (23% – 28%).

 

Younger investors look to DIY platforms

Since the start of the pandemic in March 2020, four in ten investors under 35 (39%) have invested more with DIY platforms – compared to just 14% of 55+. And while the younger investor has indicated a ‘happy to do it myself’ attitude regarding financial planning and investments they are less confident when it comes to their feelings about the industry. Just under one-third of under 35s (29%) are confident markets will bounce back compared to more than half (52%) of investors aged 55+.

Perhaps predictably, younger investors are more tapped into trends and news stories connected to investing.

39% of under 35s cited an awareness of the growth in DIY platforms with 44% familiar with the story around Reddit users driving up the share price of Game Stop and 31% aware of the rise in silver prices. Investors aged 55+ recorded significantly lower awareness across all trends.

Digital world
ArticlesFinance

Building An Inclusive Digital Future For Every Child

Digital world

By Sunita Grote, Ventures Lead, UNICEF Office of Innovation & Thomas Davin, Director, UNICEF Office of Innovation

Witnessing the scale of the global pandemic has shown us a paradox: as schools, businesses, and borders closed, our lives went online, children and young people turned to online learning; companies shifted to remote working; and our gatherings with family and friends crossed time zones over video conferencing. We turned to the digital world to deliver our groceries, discover new treasures and experiences, and manage our finances and futures.

The pandemic instigated a mindset shift and accelerated the digital future — but not for the entire world. Half of the world’s population doesn’t have access to the internet.  For many children around the world, the pandemic simply stopped access to lifesaving and essential services like education, healthcare, protection from violence— and the number of children living in multidimensional poverty has soared to approximately 1.2 billion due to the COVID-19 pandemic. It is also estimated that 142 million more children are now living in monetary poverty as parents lose their jobs and income sources.

1.7 billion adults still lack the most basic financial services, leaving them unable to adequately access and invest in their health, education, entrepreneurship – and the chance to protect themselves and their future in the wake of another crisis.

We need to build the infrastructure and systems that enables the most marginalised communities to access digital services. This means closing the current gaps in access, financing, capacity and priority to develop valuable solutions that leverage the latest technological breakthroughs.

 

Closing the gaps to build inclusive digital economies

UNICEF’s Innovation Fund aims to close these gaps by financing early stage, open-source emerging technology with the potential to impact children on a global scale. The Innovation Fund has grown into a $35M+2267ETH+8BTC pooled fund that has invested in 118 solutions across 57 countries, and provides product and technology assistance, support with business growth, and access to a network of experts and partners. Beyond building solutions, the Fund sets out to diversify the community of entrepreneurs that benefits from capital. We put special emphasis on supporting solutions built by the traditionally underrepresented in venture capital – to date, 40% of our investments are in female-led companies. We exclusively support  open source solutions to ensure that these become digital public goods, opening access to them and the value they generate to communities around the world.

The Fund’s investments have generated solutions supporting the global response to COVID-19. These include, for instance, the HealthBuddy chatbot that provides information and addresses misconceptions in 7 languages, built on Ilhasoft’s platform Bothub. UNICEF’s Magic Box platform is able to analyse and develop models based on data provided to us by our partners, predict the spread of COVID-19 and analyse the impact of social distancing measures on children and their families in developing and emerging markets. UNICEF focused our efforts on developing and accelerating solutions that can provide services to and insights on markets that are often neglected by the rapid pace of technological development.

 

Leveraging the latest technological breakthroughs for children

Blockchain-based solutions allow us to rethink how problems are solved.The technology allows for greater transparency and efficiency in systems, better coordination of data across multiple parties, and the possibility for greater community engagement in decision-making that is more difficult with traditional technologies or systems.

In a crisis that required a shift to digital services, we saw blockchain and cryptocurrencies provide value to the COVID-19 response.

We have seen UNICEF’s leadership in establishing a crypto-denominated fund provide new opportunities to new partners,  committing resources toward innovation, including for the COVID-19 response, and toward COVAX efforts. Chainlink, a decentralised oracle network,    contributed to UNICEF’s Innovation Fund and will provide technical expertise to investment companies around smart contracts. Binance Charity donated $1 million in crypto to support UNICEF’s global vaccine rollout and released limited-edition NFTs with proceeds going towards COVAX.

Blockchain-based solutions also have the potential to improve the efficiency of the response. Our portfolio company StaTwig is piloting its blockchain-based app by partnering with the Government of India to track and improve the delivery of rice, supporting their effort to secure food for millions living in poverty – a need amplified by the onset of COVID-19. 

Our newest cohort of investments is building solutions toward greater financial inclusion. The startups are  exploring solutions to make payments to frontline workers more efficient, facilitating cross-border transfers, developing community currency, improving access to saving and lending services, and more. This is the first cohort to consist of majority female-led companies; and expands our portfolio to Rwanda and Iran.

 

Improving transparency and efficiency of our investments

This cohort is also the first to receive equity-free investments in USD and or cryptocurrency through UNICEF’s CryptoFund – a new financial vehicle allowing UNICEF to receive, hold, and disburse cryptocurrency – a first for the UN. The CryptoFund enables us to apply the benefits of blockchain to our own operations and improve our efficiency and transparency at a time when we need to find ways to achieve more with limited resources. We can now make investments in under a few minutes for under a few dollars, all while being fully transparent around where funds are being used.

This flexibility and speed allowed UNICEF to quickly disburse funds and invest further in eight Innovation Fund companies developing features to mitigate the hardships of COVID-19 on children and youth. One of the companies was Somleng (Cambodia), which needed to quickly scale its low-cost Interactive Voice Response Platform to work with the government to send vital information about COVID-19 — and eventually run its Emergency Warning System.  We are now working to bring this flexibility and speed to our government and other public partners – by building and offering digital public goods to manage and track cryptocurrencies more efficiently through our Juniper suite of tools.

 

Building the new digital economy

We now all share the experience of a global pandemic and resulting lockdowns, and those of us with access to digital services found ourselves still interconnected in the “new normal” and able to participate meaningfully – and benefit from – the digital economy. Decentralised systems are generating unprecedented revenues and returns in the current market – with benefits currently going into the hands of few.

COVID-19 has proven that only when access to the benefits of digital systems is universal, can we respond quickly and prepare for – or stay afloat and thrive during – the next crisis. Imagine a world where solutions, data, financing, and talent are instead accessible and more evenly distributed as public goods; where scarce resources are channeled towards solutions that are designed to bring both financial and social value for all.

Emerging technologies and digital public goods offer an incredible possibility to realise this inclusive, accessible world – where the digital economy is distributed so that everyone, even the most vulnerable, holds a key to safety, resiliency, and future growth and opportunities. We must venture into supporting untapped, underrepresented communities in a transparent way so that, together, we can build a digital future for every child and every young person to survive and thrive.

Housing market
ArticlesMarkets

How to Ensure Your House Is Ready For the Market

When putting your house on the market, there are numerous factors to consider. For instance, you may ask the question “when is the best time to sell a house?” However, before you consider putting your house on the market, you may want to ensure that it is ready first. In doing so, this could help to speed up the process and minimise the risk of losing money.

 

Finding the Right Agent

Deciding that you want to sell your home is the first step of the moving process, however, finding the right estate agent to help you sell your property is next. When looking to find the right estate agent, you must select the right person, as this can have an impact on the time it takes to sell your home.

As you look at the options available to you, look for the person who you feel follows the best practice, meets all the requirements and effortlessly work to industry standards. Aside from providing you with peace of mind that you have the right person capable of helping to sell your property, it can also help with increasing your chances of selling your home.

 

Check the House For Any Minor Repairs

Showcasing a house that looks as though it has been well-maintained, creates an impression on potential buyers that the property has been cared for over the years. As you begin the process of putting your house on market, it is worth conducting a thorough investigation of your property to see if there are any problem areas you notice that could be worth fixing.

These tasks do not need to be grand such as renovating a kitchen, they could be as small as filling in any holes in the walls or checking for any clogs in your guttering. This could be done before or after your valuation, however, doing it before might help with increasing the value of the property.

 

Have An Accurate Valuation First

Ensuring that you have an accurate valuation of your property is a key factor when selling your home. For instance, if you undervalue your home and it goes onto the property with too low of a value, whilst you may generate a lot of interest, if you were to sell at such a low cost then you will also lose money.

As you look to put your house onto the market, you may want to consider house valuation surveys to determine what price your property should be listed at. If you are wanting to value your house, firms such as GB Home Surveys can provide you with an accurate overall value of your property. Investing in such a service will help give you peace of mind that there are no potential pitfalls that could cause a surprise.

 

Worth Going Neutral

When looking at any property, neutral tones and colours tend to be the most appealing to potential buyers. In addition to brightening up the home and creating the illusion that rooms are a touch bigger than they are, neutral tones will help those viewing the property to envision themselves living there.

 

Ultimately, most of the updates that can be done to prepare your home for the market are unlikely to damage your bank account. Instead, they can help to increase the overall value of your property and potentially selling it far quicker – so it is worth considering implementing one of these strategies before you put your house on the market.

Wealth management
ArticlesWealth Management

Digital Adoption in Wealth Management in 2021

Wealth management

By Will Bailey, Chief Strategy Officer, InvestCloud

Just over one year ago, the world of wealth management was forced to turn digital overnight.

For many in the sector, the resulting digital drive forced technology adoption faster than we had ever seen. A KPMG study, conducted in April 2021, finds that 74 percent of organisations have accelerated operational digitisation, compared to 50 percent in August 2020 – showing the direct impact of the pandemic on priorities. But while the pace of digital adoption has increased, there are still many opportunities to innovate and differentiate a firm and ensure a better competitive advantage through technology.

But first, there needs to be a better understanding of digital adoption, and what it can achieve.

 

Adoption to date

Traditionally, many firms have geared digital adoption to the back-office – streamlining processes and simplifying human input. This of course makes perfect sense in terms of reducing costs, but it often also comes at the cost of improving the client experience.

The “point solution” approach, caused many in the industry to use digital as a means to solve specific business pain points – firms are now buried under point solutions for client onboarding, portfolio management, and report generation. Driven by the desire to grow and retain clients or find operational efficiency, managers made these one-off changes to keep with the times or to offer specific add-on functionality to remain relevant to clients. But relying on this piecemeal approach alone will not suffice and has resulted in fragmented operating environments that still rely on human processes or Microsoft Excel to see across the organisation.

The problem with the “point solution” approach is demonstrated in a report published in April 2021. It found that 63 percent of wealth platforms show significant digital capability gaps compared to investor expectations. And just 37 percent of investors give their platforms top scores for the digital experience.  This highlights a significant gap between investor expectations and the tools wealth managers actually need in order to carry out their job.

Those who have gotten digital right recognise it as a core component of their client engagement and servicing strategy. Digital must be an extension of the brand and the ongoing dialogue between client and advisor. This requires wealth managers eschew point solutions in exchange for a holistic and consistent dialogue with clients.

This move in how we view digital will help meet the rapidly shifting attitudes amongst clients. Clients now require instant access to information and the ability to take action; accessible at anytime, anywhere and on any device of their choosing. Firms who make the effort to improve their digital offering will continue to earn their place to compete in the market — whilst those who do not will be rendered obsolete.

 

The current environment

The pandemic saw digital transition from a “nice to have” to business critical. As we look to exit from the pandemic, digital’s role in wealth management will not lessen but will continue to increase as client behaviours establish the “new normal.”

Wealth managers pride themselves on delivering great client experiences, either in plush offices or wherever their clients demand. Client expectations – already shifting towards digital-first – have now been irrevocably changed as they become used to on-demand services.

The basics of client engagement need to be re-considered. What can clients access online? What do they view? What do we need them to see? These questions must be answered – but managers must answer these with an empathetic lens applied to ensure the client feels like their experience is individual to them.

Increasingly, this is leading to a rise in the notion of delivering holistic advice via digital.

 

Defining digital holistic wellness

Holistic wellness is about moving beyond traditional wealth management and brokerage services towards catering to a client’s entire financial life and beyond. It means managers can go beyond the traditional remit and get even closer to clients – becoming the center of their financial lives and extending to cover all assets.

But with a greater remit, managers face more complexity. This is where digital delivers value.

Digital tools allow managers to create holistic wellness by capturing information about their clients that goes far beyond simply finances. This includes health, family, physical assets, and life goals. It develops a complete view of the client by deploying digital tools that allow the clients to share information in their own time over the course of their relationship with an adviser.

This begins right at the start of the relationship with dedicated pre-client portals that facilitate engaged prospects to seamlessly become clients and provide advisors and clients with digital tools to give a holistic view of the future. This – combined with behavioural science, machine learning and amplified intelligence tools – allows advisers to foster deep relationships quickly and intuitively with clients, rather than taking months to build up acquired knowledge via traditional means.

Ultimately, this empowers the client with community, knowledge, and a sense of relief. This is critical at a time of unstable financial markets and where advisers cannot have physical interactions with clients.

 

2021 and beyond

As we look to exit from the pandemic, wealth management will continue to digitise.

The “old think” technology adoption approach that creates fragmented experiences will give way to “new think,” digital client and adviser interactions that are part of one continuous relationship.

New think requires managers to challenge orthodoxy and resist the dual threats of increasing commoditisation and fee compression facing the sector. To achieve new think, every manager must buy in to the thinking that every digital journey starts with the client and each client is unique, the digital journey must support the uniqueness while enabling standard practices and procedures to allow for scale.

This is why providing holistic wellness is so important to the future of many advice firms – it further resists issues facing wealth managers. Provided both digitally and via high-touch human contact, holistic wellness creates a “sticky” experience for clients, making them more likely to stay with you and even expand share of assets if you can provide a more complete service offering.

While the sector might be looking forward to a return to normal in the coming months, now is the time to review technology adoption to date and think about how digital can enable the business and unlock new revenue streams. The opportunities are there – so long as comprehensive digital solutions are embraced, and everything is designed with the client in mind.

Cryptocurrencies
ArticlesCommoditiesMarkets

Changing the Game: Looking at the Benefits of Alternative Cryptocurrencies

Cryptocurrencies

By Sergei Grigoriev, Executive Director, Eurotrader

With the popularity of cryptocurrency reaching a fever pitch, its development has also attracted new contenders within the trading sphere.

Virtual payments have made numerous impressions on global headlines. News networks were set ablaze following triggers such as Elon Musk’s influence on the market and reports of an investor losing millions in Bitcoin, to name a few. It therefore comes as no surprise that attention is focused heavily on the commodity.

However, despite Bitcoin being the most popular name in the crypto sphere – and having the highest valuation – there is a range of lucrative currencies existing in a growing market, each with its own benefits and downsides.

This article explores some of the benefits of emerging cryptocurrencies and the key considerations for finding the right investment.

 

The attraction of cryptocurrency

Much like its blockchain host, cryptocurrency boasts cybersecurity credentials that make it an attractive investment.

This ‘trustless’ style of investment reduces risk, as no bank, building society or financial adviser holds the stock for you. And despite stories of people throwing away their crypto fortunes, there isn’t any physical currency to be concerned about – significantly reducing the risk of theft or fraud that comes with traditional currencies.

Cryptocurrencies also offer another significant pull for investors: they require no middleman. While trading platforms charge fees to trade, withdraw and settle money, these are minimal compared with the hefty fees charged by other investments, like currency conversion costs.

The speed of cryptocurrency trading is also a selling point. Transactions are seamless, instant and secure, with blockchains also lessening the need for a paper trail and helping to guard you against fraud.

 

Delving deeper into the market

Bitcoin leads the cryptocurrency market in almost every department. Its popularity and value are currently unrivalled, with a market cap hovering around the $1 trillion mark.

With that said, Ethereum’s sudden surge to prominence shouldn’t be taken lightly, showing that even newcomers can quickly make waves in the market. With a market cap of $500 billion, Ethereum isn’t showing signs of slowing down.

Since Bitcoin’s launch in 2009, the creation of competing digital currencies has been steadily increasing, with a sudden boom in recent years. In terms of their functionality and operation, most alternative currencies differ wildly from Bitcoin. However, some have similar qualities to the current main player.

For example, Ethereum uses the same blockchain ledger as Bitcoin, with similar benefits. However, the system itself is geared to prioritise speed of transfer, with a different operating system that sets it apart from Bitcoin.

On the other hand, Litecoin is far more similar to Bitcoin. As its name implies, it’s a ‘lighter’ version of the reigning crypto king, however, it also offers more impressive transfer speeds.

Some cryptocurrencies run on independent, alternative systems. For example, Ripple is a centralised crypto platform, notably used for global monetary exchange, intending to make these transactions cheaper and faster than traditional international bank transfers. 

Cryptocurrencies typically aim to remove themselves from the moderation of centralised governments and geopolitical market fluctuations – however, Ripple is an exception, as its most common use is by banks and other intermediaries.

 

The cons of engaging with smaller currencies

Bitcoin is the most established market player by almost every available metric. This can make it difficult for even innovative new cryptocurrencies, offering unique benefits, to break into the market.

This is helped by the fact that it was the first successful and widespread digital currency. Because of its unprecedented growth – and an established blockchain ledger, accessible to all – Bitcoin boasts the largest user base and offers the highest potential prices and rewards on investment.

It’s because of this dominance in the market that alternative currencies struggle to match Bitcoin in size or surpass it in growth.

 

Importance of diversification

With Bitcoin pricing many budding traders out of the market, there are plenty of attractive alternative investments available. It’s simply about identifying the right investment. However, this is more challenging than ever, for both experienced investors and first-time traders alike.

It’s important to understand the unique benefits offered by each currency. For example, those opting for advanced scalability and an intensively secure network will likely turn their attention to Ethereum.

Ethereum’s decentralised ledger is valued for its impressive security, relying on two separate verification processes, Smart Contracts and ‘dApps’.

Smart Contracts are functions that support safe and secure transactions on the Ethereum blockchain. Their specific code and data functions mean payments can only be processed when certain criteria are met. 

It’s often said that Smart Contracts behave like vending machines. A combination of money and an inputted code allows users to access the digital currency, without the need for third-party intervention or transaction management.

Similarly, decentralised applications, or ‘dApps’, are also at the heart of Ethereum’s operation. These are ordinary applications that operate on a decentralised server, like the blockchain, and are defined by smart contracts. Importantly, they allow users to engage with the front-end interface in a way that is intuitive, secure and user-friendly.

Other Bitcoin alternatives offer further unique benefits. Litecoin, for example, is incredibly scalable and efficient. It boasts impressive speeds, with transactions up to four times faster than Bitcoin.

Litecoin is also growing in popularity, as well as being cheaper than Bitcoin – appealing to particular sectors of the trading market that are geared for small, plentiful and rapid trades.

 

Knowing what is right for you

To find the right investment, it’s advised to produce a checklist of what you want to achieve from your investment, as well as defining how much risk you’re willing to incur.

It’s impossible to simply declare a single cryptocurrency as ‘the best investment’. Defining your ambitions and goals as a trader first helps narrow your potential investments into a viable portfolio of assets. 

Over the last decade, the range of accessible cryptocurrencies has boomed, giving traders more autonomy in their choices. 

That being said, an alternative to directly investing in a single cryptocurrency is to trade CFDs. Instead of owning an asset, you speculate on market movements. If you correctly predict a market rise or fall, you may be able to earn money.

The growing number of crypto contenders, combined with the growing interest in cryptocurrencies, makes crypto CFD trading a suitable alternative to those who are following the market and are interested by different crypto currencies.

This heightened interest has led to more CFD trading platforms and retail brokers offering cryptocurrency trading pairs. Traders can trade crypto-fiat pairings, such as Bitcoin Cash USD (BCHUSD) without the need for a crypto wallet or ownership of cryptos themselves. 

However, no matter your experience level or route you decide to take, research is key. In addition to analysing the fundamental nature of each currency, it’s important to understand how to build and manage a portfolio. Cryptos with different growth triggers can help diversify your portfolio and hedge against crashes, giving you peace of mind over your finances.

If you’re unsure, working with a professional can help you better understand the market, putting your mind at ease over the risks and rewards of your investments.

Savings
ArticlesFinanceFunds

The Nation’s Most-Searched Savings Strategies… and How to Access Them

Savings

By Annie Charalambous, Head of Communications at ETX Capital


Britain is pinching its pennies. According to the FT, UK household savings have increased nearly 2 percent in the last quarter as 20 million Brits commit to saving more of their income after the pandemic settles. That being said, many Brits aren’t sure where to start when it comes to managing finances.

We’re taking a look at how the nation is researching its savings options, revealing the UK’s most-searched strategies and we’ll even explain how to take the first steps towards them.

 

1. Premium bonds (368,000 monthly searches)

Premium bonds are a unique, interest-free way to save. You buy the bonds (in this case, a minimum amount of £25, and a maximum of £50,000) from NS&I, and each month you enter a prize draw in which your odds are 34,500 to 1, and you can win between £25 and £1 million. You won’t earn interest on your bonds, but instead, it’s the interest that funds the prizes.

Anyone can buy premium bonds, and this can be done on the NS&I website. Your money is secure in premium bonds and you can cash out all – or part of – your bonds at any time.

 

2. Lifetime ISA (74,000 monthly searches)

Lifetime ISAs are specialised savings accounts designed for those aged 18 to 40 to save for retirement or a first home. They allow you to save up to £4,000 each tax year, and the government adds 25 percent to whatever you contribute.

Anyone within these age limits can open a Lifetime ISA with a bank or building society. They can be paid into until you turn 50, however, money can only be withdrawn once you turn 60, or to buy a first property once the account has been active for 12 months. If you withdraw money before these key dates, you’ll lose your government contribution.

 

3. Savings accounts (74,000 monthly searches)

A savings account is a traditional bank or building society account, which lets you deposit money and earn interest each month. Savings accounts often have a low, if any, minimum starting amount, anyone over the age of 18 can open one, and your money can typically be withdrawn at any time. For these reasons, savings accounts are a common, low-risk approach to saving money.

 

4. State pension (74,000 monthly searches)

The UK state pension is a weekly financial sum for retirees. Anyone with 10 years of National Insurance contributions or more is eligible for some level of the state pension – with 35 years qualifying you for the full amount.

State pensions can currently be claimed once you turn 66, however, this is set to increase to 67 in 2028. The basic state pension is £137.60 per week but you may be able to claim more, depending on your earnings over your career.

 

5. Bonds (49,500 monthly searches)

A bond represents a loan, typically given by an investor to any government or company, which agrees to buy it back at an agreed date, with interest.

Anyone can buy bonds. Savings bonds can be accessed from banks and building societies, while Government bonds can be bought through their dedicated Debt Management Office website.

 

6. Fixed-rate savings account* (14,800 monthly searches)

Fixed-rate savings accounts offer a guaranteed rate of returned interest, on the agreement that deposited funds aren’t withdrawn for a set time. They typically offer higher rates of interest than traditional savings accounts and are also resistant to market fluctuation.

Anyone can open a fixed-rate savings account with a bank or building society, however some institutions may require a minimum deposit amount or set term length, so this may not be the ideal route for everyone.

 

7. Private pension (14,800 monthly searches

Unlike the state pension, which workers automatically contribute to through their National Insurance, private pensions require active entry and payments. Private pensions can include both workplace pensions, arranged by employers (who typically also contribute) or personal pensions.

Anyone of working age can set up a pension. Some, like ‘final salary’ and ‘career average’ pensions will pay out a pre-agreed sum upon retirement, while other pension types may invest your money, meaning you’re able to earn higher interest (at higher risk).

 

8. Child savings account (14,800 monthly searches)

Child savings accounts are similar to regular ISAs but are designed for parents to save for their children (18 and under). These give children the opportunity to learn how to manage and save money, and they can even withdraw money before they’re old enough to open a regular savings account.

Some alternatives to children’s savings accounts include Junior ISAs and Children’s Bonds. These may offer greater returns and tax breaks but often put limits on when and how funds can be accessed.

 

9. Student bank account (12,100 monthly searches)

Some banks and building societies offer specialised savings accounts for those in higher education. These typically act in the same way as a regular ISA but offer sign-up incentives for students, like discount public travel cards and 0 percent overdrafts.

As the name suggests, only active students can open student bank accounts and providers will require savers to prove their identity with a valid student card.

Selling house
ArticlesWealth Management

9 Mistakes You Need to Avoid When Selling Your House

Selling house

You might not be aware of this, but selling your house is not going to be easy. In fact, it is very likely to end up being incredibly time-consuming, costly, and stressful. After all, there aren’t many billboards next to the roads that state “We want to buy your house in California!” or “We will pay any price you want for your home”.

Fortunately, selling your property can become a bit easier if you educate yourself on the topic. If you want to do just that, then you should definitely keep reading! In this article, you will learn everything you need to know about the mistakes you should avoid when selling your house. They include but are not limited to getting emotional, hiding major problems, selling during winter months, setting an incredibly unrealistic price, and not accommodating your buyers. Let’s get started.

 

Getting Too Emotional

As a person who is selling their home, try to keep your emotions out of the process. While it is understandable to get attached to the place where you have lived for a long time, you should not let that get in the way of making a rational decision. Remember that selling your house is a business transaction, and business transactions are all about cold hard facts and figures.

 

Ignoring Home Repairs

Before putting your house on the market, it is crucial that you make some home repairs. At a bare minimum, you might want to replace the front door and windows, paint the interior, and do some landscaping. If you aren’t sure whether garage doors in your home work perfectly fine, you might be interested in a garage door tune up to avoid any problems with potential buyers.

More than anything else, you need to make sure that your house looks lovely! It is also a good idea to clean up the clutter and get rid of any personal stuff, as it will only take up space and not benefit you in any way.

 

Contacting an Agent Right Away

Many people believe that they should contact real estate agents as soon as they decide to put their house up for sale. However, this is not always necessary.

In fact, many agents will tell you that it is often better to begin marketing your house yourself through online advertisement websites, social media, and word-of-mouth. The reason why this can be beneficial is due to the fact that an agent may sell your home for less in order to get the commission.

 

Hiding Major Problems from Buyers

It is a good idea to be upfront with potential buyers about any defects or problems that your house may have. After all, everyone can be furious when they realize they bought a home that has a significant flaw.

For instance, if one of the rooms has mold or smells funny, it would be better to inform your potential buyers about it. This way, they can take it into account when making an offer. If you do not tell them, they might try to negotiate, only to walk away when they find out about the issue. As a result, you will only waste your time and harm your reputation as a seller.

 

Forgetting About Home Staging

Home staging is an excellent way for sellers to get more money for their homes. Studies have shown that staged homes sell faster and for more money than those that are not staged.

In order to successfully stage your house, you are going to need to accessorize the interior and get rid of most of the clutter. You might also want to consider changing the color schemes throughout each room. Doing these simple things can significantly impact your chances of getting a good deal when you present your home to potential buyers later on.

 

Selling During Winter Months

There is no doubt that some people will buy a house at any time of year. Nevertheless, there are certain times of the year when buyers are less likely to buy. For instance, few people go house hunting during the winter months. Therefore, if you want to increase the odds of selling your house quickly and for the best possible price, it would be wise to avoid selling from December through March.

 

Setting an Unrealistic List Price

If you want to sell your house quickly and for top dollar, you need to set a reasonable list price. Many people believe that setting an incredibly high list price will result in a quick sale. It may be true in some cases. However, there is also a risk involved with this type of strategy.

For starters, you might set your list price too high and end up losing a ton of money on buyers who are unable to afford such a property. Another possibility is that a lower price might invite one of your potential buyers to pay more than your asking price to secure a deal. As a result, you may end up taking what the property is actually worth without scaring away customers.

 

Failing to Accommodate Buyers’ Needs

To sell your house as fast as possible, you should think about accommodating your buyers’ needs. For example, if they need flexibility in terms of closing day or moving day, it would be wise for you to accommodate them, as if you fail to do it, they might even walk away from a deal. The same logic applies if they want certain upgrades or appliances replaced prior to buying your home or if they have pets or children with special needs.

 

Selling for Less

Many homeowners decide to sell their homes for less than they are actually worth. While some people do this by lowering their list price, others set unrealistic expectations regarding the final sale price. The truth is that you will end up losing money if you are going to follow in their footsteps.

Do not succumb to the time pressure. Instead, try to sell your property at a reasonable price. One method you can try is doing some research on comparable properties so that you can get a clear idea of what your property is worth.

 

The Bottom Line

There is no denying that selling your house is going to be a stressful experience. However, if you want to make it easier on yourself, try to avoid the mistakes listed above. If you do so, then it is very likely that you will sell your home faster than you expect!

Remember to do all the necessary repairs and try your hand at promoting your property and home staging. By doing these things, you will boost your chances of finding interested buyers and increasing your home’s value at the same time. Additionally, you might want to be straightforward about the major issues with your home and avoid getting too emotional. This way, you will look more professional as a seller and gain a good reputation among home buyers.

Covid e-commerce
ArticlesFinance

E-commerce In Post-COVID Economy: What Has Changed?

Covid e-commerce


Fintech innovations during the pandemic have been a crucial driving force for businesses worldwide. A number of solutions launched or quickly adapted to aid the growing global payments demand, contributing to growth of the e-commerce sector by 26% globally.

Fintech startups played a significant role in the global financial industry during the pandemic. Payments companies especially, have brought rapid solutions to aid the transition in commerce, which shifted from physical to digital in a matter of months. Many brick-and-mortar businesses began to offer online services, which led to a significant 26% jump in global e-commerce activity last year. That said, the question whether the need for e-commerce-boosting Fintech solutions will remain after the pandemic still lingers.

Payments industry experts expect the increase of Fintech solutions to continue driving the growth of e-commerce for the foreseeable future, citing the change in user behaviour. To further this, Frank Breuss, CEO and co-founder of Nikulipe—a Fintech company creating and connecting Local Payment Methods (LPMs) in the Fast-Growing and Emerging markets—has noted that some challenges, which have undermined e-commerce before, remain unsolved and so the need for Fintech solutions will remain for the foreseeable future.

Breuss explained that the pandemic highlighted one of the main challenges that e-commerce faced for years prior to 2020—the willpower to move towards digital payments. The pandemic restrictions, in turn, have forced many companies to accelerate the implementation of digital payments and virtual customer support in their businesses.

“Prior to COVID-19, many retail companies around the world had been mulling over digital service offerings. However, a relatively small segment of early adopters treated it as an urgent need. The pandemic effectively drove many companies that previously relied on brick-and-mortar stores to explore digital channels to ensure business continuity and survival.”

E-commerce platforms like Shopify, WooCommerce and others allowed even small businesses to make a quick digital switch without going through huge infrastructural investments. They offer easy creation of an e-shop, as well as access to payment gateways and plugins, which enabled business owners to manage essential customer relationship management (CRM) tasks like making appointments, creating a contact list and managing orders in real time.

During this time, Fintechs working in the Payments industry have also introduced various services and solutions to ease the financial burden on consumers during the difficult economic situation. As an example the ‘Buy Now Pay Later’ (BNPL) option, which allows shoppers to pay in installments, was made available to many more customers in recent years. Mobile payments have also shown a dramatic growth, becoming a lifeline for the Emerging markets as mobile phones are more widely accessible than bank accounts. Experts regard this as a giant step towards achieving financial inclusion globally.

According to Breuss, low financial inclusion has been and continues to be a significant impediment to the growth of e-commerce, especially in Emerging markets. As a result, over 2 billion people worldwide are unable to participate directly in global online trading. In Africa, where about 60% of the population remain unbanked, Fintech companies have come to the rescue. Many African countries recorded huge Fintech investments last year, peaking at $1.35 billion by Q4 2020. This is expected to see Africa’s contribution to global trade rise significantly over the next few years.

“At Nikulipe, we are working on meeting consumers’ needs to be able to pay with the Local Payment Method of their choice—not just at their local but also at global merchants. This became even more relevant since the COVID-19 crisis,” explained Breuss. “During the last one and a half years, Fintechs working in the Payments industry came up with a number of solutions to ease e-commerce tool adoption and they still have a significant role to play in the growth of e-commerce and global trends over the next decade,” he added.

As the world begins to make a gradual return to normalcy, e-commerce will have to continue solving the challenges it faces. While the move to digital payments has seen significant progress, a majority of LPMs still exclude global merchants, limiting consumer choice. Financial inclusion has moved forward as well with BNPL and mobile payments gaining popularity, but suitable LPM solutions and internet accessibility remains restrictive to the wider inclusion. Region-specific regulations remain another hurdle to figure out, and these ongoing challenges could be solved only with continued Fintech involvement.

TikTok
ArticlesFinance

Expert Warns Against the Dangers of TikTok Investing Craze

TikTok


By Ben Hobson, Markets Editor, Stockopedia

When users of the online discussion site Reddit banded together recently to bid up the price of shares in GameStop Corp., it showed just how influential – and risky – some online investing communities can be.

But Reddit isn’t the only online resource that’s proving popular with investors. Social media platforms are attracting large audiences looking for ideas – including TikTok.

Videos with the hashtag #Investing have so far racked up over 2.2 billion views on TikTok, opening up a world of investing to millions of younger people. But it comes with big risks – there is a very real danger of losing money if (and when) things go wrong.

 

Ben Hobson, Markets Editor at Stockopedia talks about some of the dangers of the TikTok investing craze and how to avoid the risks…

More and more young people are turning to social media platforms like TikTokto find investments with the promise of life-changing profits. 

Economic turmoil and low trust in financial institutions has left a generation of investors thinking differently about where they invest and who they listen to. In fact, according to brokerage Charles Schwab, 80 percent of millennial and Gen Z investors believe recent economic difficulties are making it harder to get good investment returns.

With social media platforms like TikTok enjoying huge global reach, it’s no surprise that they’re now influencing the investment decisions of millions around the world. 

Earlier this year, the now infamous trading frenzy in US games retailer GameStop Corp, showed how “viral” trends can have a huge impact on individual securities. That was intensified by TikTok videos encouraging viewers to take considerable financial risks in return for what they portrayed as a guaranteed win. For many, the episode simply resulted in losses.

Events at GameStop and other stocks like it have raised fears that apps like TikTok are a new frontier for the kind of stock market manipulation regulators have been battling for decades.

Recently, the Financial Conduct Authority has specifically warned that videos on apps like TikTok are a major risk to young and inexperienced investors.

Part of the problem is that the sense of community on social media platforms can lead to herd mentality. This psychological togetherness is what makes the apps popular. But it’s a huge risk in investing and it’s often blamed for whipping up manias and bubbles.

Sadly, it’s the unprepared amateur investors that are most likely to be left with stomach-churning losses when the frenzy dies down.

 

Beware of scams

Beyond videos that overpromise, there are also outright scams. And TikTokhas been a lucrative target for criminal groups.

These scams range from the notorious ‘Money Mule’ money laundering scam to much more common ‘day trading’ cons and even celebrity-endorsed money-making schemes.

Videos from these accounts often promise high returns for following their advice and signing up for exclusive subscription services to get ‘insider knowledge’ on the markets. 

Users can find themselves enticed to visit websites that often have very little information about the company’s management, location or details about what they do. These are serious red flags and should be avoided at all costs.

 

Be careful who you trust

Social media has created a revolution in the way consumers connect and interact. But the risks for investors tempted by the promise of quick wins are very high.

Excessive promotion, clickbait, herd mentality and even criminal scams are not always easy to detect. So be wary of these risks. 

Always double-check any advice you find on social media using a trusted, independent source. With additional research, you can make an informed risk versus reward calculation to see if something is worth investing in while guarding against false claims or scams.

 

Here are some top tips to remember:
  1. Be wary of users that promote high-return investments. Remember that risk and reward go hand-in-hand, so if what is on offer seems too good to be true, it probably is.

  2. Investigate investment ideas by doing your own research. There is no easy button in investing but doing your homework can pay off. There’s no such thing as a perfect investment, but financial data will tell you what you are dealing with.

  3. Remember the age-old warning about consulting a financial adviser. At the very least, discuss your ideas with someone you trust before parting with cash.

  4. Never open an e-currency account to transfer money to an investment scheme. This is an unregulated space that fraudsters use to avoid detection.

  5. If you’re keen on becoming a successful investor, consider signing up to a reputable investment platform for expert guidance, ratings and portfolio management support.

  6. If you’re in any doubt at all, swipe-up and walk away.

SME Investment
ArticlesFinance

Almost a Third of SMEs Invest to Make Businesses Safe for the Summer

SME Investment
  • Nearly eight out of ten small businesses are confident of a summer boost in trade
  • But over a third are worried about the impact of continued social distancing

 

 
SMEs are increasing their investment in protective measures for both customers and staff as they remain cautiously optimistic that the summer will bring a boost to trade, according to research by Recognise, the UK’s newest SME bank.
Almost a third (30%) of smaller firms told Recognise they would be spending on PPE or protective measures for staff, while one in five (22%) of SMEs said they would be investing in protective measures for customers.
Overall, nearly eight out of ten (78%) SMEs said they were confident of a boost in business in the summer if Covid restrictions were removed completely, an 11-percentage point increase on the 67% of smaller businesses who said they were confident of a seasonal uplift when questioned by Recognise in March this year.
Confidence is highest in the retail sector, one of the areas most impacted by lockdown measures, with 86% of smaller retailers telling Recognise they are confident of increased trade in the summer, compared with 60% in March.
But Covid is still causing concern for smaller businesses. Recognise found that over a third (37%) of SMEs said they were concerned that restrictions, such as social distancing, could hamper trade or reduce customer numbers. The figure increased in the hospitality sector where more than half (52%) of SMEs said they were worried  that continued restrictions would dampen business.
Less than a third (30%) of SMEs said they were worried that customers would be too afraid to shop or do business with them because of the fear of catching Covid-19, compared with 20% in March.
As a result, many SMEs are increasing their spending to ensure they can make the most of summer trading, whatever the circumstances. Recognise found:
  • 41% of SMEs in the hospitality sector had already, or said they were planning to invest in outside seating
  • 35% of all SMEs said they would be investing in new equipment including IT, up from 22% in March
  • 30% of smaller firms said they would be spending on PPE or protective measures for staff, up from 25% in March
  • 22% of SMEs said they would spend on PPE or protective measures for customers, up from 20% in March
 
However, previous concerns around the long-term impact of Covid lockdowns on business seem to have diminished. The number of smaller firms worried about replacing customers lost during lockdown has fallen to 20% (down from 26% in March), while worries that customers will have taken their business elsewhere have dropped to 14% of all SMEs (compared to 18% in March).
According to Jason Oakley, CEO of Recognise, the latest findings reveal the resilience of the UK’s SME sector. He explained: “SMEs remain cautiously optimistic that business will continue to improve as we get closer to the summer. If that means continuing to operate within certain restrictions, you can be certain they will adapt their businesses to welcome as many customers as possible.
“This can-do attitude is shown by the growing number of SMEs planning to invest in their businesses in readiness for the summer. While expenditure on protective equipment is to be expected, higher spending on marketing and promotional activity suggests that smaller businesses are coming out of lockdown with ambition and plans to win customers.”
Recognise’s research found that using cash surplus remains the most popular option for funding the investment in business, as indicated by 20% of all SMEs (up from 14% in March). 17% of smaller firms said they planned to use government loan schemes to fund spending (up from 14% in March), while 15% intended to borrow from their bank (up from 13% in March). A further 6% of SMEs surveyed said they would borrow from a lender other than their bank, the same as in March.
Recognise provides lending to the UK’s SME sector via a network of regional Relationship Managers in London, Midlands, Manchester and Leeds, backed up by the latest cloud-based technology to provide quick lending decisions and fast access to funds.
The bank aims to provide more than £1.5 billion of business lending over the next five years. Business and personal savings accounts will be launched later this summer.
Cash Flow
ArticlesBankingCash Management

How To Improve Your Business’ Cash Flow Through Invoice Factoring

Cash Flow


Managing business cash flow can be difficult. It involves more than looking at profits and losses. It’s also about looking at revenue streams as a whole and the factors affecting them. Sometimes, an enterprise will have to wait for a few weeks for payments, and this can negatively impact your operational expenses on a daily basis.

Luckily, invoice factoring may be an option for organizations that want to quickly ensure steady cash flow. Under this scheme, you can raise funds to cover regular expenses such as fuel, rentals, taxes, and employees’ salaries.

If you think your business can benefit from giving invoice factoring a try, read on for more information about this particular financial method. In this article, you’ll discover how invoice factoring can improve your cash flow while you’re waiting to be paid by your customers.

 

What Is Invoice Factoring?

This involves a business ‘selling’ its unpaid invoices to factoring businesses. In return, the latter pays a portion of the invoice values and returns the rest after the customer has paid. Some businesses may be discouraged from turning to invoice factoring since it can significantly reduce your profit margins. However, if you prefer to have a steady cash flow without resorting to loans—which may hurt your finances further with their exorbitant interest rates—this may be a good option to consider.

Besides, in selling your accounts receivables to a factoring company, you may still get up to 98% of your invoices’ total value. Most factoring companies take charge of the billing and collections, saving you time from chasing after customers and minimizing the risk of incurring bad debt.

 

Why Is Cash Flow Management Important For Your Business?

Without steady income, a business can’t operate smoothly. Relying solely on customers for cash inflow can cause several problems. Your employees won’t be able to work properly if they’re not paid. Government offices will run after your business for not paying taxes on time. Simply put, your business can’t grow.

Proper cash flow management is crucial in any business organization. What many don’t understand is that it isn’t limited to earnings and losses. Cash flow covers all aspects of your business income streams along with the factors influencing them: expenses, debts, payables, receivables, and inventory.

 

How Does Invoice Factoring Improve Your Business Cash Flow? 

Having a steady cash flow is crucial in business sustainability and growth. Enterprises should aim for more cash inflows and shouldn’t have to wait for customer payments to finance operations. Invoice factoring improves business cash flow in the following ways:

  • This method allows you to meet your financial obligations on time, preventing your business from incurring penalty fees and overdue charges.

  • Instead of getting loans that require collateral plus out-of-pocket application costs and come with high interest rates, your business can save cash with invoice factoring. The money you save from loan-related fees may not be substantial, but it can still help improve your cash flow.

  • Being free from chasing non-paying customers, your finance department can perform other important tasks and increase productivity.

  • Paid on time and working in great conditions, your marketing staff will be able to focus on your company’s promotional strategies and attract more customers, increasing your income potential.

  • Because your business will no longer suffer from delays and shortages due to limited cash flow, you can take in more customers and, consequently, see your profits rise.

  • With enough money on your hands, you can consider expanding your business. Consider buying new assets or pieces of equipment to make your business more efficient.

  • Having extra cash at your disposal allows you to prepare for contingency. Reliability increases your brand reputation, and more customers are inclined to transact with you as a result.

  • As your brand reputation increases, an increasing number of customers would be willing to purchase your offerings.

  • A steadier cash inflow allows your business to take on more projects, including expansions and partnerships, which in turn would allow your business to have a more stable financial standing.

Invoice factoring is an attractive prospect for businesses without a credit score or even those with poor credit scores. Banks and lending institutions look at a borrower’s credit score before deciding whether to approve or reject an application. Comparatively, factoring companies don’t look at your business’ credit scores but rather those of your customers, who now owe them money.

Additionally, some invoice factoring companies offer longer payment terms, which may work to your advantage. Check out this article if you want to learn more about invoice factoring and its benefits.

On the other hand, invoice factoring may have hidden costs, so taking this route is more costly than choosing government-backed financial programs. What’s more, your business may still be held liable if your customers default on their payments.

In choosing the best factoring company, a good rule of thumb is to carefully look into their terms and conditions. Make sure there are no hidden fees, and they should have a dispute resolution system. 

 

The Wrap-Up

Invoice factoring can be an attractive option for businesses that need immediate cash flow. If you’re struggling to collect payments, consider invoice factoring in order to finance your daily business operations. Just make sure that your customers are able to pay promptly in order to avoid headaches.

When used properly, this alternative business financing method can help enhance your business cash flow without pushing your business into a financial sinkhole.

FinTech Payments
ArticlesBanking

Emerging Markets Lead in Adoption of Latest Fintech Payment Solutions

FinTech Payments

While the changes in the Fintech Payments industry, brought on by the pandemic, were seen across all markets, Fast-growing and Emerging economies have experienced the biggest shift. Increased use of mobile payments have put them at the forefront of the new payment technologies adoption.
 
It is now clear that the coronavirus pandemic served as a significant catalyst for growth in the Fintech Payments industry. The changes in consumer behavior the pandemic imposed, alongside the massive expansion of e-commerce, brought new consumers into the market, increased the volume and variety of purchases, and promoted new payment methods. While the changes were felt across all markets, Fast-growing and Emerging economies have had to adapt the most, and seems to be leading the way in the adoption of new payment technologies.
The coronavirus pandemic has had a significant impact on how buyers shop online. In the developed countries, the volume of online purchases increased—amounting to $4.28 trillion —as has their scope. Consumers started shopping online for a wider range of goods, including bulky ones such as furniture and tools alongside groceries.
‘Instant delivery’ services pair with contactless payments
The share of goods traded across borders increased, both regionally and globally. More shopping is now conducted through “instant delivery” services, which deliver goods within minutes rather than days. Contactless payment options became more popular, as cash and card machines were identified as a pandemic risk. With such changes, new user groups have entered the market as well, especially the older generation, which long resisted the shift to Fintech.

 

Rise of online purchases in Emerging Markets

While generally trends differ from continent to continent, Emerging markets saw some of the same trends as the Mature markets. Online purchases were on the rise, as was the demand for international goods and services. There was also a significant increase in the number of people that purchased online. For example, 68% of South Africans were spending more time shopping online than prior to the pandemic—most common items bought through e-commerce platforms in 2020 were clothing and groceries.
“The pandemic has caused a behavior change that will be difficult to undo,” notes Frank Breuss, co-founder of Nikulipe, a fintech company connecting Fast-Growing and Emerging Markets with the global payments industry. “These changes are not localized or specific for a number of countries, as it usually is. Once people have made the shift to more convenient payment methods, they are unlikely to go back, and we are seeing this happen for more than a year now.”

 

Mobile payment—key to e-commerce success

The move to new payment methods gave rise to the trend of the increasing popularity in local payment methods (LPMs), such as the various mobile payment systems operated by national telecom companies. Breuss singles out two main reasons why mobile payments are becoming that much more popular: many buyers in Emerging markets, like in Mature economies, still wish to keep the physical contact to a minimum—and will continue to do so; buyers are also without access to credit cards, which makes mobile payments more widely accessible.
Such and similar technologies allow them to deposit money on their account and send it to anyone else on the network, including merchants. That is why LMPs are being called the key to e-commerce success in Emerging markets. 

 

Pandemic-influenced trends are here to stay

Breuss identifies the development of multinational LMPs as a key opportunity in the industry, as cross-border payments are growing rapidly.
“It is critical that Fintech firms seize the momentum and continue to push for new and better technology,” explains Breuss. ”Interestingly enough, Emerging markets seem to be leading the way with mobile payment systems that are much more ‘instant’ than what we have in Europe or the U.S. It’s something worth keeping an eye on, as businesses seem to be slowly moving back to normal.”
The coronavirus pandemic has brought significant changes to consumer behavior and what has been thought of as trends, set in motion by the pandemic, seem to be truly global, affecting the markets worldwide. As consumers in both Mature and Emerging markets get used to more convenient means of payment, the continuity of such behavior could stay much longer than anticipated.
Business value
ArticlesFinanceWealth Management

How To Increase the Value of Your Business

Business value


If there is a possibility that you may sell your business at some stage in its life, no matter whether that is in 3 years or 30, you need to consider increasing its value. By doing so, you increase your chances of securing a more profitable sale in the future.

Selling a business can be tough. If you have put years of effort into building yourself a profitable company, you’ll want to be secure in the knowledge that you will eventually complete a worthy sale.

Here we provide a range of tips that will each help you to not just maintain the value of your business, but steadily increase it over the years up until its sale.

 

Understanding your business’s current value

Knowing where you currently stand in terms of business success and value, is vital. If you have a clear starting point, you have a base in which you can prove your growth in the future to your buyers. It is always worth you finding out the current value of your business in order to identify areas in which you have grown over the following years.

A buyer will be interested in a clear depiction of growth with sufficient evidence being provided – this represents great business value. If you spend a decent amount of time looking into every element of your business and analysing where it provides you with value, you can use this knowledge to your advantage.

 

Taking the right steps towards improving business value

Along with the efforts that you are currently making to ensure that your business is successful, you can follow a few simple steps that will help to secure that value. By doing these as additional steps, you boost your chances of success in a future sale.

  1. Ask for advice

There are plenty of experts out there who can help to advise on improving your business, managing cash flow and keeping financial troubles at bay. Professional help could make the difference between you maintaining value and gaining value.

If you are facing financial trouble, it’s always best to get this under control before you consider selling your business, if you can. A valuable business is a profitable business.

 

  1. Invest and update

Actively investing in new equipment, machinery or whatever it may be that your business relies on in its day to day operations, is important. The more outdated your business operation becomes, the more that your overall value reduces over time.

Spending money on new equipment and technology may seem like a large investment at first, but you will soon see the benefits. Don’t let the initial spending put you off – this is often what causes financial issues within companies. Some businesses will fail to modernise and as a result, become slow in their processes and start seeing losses.

 

  1. Repeat what works

If you know what already works well for your business, you can continue to do this and strive to improve it even further. Spend time assessing where your priorities lie and what you can afford to leave on the backburner.

If a part of your business is running efficiently and doesn’t require much attention, let it continue to be successful whilst you focus on other areas. If you can implement those winning processes in other areas, do so.

 

  1. Keep an eye on cash flow

Buyers will obviously pay close attention to a business’s cash flow. If your future cash flow projections show it being set to increase, you will automatically attract keen buyers. Document this growth clearly and go back to step 1 should you find yourself having problems with cash flow.

Cash flow is clearly important in any business. Make sure that you are dedicating enough time into managing this area before it becomes a major issue.

 

  1. Don’t forget the importance of customer service

Whether you have a large or small customer base, it is key that you keep those customers happy. If you have a good relationship with repeat customers and spend

time getting to understand the needs of new ones, you will please future buyers.

By documenting what you learn about your customer base, you have a valuable document of information that a future buyer will really appreciate.

There are clearly a lot of ways in which you can help improve the value of your business. What is important to remember, is that you need to have future value in mind at all times. If there is a chance that you may complete the sale of your business at some point, you need to be sure that you are offering buyers a valuable and profitable business.

If you can optimise your current processes to help increase value, then do so. It is unlikely that you will lose out by focusing on these areas, so allocate the time you need to really make it work.

Money transfer globally
ArticlesBanking

Five Things You Need to Know Before Sending Money Abroad

Money transfer globally

Millions of Brits provide financial support to their families overseas, with an average of £7.7 billion being sent from people in the UK to support loved ones each year.  

With money transfer apps becoming the new norm, it is now easier than ever to send money to family and friends back home. People can make payments from the comfort of their homes or on-the-go without having to enter a physical store or bank.

However, as with any modern apps, there are a few things to bear in mind in terms of online security whilst sending or receiving money from abroad. The experts at global cross-border payments company WorldRemit have compiled some top tips for any first-time sender. 

 

1. Secure your email address

Most companies require an email address to set up an account, therefore it’s important that you ensure that your email is protected with a strong password to prevent anyone from gaining access to not only your emails, but any apps you use via this address.

Strong passwords include a combination of lower and uppercase letters, numbers, and symbols, it’s also important to ensure that you don’t use the same password for multiple applications.

 

2. Avoid public wi-fi

Although it seems convenient to connect to a public wi-fi to make a quick money transfer, the open access can be a security threat, allowing unauthorised users to intercept your sensitive personal information or gain access to your device.

It is recommended to avoid logging into online banking or money transfer apps, or managing your mobile wallet using a public network.

Instead, either waiting until a secure wi-fi network is available, or using mobile data, is the safest way to use money transfer apps while you’re out and about.

 

3. Research the app you’re downloading

Before you download a money transfer mobile app, try to find more information about the company online. If there is little to no online presence, stay away from it. On social media, always look for the verified “blue tick” next to the business name. Last year, WorldRemit launched a Transfer Tracker App which allows recipients of money transfers to track their funds. The app is free to download through the Google app store in a number of countries including India and Nigeria.

 

4. Keep your operating system up to date

Whenever your smartphone’s operating system, internet browser or applications notify you that there are updates available, be sure to install them as soon as possible.

Many of these updates are fixing bugs or weaknesses in order to help you stay safe online.

 

5. Use a pricing comparison tool to get the best deal

The cost of sending money abroad takes numerous factors into account, for example, the exchange rate as well as any sending fees. 

Be sure to use a pricing comparison tool to ensure you’re getting the best deal ahead of making the commitment and sending the funds. 

 

A spokesperson from WorldRemit added: “Sending money overseas for the first time may seem like a daunting task, but it’s actually easier now than ever before. 

“With WorldRemit, you can send in 70 currencies to more than 130 countries worldwide, in a safe and secure manner, and it can be done within minutes – it’s as easy as sending a text message.

“If it is your first time sending money to your loved ones overseas, we have customer service advisers available to help 24/7, to make your money transfer journey as seamless as possible.”

Entrepreneur
ArticlesBanking

Start Up Loans Set to Unlock the Potential of Young Entrepreneurs Following the Pandemic

Entrepreneur
  • New British Business Bank campaign encourages people thinking about their career options to start their own business and become their own boss via the Start Up Loans scheme
  • The majority of unemployed people (54%) who have become entrepreneurs through Start Up Loans since 2012 are millennials
Start Up Loans, part of the British Business Bank, today sets out its commitment to unlock the talent of thousands more people across the UK by helping them to start their own business.
The disruptive impact of Coronavirus on the UK’s economy and traditional working patterns has catalysed many to reconsider their careers, whether because of additional time to reflect during lockdown, furlough or a change in employment status.
Of the 80,000+ Start Up Loans recipients since 2012, a third (31%) were unemployed at the time of application. Start Up Loans data also indicates that the scheme is particularly effective in enabling young entrepreneurs to start up a business, with millennials representing more than half (54%) of all previously unemployed loan recipients since 2012.
The Start Up Loans scheme has also seen this trend continue with the youngest generation of entrepreneurs, with double the number of Gen Z (18-24 year old) applicants using the scheme as a route out of unemployment in 2020 compared to 2019.
The Start Up Loans scheme was initially set up as the UK economy was recovering from the 2008 credit crisis, with a mission to make business ownership a viable career for individuals who would struggle to raise finance. Building on a nine-year track record of success, the scheme is set to play a vital role as our economy starts to rebuild after the impact of Covid-19, providing both funding and wider support for people starting up their own business for the first time.
Richard Bearman, Managing Director, Start Up Loans said: “Start Up Loans is uniquely positioned to drive the nation’s investment in creative, entrepreneurial talent of any age, thanks to our extensive network of delivery partners and support services. As well as a loan, we support individuals with the practical steps they need to take to begin their own enterprise from writing business plans, accounting and marketing, as well as access to learning with partners such as The Open University.
“It is paramount that we do everything to empower the next generation of young working talent, who have an important part to play in unlocking the UK’s economic recovery, by giving them every chance to succeed, whatever their circumstances. Unemployment can have a catastrophic impact on an individual’s financial security, self-confidence and ability to apply for finance from lenders, and the support provided by Start Up Loans can be of particular use to younger, less experienced business owners.”
Small Business Minister Paul Scully said: “The Government’s Start Up Loans programme has a phenomenal track record of backing budding entrepreneurs across the UK, having helped more than 80,000 people to start their own business.
“Anyone out there looking to strike out, seize opportunities and build something new can benefit from the funding and support which the programme provides. This campaign will be pivotal to our ambition of making the UK the best place in the world to start and grow a business and help us build back better from the pandemic.”
James Talbot, Co-Founder of Pobi Bakery, said: “At the start of the pandemic my partner, Jake, was made redundant and we decided that it was time to start working for ourselves. We took out a loan of £20,000 from Start Up Loans in September 2020 and have never looked back.
“The process of becoming unemployed is stressful and full of uncertainties, but the fact that everyone in the UK has access to schemes like Start Up Loans should be cause for optimism in the current economic environment. Despite all the challenges thrown at the retail industry throughout the last year, we have managed to employ 3 members of staff, open a second site, and are forecasting a turnover of £250,000 in the next financial year. It’s been a huge journey for both of us.”
The Start Up Loans programme provides finance and support for businesses and aspiring entrepreneurs who struggle to access other forms of finance, working with a national network of Delivery Partners based across England, Wales, Scotland and Northern Ireland.
Andy Fishburn, Managing Director of Start Up Loans Delivery Partner, Virgin StartUp said: “Virgin StartUp exists to help founders in the UK to start and scale early stage businesses. We’re proud to be working with the British Business Bank to deliver the Start Up Loans scheme to ensure that applicants receive the right combination of funding and support, to not only start up and survive, but thrive. Small businesses have such a vitally important role to play as we look to rebuild communities, the economy and the world more broadly.  We look forward to continuing to work with future founders, in our shared mission to inspire entrepreneurs around the UK.”
ESG
ArticlesFinanceSustainable Finance

With Sustainable Financing on the Rise, Expert Advises How Fintechs Could Step Up ESGs Activities

ESG

 Embedding ESG goals could help fintechs become more immersed in sustainable banking, thus improving their market resilience.
An increasing number of businesses are focusing on how to embed ESG (Environment, Social, and Governance) goals into their strategies. As the notion of sustainability is gaining more ground in the finance sector as well, Marius Galdikas, CEO at ConnectPay, has shared how fellow fintechs could incorporate ESG practices into their business and what impact it could have on fuelling further growth.
ESG investing has skyrocketed over recent years, as more and more investors have started to consider the impact of their money. This shift in attitude is already well-reflected in the market —  last year companies with better ESG ratings had greater returns in almost every month. The finance sector is no exception, with major players boosting their financing goals to trillions of dollars. In the US alone, six largest banks in the country have pledged to eliminate all financing activities related to greenhouse emissions by 2050.
According to Galdikas, although fintechs may not have massive budgets to finance low-carbon initiatives, it should not be a limiting factor to support ESG goals. In fact, neglecting the subject may result in decreased company value and missed opportunities.
“First of all, ESG issues are becoming more important for stakeholders looking to invest long-term. Neglecting the topic may lead to a poor ESG “risk score”, which is closely monitored by business partners and investors. This could negatively impact the company’s reputation, followed by decreased market value, as well as losing the edge against the “more green” competitors,” Galdikas explained.
He also noted a few strategies for how fintechs could become more immersed in sustainable banking and improve their market resilience.
“One of the ways could be setting up “green pricing” for ESG-driven businesses, as in offering tailored pricing options for your services. It could be set case-by-case, taking into consideration how the company operates and what strategies it uses to achieve their business goals. Making sure that they’re consistent in their actions will allow you to sift out potential fraudsters as well,” Galdikas advised.
“Also, take time to overview your current client portfolio. ConnectPay works with digital-only businesses, thus large scale manufacturers or other industries, contributing to high carbon emissions, are not in our client base. Yet fintechs with a wider scope of customers should re-evaluate if businesses they are working with operate with ESG-values in mind.”
Another way to support the sustainability movement is to reorganize in-house processes with a goal to lessen CO2 emissions, for instance, by reducing business trips. “Albeit it may not be as relevant with the ongoing pandemic, which put a halt on international travel, but sooner or later the world will recover, thus it’s important to keep this in mind for future reference.”
While the Environmental aspect usually retains the main focus in the context of sustainability, Social and Governance criteria need to be approached with the same determination. In Fintech, this could be addressed by tackling the gender gap. At the moment, women make up less than 30% of the industry’s workforce. At ConnectPay, however, the team is split almost equally in half, having 48% women and 52% men.
“Diversity in the team inspires new ideas, improves decision-making and leads to higher overall performance, all the while contributing to better integration of ESG goals,” the expert concluded.
Investment
ArticlesFinance

Playing the Long Game: How to be Successful at Long-term Investing

Investment

By Ben Hobson, Markets Editor, Stockopedia 

 

Read the financial headlines and it would be easy to believe that an investment fortune can be made with just one trade.  

 

While it’s true that some people do get lucky with one “magic” stock during their investment journey, most successful investors build their personal wealth and security over the long term. 

 

Investing is mostly a waiting game. Sticking to a predetermined strategy is key to success in this field – while not letting emotions compromise your judgement. 

 

In the modern age of investing, this isn’t easy. New and experienced investors are being bombarded with more information and ideas than ever before. But in all this noise comes the increased risk of mistakes and misinformation – making the idea of getting quick money sound all the more tempting. 

 

That’s why Ben Hobson, Markets Editor at Stockopedia shares his insights on how to manage your portfolio for the long run.

 

 

Have a plan  

 

Investment strategies naturally change over time and making mistakes is unavoidable as markets fluctuate.  

 

Understanding the risks ahead of time and looking at the bigger picture can help you manage the highs and lows so that you stay committed for the long term. 

 

Not only will this give you confidence, but it will help you manage the fear of loss that can lead some investors to throw in the towel.  

 

Everyone is guilty of dipping into savings to fit their needs – whether it be for a treat or a surprise expense – but it’s vital to know precisely how much you’re willing to invest. 

 

For the most part, the longer you remain invested, the more you’re likely to benefit from compounding returns over time. So, being confident that you can afford the amount you have invested today, and in the years that follow, is paramount. 

 

 

A strategic stance 

 

Investors and investment strategies are all different and investing advice takes many forms and can seem confusing to those starting out. Yet the historical drivers of stock market profits are surprisingly consistent.  

 

Keep it simple and create a strategy around the three factors that many professional investors focus on – Quality, Value and Momentum. This way, you’re aligning with factors that have historically driven the strongest performances in the stock market over time. 

Remember that high profitability and cash flows are markers of a strong business and are likely worth looking at. Be vigilant of low or no profits, thin margins, debt and precarious balance sheets – businesses with these are usually worth avoiding. 

 

Valuation is vital when choosing a stock. Unloved shares that can be bought for a snip may offer supersized returns. But paying a fair price for higher quality or promising growth is just as viable.  

 

Finally, looking at trends and history can help you gauge a stock’s performance. Positive momentum is one of the most significant return drivers in investing. Share prices that are rising strongly often continue to do so. 

 

 

The perfect all-weather portfolio 

 

Stocks, sectors and markets move in their own cycles. When one zigs, the other zags, so think about the roles that each investment type plays in your portfolio and how many positions you feel comfortable with managing. 

 

Any investor worth their salt would recommend spreading out finances across a range of investment types and trying out different strategies. 

 

Diversification between different market-cap sizes, investment styles, industry sectors and even international geographies can protect you from being too exposed to unnecessary risks and can smooth out your investment returns over time. 

 

For example, having your money invested in funds and bonds can be less risky than a volatile stock, but having both could help limit losses and increase the chances of a positive return. 

 

 

Keeping a balance 

 

When your portfolio is in place, understanding where to prioritise your attention lets you rest easy at night rather than fretting over small changes. 

 

One or two big winners can quickly dominate your allocation, but those big winners can also be life changing. 

 

Don’t get too caught up in your portfolio performance – you need to let your investments breathe. If anything, getting too caught up in the losses can make you miss an uptick in value around the corner. 

 

Overtrading can not only fuel emotional investing, but fees and charges can quickly mount. Trading fees all chip away at your portfolio, so avoid throwing money at unnecessary trades – especially when you’re bored. 

Online banking business
ArticlesBanking

The Co-operative Bank Achieves Growth Targets & Launches Value Add Services For SME Customers

Online banking business
  • Investment totaling £33m has been used to develop an SME mobile banking app, deliver new onboarding functionality and enhanced authentication tools.
  • The Bank has also launched new value add options for customers such as its Business Concierge service and a preferred Business Insurance provider.
Two years on from its successful £15m award of funding from the Capability and Innovation Fund, The Co-operative Bank has delivered on its commitments to launch value added services such as a preferred Business Insurance provider and a mobile banking app for its SME customers. The Bank is also attracting a higher volume of new customers as the number of business accounts opened was 62% more in 2020 compared with 2019. To date, the bank has also doubled its target of acquiring customers through the Business Banking Switch scheme (achieved 12% against a target of 6%).
With an additional £18m investment from The Co-operative Bank to transformation its SME online banking services, enhancements have been made to products and services that have improved the customer banking experience, this includes a new onboarding process for sole traders and single director limited companies and a more innovative approach to authentication with the use of a soft token app developed in partnership with HID Global.
Key to the delivery of the technological improvements made by the Bank are its collaboration with eight fintechs and specialist partners that have aided the building of its new digital infrastructure. The relationship with fellow Manchester based fintech, BankiFi has been especially valuable as the Bank has worked with BankiFi to deliver two important projects. The main focus of the work between the Bank and BankiFi was the creation of The Co-operative Bank’s new SME mobile app which offers customers a more agile way to bank and supports SMEs who want a more accessible banking service. The app launched on April 13 2021 and has already been downloaded by 14% of its customers. The second project is a new and innovative app based payment solution that will help customers to manage their invoices, receive payments and keep their cash flow moving.
Commenting on the success of the Co-operative Bank’s transformation plan, Director of SME Banking Catherine Douglas said:
“Two years ago we set about transforming our SME Banking Business with ambitious targets for customer growth and committed to a significant investment in our digital capabilities. We’re seeing the successes of that programme as the number of accounts we opened during 2020 was 62% higher when compared with accounts opened in 2019. Our longstanding customers are telling us that the addition of a mobile banking app and improved digital banking experience are really making a difference to how they bank with us day to day.
“We know that the majority of our customers banked with us as we had strong environmental credentials and shared a lot of the same values and ethics that underpin how we do business, but now we are also offering them products and value added services with improved digital functionality that really support their business needs.
“The growth in our customer base in the last year especially has shown that the work we’ve done has genuinely established us as a challenger to the larger SME banking providers and that we are the digital and ESG-led bank of choice for those looking for an alternative to the other UK high street banks.”
Mark Hartley, Founder and CEO of BankiFi said: “As entrepreneurs we lived and experienced how (too) much time is spent on admin tasks, invoicing, chasing payments while still not having an accurate overview of where the business stands. This new Co-operative Bank SME mobile app offers convenience and overview in one single place. We were enthusiastic to work with The Co-operative Bank because of its DNA which is rooted in society and supporting SMEs which are the backbone of UK industry, they are the best launching partner we could have wished for, and as we add functionality, the Bank’s business customers will benefit too.”
Working in work in partnership with innovative fintech businesses such as BankiFi has enabled the Bank to deliver enhancement to its products and services at pace for customers and this collaborative and co-operative way of working has been pivotal to in this process. The success of this approach to working was a key driver to The Co-operative Bank being a signatory of ‘The Fintech Pledge’ and why it will continue to look for other opportunities to work with innovative partners in the future. 
As well as forming new connections in the fintech world the Bank launched two of its new propositions by working with established brands Assurant and AXA Insurance. The bank’s Business Concierge in partnership with Assurant offers a market leading package or services such as HR and legal support for businesses, and the Bank also recommends AXA Business Insurance as its preferred provider to customers as it offers cover that can be tailored to meet specific business needs.
Whilst the Bank has had success in working collaboratively with others, it has also invested and grown its internal talent and resource that supports its transformation programme, including significant focus on its dedicated Relationship Management team. The demand from new customers meant the Bank went above and beyond its 2020 recruitment target (achieving 114% of recruitment) and has increased its SME banking support teams by recruiting based mostly around its North West heartland. 
As a participant in the Business Banking Switch scheme the Bank has grown its customer base with more than 8,000 former NatWest customers joining the Bank since the start of the scheme, with this number set to grow further as the switching deadline approaches at the end of June 2021. This is ahead of the Bank’s original expectations and shows that the Bank’s unique brand and strong proposition is attractive and stands out to UK SMEs looking for an ethical banking alternative.
Catherine Douglas continues:
“We are committed to continually listening to the feedback from the businesses that bank with us and although we’ve made such significant progress so far, this is still the beginning of what we know we can offer our customers, especially with the continued influence of the innovative fintechs and other specialist partners we are working with.
”We want to continue to grow and especially attract more charity and community led organisations as well as truly establishing ourselves as the bank of choice for co-operative businesses. We are continuing to challenge ourselves to have stronger and bolder ESG commitments that stand us apart as the ‘go to’ ethical bank for UK SMEs.”
Tax Fraud
ArticlesTax

Do You Want to Learn About Tax Fraud? Here Are Some Valuable Resources in 2021

Tax Fraud


So, you want to know all about tax fraud? Well, that is one of the duties of every patriotic citizen. We have to educate ourselves on ways in which we can comply with the laws of the land. Else, we may end up paying for crimes we commit through ignorance.

 

First Things First: What is Tax Fraud?

According to Investopedia, tax fraud is when you or a business entity consciously and deliberately falsifies the required information in filing tax returns. That way, they can limit the amount of tax they are liable to pay.

It is clear now that tax fraud is not just an error. Furthermore, there are different categories of tax fraud, with each of them having diverse penalties. If you do not have proper guidance or advice, what seems to be a small matter can go out of hand.

On the other hand, individuals may not intend to falsify their tax information. It can be accidental tax fraud. This happens when you are not keen during the tax season.

Whichever the intent of the tax fraud, both will cost and put you at loggerheads with the tax collector.

 

How Serious is Tax Fraud?

The IRS doesn’t pursue tax fraud for every individual. However, when they catch you, the penalty is quite harsh. In such a case, the government will force you to repay your tax coupled with an expensive fine.

The Internal Revenue Service takes it seriously when you file a false return or any other legal document. When upon investigation substantive information turns up, Tax Fraud charges could result. That is a grave crime that could send you to jail for five years if you are found guilty.

 

The Cost of Tax Fraud in 2021

Tax Fraud is quite common in the US as it is in the rest of the world. For instance, it is estimated that Tax Fraud costs the United States $190 billion a year. In the year 2020, IRS reports identifying tax fraud costing $2.3 billion.

Looking at the cost of Tax Fraud yearly, one can’t help but ask themselves who in the world are these Fraud stars. Well, these are corporations and individuals. Company employees also fall under the “individuals” categories. How do you deal with that as an employer?

 

How to Prevent Employee Tax Fraud in 2021

You do not know an employee whom you have just hired to work for you. You are looking for the right applicant with the right skills and qualifications to fill a particular position in your company.

The essential quality that you should not overlook is integrity. That goes a long way since you build a partnership on trust. Moreover, that calls for some digging on your part.

It is a popular business principle that your employee is the closest person to you for your business to grow. You have to consider the relationship between you and your employees as a partnership. No matter how “insignificant” their job may seem.

Your company’s success also depends on the input that every worker contributes on the job in addition to honesty. Else, you will see your business on its knees sooner than later.

Therefore, it is best to put in check any possible incident of employee tax fraud before it happens. That is where a background check for employment comes in.

 

How Employee Background Checks Help Prevent Tax Fraud

It is best to put an axle to the root of the problem rather than the stem. An employee who is dishonest in their tax payment may not be honest in their dealings with the day-to-day duties. So take care of the problem before hiring them.

Pre-employment background checks help you to discover the following information about applicants;

  1. Consistency.

  2. Honesty.

  3. Criminal records, which includes IRS charges.

However, you ought to be careful not to trample on the potential employee’s rights. There is a thin line there. That is why you need a professional to help you do that.

Therefore, background checks on employment play a significant role in uprooting problems such as future tax fraud, among others.

 

Do You Want to Learn About Tax Fraud? Here are Some Valuable Resources in 2021

From what you have learned so far, you realize who critical it is to guard against tax fraud. If you’d like to learn more about Tax Fraud, here are some great sources for you;

  1. The internet has a lot of information on tax fraud. Below are some credible sources you can search out;

·    FedorTax.com has a wealth of knowledge regarding this subject. Mainly because they are Attorneys and Counselors at Law, that is a great place to begin.

·    Investopedia.com is also a great place to learn about tax fraud. They have a lot of research done on the subject.

·    IRS.gov also informs you on how you can report tax fraud. It is worth your time.

  1. IRS Taxpayer Assistance Centers. You can visit any IRS center near you to get your questions answered.

  2. The Taxpayer Advocate Service office is another place where you can get help and get more info on tax fraud.

  3. The local library is a great place to get your questions answered. However, if your attendant cannot give you answers, they can direct you to a local organization that will be of great help to you.

 

Conclusion

Whether you run a company or an employee, tax fraud is a serious crime that will cost you. Therefore, it is vital to learn about tax fraud and guard against committing the crime by all means. Do not forget to do legal background checks on employees to ensure integrity and transparency for a healthy and successful business.

Banking Fraud
ArticlesBanking

Online Banking Fraud Victims Lost Over £160 Million in 2020-21

Banking Fraud
  • Overall, from 44 police forces in UK, there were 25,717 cases of cheque, plastic card, and online bank account fraud from April 2020 to March 2021
  • From the 25,717 cases, the accumulative financial loss victims suffered was an astonishing £161,221,800 million
  • Metropolitan Police had the highest number of cheque, plastic card, and online bank account fraud cases between April 2020 – March 2021, at 4,224
  • Greater Manchester Police had the next highest amount of incidences at 1,332 and those who fell prey to the crime in Greater Manchester incurred a collective financial loss of £14.3 million
For many of us, online banking and credit/debit cards are an essential part of our everyday lives as they allow us to pay for a multitude of necessities such as food and utility bills. Despite this, they are vulnerable to opportunistic criminals who may defraud an online bank account or use a payment card/cheque that is stolen/forged/cloned by them. 
Interested in financial security, MoneyTransfers.com analysed the latest data from the National Fraud Intelligence Bureau on 44 police forces/constabularies to establish which areas of the UK have experienced the most cheque, plastic card* and online bank account fraud causes from April 2020 to March 2021 (i.e. the financial year of 2020-21).

 

Cheque, Plastic Card and Online Bank Account Fraud Cases in 2020-21: Overall Findings

MoneyTransfers.com found that there were 25,717 cases of cheque, plastic card and online bank account fraud recorded by 44 police forces between April 2020 to March 2021. During this period, July 2020 (2,349 cases) was the worst month, followed by November 2020 (2,341). Whilst April 2020 saw the least number of cases at 1,851.
Additionally, from the 25,717 cases, the collective financial loss that victims suffered was an astronomical £161,221,800 – that equates to a financial loss of £6,269 per case!

 

Cheque, Plastic Card and Online Bank Account Fraud Cases in 2020-21: Breakdown by Police Force

Metropolitan Police had the highest number of cheque, plastic card and online bank account fraud cases from April 2020 to March 2021, at a shocking 4,224 reports, the equivalent of 12 incidents per day in the capital. From the 4,224 cases, the accumulative financial loss victims incurred was a colossal £32.3 million.
In second position is Greater Manchester Police with 1,332 incidences of cheque, plastic card and online bank account fraud between April 2020 – March 2021. Victims who fell prey to the crime in Greater Manchester experienced an overall monetary downfall of £14.3 million.
West Midlands Police are in third place as they received 1,265 reported cases of cheque, plastic card and online bank account fraud from April 2020 to March 2021 and from those who were targeted, the financial loss equated to £10.3 million; that is comparable to a personal loss of £8,142 for each individual case.
Thames Valley Police (971), Kent Police (896) and West Yorkshire Police (873) are among the other police forces which recorded over 800 cases of cheque, plastic card and online bank account fraud from April 2020 to March 2021, respectively ranking in fourth, fifth and sixth place.
On the other end in 44th position is Cleveland Police who had only 124 cases of cheque, plastic card, and online bank account fraud.  
Slightly above Cleveland Police in 43rd spot is Dyfed-Powys Police, with the Welsh police force reporting 146 occurrences of cheque, plastic card, and online bank account fraud. Despite having a low sum of incidents, the amassed financial loss the 146 victims experienced was still a hefty £558,100k.  

 

MoneyTransfers.com’s top four tips on how individuals can safeguard themselves from cheque, plastic card, and online bank account fraud:

1.) Stay Vigilant
Even though it may feel taxing, it is a good idea to keep a close eye on your monthly bank statement(s) to make sure there is no unusual activity and if there is, report it immediately to your respective bank(s). Likewise, opt to shred any financial documents you intend not to keep.
2.) Avoid Public Wi-Fi Hotspots
Do not use public Wi-Fi hotspots such as those in coffee shops and libraries to access online banking or carry out financial transactions as you cannot be certain how your personal information is being tracked and logged by their respective networks.
3.) Take Online Banking Precautions
Only access online banking via your bank providers official website and not by means such as clicking on a link provided in an email. Likewise, when it comes to mobile banking, only use your bank providers official app and keep the app updated for the latest and strongest security protection.
4.) Have Strong Credentials
Make the password for your online banking as sophisticated as possible – this includes using a combination of numbers, special characters, uppercase and lowercase letters. When it comes to the pin for your bank card, don’t make it very obvious such as the current year (e.g. 2021) or a combination of credentials from your date of birth (e.g. dd/mm, mm/yr etc).

 

Foreclosure
ArticlesFinance

A Complete Guide To Foreclosure Investing

Foreclosure


Whether you’re new or a veteran in a real estate business, foreclosure investing is an incredible strategy to pay attention to. It’s understandable to have hesitations. People’s perception of foreclosure investing could easily affect your judgment.

Well, you shouldn’t have to be. Contrary to some beliefs, you can actually use it as your opportunity to start a business venture. You can potentially expand your investment portfolio if you can successfully invest in foreclosed properties. Doing so will also boost your chance to generate revenue.

 

How Foreclosure Occurs

But first, you need to understand why foreclosures happen. It starts when someone decides to acquire a property. One may own a property without paying the entire cost at once in terms of down payment. 

Typically, people can settle the payment for a small portion of the total cost, usually around 3-20% of the price, and borrow the remaining amount. The borrowed amount shall be payable within 2-3 years, depending on the contract term.

Unfortunately, accumulating money needed for the payment may not be easy as allocating thousands of dollars for such may be difficult. Or their earnings may not be enough to meet this obligation. 

Hence, it’ll be stipulated in the loan agreement that the property they’ll buy will also serve as your collateral. If they lose the capability to continue the payment, the lender will confiscate the property. Real estate lien allows lenders to withhold such property if they fail to pay off such debt.

During foreclosure, the lender repossesses the property, and they lose the right of its ownership. The lender will then sell the property to catch up with the amount they lent you. Thus, the lender gets the right to dispose of your property.

 

Should You Buy Foreclosed Property?

There’s absolutely a good reason for purchasing a foreclosed property. As mentioned, these properties can come cheap. Thus, it can create enticing profit margins, which are not common on other real estate properties. Being a new investor, it’ll be a wise decision if you would start with such an investment.

 

Conducting Analysis For Investment Property

No matter how cheap or promising the foreclosed property is, you can’t be impulsive when investing in foreclosure properties. You can ensure a successful investment property if you don’t hurry to buy the first ones you see. Thus, it would be best if you do your due diligence before buying one.

This is in the form of conduct an analysis of the particular property you wish to acquire. When conducting your analysis, you should look for the best properties that could indicate the highest ROI. Hence, the higher the number you can potentially earn, the more promising it becomes for an investment. 

 

Finding Foreclosed Homes

Try to be resourceful if you want to buy a foreclosed home as there are several ways of finding foreclosed properties. One of which is going to the local County Recorder’s Office to check the list of foreclosing homes.

You can also visit websites and read the local newspapers to check foreclosed homes for sale. Furthermore, auction houses which conduct foreclosure sales can also give you a list. You may also seek help from the local real estate agents to help you find foreclosed homes.

 

Additional Cost Of Foreclosed Property

One of the considerations in real estate investment is, buying such properties will generally involve additional costs intended for the renovation. 

The real estate investment strategy concept is to acquire foreclosed properties that require renovations below the current market price. So, you must be ready to settle the additional expenses.

 

Utilizing The Experts

If you’re serious about investing in foreclosures, you must bring experts to your team. One of the people you can trust is a qualified agent. You must understand that there’ll be plenty of tasks that demand time and effort when investing in foreclosures. It’ll be tough for you to carry out everything on your own. 

From obtaining funds to doing the renovations, you’ll need experts to help you. With that in mind, here are some key players you can add to your team:

  • Property Manager: You’ll need a property manager to take charge of marketing your property. Your property manager will also be responsible for collecting the rent and managing the homes for their maintenance once you start using the foreclosed property to generate real estate income.

  • Loan Officer: Loan officers may not be necessary if you have the whole amount ready to buy a foreclosed property. If not, you should find a loan officer to help you with a mortgage or any form of financing so you can purchase the property. You must establish a harmonious relationship with a loan officer when looking for financing, particularly if you ‘e planning to acquire numerous properties.

 

Conclusion

With the great opportunities investing in foreclosed properties, you may want to start now. Gone are the days you’ll feel intimidated by this kind of venture. With the right knowledge about investment foreclosed property, you’ll know you’re doing the best thing.

However, remember this venture doesn’t guarantee success unless you put hard work and exert more time into it. Before you begin with your business, you must equip yourself with a team. Get the best people in your team and maximize their expertise. You’ll soon enjoy high profits from your investments.

Gold
ArticlesFinanceMarkets

Why Gift Premium Bonds When You Can Gift Gold?

Gold


Becky Hutchinson, Managing Director at Minted, an investment platform which allows individuals to buy and sell gold bullion.

In light of the ‘new normal’, parents and grandparents are looking for new ways to gift, virtually or otherwise. But in a climate of stock market volatility and low interest rates, are traditional financial investments still a solid choice, and could gold bullion be a safer bet?

There’s no doubt about it, Premium Bonds have earned their reputation as a safe and steadfast savings option. First introduced by the Government in 1956, these tax-free bonds from the National Savings and Investments (NS&I) agency are now UK’s biggest savings product, with about 22 million people having over £86 billion invested in them. Every £1 Bond is given a unique number and all numbers are put into a computer called Ernie (which stands for Electronic Random Number Indicator Equipment), which draws monthly winners. For years, they have been popular to give as presents to children under 16. The parent or guardian named on the application looks after the Bonds until the child’s 16th birthday, when they are entitled to a gift that will hopefully keep on giving.

In December 2020, however, the prize fund was cut considerably and due to the drop in the Bank of England base rate, NS&I also reduced the odds of winning. As a monthly lottery, the closest thing Premium Bonds have to an interest rate is their annual prize rate, which currently stands at one percent. This is based on the average pay out, depending on the number of bonds owned and, while it isn’t completely accurate, it does allow for an estimated calculation to be made about interest gained in a year.

But winning may be harder than it seems. According to Money Saving Expert, only 30% of people with £1,000 in Premium Bonds win £25 or more per year. And, over five years, someone with £1,000 in Premium Bonds and ‘average luck’ is expected to win roughly £50. While that may seem a lot of money to a child who’s been gifted Bonds, any parent knows that £50 doesn’t go far in today’s society.

When it comes to investment options, however, Premium Bonds are as safe as they get. Operated by NS&I, which is backed by the Treasury rather than a bank, funds are easy to access and there is little-to-no risk of losing money – only a small gamble around any potential ‘interest’. However, while this level of financial security was once a significant perk, all UK-regulated savings accounts are now protected by the Financial Services Compensation Scheme (FSCS) under the savings safety rules. This extends up to £85,000 per person, per bank, building society or credit union – £35,000 more than the maximum deposit allowance for Premium Bonds.

So, is there an alternative safe-haven investment option, with a better interest rate and without a savings cap? There is and it’s far older than Premium Bonds. Gold was one of the first precious metals to be used by humans as a trading commodity and, to this day, remains a stable choice. Many children’s books tell stories of gold – from pirates to royalty – and, in sport, a gold medal has always been associated with winning. From a very young age, the intrinsic value of gold has been ingrained in most people’s minds.

Aside from the glitz and glamour, perhaps the biggest difference between gold and Premium Bonds is that gold is a tangible asset. Investors can handle their physical gold and store it as they wish or even liquidate an asset if needed. Gold doesn’t just sit pretty either; while its price may fluctuate, historically and over the long term, it trends higher. Currently, the average growth rate per year is nine percent, considerably greater than bonds or current interest rates. With this in mind, £1,000 invested in gold could be worth around £1,538 after five years.

With the popularity of the finite resource growing, more user-friendly and flexible tech-focused routes into gold investment are appearing, making gifting the precious metal much easier. Features such as reward points for referring friends and family also provide an incentive for parents to start building up points for their children. With investment platforms like Minted, people can either purchase gold with a lump sum or save set amounts every month, starting at £30. Once enough has been saved for a gold bar, the physical gold can either be stored in a secure London vault or withdrawn – something any child would be proud to own. 

Despite its high-class status, gold is much more than just a luxury good and can be a viable option for every investor, at any age. As markets continue to fluctuate and interest rates drop, the price of gold could remain on its upward trajectory for some time. No matter the state of the current economic climate, the metal will always be a must-have addition to anyone’s investment portfolio and, with growing options to transfer gold virtually, the best kind of gift.

Alternative Investment
ArticlesFinance

Why Choose Alternative Finance?

Alternative Investment


With retail, hospitality and leisure businesses opening again, and demand for suppliers, manufacturing and construction greater than ever, it is important that companies have the facilities to expand, grow and invest in the future. With cash flow becoming one of the main concerns for SMEs in the last year, it’s important to get the balance right, and with mainstream lenders come long waiting times, increased scrutiny and endless criteria, more business are seeing their applications for loans, finance and leasing being rejected than ever before. This level of scepticism has a significant impact on businesses and their operations

However, alternative finance is an option that cannot be underestimated, and has the ability to support suppliers, businesses and their clients in selling more and investing in their products and services. There are many reasons why businesses are turning to alternative finance, and will continue to do so.

 

Common sense

Mainstream lenders have different processes to alternative lenders, and therefore business plans and propositions with genuine strength and durability can be misunderstood or ignored. We specialise in being a common sense lender, listening to your story and finding out how we can make finance work for you, rather than the other way around. Common sense means decisions are made by people who understand your industry and what you want to achieve.

 

Competitive rates

This is, and should be, important for any business owner. It affects your bottom line and how your business operates financially, which is crucial to ensuring you succeed. By offering competitive rates, alternative lending is an attractive option for businesses who may be in doubt about the value for money they can get elsewhere. It’s important for us, and it’s important for you, that’s why we make it a priority to secure competitive rates for your business.

 

Quick

More so than ever the queues have been getting longer, processing time and waiting for decisions is not what you should be doing when trying to secure finance to improve your business. Our team work directly to ensure all necessary steps are completed in an efficient manner to give you the best chance of getting your funds quickly, as we understand how important every second is. Alternative lending means you have a dedicated team working tirelessly to help you and your business, your clients and your customers.

 

Experts in your sector

Knowing your sector and industry gives us alternative finance the edge, because we work closely with suppliers, customers and industry bodies to understand what makes it tick and what’s important. That’s why when you bring us some Quirky Kit that banks or lenders may not see as valuable, we make it our mission to help you secure it. There’s not much we haven’t seen, and it can be frustrating dealing with people who don’t understand why you need your equipment, what it’s for or how it can benefit your business. By specialising in this area of equipment finance, alternative finance has a significant advantage.

 

Improve cash flow

It’s important to keep on top of cash flow, and it can be a dilemma when you want to invest but don’t want to spend. Using alternative finance to secure a loan or equipment finance for your business you can improve your service or product, make it more cost effective, more efficient and increase revenue, allowing you to take care of overheads, bills, wages and other expenditures. This allows you to keep any cash you have for a rainy day, whilst also improving your business. You can find out more on how to improve your cash flow by viewing our guide here.

 

Freedom to grow your business

Another benefit of alternative finance is the freedom to grow your business. This means that we will support you in how you plan to use the loan or finance, as you know your business better than anyone, meaning you know how to make it succeed, and keep to your ongoing commitments. Compare this to mainstream lending which may require more detail and may be more strict with the delegation of your agreement, we want you to have freedom.

 

Whether you’re in manufacturing, engineering, hospitality, leisure, or any other industry, alternative finance can be a great option to support your business in its next stage, helping to increase revenue, decrease costs and improve service to your customers

ROI
ArticlesFinance

5 Renovations With the Best ROI in 2021

ROI


When remodeling your commercial property, one of the most important considerations is the return on investment (ROI). You want to make your property attractive to others so they’ll stop in or use your business. Plus, your clients and other companies see your building often, so you want to portray the right picture to them.

Any time you put money into your commercial property, you want to get that money back or even get more than what you put into the investment. Here are five renovations with the best ROI in 2021 to keep your business booming.

 

Remodeling the Kitchens

Most commercial properties have a kitchen of some sort or even kitchen appliances in a break room. Remodeling a kitchen in any building is bound to increase the property value. Freshening up the kitchen can be affordable, and it will have a great ROI in the end.

Add in some energy-efficient appliances and a new backsplash or countertop for a simple remodel. You don’t have to be fancy with it. Just keep it updated and modern.

 

Going Green

Implementing eco-friendly appliances and systems in your commercial property will lead to savings in energy usage. If your energy system is outdated, it’s time to take it out and invest in something newer and more efficient.

You can get a new heating and cooling system, install low-flow plumbing, put in a cool roof, and upgrade your windows. These investments will help you save money on utility bills and attract customers who have environmentally charged ideals.

 

Updating Safety Features

Older commercial buildings can be hazardous, especially if you haven’t renovated them for many decades. Safety should be your number one priority as the owner or operator of a commercial building if you have numerous clients and employees working there every day.

Safety features might include a fire alarm system, burglary alarms and even a designated shelter for inclement weather. Adding in new safety features will decrease the risk of a worker or visitor getting injured. Safety renovations will save you time and money overall.

 

Investing in Curb Appeal

The outside of your property is just as important as the inside when it comes to return on investment. Curb appeal renovations often bring in the highest ROI. Every time someone comes to your property, the first thing they see is the outside of your building.

Every year, take the time and money to invest in curb appeal. Add new mulch, keep the lawn looking trimmed and green, and add plenty of walking space for clients and customers. It will attract more people to your business when the outside looks just as clean and neat as the inside.

 

Upgrading the Cosmetic Features

Finally, you can boost your ROI by renovating the cosmetic features of your commercial property. For example, old flooring, chipped paint and fixtures that aren’t doing your building justice won’t bring you in as much money as possible.

Take the time to investigate your property and take note of things that could use improvement. Install new flooring, doors, lighting fixtures or anything else that needs to be updated. Keeping things fresh and modern will do wonders for your ROI.

 

Get to Work

Begin these renovations as soon as possible. Investing in your commercial property in these ways will bring you the highest return on your investment this year.

CBDC
ArticlesFundsMarkets

CBDCs Impact on Payments Market: A Push for Repositioning Barriers for Market Newcomers

CBDC


For the payments market, government-backed digital currencies could accelerate innovation by setting novel technology benchmarks, as well as rearrange some of the entry barriers for new companies looking to set up shop.

A recent survey of central banks has revealed that 86% are actively doing research into central bank digital currencies (CBDCs), 60% are already in the experimenting phase and almost 15% doing pilot testing. With CBDCs heavily gaining traction across governments worldwide, Marius Galdikas, CEO at ConnectPay, has discussed how this technological solution could impact the payments market players.

The idea of CBDCs has been circling around for a few years now, however, with the growing attention towards cryptocurrencies and money digitalization in general, banks are now focusing on how to put the idea into practise. For instance, the Bank of England together with HM Treasury has created a dedicated task force to explore potential use cases of CBDC in the UK market, as well as monitor international developments regarding the topic. Norway is pushing ahead with CBDC, too, while China is already in the process of testing digital Yuan out in the real world.

“CBDCs could be a game-changer for the payments industry. Aside from the clear benefits, for instance, low-cost cross-border payments or boosting financial inclusivity, it could also enhance domestic payments system resilience, slightly shifting dependence from the international payment processing networks,” Galdikas said.

According to Galdikas, CBDCs could be a major catalyst for the payments market, as government-issued digital currencies would be as easily accessible as current e-money payment methods, yet, in some respects, it could surpass what current market players have to offer.

“Although it has immense potential, the idea still has a long way to go. Essential decisions need to be made concerning how state-backed currencies could inherit the properties of cash, for instance, working offline or addressing the double-spending problem. Also, it’s highly likely that the central banks will not take on the responsibility to develop and implement the technology themselves, yet will want to retain the control of the currency itself,” Galdikas explained. “There is no best way to address these types of questions and that’s why specialized teams and task forces are being assembled — to come up with an approach that would combine different tools into a single solution.”

“Therefore payment service providers will have to step up their game to match the benefits CBDCs would bring to the table, which means moving up into a higher gear when it comes to innovation and delivering unique market solutions. They’ll have to be more strategic in communicating their strengths and value proposition to their target audience, too,” he added.

While outlining the benefits, Galdikas also noted how this would impact market newcomers. “CBDCs would definitely set an even higher standard for greater technological competence, which means setting up shop for new businesses is going to need a lot more investment from the get-go.”

“That said, I believe that some of the barriers would drop, for example, the requirement that only credit institutions have access to payment systems, such as SEPA. All in all, the CBDC, with inherent properties of cash, would allow for a wide variety of innovative financial solutions,” he concluded.

This could be a pivoting moment in the industry, which would greatly contribute to building a more financially inclusive society. However, a lot of questions must be addressed before then, with the main ones being technological implementation, as well as privacy concerns, which might arise due to CBDCs being state-backed.

Gold Investment
ArticlesRisk Management

How Gold Investments Help in Business Risk Management

Gold Investment


Gone are the days when gold was limited only to jewellery or to décor. When you think about the history of gold, you’ll find that many families have passed it on from one generation to the next as an asset. And, you should, too, particularly if you’re in business. Investing in gold can contribute so much to counter risks, making it a good strategy for risk management.

Whether or not you’re a seasoned businessman, it doesn’t change the fact that risks for businesses are always present. You can never really determine when a sudden change in the economy will happen, much like how the world was struck by unprecedented changes last year. Hence, you need to adopt effective asset protection strategies and make some crucial considerations to avoid dire consequences. One of the best options today is through investing in gold.

To convince you further of its viability, here are some great ways gold investments can help in business risk management:

 

1. It Offers Security of Value

One of the most compelling advantages of investing in gold is that its price will be consistently going up. Gold brings forth security of value, and this security can help smoothen out rough seas that your business might go through.

With gold, it’s normal that, sometimes, the price will go down, but it’ll always go back up again. For instance, if you bought a piece of jewellery five years ago and had it assessed by a jeweller, the value will have already increased. This becomes even so much truer with bigger gold bullions or assets, which businesses typically invest in.

With an appreciating asset, this means that you’re earning passive income. Should your business fall into the risk of low income, you can have a hedge through your asset. As a result, your financial portfolio may not suffer as much as it would’ve without this stable investment.

 

2. Offers Protection Against Inflation Risks

One common enemy of businesses, small or big, is inflation. If you’re not careful about following through the flow of inflation, it may kill your investment. This means losing everything you’ve worked so hard for.

Given this inherent risk of inflation in the economy, it’s never advisable just to put all your business resources in cash. Physically, the cash is kept in a bank, yes, but its value will deplete in a few years because of inflation.

Here’s a simple illustration of such a scenario: USD$100 in the past could buy you more than it can today. So, for instance, with your business, USD$10,000 can give you more today than it could ever do five to ten years from now.

To protect your business against inflation, it’s a good idea to place your eggs in different baskets so you can have a mix of stable assets. One of these stable assets is gold. There are online portals like https://learnaboutgold.com/ that can give you a better idea of how gold works as a stable asset to provide a hedge against inflation. Typically, this has something to do with its growth and stable history.

Such benefit is very advantageous to businesses, given that inflation usually comes along with dire effects. Some of the negative effects of inflation include the following:

  • If inflation continues to soar, this means that customers of your business will have lesser purchasing power. In effect, they may buy less from your business than they used to in the past.

  • Inflation can get out of hand, whereby businesses’ employees will also demand more in terms of their wages simply because their current salary could no longer buy them as much of their needs as it used to. When you’re forced to increase salaries, this means lowered profit margin for your business as well.

  • Inflation can also lead to disruptions in business planning, resulting in lower investments.

 

3. It Keeps Your Inventory Stable

When prices continue to soar because of inflation, this affects not just the purchasing power of customers, but also that of businesses. This is a risk that’s inherent as there really is no controlling the possible instability of economies. If your business puts too much faith on cash savings, then chances are you’ll succumb to an unstable inventory level.

Investing in gold can help you cover up the value losses of your cash savings. When the value of your cash gets too low, such that your inventory suffers, that’s when you can sell or trade gold, or make gold investments. You, then, can use the proceeds to level up your inventory.

With this, in a way, your business is protected against this business risk. Imagine how much you’d lose if your inventory won’t be able to keep up. You aren’t just losing profits, but you’re also losing potential customers that would’ve stayed happy doing business with you.

 

4. It’s A Good Way to Save Money For The Future

Over time, your business may need to expand so it can keep up with growth and competition. If you don’t have expansion in mind, then you’re not maximizing your business’s potential.

However, to achieve this business goal, you’ve got to save for it. Not only do you need to have a regular flow of income coming in, but you’ll also need to have money for your future investments. This means that your business has stable assets to keep up with the cost of future investments.

Apart from protecting your business against inflation, as explained in the sections above, having gold assets is also a good way to save business income for the future.

 

Conclusion

With the list above, now, you can clearly see that there are many benefits to choosing gold as your investment. When other assets don’t offer that much of a stability, gold is there to save the day. But, before you get too excited, don’t forget that it’s not always going to be positive all the time. Any investment form, gold included, isn’t without risk. The key is for you to ensure you’re investing in good providers, and that you’re able to weigh all pros and cons for your business before making a decision.

Homebuying
ArticlesFinance

Home buying: Is There Really a Financially Best Time to Buy?

Homebuying


Buying a home is one of the biggest investments we make in our lives. However, while the average house price in the UK is valued at £249,633, the cost of mortgages among other factors means that the total cost of the home-buying process can vary between individuals.

Even then, house prices continue to rise year on year. In England, house prices have increased by 7.6% in the past year. Competition spurred on by the housing crisis may mean that this increase is set to continue. This raises the question: when is the best time to buy?

‘Immediately’ is not always the answer. The true cost of a house will depend on your personal finances when you buy, and it can vary depending on which financial schemes you use to help you on your homebuying journey. Jumping into a sale too soon can cost more than it’s worth.

Here, we explore the options for buying your house, what schemes you can take advantage of, and when to buy your home.

 

Government schemes

On 3rd March 2021, Rishi Sunak unveiled his latest budgetary plan for the nation. Included in this were schemes for home buyers which may make the process of climbing the property ladder easier for many people.

 

Stamp Duty holiday extension

The Stamp Duty holiday extension reduces the tax paid when buying properties. Under this scheme, homebuyers will only pay stamp duty on properties above the value of £500,000. This scheme was set to end on 31st March 2021. However, the Government has extended this until 30th June 2021.

Buying a property within this timeframe could save homebuyers up to £15,000 before the tax break ends.

The sale of properties must be completed before the 30th June deadline. However, the opportunity to save on Stamp Duty could be extended based on your buying choices. One national housebuilder, St. Modwen Homes, has its own Stamp Duty holiday extension which is available on a selected number of homes until 30th September 2021. Buying a new build property with this company can help you save thousands beyond the Government’s June deadline when you buy houses in Eastwood or houses in Newton-le-Willows, among many other locations. The housebuilder has also launched a new ‘Mortgage Paid’ offer for those buying a new-build home. Available on selected homes at developments across the country, the company will essentially pay up to six months of your mortgage. So, if you’re ready to buy now, it may already be the best time! The offer is only available for a limited time, but being six months mortgage free could save you thousands.

 

5% mortgage deposit

A new mortgage scheme has enabled lenders to offer mortgages to more homebuyers with lower deposits from April 2021. The Government-backed 95% loan-to-value mortgage scheme means that first-time buyers and current homeowners will be able to purchase a home with just a 5% deposit.  

The scheme will run until December 2022. So, if you want to take advantage of this new offer, applying for a mortgage before this deadline may be the best time to buy. A lower deposit means that you will have more money in your pocket on moving day to help furnish your new home, or some extra cash to save for a rainy day.

The scheme is similar to the Help to Buy: Equity Loan which is solely available for first-time buyers who are buying a new-build home. So, if you’re a first-time buyer, there’s still plenty of time to save up for a mortgage deposit and buy your dream home.

 

First-time buyer?

As mentioned above, it’s now easier for first-time buyers to get onto the property ladder with help from the Government-backed Help to Buy: Equity Loan scheme. Similar to the 95% LTV mortgage scheme, first-time buyers can also use a 5% deposit to buy their home.

The key difference with the Help to Buy scheme is in eligibility and how the finances are organised.

Firstly, you must be a first-time buyer and be buying a new-build home, and you will need a 5% deposit of the value of the property. The Government will provide an equity loan of up to 20% of the property value (or 40% in London), which is interest-free for the first five years. This means you will only need to borrow 75% of the property value from a mortgage lender.

The total value of the property is capped depending on where you’re buying the house, but they’ll likely be above a first-time buyer’s budget. The regional caps range from £261,900 to £600,000:

 

Region

Price cap

East Midlands

£261,900

West Midlands

£255,600

South West

£349,000

Wales

£300,000

North West

£224,400

South East

£437,600

London

£600,000


This scheme runs between April 2021 and March 2023.

 

Best time to save

If it’s not looking like the best time to buy for you right now, it’s always the right time to save. For those buying their first home, Help to Buy schemes along with various ISAs mean that you can prepare for your homebuying journey.

Unfortunately, you can no longer open a Help to Buy ISA. But those with existing accounts can continue to deposit up to £200 each month. When you buy your first home, the Government will top up your savings by 25%. You can save up to £12,000 and receive an extra £3,000 from the government. This incentive gives you up until November 2029 to save and until November 2030 to claim the 25% bonus.

Another scheme that is open to new savers is the Lifetime ISA allowance scheme. You can put up to £4,000 into your ISA each year and the Government will top it up by 25% at the end of the tax year.

This isn’t a scheme for those looking to buy a home in the short term. The money must be in the account for at least one year. The money must also be used to buy your first home, otherwise, the funds are available to withdraw when you’re over 60. You’ll be charged a 20% withdrawal fee if you withdraw the money before you’re 60.

Remember, the higher the mortgage deposit, the lower the loan amount and, therefore, the lower the repayments.

It can be argued that this is an exciting time for those who are buying a home — especially for first-time buyers. New schemes mean that those with a proactive nose to hunt out the best deals can save thousands when they buy a home. But ultimately, there’s no set date for the best time to buy. It’s up to you and your finances. The new buying schemes will be useful for those looking to buy their home in the near future as thousands of pounds can be saved. But those who are planning ahead should aim to save as much as possible before they buy their home, as in the long term, larger deposits make the mortgage application and mortgage repayments easier.