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Lasting Legacy IT Disruption Can Have In Consumer Banking - TSB Bank
BankingSecurities

The Lasting Legacy IT Disruption Can Have In Consumer Banking

Lasting Legacy IT Disruption Can Have In Consumer Banking - TSB Bank

The Lasting Legacy IT Disruption Can Have In Consumer Banking

Recent statistics show that TSB, whose catastrophic IT transfer meltdown last year is still having lasting repercussions for clients, has come last in a consumer poll on the effectiveness of its online banking solutions. Staff Writer Hannah Stevenson explores how this is the direct result of the bank’s meltdown last year.

Last year, TSB lost thousands of customers when its IT systems switchover caused widespread outages and led to consumers and businesses being unable to access their accounts.

At the time, Paul Pester, TSB Chief Executive Officer, commented on the issues by saying:

“We’re making progress in resolving the service problems customers experienced following our IT migration, and we will continue to work tirelessly until we have put things right.  I know how frustrated many customers have been by what’s happened.  It was not acceptable, and was not the level of service that we pride ourselves on – nor was it what our customers have come to expect from TSB.

“It has been a difficult time for customers and I am grateful to them for their patience. I would also like to say thank you to our Partners for their enormous efforts.  They have done everything in their power to continue serving our customers, and I am proud to see that the values on which the Bank has been built have shone through during this time.

“Our priority in the second half of the year continues to be putting things right for our customers.  Looking further ahead we are determined to get back to bringing more competition to UK banking and ultimately making banking better for consumers and small businesses.”

Shortly afterwards, Paul stepped down from his position, showing how detrimental the issues had been to his career. Commenting on the changes, Richard Meddings made it clear that the IT problems were a key driving force in this decision.

“Paul has made an enormous contribution to TSB. Thanks to his passion and commitment, TSB is today one of the UK’s strongest challenger banks, serving over 5 million customers across the UK. On behalf of the TSB Board, I want to thank Paul for everything he has achieved as CEO and pay tribute to the contribution he has made in bringing greater competition to the UK retail banking market.

“Although there is more to do to achieve full stability for customers, the bank’s IT systems and services are much improved since the IT migration. Paul and the Board have therefore agreed that this is the right time to appoint a new CEO for TSB. Our goal is therefore to allow a full search to commence, without any distractions, enabling TSB to build for the future.

“Meanwhile I have been asked by the Board to take on the role of Executive Chairman on an interim basis. Together with the Executive Committee, we have three immediate priorities: to complete the work of putting things right for customers; to enable the bank to achieve full functionality – including the availability of all product services and launch of a leading Business Banking offer; and appointing a CEO for the next chapter of TSB.”

Later, TSB had a further issue, with smaller problems causing the bank further problems throughout 2018.

Andy Cory, identity management services lead at KCOM commented shortly after TSB’s second issue with authentication, which saw clients locked out of their accounts.

“A broken authentication system has an instant impact on customer loyalty. If a business cannot provide easy access to its services without sacrificing security, it only has itself to blame when its users desert.

“The problem is balancing access with security. Too easy to get in and you risk leaving customers unguarded; too many security measures and it becomes offputting for users.

“Fortunately, there is a way to achieve the best of both worlds. Frictionless customer authentication – where users can access online services with zero input into the identification process – is becoming a reality.

“For example, geo-location and geo-velocity checking allow companies to trace a user’s physical location and how far they have travelled since their last login. Taken together, they verify if the user is who they claim to be and make any manual input from the customer unnecessary.”

The latest results from the Competition and Markets Authority (CMA) showcase the long-term detrimental effect that the IT issues have caused. In the personal banking space the firm was last for its online services, but within the business banking space TSB was last in almost every category including online banking services, highlighting how much more important IT stability is for businesses. 

There may also be other factors at play, including poor interest rates, lack of availability for certain financial products and poor customer service as a whole, but there is clearly a link between the lack of faith consumers and businesses now have in TSB’s IT infrastructure and its poor ratings in this latest poll.

Looking ahead, TSB needs to restore faith through new initiatives and by showing its clients that it has truly put its IT failings behind it. For more of the latest news, insight and banking knowledge, subscribe to Wealth & Finance International Magazine HERE.

wealth management
Corporate Finance and M&A/DealsHigh Net-worth IndividualsWealth Management

Report calls for major digitisation of the wealth management sector but warns 84% of projects could fail

wealth management

Report calls for major digitisation of the wealth management sector but warns 84% of projects could fail

Over £20 billion of high net worth individuals’ investable wealth could be passed on to their loved ones every year, but as many as 80% of wealth manager’s don’t have an existing relationship with these beneficiaries. Digitisation is key to addressing this challenge.

A new report from Nucoro, a B2B fintech providing Wealth Management as a Service solutions, says traditional wealth managers need to totally re-engineer their operations if they are to prosper in the future. However, it warns that on average around 84% of companies generally fail at digitisation projects. 

The report entitled ‘The Future Challenges for Wealth Management’, says wealth managers and financial services companies in general need to prioritise and redefine what can be expected and achieved from digitisation, and make increased use of partnerships with expert solution providers.  

Nucoro says the digitisation of the wealth management sector needs to go beyond simply moving physical into digital, and fundamentally rethink products from the conceptual to execution. It says this is being driven by the rise of automation facilitating scalable growth, and the transformation of customers where their expectations, needs, behaviours and demographics are changing.

To illustrate this point, Nucoro estimates that on average, for the next decade over £20 billion of high net worth individuals’ investible wealth will be passed on to their loved ones every year, but as many as 80% of wealth manager’s don’t have an existing relationship with these beneficiaries. Many of these beneficiaries will be millennials who make great use of technology in all aspects of their lives, including managing their finances.

Nikolai Hack, the COO and UK MD of Nucoro commented: “As with any investment in a financial business, a central motivation should be to ultimately produce outcomes that can benefit customers. Adopting bolt-on enhancements like digital customer experiences or automations for back office functions are the best routes to upgrading the services to existing and potential clients due to their accessibility, scalability and affordability.” 

“Wealth managers must embrace technology. The industry is heavily regulated, and it therefore faces a large administrative burden, but technology can minimise the time and resources spent on tasks that are very basic but high in volume.”

The report highlights several key trends that innovative wealth managers need to address if they are to be successful in the future:

The growth of digital wealth management:

The report says it is now realistic to consider direct to consumer robo-platforms as legitimate industry challengers. By the end of 2018, they were managing $257 billion, and this could grow to $1.26 trillion by 2023. 

The rise of fintech new entrants:

While tradition still reigns supreme in wealth management, there are major indications that the next decade will see technology driven services enjoy strong growth. Taking an example from another industry, looking at the banking and payments market in Europe – new entrants (including challenger banks, nonbank payment institutions and big tech companies) that entered the market after 2005 now amass up to one third of new revenue, despite only taking 7% of the overall revenue.

Growing advice gap:

The cost of financial advice is demonstrably pricing out large sections of potential clients. A report in 2018 found that more than 40% of financial advisers has been forced to review their charging structures in the first half of 2019. This is a huge threat and opportunity for wealth managers

Wealth passed on to millennials/changing client needs

Beginning around 2030, an estimated $4 trillion of wealth is going to be passed on to millennials in the UK and North America from their parents. However, only some 20% of UK advisers currently have an existing relationship with their current clients’ beneficiaries, many of whom are millennials. This means that digital and mobile first access will become more universal as the younger generations mature. Digital finance is a highly effective engagement tool for younger generations.

Nikolai Hack said: “An unprecedented transfer of wealth is expected to be served by a shrinking pool of advisers. They will be dealing with a client base that is likely to need them to become more flexible and deliver a more modern and personal service.”

“This could mean more agile tech-driven firms will need to fill the gap. Alternatively, the existing firms could push to streamline their operational functions and manage overheads – cost cutting essentially – while handling an influx of orphaned clients at the same time.”

“For the next generation, their needs and expectations are centred on interacting with their finances via digitally accessible platforms that link their money, their everyday lives and their goals to the future. Greater customisation of service levels will also be key here.”

The reach of regulation

The number of individual regulatory changes that regulated organisations must track on a global scale has more than tripled since 2011. Tech can play a key role in helping wealth managers with this area of their business.

Conclusion

Nikolai Hack said: “For wealth managers, technology and digitisation can be applied across all functions, from onboarding clients and portfolio management to operations and reporting. It also enables wealth managers to become much more agile and focused on the needs of clients. However, wealth managers need to find the right balance between digital and human services and the key to success will be how wealth managers combine these two in order to meet the challenges now and in the future.”

From client onboarding to portfolio construction through to billing automations, Nucoro combines all the tools required to build the next generation of wealth management propositions. To help the wealth management sector move forward, Nucoro offers a new technology-based foundation built without legacies – a complete overhaul to the models of client service and accessibility. Nucoro’s is a radically different approach to the relationship between technology providers and the organisations adopting their solutions – in short, they can provide the new engine to power the next generation of financial services.

Whilst Nucoro has recently launched to the public, the technology behind it powers the retail investment platform, Exo Investing – a fully automated, AI-powered wealth management platform. Within the first year of operation, Exo won two industry awards (Best digital wealth manager OTY + Industry Innovator OTY at the AltFi awards 2018), was named as a finalist in three more and selected to two disruptive company annual indexes (Wealthtech 100 and Disruption50’s 100 most disruptive UK companies).

Nucoro is making this technology available for businesses in the wealth management sector that have the ambition to truly innovate and future-proof their businesses – and are struggling to realise their digital ambitions alone.

bank
BankingCapital Markets (stocks and bonds)

How the finance industry has evolved

bank

How the finance industry has evolved

Industries are constantly trying to keep up with the fast-paced landscape in which they operate, be it technological changes, customer demands or simply just making things easier for their consumers.

But it is the speed at which the technological advancements have reached that has forced traditionally slow-moving financial institutions to heavily invest to remain relevant to their consumers and remain competitive in the marketplace.

Personal

Banking is one of the oldest businesses in the world, going back centuries ago, in fact, the oldest bank in operation today is the Monte dei Paschi di Siena, founded in 1472. The first instance of a non-cash transaction came in the 20th century, when charga-plates were first invented. Considered a predecessor to the credit card, department stores brought these out to select customers and each time a purchase was made, the plates would be pressed and inked onto a sales slip.

At the end of the sales cycle, customers were expected to pay what they were owed to the store, however due to their singular location use, it made them rather limiting, thus paving way for the credit card, where customers that had access to one could apply the same transactional process to multiple stores and stations, all in one place.

Contactless

The way in which we conduct our leisurely expenditure has changed that much that we can now pay for services on our watches, but it wasn’t always this easy. Just over a few decades ago, individuals were expected to physically travel to their nearest bank to pay their bills, and had no choice but to carry around loose change and cash on their person, a practice that is a dying art in today’s society, kept afloat by the reducing population born before technology.

Although the first instances of contactless cards came about in the mid-90’s, the very first contactless cards associated with banking were first brought into circulation by Barclaycard in 2008, with now more than £40 million being issued, despite there being an initial skepticism towards the unfamiliar use of this type of payment method.

Business

Due to the changes in the financial industry leaning heavily towards a more virtual experience, traditional brick and mortar banks where the older generation still go to, to sort out their finances. Banks are closing at a rate of 60 per month nationwide, with some villages, such as Llandysul closing all four of its banks along with a post office leaving it a ghost town.

The elderly residents of the small town were then forced into a 30-mile round trip in order to access her nearest banking services. With technology not for everyone, those that weren’t taught technology at a younger age or at all are feeling the effects most, almost feeling shut out, despite many banks offering day-to-day banking services through more than 11,000 post office branches, offering yet a lifeline for those struggling with the new business model of financial firms.

Future innovations

As the bracket of people who have grown up around technology widens, the demand for a contemporary banking service continues to encourage the banking industries to stay on their toes as far as the newest innovations go.

Pierre Vannineuse, CEO and Founder of Alternative Investment firm Alpha Blue Ocean, gives his comments about the future of banking services, saying: “Artificial intelligence is continuing to brew in the background and will no doubt feature prominently in the years to come. With many automated chatbots and virtual assistants already taking most of the customer service roles, we are bound to see a more prominent role of AI in how transactions are processed from all levels.”

Technology may have taken its time to get to where it is now, but the way in which it adapts and updates in the modern era has allowed it to quicken its own pace so that new processes spring up thick and fast. Technology has given us a sense of instant gratification, either in business or in leisure, we want things done now not in day or a week down the line.

Hyper short-term investments what are millennials investing in
FinanceTransactional and Investment Banking

Hyper-short-term investments: what are millennials investing in?

Hyper short-term investments what are millennials investing in

Hyper-short-term investments: what are millennials investing in?

Despite the stereotype of the younger generation being frivolous with their money, it seems they are actually one of the savviest generations when it comes to turning a profit on their own. While they are hesitant to invest in stocks, millennials and generation Z are tapping into the hyper-short-term investment of fashion and beauty. For example, there’s a huge market for buying and selling trainers at the moment, or in vintage fashion.

In particular, limited-edition trainers have a huge appeal across the world, with people willing to camp outside of stores to pick up a particularly lucrative pair.


Art flipping

According to Business Insider, rich millennials are snapping up art as financial assets rather than as part of a potential collection — 85 per cent of millennials purchasing artworks say they are aiming to sell in the next year. Buying art with the intention of selling it on quickly is known as art flipping, and it’s something of a controversial subject in the art world. There are some who consider the process of art flipping as a potentially devaluing practice that harms the artist and their work.

The process can also seem more logical than artistic too, as many such purchases are made purely on the work’s monetary value. However, the piece’s social media hype can also spur rich millennials to part with their cash in a hopes of a quick resale profit — Instagram has been highlighted by Adweek as a viable platform for creating social media adoration for artists.


Clothes

One of the reasons why the younger generations are turning more to side-hustles and reselling as forms of investment is that the turnover is incredibly fast thanks to apps like Depop. There are so many stories about how entrepreneurial millennials are sniffing out limited edition items from the most popular brands, such as Supreme, during their famous limited edition ‘drops’, then rapidly reselling them.

Of course, the initial purchase is an investment, with many resellers spending hundreds of pounds or more on such a venture, but the resale of these goods can certainly turn a profit. It also taps effectively into the Instagram world we’re living in too. Sellers often combine their shop platforms with their social media accounts to merge both modelling and selling the items.


Shoes

The most sought-after trainers tend to be either limited edition or classic trainers for that much-loved vintage style. People are willing to set up camp outside a store before a particularly hyped drop of limited-edition trainers, in order to grab them at retail price, then sell it on for much higher prices. Some might seek to resell the items quickly, but there’s certainly a case to be made for popping a brand new pair of limited edition trainers away for a few years before reselling in hopes that their much-hyped status will only increase that price tag as the years roll on.

Arguably the biggest market in reselling is that of sneakers and trainers. Much like clothing, the main draw here is in limited edition shoes — but the sneakerhead culture is not anything new. In fact, it began nearly 30 years ago, though it’s enjoyed a huge resurgence in the last few years.

 
Sources:

https://www.sofi.com/blog/millennial-investing-trends/

https://www.adweek.com/digital/influencing-the-art-market-millennial-collectors-social-media-and-ecommerce/

https://www.businessinsider.com/rich-millennials-investing-art-flipping-build-wealth-2019-4?r=US&IR=T

https://www.standard.co.uk/fashion/should-you-be-investing-in-sneakers-a4014486.html

https://www.theguardian.com/fashion/2017/oct/23/teens-selling-online-depop-ebay

4Stop - Most Innovative Risk Management Platform (Western Europe)
Risk Management

Most Innovative Risk Management Platform (Western Europe)

Most Innovative Risk Management Platform (Western Europe)

Thanks to its impressive industry expertise, 4Stop, a leading fraud prevention provider, solves businesses riskbased approach through a modern, all-in-one KYB, KYC, compliance and anti-fraud solution at an international level. To celebrate the firm’s win in this year’s competitive FinTech Awards we profile it and share an insight into the innovative solutions it has to offer, speaking with members of the senior team to understand the true value of this exceptional solution.

Since its inception in 2016, 4Stop has onboarded various clients within its target markets of Payment Service Providers, Payment Gateways, eMobile payments, eCommerce, eWallets, and Cryptocurrency.

As all the founders of the company have collectively over 60 years of experience within the risk management realm, they understand the need for a simple, fail-safe, future-proof solution that businesses can effortlessly manage their risk requirements and more importantly with absolute confidence. When they first started their firm, their focus and challenges were to establish a product to resolve the cumbersome processes surrounding KYB, KYC, compliance and fraud prevention globally.

This drive led 4Stop to develop an all-in-one solution encompassing global data aggregation that resulted in a full suite of KYB and KYC data sources, and their proprietary risk management tools paired with automation and integrated analytics, all from a single AP. Removing the market pain point of multiple integrations and patchworked solutions to fully address risk management requirements.

Thanks to this unique technology, the firm now allows its diverse range of clients to easily perform required validation, verification and authentication at the point of onboarding through to transactional processing, both at the merchant and merchant consumer level.

Over the past three years the adoption and usability of the 4Stop solution have been well received. By encompassing a complete end-to-end solution for KYB, KYC, compliance and fraud prevention, 4Stop allows businesses to enjoy a single-view-ofrisk and it has already been proven to dramatically improve their overall performance and bottom line.

Today, the firm has achieved proven results for its clients and have cemented its place as a true revolutionary within the risk management and technology space. Businesses that have utilised 4Stop’s anti-fraud technology experience a 66.6% reduction in chargebacks in the first 2 months with an average of 81.5% approval authorisation rate. Additionally, businesses that have implemented the cascading KYC verification technology, have seen a growth of 10.9% in savings within the first two months.

4Stop’s revolutionary KYB solution is now leading the industry by performing granular business underwriting in near real-time with comprehensive data analysis surrounding business’ online presence, operational performance, structure. Comprehensive data analysis surrounding the business’ online presence, operational performance, structure, and compliance adherence. Enhanced by additional KYC due-diligence performed on directors/ UBO’s and required document retreival, businesses obtain all the data and documentation they require to confidently onboard businesses.

It is this unique solution that has driven 4Stop to win one of the 2019 FinTech Awards from Wealth & Finance International Magazine. Ingo Ernst, CEO of 4Stop, comments on the firm’s success in this award’s programme and how it is the direct result of the firm’s expert team’s hard work and dedication to excellence.

“This award is another great milestone for 4Stop. Our ever-changing online landscape demands innovation and for everyone at 4Stop, our focus is driving our technology advancements as an equalized force across all aspects of our product offering. Our teams’ hard work, diligence and passion have been the pathway for our success and we greatly look forward to continue bolstering our products to support online risk management.”

Seeking to change the face of risk management for the better, 4Stop’s KYC data hub solution encompasses one of the largest KYC data aggregations in the industry to provide true worldwide KYC data coverage. As a result, clients have access to thousands of global data points and hundreds of KYC data sources with real-time and on-demand activation. Additionally, this data creates full market profile data simulations in a seamless manner and allows businesses to make quantifiable decisions based on data science. Through 4Stop’s cascading verification logic costsavings on KYC data performance is maximised and the best data experience output is obtained. 4Stop continuously aggregates global data and KYC data sources so businesses can continue to enjoy all the data they require from their initial integration with zero touch on their IT and internal development resources.

Dedicated to safety as well as efficiency, 4Stop’s cutting-edge anti-fraud technology provides an automated and multi-faceted rules engine that performs real-time analysis with automated system actions through to providing granular risk monitoring and integrated intelligence. Businesses can apply risk thresholds and anti-fraud parameters per merchant, sub-merchant, region, type, market/ industry, date/time, etc. Clients have full control of their risk management in a fully automated manner. Through the single-view-of-risk, overall monitoring and risk analysis processes are efficient with minimal requirement for manual intervention.

Improving businesses authorisation rates, dramatically reducing chargebacks and accelerating their performance, the Businesses all-in-one solution provides everything required to manage risk from a single API.

Whilst its fully integrated solution is revolutionary in the FinTech market it enables 4Stop to overcome the KYC industry issue of managing so much data safely and effectively. The firm is constantly seeking to enhance this product for the benefit of its clients across the financial and business markets. 4Stops’s continued technological investment is based on a few variables within the market landscape.

By closely engaging within the industry through networking globally with key market leaders, events and conferences, close client engagement and staying abreast of global payment and risk management centric reports and trends.

Through this process, 4Stop develops vigorous assessments of the market landscape, emerging trends and evolving regulatory requirements, all of which are funnelled to their executive and product innovation teams to drive product expansion and ensure 4Stop’s all-in-one risk management solution remains leading-edge across the various industries in the market they services.

“4Stop has been designed to be future-proofed from a single API for our clients to manage KYB, KYC, compliance and anti-fraud technology on a global scale. It is our continued responsibility that the product does just that. Expanding our fraud technology and data aggregation accordingly to stay relevant to the rapid evolution of online payments and engagement.” States Brian Daly, Head of Product Implementation and Innovation, 4Stop.

At the point of inception 4Stop launched with a full suite of KYC data sources and their proprietary anti-fraud technology that encompasses a multi-faceted automated risk rules engine with cascading rule performance and automated system actions, alongside a dashboard with realtime intelligence and multiple reporting widgets. In early 2019 4Stop launched its global end-to-end KYB solution. Seeking to build upon its current success, moving forward 4Stop will continue to aggregate data and expand its KYB and KYC solution, in conjunction with furthering its features available such as machine learning to support the anti-fraud and risk monitoring technology. The firm has also recently completed a German-based €2.5 €Million Series A Round Investment from Ventech, the leading pan-European VC fund investing in early-stage tech-driven start-ups. This financing will help the company to expand its solution and drive real change in the market.

Ultimately, 4Stop is a global product with clients worldwide. In the coming years, the business has established a focused acquisition plan specific to regions and markets within Europe, Asia and the United States. These developments will drive the company to even greater global recognition and truly prove it as a pioneer in the risk management technology space. As many companies seek a single provider to manage all parts of their risk management cycle, 4Stop will become a key part of the payment’s ecosystem and the central aggregation hub in the eco-system.


Contact Information:
Name: Ingo Ernst
Address: Neusser Str. 85, Köln, Germany, 50670
Telephone Number: +49.151.1101.7175
Web Address: https://4stop.com/

banking online
Banking

A machine learning balancing act: Payments, customer experience, fraud detection

By Manuel Rodriguez, Fraud Solutions Manager at SAS

The range of potential payment services has expanded rapidly over the last few years. Increasingly, we all want the flexibility of being able to pay with new payment methods, from contactless through to Apple Pay, mobile wallets and beyond. Digital natives, such as millennials, don’t just want this – they expect it. For banks, however, this demand for flexibility is a headache.

 

Banks and other financial institutions know that they have to adopt new payment methods to meet customer demand for convenience and flexibility. However, they also know that these new payment systems leave them open to new forms of fraud. The big question is how can they adapt to these new fraud types – to protect both themselves and customers – without creating poor customer experiences through large numbers of false positives?

 

Understanding payment fraud

There is no question that payment fraud has changed over the last few years. A few years ago, card fraud, from cloning cards, was a leading form of fraud. However, the use of card processing terminals that use Europay-Visa-Mastercard (EMV) technology has reduced this considerably. This technology – the gold standard for credit cards, using computer chips to authenticate and secure transactions – has been the norm in Europe for a while. Its use is now spreading to the US.

 

Card fraud has therefore migrated to “card not present” transactions, such as online purchases. Payment fraud is driven and supported by several risks, including data breaches at retailers, credit agencies and banks, and use of malware to obtain access to accounts. It is also, however, helped by moves towards faster payments, driven by both regulators and the industry. These are good for customers, but they also good for fraudsters. The faster it is to get funds or goods through fraudulent transactions, the less time banks have to detect the fraud.

 

Fraudsters always ahead

 

Fraudsters are faster and more adept than ever before. The issue for banks and other financial institutions is to recognise that fraudsters will always be ahead but to take action to address that. Fraud detection systems need to keep up, and there is little time for long-drawn-out checks. However, there is a catch. Fraud-prevention systems need to avoid too many false positives. Up to 10% of rejected orders are actually believed to be valid. In total, in one survey, 37% of merchants said that turning away good customers was a top concern.

 

New regulations are adding challenges. Instant Payments or Payments Services Directive 2 (PSD2) are enforcing new rules, needs and requirements. We need to fit into payment processes thresholds and other aspects to make payments faster, more available and smoother. On the other side, we need to apply proper security, customer authentication and risk-based approaches to monitor payments in a more complex environment involving banks and third-party providers.

 

Systems to catch fraud

 

There are many actions that banks can take to protect themselves and their customers from fraud. First, they must look at their systems, ensure they are connected and remove any silos. Disconnected systems are vulnerable to compromise.

 

Banks also have to move from rules-based to machine learning analytics systems for fraud detection. This approach gives them the chance to identify suspicious patterns and anomalies much faster, which is essential as more and more real-time payments systems come online. Real-time scoring and decision making should drive new systems, which should also take into account new forms of data, such as device fingerprints and information phone call routing.

 

Machine learning techniques include neural networks, regression techniques, decision trees, naïve Bayesian methods, clustering and network analysis. These approaches are particularly useful to detect rare payments fraud events hidden in big data sets. Machine learning tools can understand and learn from this type of data, and they can adapt to the changing behaviours associated with fraud through automated behavioural profiling and signatures.

 

They can automate models to find hidden insights without having to be programmed directly. This means that banks have some chance of keeping up with fraudsters. Machine learning techniques can also reduce the false positive rate by learning the behaviour of individual customers over time so that normal behaviour for an individual does not raise alerts.

 

With multiple analytics techniques available, banks can better detect fraud behaviours. But they can also monitor legitimate behaviour to provide enriched answers to business needs, different requirements and new regulations.

 

End-to-end and across channels

Ultimately, payment fraud detection systems have to be able to look at payment processes from end to end and also across channels. Gartner identifies five layers: entity link, cross-channel-centric, channel-centric, navigation-centric and end-point-centric. By looking across all five of these layers and drawing data from all points, machine learning systems can draw a complete picture of the transaction in the context of the customer.

 

This combination of rules-based and analytical techniques can monitor user behaviour with considerable accuracy and speed. It can, therefore, identify normal and unusual patterns very fast, even in real time. This makes it much harder for fraudsters to find gaps and loopholes, and easier to identify potential fraud accurately. It is essential for banks to move in this direction to protect themselves and their customers from payment fraud.

mobile bank fraud
BankingFinance

Mobile financial attacks rise by 107%

According to a recent report by Kaspersky, the number of mobile financial attacks it detected in the first half of the year rose by 107%, rising to 3,730,378. Analysts at the company said they discovered 3.7 million mobile financial attacks from January to June this year and found 438,709 unique users attacked by mobile Trojan bankers.

In the first half of 2019, attackers actively used the names of the largest financial services and banking organisations to attack mobile platform users. Researchers found 438,709 unique users attacked by mobile Trojan bankers. For comparison, in the first half of 2018, the number of attacked users was 569,057, a decrease of 23 per cent

Findings by Kaspersky showed the activity of a bank Trojan called Asacub banker, which attacked an average of 40,000 people per day, peaked rapidly in the second half of 2018 and reduced in half year 2019. The number of attacked users and detected attacks peaked rapidly in the second half of 2018; 1,333,410 users were attacked and there were 10,256,935 attacks.

The cybersecurity firm identified another malware, Anubis Trojan, which intercept data for access to services of large financial organisations and two-factor authentication data in order to extort money from users. The firm described the banking Trojan as one that spreads via instant e-messaging apps such as WhatsApp and sends a link to the victim’s contact list.

Lisa Baergen, director at NuData Security, a Mastercard company comments:

“Mobile banking fraud is easy to miss for consumers as Trojans are well hidden inside other legitimate-seeming applications or attachments. Once inside the customer’s phone, they can roam free to steal banking information or account assets.

With this increase on attacks through banking Trojans, it is hard for financial institutions to know if a legitimate user is making a transaction or someone else is hijacking the account. To avoid this growing type fraud many companies are including security layers that can see beyond credentials and passwords: passive biometrics.

Adding passive biometrics technology, banks are able to detect unusual behavior within an account, even if the right device is used. By having this visibility into the user’s behavior, banks can block or authenticate a user further when they detect unusual activity, thwarting account hijacking.

Building a holistic risk-based authentication infrastructure for user verification is proving effective in thwarting bad actors armed with stolen credentials or executing account hijacking. Many companies are now combining different layers of identification such as device, connection, and passive biometrics to power a dynamic and intelligent authentication system. This multi-layered security ensures a frictionless experience for customers while seamlessly eliminating fraudulent transactions.”

Bank tech
Banking

Over 50% of banks and telcos flying blind into cloud migration

CAST, a leader in Software Intelligence, today released its annual global cloud migration report. The report analyzes application modernization priorities in financial and telecommunications firms.

Findings show critical missteps mean cloud migrations are falling short of expectations in mature institutions, just 40% meeting targets for cost, resiliency and planned user benefits. Lack of pre-migration intelligence and fear of modernizing legacy mainframe applications are the main drivers for these shortcomings. Adoption of microservices as a modernization technique is also faltering from lack of financing.

While these legacy process institutions realise only third of their target benefits for cloud migration, cloud-native approaches are enabling FinTech firms to outperform traditional banks, achieving more than half their target benefits.

Fewer than 35% of technology leaders use freely-available analysis tools. There is a systematic failure to assess the underlying application readiness for cloud migration with Software Intelligence, a deep analysis of software architecture. IT leaders must ensure the right architectural model and compliance is in place to avoid increasing technical debt. Unchecked, this leads to more IT meltdowns such as TSB’s £330m re-platforming crisis in 2018, with customers paying the expensive price for these mistakes.

More than 50% of banks and telcos are effectively taking leaps of faith, not undertaking essential analysis-led evaluations to support and facilitate cloud migrations. Instead, half the CTOs surveyed use gut instinct and ad-hoc surveys with application owners as the primary basis of their decision to move applications to the cloud. IT leaders need to adopt an analysis-led approach over gut instinct to implement the right cloud migration strategy and realise all potential benefits of migrating to the cloud.

Greg Rivera, VP CAST Highlight at CAST, commented on the findings, “Pilots going into storms turn to their instruments. If you run headfirst into a cloud migration without objectively assessing your applications, you’re flying in the dark.

Even one small change to an application has a ‘butterfly effect’ on the rest of the code set, so a disruption as big as cloud migration has detrimental effects including IT outages and loss of business. Migration to the cloud is vital when digitally transforming a business. But, it needs to be done right if organizations want success instead of suffering.”

More than 40% of software leaders are yet to define a class based approach to application modernization. Heavily legacy process firms tend to rehost apps, while rehosting, or so-called ‘lift-and-shift’, benefits apps with up to three years before end of life. However, existing and continuously evolving apps should be re-platformed and restructured during cloud migration. To successfully complete migration first gather intelligence and actively assess applications objectively.

Armed with battle scars software leaders at banks and insurance firms are revisiting their initial ‘lift-and-shift’ approach to cloud migration plans. While FinTech firms outperform mature institutions on cloud-native apps, banks lead the way on cloud-ready applications with just fewer than 50% rewriting applications. A European Chief Digital Architect said, “Cloud migration is only really a problem if you’re moving workloads without changing the way they are shaped.”

Finance Business
Finance

FINANCE BUSINESSES MISSING THE MARK WITH GAMIFIED REWARDS

FINANCE BUSINESSES MISSING THE MARK WITH GAMIFIED REWARDS

75% of finances businesses currently offer a gamified rewards system

But only a minority of these are utilising the most effective kind of gamified reward

Research reveals which types of gamified rewards have the biggest impact on motivation and productivity of financial industry workers.

A survey of 1,219 UK workers, carried out by workplace incentives and rewards provider, One4all Rewards, and published in The Gamification Report surveyed employees from different age groups, genders and industries revealing which type of gamified rewards systems would motivate them the most or for the longest period of time. The research found that 35% of finance workers were most likely to cite fixed action rewards as being the biggest motivator.

But the research shows just a third (33%) of finance businesses are utilising this type of gamified reward.

30% of finance industry workers stated that they would work harder or for longer to unlock social treasure style rewards, which are awarded by peers.

Surprise or unexpected rewards came in third place (27%), with finance workers stating they would be motivated to work harder if their employer offered them.

Meanwhile, rolling or lottery style rewards where workers hit their targets are then entered into a lottery or raffle to win a reward or bonus, would work for almost 1 in 4 (24%) finance industry workers.

Random rewards in return for completing a certain task or action would work for 19% of finance workers.

The research found that a large number (75%) of finance businesses currently offer a gamified rewards and bonus system.

But the study shows that they could be utilising this type of system in a slightly different way, to have a bigger impact.

The research found that majority (43%) of finance businesses offering gamified rewards systems are relying on surprise or unexpected rewards – which award workers for a job well done – but in fact, it is actually fixed action rewards which workers say would motivate them the most.

Michael Dawson managing director of One4all said: “It’s fantastic that such a large number of finance businesses have already adopted a gamified reward and bonus system for their staff – but the research shows that some could be using them to greater impact employee productivity.

“It’s definitely worth bosses considering which style of rewards and bonuses will have the biggest impact on productivity and effort amongst their workforce.

“Given that these types of rewards truly embody the spirit of gamified rewards – which recognise and praise good behaviour, to encourage workers to repeat this in the hope of receiving another reward – this makes sense.”

One4all Rewards are industry experts in benefits and rewards. Working with over 6,000 businesses of all sizes nationwide, One4all Rewards helps to transform customer and employee relationships through successful rewards and incentive schemes.

For more information and to read The Gamification Report, visit https://www.one4allrewards.co.uk/blog/blog/research-reports/gamification-report-2019

The most popular types of gamified rewards most likely to improve productivity and motivation levels for finance workers:

  1. Fixed Action Rewards – 35%
  2. Social Treasures – 33%
  3. Surprise Rewards – 27%
  4. Rolling/ Lottery Rewards – 24%
  5. Random Rewards – 19%
Bitcoin $150000
FinanceFunds

Bitcoin to hit $15,000 as consensus grows on safe-haven status

The devaluation of China’s currency that is rattling global financial markets has revealed that Bitcoin is now becoming a safe haven asset.

The analysis from the CEO of one of the world’s largest independent financial advisory organisations comes as investors piled into the Bitcoin and other cryptocurrencies this week amid growing trade tensions between the U.S. and China. 

The Chinese renminbi fell to under 7 to the U.S. dollar on Monday – the lowest in more than a decade – igniting drops in stocks and emerging market currencies and driving a rally in government bonds.

Nigel Green, chief executive and founder of deVere Group, notes: “The world’s largest cryptocurrency, Bitcoin, jumped 10 per cent as global stocks were rocked by the devaluation of China’s yuan as the trade war with the U.S. intensifies.

“This is not a coincidence. It reveals that consensus is growing that Bitcoin is becoming a flight-to-safety asset during times of market uncertainty. 

“Bitcoin is currently realising its reputation as a form of digital gold. Up to now, gold has been known as the ultimate safe-haven asset, but Bitcoin  – which shares its key characteristics of being a store of value and scarcity – could potentially dethrone gold in the future as the world becomes increasingly digitalised.”

He continues: “With the Trump administration now officially labelling China a currency manipulator, escalating the tensions between the world’s two largest currencies economies, investors are set to continue to pile in to decentralized, non-sovereign, secure currencies, such as Bitcoin to protect them from the turmoil taking place in traditional markets.

“The legitimate risks posed by the continuing trade dispute, China’s currency devaluation and other geopolitical issues, such as Brexit and its far-reaching associated challenges, will lead an increasing number of institutional and retail investors to diversify their portfolios and hedge against those risks by investing in crypto assets.

“This will drive the price of Bitcoin and other cryptocurrencies higher.  Under the current circumstances, I believe the Bitcoin price could hit $15,000 within weeks.”

The deVere CEO concludes: “Cryptocurrencies are now almost universally regarded as the future of money – but what has become clear this week is that they are increasingly regarded a safe haven in the present.”

IMMOATIVE
FinanceFunds

Proposed Placing of new ordinary shares to raise approximately £2.0 million Proposed broker option to raise up to £0.5 million

Immotion Group, the UK-based immersive virtual reality (“VR”) out-of-home entertainment group, announces, following the success of its recent VR installations into a range of high quality partners (“Partners”), that it has decided to focus its strategy predominantly on the roll out of its Partnership Model into high footfall locations. The visibility of higher margins and recurring revenues delivered from this model is, the Directors believe, the best strategy for the Group and its shareholders. To support this strategy, the Company is carrying out a fundraising to raise approximately £2.0 million, before expenses, via the issue of an aggregate of approximately 29.6 million new Ordinary Shares (“Placing Shares”) at a price of 6.75 pence per share (“the Placing Price”) (the “Placing”).

 

WH Ireland Limited and Alvarium Capital Partners are acting as joint brokers in relation to the Placing (the “Brokers”) and furthermore, the Company has authorised the Brokers to raise up to a further £0.5 million through a broker option (the “Broker Option”), (together with the Placing, the “Fundraising”) in order to allow existing and other investors to participate in the Fundraising.  Ordinary Shares issued under the Broker Option will also be issued at the Placing Price and will therefore be limited to approximately 7.4 million new Ordinary Shares (the “Broker Option Shares”), expected to close by 5.00 p.m. on 30 July 2019. It is intended that the net proceeds of the Fundraising will be used to accelerate the Company’s growth plans under the revised strategy. A placing agreement has been entered into today between the Company and the Brokers in connection with the Fundraising (the “Placing Agreement”).

 

The Placing is being conducted, subject to the satisfaction of certain conditions set out in the Appendix to this Announcement, through an accelerated book-build process (the “Bookbuild”), which will be launched immediately following this Announcement.

 

Operational and Trading Highlights

 

  • Currently the Group has a total installed base of 237 headsets;
  • 34 new headset installs agreed across Madame Tussauds, Washington DC; two Legoland Discovery Centres; and two Al Hokair sites in the Middle East;
  • A further 118 headsets installs agreed subject to contract, expected to be installed through the remainder of 2019;
  • Based on current headset yields, the Directors expect overall monthly EBITDA breakeven at c.410 installed  headsets (expected Q1 2020);
  • Strong revenue per headset performance in the Partner venues being driven by sector focus;
  • Launch of ‘Underwater Explorer’, ‘Thrill Coasters’ and ‘Raw Data’ themed VR stands;
  • Strong demand and enquiries from both existing and new high footfall leisure destination Partners;
  • Roll-out of the Company’s VR Cinematic Platforms with Merlin Entertainments plc (“Merlin”), now encompassing the Legoland Discovery Centre, LEGOLAND®, Sea Life, and Madame Tussauds locations with 70 headsets now installed; and
  • ImmotionVR, the Company’s own VR operations, now also includes a partnership-based model focusing on high footfall leisure destinations, such as The O2, Soar Centre in Glasgow, and Star City in Birmingham.

Fundraising Highlights

  • Proposed Fundraising of up to approximately £2.5 million before expenses at a price of 6.75 pence per share by way of a Placing and Broker Option.
  • Placing being conducted through an accelerated book-build process which will open with immediate effect following this Announcement.
  • The Placing Shares and Broker Option Shares (“New Ordinary Shares”), assuming full take-up of the Placing and Broker Option, will represent approximately 13 per cent. of the Company’s enlarged issued share capital.
  • The final number of Placing Shares will be agreed by the Brokers and the Company at the close of the Bookbuild, and the result will be announced as soon as practicable thereafter.
  • The timing for the close of the Bookbuild and allocation of the Placing Shares shall be at the discretion of the Brokers, in consultation with the Company. The Fundraising is not underwritten.
  • The Broker Option is expected to close by 5.00 p.m. on 30 July 2019.
  • The Appendix to this Announcement (which forms part of this Announcement) contains the detailed terms and conditions of the Fundraising.

Background and Current Strategy

 

Immotion Group was established to exploit the ‘Out-of-Home’ VR immersive entertainment market. Since inception, it has developed an extensive range of both CGI and live-action experiences, all of which operate on the Company’s proprietary Content Management and Reporting System. Immotion’s core offering provides virtual reality experiences to be enjoyed on sophisticated motion platforms delivering a truly engaging and immersive experience.

 

In addition to the Company’s own consumer-facing VR operation, ImmotionVR, the Company has thus far offered its solutions to third parties via both a straight sales model, as well as a revenue share model with Partners (“Partnership Solution” or “Partnership Model”). In addition, the Company has also used its CGI studio to offer the development of VR experiences for major brands, as well as licensing its own experiences into countries where it doesn’t operate.

 

Over the past year the Company has experienced positive feedback from its existing Partners as well as new potential Partners. Its innovative Partnership Model has been well received in what is a fast growing, but still nascent market.

 

The Partnership Model developed by the Company allows high footfall leisure destinations to embrace VR, adding both consumer value as well as ancillary revenue to these locations. The decision process for the Partner moves from a prolonged capital investment decision to a simple operating decision, thus speeding up the decision process considerably.

 

Feedback from Partners in regard to the Partnership Model has been very positive, with demand demonstrating a strong appeal of this model as opposed to the straight sales model. Consequently, the Company has taken the decision to focus on its Partnership Solution.

 

The Directors believe the Partnership Model, in terms of both experiences and hardware, allow Partners to enter the early stage VR market with confidence. This underpinned with the Company’s proprietary Content Management and Reporting System allows Partners, big and small, the ability to upload remotely new experiences, as well as see ‘real-time’ data on usage and revenues and to receive remote support from Immotion Group.

 

The Company has seen very encouraging results in the Partner sites generally with the aquaria sites outperforming all others.  This has led the Company to conclude that it should develop solutions for a number of high footfall “edutainment” destinations such as aquaria, zoos, science centres and museums. Initial efforts have focused on aquaria and this has now begun to gain significant traction with experiences now in 7 major aquaria locations and many further discussions ongoing. The year to date average total gross revenue per headset per month of c.£2,100 in the aquaria sector is performing 1.6x that of the historic headset averages across the Partner estate and delivers an annual margin per headset of £12,000.

 

The average annual gross revenue and average annual blended contribution margin to Immotion Group, including the ImmotionVR estate is per headset, across the continuing estate, running currently at c.£16,300 (or £1,356 per month) and c.£7,000 per annum (or £583 per month) respectively. On a Partner only basis, excluding the ImmotionVR own retail sites, based on year to date performance, this gross average revenue per headset increases to circa £18,200 per annum (£1,517 per month). At the current level of fixed operating costs (net of commercial contract work) of £240,000 per month this implies a monthly breakeven level of c.410 headsets assuming the margin contribution of £583 per month. 

 

The Directors believe that there is scope for the overall average revenue per headset to grow significantly, driven by a number of factors. The mix of sites is expected to grow in favour of Partner sites and stronger performing vertical channels within that (such as aquaria) as noted above. Furthermore, the Company is developing new marketing and selling tools to support Partners in growing revenue.  Additionally, H2 19 should yield better performance as there are a greater number of school and other holidays in H2 in USA and Europe.

 

The Directors believe the focus on the Company’s growing Partnership Model will deliver greater shareholder value as it builds these recurring revenue streams. The number of quality Partners such as The O2, Al Hokair, Merlin Entertainments, Shedd Aquarium and Santa Barbara Zoo to name but a few, all of whom are already enjoying the benefits of this model, continues to grow rapidly. With over 34 new headsets contracted, and due to be installed in the coming weeks, along with a further 118 agreed, subject to contract, this gives the Company visibility to c.389 installed headsets.

 

As noted in the final results announcement on 3 April 2019, whilst there is demand for direct hardware sales in the VR market and the Directors recognise the positive impact in the financial year in which these sales are recognised, and that they do aide cashflow, this does not in the Directors’ view outweigh the benefits of building Partner relationships with longevity and recurring revenue.

 

On balance, the Company believes due to the “one-off” transaction revenue nature of direct sales, the competitive landscape in a nascent market, the lead-times to gain decisions from prospective customers as well as the margins achievable of c.£2,500 per headset for a direct sale of hardware, makes the Partnership Solution considerably more appealing for the Group and its shareholders as a whole in the long-term.

 

The innovative Partnership Model provides a collaborative business relationship for both the Partner and the Group. The decision process for the partner is much easier, and with on-going segmental focus the Directors believe the Company can continue to drive revenue per headset up delivering added benefits for both parties. 

 

The revenue share Partner Model drives recurring revenues for both parties and with a contribution to the Group of c.£21,000 over the 3-year expected life of a VR Cinematic Platforms, the Directors believe it is a better route for the Company and its shareholders. Furthermore, the potential to grow these margins with better utilisation will further improve margins for the Company, as well as delivering a greater revenue share for Partners.

 

The Group currently has an installed base of 237 headsets, 118 of these headsets are operated by the Company’s own staff, with the balance operated by our Partners’ staff. The Group’s contracted and subject to contract pipeline is currently for a further 34 and 118 headsets respectively, which are expected to be installed throughout the remainder of 2019. The Directors are targeting an installed base of 1,000 headsets by the end of 2020.

 

Based on current contribution per headset and the current costs of operation, the Directors believe the Group will reach EBITDA breakeven when approximately 410 headsets are installed, and the Directors expect this to be achieved in Q1 2020.

 

The move to a Partnership Model will help the Company build a recurring revenue stream which the Directors believe will benefit the Group in future years as well as drive the Group to EBITDA breakeven. The short-term impact of the focus on the Partnership Model will be lower expected revenue for the 2019 financial year, as the forecast “one-off” revenue from direct sales are exchanged for recurring revenues with Partners. As the number of Partners increases, and the volume of recurring revenues increases, the revenue and profit potential for future years will not only increase substantially but will also be much more predictable.

 

As a direct result in the decision to focus on the ‘Partnership Model’ strategy the Directors have reviewed its forecasts for the year and the timing of pipeline of orders that support those forecasts. The immediate consequence of this strategy is the reduction in both top-line revenue and profit from the sale of machines, this combined with an increased overhead cost as the Company focuses its efforts on engaging quality Partners will result in lower revenue and EBITDA for 2019. As a result of this the Directors now expect the Group’s EBITDA loss (excluding one off and exceptional items) for the current financial year to remain broadly in line with the year ended 31 December 2018.

 

Once the breakeven level of installations has been achieved, the contribution from each new installation flows predominantly to the bottom line. The Directors believe, assuming continued interest from partners, this model will be highly profitable in the medium to long term and is very scalable.

 

The Company has invested heavily in building a range of experiences, along with its proprietary Content Management and Reporting System and a range of themed motion platform VR offerings. This combination, along with its unique business model has enabled it to secure a range of quality leisure partners operating in high footfall locations. As the business continues its roll-out and approaches the ‘tipping point’, the Directors believe the impact in the medium to long term will be beneficial to shareholders and that the Group is well placed to take advantage of the opportunities ahead, to become a leading out-of-home immersive VR operator.

 

Martin Higginson, CEO of Immotion Group, said:

“Since inception we have invested heavily in building a range of VR experiences, the quality of which has not been seen before at affordable price points in the ‘out-of-home’ VR market. This fact, combined with our proprietary reporting software, themed stands and on-going investment in VR motion platforms has positioned us well in this nascent market.”

 

“However, it has been our determination to create a new and exciting business model that has and will define us. Creating a Partnership Solution where we work together with high footfall leisure locations to provide them with not only a new and interesting attraction, but also a valuable ancillary revenue stream has transformed our business. Demand from high quality aquaria partners is very strong and we are beginning to see demand from other verticals.”

 

“Our continued focus in creating not only the right environment as well as VR experience for our partner, is starting to show encouraging signs with revenues in our Partner estate growing strongly. The performance of our aquaria partners is particularly strong and the Directors see this as a highly scalable, potentially global opportunity.”

 

“As we move closer to EBITDA breakeven, this tipping-point business is poised for substantial growth. Our offering is unique, our experiences are the best in class, and our list of quality partners just gets better every day. With an offering that benefits our partners as much as us, we believe this model will allow us to lead this new and exciting market.”

car management
Finance

What finance options are there to know about when buying a car?

Unlike other purchases, you don’t need to worry about saving loads of money to buy a car outright. In fact, Vindis, who are also VW service providers, have detailed various finance options available to you when getting your hands on your next set of wheels when it’s new — other than buying the car outright obviously.

Keep reading as they offer insight into how many finance options are open to you when in the market for a used car too…

 

What do you need to know when buying new?

Personal loan

A personal loan is often the cheapest method to borrow money over a long-term period and also means that you will own the car from the moment you take out the loan. Competitive fixed interest rates can be gained if you shop around for your personal loan too, while you often won’t even need to worry about paying a deposit to get the loan.

But how do they work? Well, personal loans are taken out at a bank or building society and enable you to spread the cost of purchasing a new car over a period of time that can last anywhere from one year to seven years.

In fact, according to a survey by WhatCar? a personal loan is the most popular way to finance a new vehicle, with a third of those who were involved in the motoring publication’s poll saying they favoured this finance option over all others.

Other benefits of choosing a personal loan to pay for your new set of wheels include the fact that you won’t need to worry about any annual mileage restrictions, as well as that you won’t need to hand the car back to the dealership once the loan is paid — thus no need to be concerned about reconditioning costs either. Make sure however that you can keep up with your payments, as any of your assets can be seized should you be unable to pay one of your installments — only your vehicle will be vulnerable to being reprocessed should the same thing happen with dealer finance.

It’s important to note that a clean credit rating will likely be required if you want to take out a personal loan too, while you’ll also beat the brunt of your car’s depreciation due to you owning the vehicle from the moment you take out the loan. Ensure the vehicle that you have your eyes on will be something that you can imagine driving for years to come, as the lender will still require you to repay the full loan even if you sell it or it gets written-off.

 

Hire purchase (HP)

Hire purchase — or HP — is the next simplest method of purchasing a car. Sixteen per cent of those involved in the earlier mentioned WhatCar? survey admitted they favoured this type of car finance.

After typically paying a deposit — usually 10 per cent of the car’s total value at the time of purchase — you then repay the remaining balance in monthly installments, plus interest, throughout the rest of the loan period. Once the loan is paid in its entirety, you will own the vehicle outright. Up until then, you won’t need to be concerned about any excess mileage charges and there’s no reconditioning costs to worry about either.

There are a couple of consumer rights associated with HP agreements too. You may be able to return the vehicle once you’ve paid half the cost of the vehicle and not be required to make any more payments, for instance, while your lender will not be in a position to repossess your car without a court order after you’ve paid a third of the entire amount that you owe.

You must be aware however that the vehicle is not yours until the final payment has been made. Miss a payment or a collection of them and you could well be at risk of losing the car. Likewise, you won’t have a legal right to sell the car until all payments have been made.

 

Personal Contract Hire (PCH)

Personal contract hire — otherwise referred to by its acronym PCH — is the leasing option of the types of car finance which are available to you. This is because you will never own the car in question when taking out a PCH plan; it must be returned at the end of the contract term.

Instead this works by paying a dealer a fixed monthly amount to use one of their vehicles. Fortunately, the costs of servicing and maintenance are both factored into this amount. Once a PCH agreement ends, you simply hand the car back to the dealer and needn’t worry about the vehicle depreciating in value.

A PCH plan is therefore a wise option for drivers you like to change their cars frequently. However, take note that you must ensure the vehicle remains in good condition during the entire time it’s in your possession and that you don’t exceed the annual mileage limit agreed at the start of the agreement — extra costs could come your way otherwise. 

 

Personal Contract Purchase (PCP)

Ranked as the second most popular finance option when buying a new car according to the aforementioned WhatCar? poll, with 25 per cent of those involved in the poll saying they favour this technique, personal contract purchase — otherwise known as PCP — has a few similarities to hire purchase agreements. You again pay a deposit, which is often ten per cent of the vehicle’s overall value too, before paying a series of monthly installments.

However, the monthly installments will this time be actually paying for the deprecation in the car’s value during the contract period — as opposed to going towards the whole value like with HP. Once you reach the end of the contract term, you’ll be presented with three options with what you want to do next:

  1. Trade the vehicle in and use any GFV equity as a deposit towards getting your hands on a new set of wheels.
  2. Return the vehicle to its supplier — this won’t cost you anything unless you’ve exceeded your agreed mileage or fail to return the car in a good condition.
  3. Take full ownership of the vehicle — though for this option, you will be required to make a final ‘balloon’ payment. This amount will be the car’s guaranteed future value, or GFV for short.

In effect, with PCP the GFV is where you will be repaying the difference between what your vehicle is currently worth at the time of getting it from the dealership and the amount that it will be worth at the end of your contract, plus the cost of interest.

Take note too that the GFV will be agreed before a PCP contract begins, though so too will a mileage allowance — and any excess mileage charges will apply if you go over this limit.

There’s a few additional points to consider when it comes to PCP finance options too. You will be unable to sell the vehicle during the contract period of the PCP agreement, as you won’t own the car during this term, while some PCP contract providers will have a limit on the number of days that a vehicle can be out of the country — something that’s certainly worth thinking about if you drive abroad at least from time to time.

You’ll also be required to pay the difference between the vehicle’s current value and the payments which are outstanding if you choose to settle at an earlier date. Early settlement charges sometimes apply here too, so bear that additional cost in mind too when thinking about doing this.

 

What do you need to know when buying used?

While you may associate the above finance options when you’re only in the market for a new car, both HP finance and PCP finance can be used to afford a used vehicle as well — both using the same principles as discussed too. Of course, you can also take out a personal loan when looking for a way to finance a used car.

Leasing is a bit more complicated in the used car market. Some dealers will allow their second-hand vehicles to be leased, but not all of them. Many dealers will determine the amount that you have to pay on a monthly basis based on how much they expect the vehicle that’s being leased will depreciate over the finance term you have in mind. This may result in you witnessing more expensive leasing deals that you’d have expected though, as the residual values of used cars are usually more difficult to forecast and so dealers will be aiming to always cover the cost of any unexpectedly severe depreciation periods.

We hope this guide has helped you take a lot of stress out of buying your next set of wheels — all that’s left to do is to wish you a happy new (or used) car day!

Santander
Banking

SANTANDER CONSUMER FINANCE LAUNCHES ONLINE APPLICATIONS

  • Online loan application launch expands digital support for dealers

Santander Consumer Finance (SCF) is set to launch its online loan application platform with e-sign capability in a significant expansion of its support for dealers.

 

Selected dealers have started testing the system which will be rolled out across the country within the next month for partners already using Santander Consumer Finance’s free online finance calculator.

 

The new system is integrated into the dealer’s website and customers will be able to source a finance quote on the calculator before applying in Santander Consumer Finance’s secure online platform. Installation takes minutes for dealers who already have the calculator and Santander Consumer Finance will support dealers to help them make the most effective use of the digital proposition.

 

Customers receive a real-time decision on their selected product and accepted customers can then choose to sign their documentation at home or at the dealership. The system is designed to provide a simple, fair and personal experience for car buyers.

 

It builds on the success of Santander Consumer Finance’s partnership with Volvo Car UK launched in April enabling customers to configure and order their car and sign a finance agreement online.

 

Stewart Grant, Santander Consumer Finance Commercial Director said: “This is a significant step in our digital marketing strategy and underlines our commitment to supporting our dealer network in maximising sales and profitability within the growing digital market.

 

“It is a huge achievement for the teams involved at Santander Consumer Finance to be able to launch two Online Application systems in less than four months and within a year since the project was first planned.”

 

Dealers interested in using the calculator or wishing to register interest in the Online Application platform should contact their Business Development Manager or visit www.santanderconsumer.co.uk/dealer

 

Santander Consumer Finance, headquartered in Redhill, Surrey, employs 600 staff and is the UK’s leading independent finance company with over 500,000 live customer agreements in place.

liquidation 2
Finance

What Is The Difference Between Solvent And Insolvent Liquidation?

Occasionally, some companies may find themselves not being able to make ends meet when it comes to their bills and creditors.

When long-term financial obligations become impossible to meet, it may be time to register your business as insolvent.

Doing so will force your company into insolvent liquidation; striking it from the Companies House register.

But what about solvent liquidation?

Solvency vs insolvency

There are many reasons why a company may enter into liquidation – whether it be voluntary or not – but it all depends on its debts.

If a company remains able to meet its long-term financial obligations, but serves no further useful purpose as a business, it can be classed as solvent.

This also applies for closure processes caused by something other than finances, for example the company director’s retirement.

If you’re unsure whether your business would be classified as solvent or insolvent, there are three different ways of finding out:

● The Cash Flow Test – Under the Insolvency Act 1986 a business is rendered insolvent if it is ‘unable to pay its debts as they fall due’. This cashflow test highlights that if you are unable to meet your PAYE and VAT requirements, you may well be insolvent.

● The Balance Sheet Test – if the outstanding debts of your company outweigh your assets (e.g. property, cash, stocks, equipment), the company will be considered insolvent. This will prove problematic when the company’s assets are liquidised as this deficit will make it impossible to repay all creditors.

● The Legal Action Test – if a creditor is owed over £750 they are entitled to put forward a formal demand for the sum, or a County Court Judgement (CCJ), which must be paid within three weeks. If it is not paid the law will deem the company insolvent.

The ‘winding up’ procedure

Whether your business is solvent or insolvent, the process for winding up is quite similar.

A company winds up when it decides to close down, by ending all business affairs.

This covers every aspect of the business, including everything from customer/client relationships to obligations with employees.

If these business affairs are settled by the company director, this is classed as a voluntary winding up.

However, it doesn’t always go this smoothly.

Creditors who are owed more than £750 from a business are entitled to submit a winding up petition (WUP) to the court, which forces the company to be investigated and liquidated by the Official Receiver.

This involves an intrusive investigation into the company’s debts and trading history, and is not to be confused with the conventional winding-up procedure.

What is liquidation?

Liquidation is the process of bringing a business to a close by distributing its assets to pay off its debts, once all relationships have been severed.

The cause of liquidation often lies in the hands of the director(s), but other factors may also affect cash flow, such as:

● Late customer payments

● Customers/suppliers entering insolvency

● Market fluctuations

● Increased competition

● Mistakes in pricing of goods/services

Due to the complex nature of the process, the only person qualified to liquidate a company’s assets is a professional Insolvency Practitioner (IP).

This can be done in different ways depending on the company’s position:

● Members’ voluntary liquidation (MVL)

A members’ voluntary liquidation is the formal process whereby a solvent company is closed down.

This method divides the company’s assets in the most tax efficient way between creditors and directors.

As this is a solvent liquidation process, all creditors are repaid in full and the directors must each sign a declaration of solvency.

This declaration provides evidence that the company is able to settle its outstanding debts within 12 months of beginning the liquidation process.

● Creditors’ voluntary liquidation (CVL)

When a creditor is threatening to take legal action against an insolvent company (e.g. through a WUP) the safest and most harmonious option is to enter a creditors’ voluntary liquidation (CVL).

This means the appointed IP works on behalf of the creditors as opposed to the company directors, with a main priority of ensuring all debts are settled.

This option provides the best chance for creditors to receive a return, as well as helping directors to avoid being investigated for wrongful trading.

CVL and MVL procedures are very similar but because CVL companies are insolvent and unable to settle their debts, a meeting with the creditors is a fundamental step in the process.

As this procedure is voluntary as opposed to court led, the company directors can decide who their IP will be.

The directors will also have the option to purchase any assets as part of the company rescue process.

● Compulsory liquidation

Compulsory liquidation may be considered the final resort for an insolvent company to be forcefully liquidated.

Although compulsory liquidation can be proposed by its directors, it is more often a forceful procedure brought forward to a court by a company creditor owed over £750.

This can be done so by submitting a WUP.

If the courts grant this, business assets are settled using an IP and directors face a rigorous investigation – much more severe than those following a CVL.

The investigation aims to uncover the cause of insolvency and reveal any evidence of misconduct or illegal, wrongful trading.

Any evidence found could result in directors facing disqualification for 2-15 years, and criminal charges if necessary.

 

Company dissolution

Dissolution takes place at the final stage of closing a business, whereby the company’s existence is officially withdrawn by the law.

This is recorded and registered by the Registrar of Companies.

Dissolution may seem like an easy and cheap way to strike off a company, with just a £10 admin fee to submit an application.

But be sure to seek advice from a professional before proceeding.

 

Why you should act quickly

If you are headed towards insolvency, it is your legal responsibility to act fast in order to protect the interests of your creditors.

To avoid personal consequences for continuing to trade while insolvent, seek advice from an IP and register your company as insolvent when the time is right.

Hudson Weir are licensed insolvency practitioners with vast experience in all industries, and are available for liquidation services.

accountancy hack
BankingFinanceFunds

Hackers set their sights on accountancy firms – 7 steps to minimize risk

Accountancy practices are facing an increase in cyber risks as criminals switch their focus to ‘softer target’ smaller firms. Joe Collinwood, CEO at CySure explains why accountancy firms are targets for hackers and what steps they can take to minimize their exposure.

When it comes to cyber crime, small accountancy practices are not exempt from the disruption that affects large organizations. If anything, their size makes them more vulnerable as they are perceived as a softer target. In the USA for example there has been an explosion in fraudulent W-2 filings and in the UK with more filings now on-line risk is increasing. So why are accountants being targeted?

• They hold large amounts of private data
• They have the information cyber criminals want – corporate financial data, social security numbers, Tax IDs, bank accounts, payroll data, identification data for validation and reporting purposes
• Accounting firms use similar software so if a criminal finds a vulnerability that can be exploited they have lots of potential victims
• Typically there is inadequate technical protection, policies and procedures that leave firms wide open to a cyber attack
• A lack of incident response and business continuity procedures means accountants are more likely to pay a cyber criminal money because they fear they may not be able to recover from an attack and the firm’s reputation will be tarnished.

Many accountancy firms are making it easier for hackers by underestimating the threat they face from cyber attacks. There were 438 (i) separate data security incidents reported to the Information Commissioner’s Office (ICO) in Q2 2018/2019 alone in the finance, insurance and credit sector. The cost to launch cyber attacks is negligible and the most likely method of breach is phishing i.e. human error. It’s time to think again.

Gateway to Information
Self-employed accountants and accountancy practices are on the radar of cyber criminals because of the amount of valuable data they hold. Firms collect and store highly desirable data and information on clients. This information enables hackers to pull off complex frauds at a later date. The more information they have, the better a picture they can build of the small business or person whose bank account they intend to target.
Cyber criminals view accountancy firms as a “gateway” to client information and are perceived as a soft target with few security barriers, limited cyber security tools and little or no in-house expertise. Additionally, as many firms use the same software systems, hackers are motivated to seek vulnerabilities in the software knowing there will be a substantial pay day by exploiting the weakness to attack multiple businesses.

Small but not safe
According to the Cyber Security Breaches Survey 2018 (ii), 42% of small businesses identified at least one breach or attack in the last 12 months. Depending on the severity of the attack, SMEs can suffer more disruption than their larger counterparts as they lack the processes and cyber expertise to deal with the ramifications of an attack. The impact to business operations and the inability for staff to carry out their day to day work can have longer term consequences, not only for an accountancy practice itself but also for its clients.

Minimize Risk – 7 simple steps to cyber resilience
No business is too small to be attacked, however with the right approach to security, no business is too small to protect itself. Accountancy firms can pave the way to cyber resilience by following these top cyber-security tips:
• Invest in effective firewalls, anti-virus and anti-malware solutions and ensure any updates and patches are applied regularly, ensuring that criminals cannot exploit old faults or systems
• Ensure business critical data, such as customer data and financial information, on all company assets is securely backed up and can be restored at speed
• Have simple, clear policies in place to create a cyber-conscious culture in the workplace and ensure it is communicated to all personnel so they are familiar with it
• Have regular awareness training so that employees are constantly reminded of potential scams or tactics that can be used to trick them
• Review contracts and policies with suppliers to ensure they have an accredited standard for cyber-security for themselves and their partners to protect the supply chain
• Have an up-to-date incident response plan that is practiced regularly so that employees know what to do when they suspect there is an attempted breach or if an actual incident occurs
• Consider investing in cyber insurance to cover the exposure of data privacy and security. Accountancy firms should research insurance policies carefully to understand the level of coverage offered and their responsibilities to stay within the conditions of the policy.

Where to start and what to do now
Cyber security need not be complex or prohibitively expensive, in the UK Cyber Essentials (CE) is a government and industry backed scheme specifically designed to help organisations protect themselves against common cyber-attacks. In collaboration with Information Assurance for Small and Medium Enterprises (IAMSE) they have set out basic technical controls for organisations to use which is annually assessed. In the US the National Institute Standards and Technology (NIST) framework guides organizations through complex, emerging safety producers and protocols.

By utilising an online information security management system (ISMS) that incorporates Cyber Essentials and NIST, accountancy firms can undertake a certification route guided by a virtual online security officer (VOSO) as part of their wider cyber security measures. This will help the organization to coordinate all security practices in one place, consistently and cost-effectively. Additionally, firms can take advantage of the expertise of online cyber security consultants at a fraction of the cost of a full-time in-house security specialist.

Demonstrating confidence to the client base
Cyber security certification has many benefits; it ensures standardization and is a good differentiator for accountancy firms as it shows a diligence to information security. By giving cyber security the same priority as other business goals, accountancy firms can proudly display their security credentials and demonstrate trust and confidence to their client base.

Joe Collinwood is CEO of CySure

dubai
FinanceFundsMarkets

Dubai International Financial Centre boosts UAE financial sector development and reports significant growth during first half of 2019

Maktoum bin Mohammed: “Strong performance by DIFC highlights the international financial institutions’ confidence in Dubai”

 

  • Total number of companies currently operating in the DIFC stands at 2,289 – a 14 percent increase year-on-year and a 7 percent increase since end of 2018
  • Over 250 new companies, a 10 percent increase from the same period in 2018
  • More than 660 jobs created, boosting combined workforce to more than 24,000 professionals
  • DIFC’s financial technology ecosystem doubles in size in first half of 2019 – now includes over 200 companies, of which more than 80 are fully-licensed FinTech firms
  • 425 applications received for third cohort of FinTech Hive accelerator programme – three-fold growth since 2017 and 42 percent increase from 2018

 

Dubai International Financial Centre (DIFC), the leading international financial hub in the Middle East, Africa and South Asia (MEASA) region, reinforced its contribution to the UAE’s economy and its commitment to driving the future of finance, following strong performance during the first half of 2019.

The Centre saw sustained growth in the first half of 2019, welcoming more than 250 new companies, and bringing the total number of active registered firms to 2,289, demonstrating a 14 percent increase year-on-year. This has fuelled the creation of over 660 jobs, boosting the Centre’s combined workforce to more than 24,000 individuals, and has resulted in the occupancy of 99 percent of DIFC-owned buildings.

The DIFC now boasts more than 671 financial related firms, an 11 percent increase from the same period last year.  The financial services firms that joined in 2019 include Maybank Islamic Berhad from Malaysia, Cantor Fitzgerald from the United States of America, Atlas Wealth Management from Australia and Mauritius Commercial Bank. In addition, leading non-financial firms including Guidepoint MEA, Medtronic Finance Hungary Kft. and Network International, have also joined the Centre in the first six months of 2019.

His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai and President of the DIFC, said: “Dubai continues to gain recognition on the global stage as the destination where business meets innovation, and the DIFC has been a significant driver of this.  The strong performance that the Centre has delivered during the first half of 2019 highlights the confidence and trust that international financial institutions have in Dubai.  Aligning with the 50-year charter announced by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, the planned expansion of the DIFC will solidify Dubai’s role as a pivotal hub for companies from around the world to access regional opportunities.”

His Excellency Essa Kazim, Governor of DIFC, commented: “The DIFC has been a pioneer in the financial services sector since its inception in 2004, as the first purpose-built financial centre in the MEASA region. 15 years on, we continue to demonstrate our forward-thinking approach with the enhancement of our legal and regulatory framework, as well as the development of a comprehensive ecosystem. The Centre remains a fundamental driver in leading financial sector transformation, supporting the advancement of the UAE economy, and developing the next generation of financial professionals.”

Driving the Future of Financial Services in MEASA

In response to the strong demand the DIFC continues to witness from financial institutions across the globe, the Centre embarked upon 2019 with the announcement of new expansion plans, supporting the economic future of Dubai and the UAE. The phased growth plan will triple the scale of the leading financial hub and enable the DIFC to help deliver on Dubai’s ambitious growth agenda, whilst diversifying and transforming the financial services sector within the wider region.

The new development will provide an international focal point for FinTech and innovation, enhancing the Centre’s reputation as one of the world’s most advanced financial centres and reinforcing Dubai’s position as one of the world’s top ten FinTech hubs, as listed by FT’s The Banker.

The Centre has already seen a marked increase in the number of firms that make up its dynamic FinTech ecosystem, which more than doubled in size from over 80 to 200 companies in the last six months.  Similarly, the number of licensed FinTech firms operating in the DIFC increased from 35 to more than 80 in the first half of 2019. Key international FinTech firms that have made the Centre their MEASA base include Dublin-based software company Fenergo, InsurTech leaders Charles Taylor and Swedish crowdfunding platform, FundedByMe.

Arif Amiri, Chief Executive Officer of DIFC Authority, commented: ‘We are continuing to cement our global position as a pivotal business and finance hub, while making significant headway towards meeting our 2024 targets.  Our focus on innovation and technology is delivering a blueprint for sustainable growth as we continue our journey towards driving the future of finance. DIFC’s emphasis on transforming its lifestyle offering, alongside strategic investments within technology and FinTech means we are confident about reinforcing our position as a leading global financial centre – a great place to live, work, play and do business.”  

The Centre received 425 applications from start-ups operating in the RegTech, Islamic FinTech, InsurTech and broader FinTech sectors, for the third cohort of its DIFC FinTech Hive accelerator programme, a 42 percent increase from the 2018 programme. This also marked a three-fold increase from its inaugural cycle in 2017, exemplifying the pace of evolution of this fast-growing industry, as well as the preference of Dubai and the DIFC as the home for FinTech firms looking to scale their business across the region.  Approximately half of the applications received for the 2019 programme originated from the Middle East, Africa and South Asia. 

33 start-ups have been selected following a series of interviews, conducted in consultation with DIFC FinTech Hive’s network of 21 participating partners, including Abu Dhabi Islamic Bank (ADIB), Emirates Islamic, Emirates NBD, Finablr, HSBC, National Bank of Fujairah, Noor Bank, Riyad Bank, Standard Chartered, and Visa, as well as the associate financial institution partners Arab Bank and First Abu Dhabi Bank (FAB).

InsurTech start-ups will work closely with leading insurance players, AXA Gulf, Noor Takaful (Ethical Insurance), Zurich Insurance Company Ltd (DIFC), AIG, Insurance House, Cigna Insurance Middle East S.A.L. and MetLife, to help them develop game-changing solutions that address the growing requirements of the industry. In addition, this year’s finalists will be supported by strategic partner Dubai Islamic Economy Development Centre (DIEDC) and digital transformation partner Etisalat.

Furthering the Centre’s commitment to supporting FinTech in the region, DIFC hosted the first Demo Day for the inaugural cycle of the Startupbootcamp programme in April 2019, alongside HSBC and Mashreq.  The event showcased innovative concepts from ten graduates of the programme, consisting of entrepreneurs from the UAE, Singapore, United Kingdom, Greece, France, Thailand, Ghana, Morocco, Ukraine, and the Czech Republic.

The Centre’s thriving FinTech community benefits from the strong relationships the DIFC has continued to build with key international accelerators through ongoing delegations and partnership agreements. The DIFC signed four MoUs during the first half of 2019, one with Dubai SME to help foster entrepreneurship in the UAE and further the National Innovation Agenda, as well as three additional agreements with FinTech Saudi, Milan’s FinTech District and FinTech Istanbul, expanding the Centre’s network of international FinTech hubs to 14.

Furthermore, DIFC has worked to increase access to funding by engaging and building its Venture Capital ecosystem, as well as investing directly into promising FinTech start-ups.  In March 2019, the Centre announced the appointment of Middle East Venture Partners and Wamda Capital to manage USD 10 million of its dedicated USD 100 million FinTech fund.  To date, DIFC has received more than 50 applications from a variety of financial technologies, including payments, roboadvisory, blockchain and KYC platforms.  The applications received have been in equal parts from early and growth stage firms, signifying interest from firms across the start-up business cycle.

Supporting Human Capital Development and Delivering Sustainable Impact

As part of the DIFC’s efforts to support continued professional development and strengthen the regional talent pool, the DIFC Academy offers world class financial and legal education through strategic partnerships with 26 leading educational institutions and government entities. To date, the DIFC has seen more than 5,500 graduates successfully undertake executive education courses and programmes in finance, business and law, as well as two dedicated Masters of Laws (LLM) programmes.

Knowledge sharing and thought leadership remained a core focus for the financial centre in 2019. The third edition of the Dubai World Insurance Congress (DWIC) and the second edition of the Global Financial Forum (GFF) welcomed more than 700 industry leaders to each flagship event. Key speakers at DWIC included James Vickers, Chairman of Willis Re International and David Watson, Chief Executive Officer for Europe, Middle East and Africa and International Casualty at AXA XL, who shared global perspectives on reinsurance growth strategies. Meanwhile, the GFF, which brought together more than double the number of business leaders compared to the inaugural event in 2018, attracted the likes of Sir Gerry Grimstone, Former Chairman of Barclays Bank PLC and emerging markets guru, Mark Mobius.

In recognition of DIFC’s efforts towards building one of the world’s leading financial centres over the last 15 years, the Centre was the only free zone in the UAE to receive the Dubai Quality Award in April 2019. The award is a reflection of the DIFC’s hard work and dedication in building a sustainable and progressive business environment. 

In May 2019, another milestone for sustainable business growth was achieved as Majid Al Futtaim launched the world’s first benchmark corporate Green Sukuk at Nasdaq Dubai, supporting Dubai’s growth as the global capital of Islamic economy. The Green Sukuk investment will be used to finance and refinance Majid Al Futtaim’s existing and future green projects, including green buildings, renewable energy, sustainable water management, and energy efficiency. 

Enhancing the Legal & Regulatory Framework to Fuel Growth

The Centre has been at the forefront of enhancing its legislative infrastructure to provide the DIFC community with access to opportunities within the MEASA region, whilst providing greater stability and certainty when doing business in the DIFC. The Centre’s robust legal and regulatory framework remains the most sophisticated and business-friendly Common Law jurisdiction in the region, aligned with international best practice.

DIFC continues to support the development of the financial services sector and foster the UAE’s economic growth by encouraging the development of the domestic funds market. In May 2019, the DIFC’s independent regulator, the Dubai Financial Services Authority (DFSA), announced the a new regime to facilitate the passporting of funds, in collaboration with the UAE’s other financial regulators. The UAE passporting regime is a regulatory mechanism for the promotion and supervision of investment funds that encourages foreign licensed firms in financial free zones based in other countries to enter the local market.  

With the aim of ensuring businesses and investors can operate across the region with confidence, the DIFC also unveiled the new Insolvency Law in June 2019, enacted by His Highness Sheikh Mohammed bin Rashid Al Maktoum. The new law facilitates a more efficient and effective bankruptcy restructuring regime for stakeholders operating in the DIFC.

In addition, the DIFC has continued to create an attractive environment for the 24,000 strong workforce based in the Centre to thrive, whilst protecting and balancing the needs and interests of both employers and employees. To support its vision, the DIFC unveiled its new Employment Law in June 2019 to address key issues such as paternity leave, sick pay, end-of-service settlements and more.

As part of the Centre’s blueprint for the transformation of the financial centre and in line with global retirement savings trends the DIFC launched the Employee Workplace Savings (DEWS) scheme, which will see the evolution of end-of-service benefits from a defined benefit scheme to a defined contribution scheme, while offering a voluntary savings component for employees.

The Centre also unveiled a new unified, simplified and more expansive Prescribed Companies regime that makes structuring and financing in the DIFC faster, flexible and more cost-effective. The new regime encompasses structures previously offered by the Centre, including Intermediate Special Purpose Vehicles (ISPVs) and Special Purpose Companies (SPCs).  This has contributed significantly to a robust pipeline of prospective business from the aviation financing sector, as well as generating substantial interest from family offices looking to utilise these structures in their succession planning.

Creating a Vibrant Retail & Lifestyle Experience

Today, 91 percent of DIFC’s prime retail space is occupied by 432 leading lifestyle, art, fashion and food & beverage brands, an offering that will be significantly boosted once Gate Avenue is fully open.  Upon officially opening its doors to the public, the new development will provide seamless connectivity to the Centre’s comprehensive lifestyle offering, from The Gate building through to Central Park Towers.  The new retail experience will feature over 100 days of unique arts, culture and wellness activations, making DIFC the destination where business meets lifestyle.

During the first half of 2019, Hilton Hotels & Resorts announced the opening of Waldorf Astoria, Dubai International Financial Centre. The 275-key hotel occupies the 18th to 55th floors of the Burj Daman complex, including 46 suites and 28 residential suites offering unobstructed views of the Downtown Dubai skyline.  Combined with the two other world-class hotels based in the Centre, Four Seasons and the Ritz-Carlton DIFC, this brings the total number of hotel rooms available to those visiting the DIFC to 722.

In addition, the Centre welcomed a number of new culinary concepts to the DIFC’s gourmet scene including ‘Marea’, the New York fine dining experience led by multi-Michelin starred chef, Michael White as well as Grecian inspired ‘Avli by Tasha’. In March 2019, it was announced that renowned chef Nusret Gökçe is set to launch casual dining concept ‘Saltbae’ at the Centre this year.

DIFC is also home to one of the UAE’s largest collections of public art with sculptures from internationally renowned artists including Manolo Valdés and is the foundation for initiatives such as the One Mile Gallery in partnership with Brand Dubai which showcases the best of local, regional and international design and promotes art, innovation and entrepreneurship. 

The Centre also welcomed its seventh elite art gallery, Sconci Gallery to the DIFC in the first half of 2019. Established in Rome during 1977, the gallery has collaborated with leading artists and international auction houses to showcase collections from masters of modern and contemporary art, as well as emerging artists. 

During March 2019, the DIFC hosted the most successful edition of the hugely popular Art Nights in the last five years. The event, which marks the beginning of Dubai’s coveted art season, Art Dubai 2019, saw participation from international and local art galleries and artists, as well as installations accompanied by electric musical performances and light installations from interdisciplinary artists.

Finance

Thinking about starting a new business? Female entrepreneurs will face more obstacles than their male counterparts

Thinking about starting a new business? Female entrepreneurs will face more obstacles than their male counterparts

Women face more obstacles when starting a business, meaning they need more support in order to succeed, reveals new research from ESCP Europe.

Females and males experience the support provided by the ecosystem for their start-up activities very differently. Women in contrast to men tend to majorly rely more on social support, which interestingly applies to start-ups in both highly supportive as well as non-supportive environments.

Professor of Management Christian Linder and his co-author Sonja Sperber from the ISM International School of Management in Frankfurt (Germany) explain

“We found that when starting up a new business, women face problems with confidence and obtaining finance, and are more critical about their own capabilities and skills. In order to still be successful, this lack of confidence is compensated by mobilising their network for support. However, in contrast, males are more confident of their capabilities to overcome support constraints on their own.”

In addition, it was found that women face a work-family conflict, and struggle more to counterbalance their different roles when committing to new business ventures.

Professor Linder adds,

“starting a business is always linked to emotional or psychological stress. When facing a lack of resources, social support can serve as a source of information as well as provide assistance.”

As a result, the start-up strategies chosen are a reflection of the individually perceived support from the ecosystem, the current life situation as well as the intended goals (as for example, high level of autonomy, financial success, status). This research shows the highly complex situation of female entrepreneurs, and concludes that there certainly is a need for stronger, sustainable foundations so that females can catch up with their male counterparts.

This research was published in ‘Small Business Economics: An Entrepreneurship Journal’.

Banking

Capital on Tap Announces New Partnership With Marqeta, Pairing Industry-Leading Business Credit Card With Best-In-Class Card Issuing Platform

Capital on Tap will turn to Marqeta’s modern card issuing platform to power its card offering, used by UK small businesses to better access capital.

Capital on Tap, one of the UK’s fastest growing companies, announced today that it is partnering with Marqeta, the leading global modern card issuing platform, to power payment processing for its small business credit card, relied on by over 60,000 UK enterprises.

As part of this new agreement, all of Capital on Tap’s users will be provided with a new, Marqeta-powered card. Since its launch in 2012, Capital on Tap has competed with the offering of major banks, by offering small businesses a faster and more transparent way to fund their business. Capital on Tap has already provided close to £1 billion in funding to more than 60,000 small businesses across the UK.

“Capital on Tap have shown themselves to be true innovators in the UK fintech space, taking an underserved market like credit for small businesses and building a product that can make a real difference for their customers,” said Ian Johnson, Head of European Growth at Marqeta. “They’re the very example of a European fintech innovator that the Marqeta platform was designed to empower, providing an agile and scalable platform that allows them to focus on what they do best, creating a top shelf product with a memorable user experience.”  

Founded in Oakland, California in 2010, the Marqeta platform is used by the world’s leading innovators to drive new modes of commerce through modern card issuing. Marqeta’s European Digital Banking solution supports instantly issued virtual cards and offers advanced spend controls to engage users and grow card use. Marqeta’s platform and its feature-rich APIs are highly configurable and scalable, and allow Marqeta partners to access actionable, real-time transaction data to drive program improvements.

“We’re excited to partner with Marqeta. We loved the transparency and simplicity of their technology and how future focused and innovative their open-API platform is,” said David Luck, co-founder and CEO of Capital on Tap. “We felt a really close DNA fit with them and how they’re looking to constantly evolve and build on their tech. They showed an intuitive understanding in how they could support our mission to help small businesses thrive through better access to working capital.”

Articles

Utilizing Cutting Edge Technology to Achieve Outstanding Results in Asset Management

Founded in August 2015, Catana Capital is a quantitative asset manager based in Frankfurt that offers innovative asset management based on a unique combination of data, experience and modern technology. The company runs a revolutionary new type of strategy which invests according to independent trading signals generated from big data analysis, combined with artificial intelligence algorithms. The company is completely licensed and capitalized according to the German Banking Act. Here the firm’s Founder and CEO, Bastian Lechner, reveals more about Catana’s extraordinary approach to diligent asset management.

Catana Capital is an innovative FinTech company that has already received numerous awards. In 2017 Catana was awarded, inter alia, as best early stage German FinTech company and as best quantitative asset manager in Germany. Since 2013 the Catana’s team has been developing trading strategies that are based on big data and artificial intelligence. Catana is also focused on the automatization of internal processes to accelerate the decision-making process and order execution.
November 8th, Catana has launched the Data Intelligence Fund (DE000A2H9A76) to provide its clients a contemporary investment opportunity that keeps pace with the times by using digital and quantitative methods up to the current state of research. In order to guarantee high investment standards and reach a broad set of potential clients, the fund is packaged as UCITS. 


The basis of the investment decision in the Data Intelligence Fund is a unique database containing millions of individual opinions about single stocks and the stock market in general. Every day an algorithm collects more than 2 million securitiesrelated news, articles, research as well as blogs, tweets and forum entries in the world wide web. The algorithm automatically crawls through more than 22 messages per second around the clock. In order to get a broad variety of opinions the algorithm covers content about more than 45,000 securities from seven different countries written in German, English and Chinese. Currently, more than 90% of the data comes from social media.

Catana Capital is an innovative FinTech company that has already received numerous awards. In 2017 Catana was awarded, inter alia, as best early stage German FinTech company and as best quantitative asset manager in Germany.

In two steps the algorithm creates buy and sell signals just by using the continuously updated database. Firstly, all of the collected data is analyzed using Natural Language Processing (NLP). Through the application of NLP, the machine learns to understand the collected content, and constantly improves on this ability day by day. Continuously, NLP is reflecting on the central question of the Data Intelligence Fund investment idea, namely: “Who says what to which security?” The answer to this question is represented by an aggregated sentiment score of each security which builds the basis of generated trading signals.

Secondly, machine learning methods quantify the relevance of the calculated sentiment scores with respect to future stock price movements. As well as the NLP method, the ‘prediction power’ of the used methods is increasing on average over time, since they learn from historical forecast errors. Finally, the algorithm derives trading signals based on the forecasts of the underlying machine learning approaches and adjusts the trading strategy automatically.

The Data Intelligence Fund consists of multiple sub-trading strategies that can be divided into two components: the first component is the stock selection component which is a long only equity strategy that enters long positions in highly liquid European equities according to the outputs of the machine learning methods. The average holding period in the stock selection component is four weeks, while the investment universe consists of stocks that are listed in DAX, MDAX, TecDAX or EuroStoxx50. The second component exposure management, which is a long and short strategy mix entering long and short positions in highly liquid equity indices such as DAX Future. The exposure in this strategy varies from -100% to +100% and the average holding period is one week, while multiple trades per week are possible. 

The weighting of each component also varies over time. While the stock selection component accounts for 30-50% of the Data Intelligence Fund strategy, the exposure management component is most of the time a bit weightier as it accounts for 50-70% of the Data Intelligence Funds performance.
In conclusion, the Data Intelligence Fund provides professional investors as well as retail investors the opportunity to invest in an UCITS funds that has hedge funds-like strategies. The underlying data draws a broad picture of the sentiment of individual investors providing useful information about future trends and upcoming risks in the markets. 

Accessing a powerful database leads to a competitive advantage compared to traditional investment forms, since traditional investment decisions are based on significantly less information. Furthermore, the investment decisions in the Data Intelligence Fund are only based on the independent buy and sell signals that are generated by the machine learning methods fed with the sentiment scores. As a result, the Data Intelligence Fund is weakly correlated to large indices as well as to large mutual investment funds and is suitable for diversification purposes. 

Based on extraordinary back test and out of sample trading results the Data Intelligence Fund targets a significantly higher risk adjusted return than the DAX on a long-term average, without having negative years and keeping volatility below 10%. Catana Capital was recognized as Quantitative Asset Manager of the Year in Germany, and Most Innovative Equity Fund of 2019 (for the Data Intelligence Fund) in Wealth & Finance International’s 2018 Investment Fund Awards.

Address: Frankfurt, 60311, Germany 

Website: http://www.catanacapital.de/ 

Telephone: +49 69 2561 7004

 

Banking

A Paragon in Commercial Banking in the Islamic Republic of Afghanistan

Azizi Bank has swiftly become one of Afghanistan’s largest commercial banks with a presence across 31 of the country’s 34 provinces. From the outset, the bank has sought to become a stalwart on the global financial market, driving technological innovation in the sphere. On the back of this approach, Azizi Bank was named the ‘Best Commercial Bank’ in Wealth & Finance International’s 2019 Global Business Excellence programme. Following this deserved success, Dr. (Prof) Mohammad Salem Omaid, CEO of Azizi Bank, was interviewed to find out more about the bank’s mission, vision and how it aligned itself with the highest international standards of corporate governance, social responsibility and customer relations.

The global financial landscape is changing dramatically, evolving on the back of technological development, and expansive regulation. On a similar front, working in tandem with this churning paradigm shift, is the effect that changing consumer behaviours are having on an industry that was- for the most part at least – in charge of its own course. As banking turns to more digital fronts, it is having to adapt to the needs of the people that utilise its services. Many long-standing establishments have become defined, as a result, by resistance, as they cling to the practices of yesteryear.

This has led to a rise in so-called ‘Challenger Banks’ who have adopted an innovative outlook to capitalise on the market’s new customer-centric ethos. But what happens when a more traditional brick and mortar bank follows this path? And, more appropriately, how has Azizi Bank in particular become a paragon on the field, reaping the rewards where their peers and competitors have floundered? Dr Omaid explains more. 

“This institution is the outcome of the professional and entrepreneurial commitment of its founder, Mr. Merwais Azizi, and its top management team to establish a high-quality, customer-centric, servicedriven, private Afghan Bank catering entirely to the future businesses of the country. Having formed in 2006, the bank today has more than eighty branches and more than 100 ATMs and, along with its 100% subsidiary bank The Islamic Bank of Afghanistan, has the highest network of branches and ATMs in the country.

“The vision of the bank is to evolve into a professionally managed technologically advanced bank with world-class cost-effective products and services, following the best international practices and contributing to the national economy and adding value to its stakeholders. Its mission is to provide excellent professional services with the usage of the latest technology with an eye on a sustained corporate social responsibility and maintain its commitment towards all its customers, staff, shareholders and stakeholders.”

Ultimately, Azizi Bank has thrived through a dedication to its five founding values: Operational Excellence, Customer Focus, Product Leadership, People and Sustainability. More impressively, the bank has secured sustained growth year on year despite substantial challenges in the country, acting as testament to the strength of their offerings and ethos. “Azizi Bank’s key clients includes retail and corporate bodies, trade finance and remittance businesses. Afghanistan is an import-driven economy with more than 90% of the goods imported into the country. It is also an USD driven economy. Afghanistan is also a challenging economy, with its own political challenges over the last two decades and beyond. 

The country was under the FATF sanctions until June 2017 where it was barred from having any USD inter-bank cooperation with banks around the world. This issue of USD Nostro is still a big challenge in the country with most of the banks.” Dr Omaid continues, moving on to discuss the importance of client service to the bank’s ongoing development and operations. “Azizi Bank ensures prima facie importance on customer service. It believes this important aspect as the most important factor of its sustained growth. The bank ensures regular training of its employees to guarantee exceptional customer service. Classes and training programs on the various aspects of customer service are held regularly in the training room of the bank. Employees are also sent to attend international training programs on customer relations and effective service. Regular monitoring of the same is done by the head office official and specially incorporated customer service cell in the bank.”

To make sure that the bank remains in-line with the needs of their customers, Azizi Bank regularly conducts market research, as Dr Omaid sheds more light on their efforts. “Azizi Bank is dedicated to conducting comprehensive market research to understand customer requirements. Afghanistan is a niche country in terms of new banking indicatives as only 10-11% of the people are banking, as per the Central Bank’s report, and Afghanistan is an Islamic nation. This opens up the opportunity to create products as per the requirement. This is the reason why Azizi Bank converted its 100% subsidiary bank into a full-fledged Islamic bank. Additionally, more than 70% of the population in the country are mobile savvy, and this is the reason why Azizi Bank have developed mobilebased technologies to bring more and more customers into the banking fray.” 

The conversation soon turns to things of a more corporate nature: namely, governance policies and the crucial role that they play in outlining the bank’s goals and future. “Azizi Bank ensures responsible and value-driven management practices are adhered to throughout its system of corporate governance, which is built on key elements of discipline, transparency, independence and fairness. As it strengthens its presence, Azizi Bank continues to review compliance, risk management skills, systems & processes and – where appropriate- it aims to enhance these further. The commitment applies to Azizi Bank’s relationship with its shareholders, customers, employees, suppliers, regulators and the community in which it operates.”

Here Dr Omaid takes a moment to discuss each of Azizi Bank’s core characteristics in more detail. “In relation to discipline, we ensure that all employees and senior management members are committed to adhering to procedures, processes and hierarchies established by the bank. These are recognised and deemed to be correct and proper. Transparency remains critically important and mentioned in almost every policy. All actions implemented and the procedures that led to them are always available for inspection by authorised entities and stakeholders. 

“Similarly, mechanisms and regulations have been put in place to minimise or entirely avoid potential conflicts of interests such as undue dominance by the Chairman, Chief Executive or other shareholders. This mechanism ranges from the composition of the board to committee appointments and involve external parties such as auditors. Azizi Bank remains committed to independence. Moreover, Azizi Bank believes that responsible management would, whenever necessary, take appropriate actions to set and keep the bank on the right path. Whilst the board is accountable to the bank, it must act responsively to and with the responsibility towards all stakeholders. The individuals and committees who make decisions and take actions are truly help accountable for those decision and actions. Lastly, Azizi Bank believes in ‘fairness’, and each of the bank’s systems are balanced and take into account all those who have an interest in the bank and its future. The rights of the various groups involved have to be acknowledge and respected.” 

Dr. Omaid also spoke about their strategic plan, which details the banks goals through 2022. He reiterated that strategic planning is the process of determining the organization’s long term objectives and establishing the goals necessary to achieve them. The process involves in-depth analysis of current and anticipated conditions that may affect the organization’s ability to achieve the mission. 

Finally, it would be remiss to not mention Azizi Bank’s considerable efforts in the area of corporate social responsibility over the last few years. In his closing comments, Dr Omaid details some of the bank’s more recent and significant ventures. “Azizi Bank has taken a strong lead in Corporate Social Responsibility initiatives by providing aid and financial assistance to local educational institutions which include schools, colleges, universities and NGOs. The bank has also engaged itself with relevant ministries in supporting female empowerment, cultural enhancement and environmental sustainability initiatives. Recently the bank involved itself with the municipality to see a Greener Afghanistan and planted trees across the country. 


“Azizi Bank planted more than 10,000 trees in Kabul and other provincial locations as part of this campaign. We provided financial assistance to the Ministry of Women Affairs for the treatment of breast cancer on International Women’s Day. Furthermore, the bank is working in association with the Ministry to sponsor the event, “Empowering Afghan Through Access to Financial Services, alongside financing for the creation of job opportunities for women. In coordination with the National Blood Bank, Kabul organised blood donation campaigns at the head office. More than 100,000 ccs of blood were collected during the campaign. Lastly, Azizi Bank is promoting child education in the country, and encouraging initiatives to stop food wastes and other environmental sustainability initiatives like Save Water, Clean Air, Avoid Pollution etc.”

 

“Azizi Bank continues to review compliance, risk management skills, systems & processes and – where appropriate- it aims to enhance these further. The commitment applies to Azizi Bank’s relationship with its shareholders, customers, employees, suppliers, regulators and the community in which it operates.”
azizi bank design-01
“Empowering Afghan Through Access to Financial Services, alongside financing for the creation of job opportunities for women. In coordination with the National Blood Bank, Kabul organised blood donation campaigns at the head office.”

Company: Azizi Bank

Name: Dr. (Prof) Mohammad Salem Omaid

Designation: President and Chief Executive Officer

Addl. Titles:

(a) Chairman – The Afghanistan Banking Association

(b) Chairman – The International Chamber of Commerce, Banking Commission, Afghanistan

(c) Member- Thames Valley Chamber of Commerce, United Kingdom, Europe Business Assembly

(d) Member – The World Confederation of Businesses (World COB), United States of America

(e) Honorary Professor of the Academic Union, Oxford, United Kingdom

Finance

Best European P2P Loan Platform 2019

Swaper is a P2P loan marketplace offering an easy investing in pre-funded consumer loans from Poland, Spain, and Denmark in cooperation with Wandoo Finance Group.

Launched in 2016, Swaper began life from the idea to build better financial products and to offer many different financial products. When the platform was initially under construction, the firm’s main goal was to make it according to the needs of investors. As part of this focus, the Swaper team collected opinions and feedback of experienced investors. Investors expressed a need for easily accessible mobile platform with clear and understandable overview of their investments, and a possibility to have configurable push notifications, to decide what kind of information they needs and how often. 

As a result of this newfound knowledge, the Swaper team realized that in addition to focusing on the web platform, they should be also building the mobile application. Therefore, they launched the website version of the platform and after a short while Swaper was the first P2P marketplace that was also launched as a mobile application. Today, this innovative company offers investment options into loans driven by a dedicated team who are highly experience in the financial sector, and as such are able to offer clients the benefit of their extensive market knowledge and industry understanding. All investments offered on Swaper’s marketplace start from 12% annual interest with unique loyalty bonus to earn an additional +2%.

The firm makes investment convenient through the Auto-Invest Portfolio, which investors can easily set up with just one click. This innovative approach grants investors the maximum interest income based on their chosen investment amount and period. Seeking to remain ahead of emerging market trends, Swaper has developed a Mobile Application for both Android and iOS, which provides investors with the opportunity to manage their investments easily and conveniently, and have full control over investment thanks to the push notifications.

As part of the Wandoo Finance Group, a professional IT systems developer based in Latvia, Swaper is able to leverage its parent group’s vast technological expertise and infrastructure to ensure it offers clients the most innovative and reliable solutions. In today’s modern financial market where technology is key, Swaper is making waves thanks to its revolutionary online platform. 


Alongside offering cutting-edge support and innovative financial services, Swaper is also deeply committed to providing its users with exceptional client service and support they can rely on. For the Swaper team, the key to good customer service is building good relationships with customers. They believe in thanking the customer and promoting a positive, helpful and friendly environment, which will ensure they leave with a great impression. They also feel that good customer service means helping customers efficiently, in a friendly mannerand that it is essential for the firm to be able to handle issues for customers and to do its best to ensure they are satisfied. 


It is the provision of exceptional customer service and the constant collaboration with the investors, that sets Swaper apart from its competitors. By constantly working with investors to understand their needs and update its offering and processes, the firm is able to drive customer loyalty and ensure that customer expectations are met in all cases. 


“Looking to the future, Swaper will launch a range of exciting new products and features to enhance its already impressive platform. In 2019, the firm’s focus will be on growing both sides of the marketplace by satisfying increasing investor demand, as well as loan supply from current and possibly new locations by expanding the investment opportunities on the marketplace. These developments will drive Swaper to even greater global renown and establish it as the ideal platform for anyone seeking financial services,” said Danija Misus, the Product Owner at Swaper (pictured right).


Ultimately, with the FinTech market showing no signs of slowing down and investment in this growing industry higher than ever before, Swaper has a bright future ahead of it. The firm will continue to collaborate with clients to understand their needs and remain ahead of emerging market developments.


Web Address: www.swaper.com 

 

“Swaper will launch a range of exciting new products and features to enhance its already impressive platform. In 2019, the firm’s focus will be on growing both sides of the marketplace by satisfying increasing investor demand, as well as loan supply from current and possibly new locations by expanding the investment opportunities on the marketplace.”

Swaper picture

“Investors expressed a need for easily accessible mobile platform with clear and understandable overview of their investments, and a possibility to have configurable push notifications, to decide what kind of information they needs and how often.”

Banking

Belize : The ‘Next Big Thing’ in Offshore Banking

When it comes to offshore banking solutions, would-be clients can certainly feel overwhelmed with the plethora of choices available. Yet, over the last couple of years, Belize has become a go-to for many investors looking for security, stability and new investment opportunities. Here, Luigi Wewege, Senior Vice President of Caye International Bank, writes on the unique benefits that Belize has to offer, and how it has become the region of choice for savvy investors from all over the world. Caye International Bank was recently recognised by Wealth & Finance INTL as the ‘Best Offshore Private Bank in Latin America’ in the 2019 Banking Excellence Awards.

Offshore banking has long been a popular option for those that want to secure their financial future, whether that be for the dream retirement or, more simply, to ensure that their liquid savings are safe and secure in the hands of expert financial establishments. 

When you bring up the idea of offshore banking, it’s not unusual to get a dozen different opinions about where the best tax haven is or where banks are most eager to get foreign investors. Look beyond all the noise and you’ll find that Belize is consistently chosen by savvy investors for offshore banking. Clearly, Belize has a lot to offer those interested in the financial side of the equation. 

Ease of Banking in Belize 

Something that can’t be ignored is the ease of managing an offshore bank account in Belize. Some people are worried about offshore banking because they don’t know what to expect, or they are worried about it being difficult or inconvenient. In reality, that misconception couldn’t be further from the truth. 

To start, the official language of Belize is English. Although you might hear Spanish or even Creole spoken on the beach, financial professionals all have a complete and fluent command of English. Whether you’re signing a contract or reading the terms of a new account, it will be in English. You won’t need a translator, nor will you have to pay to have English documents translated. In short, there is no need to be concerned about a language barrier at any point.
Another reason that banking in Belize is so convenient is the time zone. Belize is located in the Central Standard Time Zone (CST). That means it is the same time on Ambergris Caye, Belize, as it is in Chicago. Some people are concerned that offshore banking means getting on the phone in the middle of the night with banking staff, but that’s not the case in Belize. Banks operate during normal office hours, which just so happen to coincide perfectly with most North American hours of business. 

Of course, you may not want to communicate over the phone about your offshore banking needs at all. Fortunately, the convenience of banking in Belize also extends to online banking services. As long as you have access to an internet connection and a smartphone, tablet, or computer, you can transfer money or check your account balances with the click of a button.

CIB staff in from of bank headquarters - San Pedro, Belize (2)

Diversification is Key

People delve into offshore banking for varied reasons. However, one of the most common is to diversify financial holdings. A basic tenet of Economics 101 is that in order to reduce risk, you need to diversify. Many people diversify but continue to maintain their holdings within a single country’s jurisdiction. Ultimately, true diversification also includes geographic diversification. Although Belize offers a chance to invest in a new geographic location, it also offers all the things you expect in a secure financial environment. This allows for diversification without the stress of learning a new banking system or even a new legal system. Belize operates according to common-law systems similar to those you find in Britain, the United States, or Canada. 

Unparalleled Asset Protection and Privacy In decades past, certain nations held a monopoly on banking privacy and anonymity. As those destinations received more and more publicity, however, banking clients actually received more scrutiny, not less. In Belize, banks still operate in a way that grants account holders and businesses financial privacy as well as asset protection. This doesn’t mean that you can open a bank account anonymously or avoid taxation in your home country. What it does mean is that once your assets are placed in a bank account in Belize, those assets are far more secure than they would be elsewhere. If you face lawsuits or the freezing of your assets in the future, your accounts in Belize will remain secure. Plus, those who operate businesses within Belize can protect the identities of board members or shareholders if desired. 

Reputable Banking Systems 

If you choose to bank offshore in Belize, then it makes sense to bank with an institution that is established, financially solvent, and is recognized for its banking excellence. When selecting a bank, ensure it is compliant with necessary regulations and is licensed to provide international banking services to both corporations and individuals. Caye International Bank certainly fits this criteria. 

Discover Banking in Belize 

Clearly, plenty of investors around the world appreciate what Belize has to offer and choose this location to assist in asset diversification. When looking for the best locations for offshore banking and investing, you’ll be hard-pressed to find any more favourable than Belize.

Company: Caye International Bank 

Address: San Pedro Town, Ambergris Caye, Belize, Central America 

Website: www.cayebank.bz 

Telephone: +501-226-2388 or +501-226-3083

Unexpected Tax
Tax

Businesses not ready for contractor tax upheaval

Employers are largely unprepared for changes to off-payroll working in the private sector, which are due to come into effect in April 2020. That is according to new research from recruitment trade body, the Association of Professional Staffing Companies (APSCo).

The new rules mean that changes to IR35 legislation, which were introduced in the public sector in April 2017, will be extended to medium and large private sector companies. From next year, businesses engaging independent workers will become responsible for setting the tax status of these individuals. As part of this reform, the tax liability will also transfer from the contractor to the fee-paying party in the supply chain, which is typically the recruiter or the company that directly engages the individual.

A survey of the trade association’s membership revealed that fewer than half (39%) of the professional recruitment firms polled believe that most of the businesses they work with are aware of the incoming changes. In addition, just 12% said the majority of their clients are actively preparing for the updated legislation.

When asked if the organisations they recruit into are expecting to pay more for contractors after the changes are implemented, just 10% said ‘yes’, 21% said ‘no’ with the remaining 69% ‘not sure’. This suggests that many are unaware of the wider potential consequences of the reform.

Previous research from APSCo following changes to off-payroll working in the public sector found that 45% of professional recruitment companies witnessed the costs of resourcing contractors increasing after the new rules were introduced. Of these, 46% reported that rate rises were in excess of 15%.

On the findings, Samantha Hurley, Operations Director at (APSCo) and Co-Chair of HMRC’s IR35 Forum, commented:

“Businesses now have just months to get ready for incoming changes to IR35 legislation but, as this research suggests, it seems that many may be ill-prepared. Companies which haven’t already must urgently review their existing contingent workforces to determine what employment models individuals are working through to understand the extent of PSC contractor usage. They should then work with trusted recruitment partners to discuss which roles are likely to be in scope across different levels, and if individuals with these skills are thin on the ground or easily replaced, so that plans can be put in place to enable them to sustain and grow future workforces effectively. If we’ve learnt anything from the public sector roll out, it is that we are now entering a period of significant and arduous change. However, by working with expert recruitment partners, private sector organisations can ensure that they navigate the new landscape with ease.”

Women Finances
Finance

Financial Inequality: The Gender Gap

  • There is a financial inequality gap between men and women in developing countries and their economies and there has been no sign of improvements in recent years. There is no discernable gender gap in high-income economies.
  • 69% of adults. Which is a total of 3.8 billion people around the world have a bank account or mobile money provider. This number has increased by 7% in the last 5 years.
  • About 1.2 billion adults have obtained some sort of formal financial account since 2011, when the rate of financial inclusion was just 51%.
    However, 1.7 billion people around the world remain outside of the formal financial system.
 

In developing countries, the gender gap in financial inclusion between men and women has stalled at nine percentage points. FairPlanet researched further into the current situation.

 

When governments deposit social welfare payments directly into women’s digital bank accounts it can  empower their decision-making at home.

 

Research suggests that when women have more financial autonomy, spending in the home tends to be reprioritized. With factors such as the interest of families and children. It can also boost labour force participation among women.

 

The gap is large in the Middle East and North Africa: 35% of women compared with 52% of men, have access to some type of financial account.

 

Beyond labor force participation, women face an array of problems and obstacles to getting financial services, including discriminatory laws and conservative social norms.

 

Simple accounts accessed through mobile phones might help thwart some of these barriers.

 

Mobile money accounts are often easier to open than traditional bank accounts and they have the added benefit of allowing women to transact from the safety and comfort of their homes.

 

Mobile technology and money accounts may help to close the gender gap when it comes to financial equality. However, like anything, further research and data is needed to truly predict what the future holds.


Finance

12 Expenses You Can’t Deduct Against Business Even If You Incurred Them For Business

By Jonathan Amponsah CTA FCCA, The Tax Guys

One of the key ways to reduce your tax bill is to claim all legitimate expenses you incurred for the business. But the general rule that says you can claim all expenses incurred wholly and exclusively for the purpose of your business is not as straight forward as you may think.

 

So here are some surprising things you cannot tax deduct even if you incurred them for your business.

 

  1. Accommodation

Imagine you’re an actor who lives in London. You’ve secured a contract to shoot an exciting film in Edinburgh for three months. You realised hotel costs would be too high. So, you decided to rent an apartment for three months. Surely you can claim for the costs of the rent against your profits right? Well it makes sense but HMRC will deny the claim on the basis that the expenses were not incurred wholly and exclusively for the purposes of your profession as an actor. Why? One of the reasons HMRC will put forward is that there is a dual purpose in incurring the expenditure, namely to meet your ordinary needs for warmth and shelter as well as your stated business purpose.

 

  1. Travel

Here’s another scenario that might surprise you. You operate as a self-employed doctor or sole trader rather than limited company. You have a home-based office. You travel to see different patients or clients on a regular basis. Your journey starts from your office (at home) and includes a few itinerant travels from one client to the other client. Can you claim the full travel expenses? Logic will tell us that yes. However, the rules deem the travel from your home office to patients / clients as ordinary commuting and therefore not tax deductible.

 

  1. Client Entertainment

As part of your sales and marketing, you decide to take clients to a relaxed restaurant to discuss new business. The purpose is to negotiate and generate new business. The income will be taxed so the expenses should be ok to put through the business, right? Unfortunately, the rules specifically disallow these expenses to be claimed against tax. Part of the reason behind this is that you could have had the same conversation over a cup of tea in the office, plus there is an element of personal benefit in the entertainment.

 

  1. Promotional Gifts

It’s true that nothing ever happens in business until a product or a service is promoted and sold. And when it’s sold at a profit, tax gets collected accordingly. However, if you promote your business by spending too much money on promotional gifts to customers and the gifts cost more than £50 per customer, you won’t be able to deduct these costs against your income. Even where the gift cost £50 or less, make sure it carries a conspicuous advert for your business.

 

  1. Clothes for Work

Imagine you’re a barrister and you’ve purchase your gown to be worn in court. You don’t wear this gown in public. Can you go ahead and claim the cost of the gown against your tax? Not according to the famous tax case of Mallalieu v Drummond which established that “no deduction is available from trading profits for the costs of clothing which forms part of an ‘everyday’ wardrobe. This remains so even where the taxpayer can show that they only wear such clothing in the course of their profession.”

However, some protective and work clothing with logos and other business branding are claimable. If in doubt, speak with a tax accountant.

  1. Staff Reward via Trust

Your staff are well engaged within your business and you want to reward them. You decide to make payment into a Trust to demonstrate that the money has been earmarked for them and waiting to be paid when they hit their targets.

 

As the money has been paid out of your bank account to the Trust, can you claim it as a legitimate business or staff expenses? Unfortunately, not. Because of a specific tax avoidance rule, this legitimate expense cannot be claimed. 

 

  1. Parking Fines

Your business is delivering some items to a customer. The driver parks for a few minutes and get a parking ticket. Surely the reason for the fine is because of business activity so it should fall under the wholly and exclusive for the purpose of business rule? Not quite. Fines incurred for breaking the rules are disallowed.

 

  1. Legal Expenses

Legal fees can be expensive right…? And whilst they do add value to your business and may save you from making costly business mistakes, not all legal costs are tax deductible. For example, fees in connection with the purchase of a business premises or investing in shares are disallowed.

 

In addition, fees that have both personal and business elements may fail the wholly and exclusive test. And legal costs associated with breaking the law are also disallowed. For example, where you’ve got a parking fine and you decide to call your lawyer to defend the case and you lose, you won’t be able to claim the legal fees.

 

  1. Wages to Spouse or Kids

A great way to keep more of your cash within the family is to employ your spouse and kids. And there is nothing wrong with this plan. However, where you pay family members over and above the market rate, where they don’t actually perform any task for the business or where you’ve structured this working arrangement incorrectly with no evidence or paperwork to back up your plan, HMRC will not allow their salaries to be put through the business. Do take care with this as it’s currently a hot spot for HMRC enquiries.

 

  1. Sponsorship

Sponsoring an event is another area that might surprise you. HMRC will disallow the cost if they can show that perhaps the sporting field you are sponsoring is a director’s, partner’s or proprietor’s regular hobby or if the party being sponsored is a relative of the business owner, or if there is no proposed or actual return on investment from the sponsorship.

 

So, the trick here is to ensure that the sponsorship deal is structured correctly and there is a clear commercial benefit for your business.

 

  1. Donations

Donations made to political parties and non-registered organisations outside of the Gift Aid regime cannot be claimed against tax. This is to stop businesses offsetting costs through privately owned ‘non-profit’ organisations.

 

  1. HMRC Penalties

Penalties imposed by HMRC and other government departments are not tax deductible. So, avoid those penalties and get your accounts and tax returns done on time.

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Jonathan Amponsah CTA FCCA is an award-winning chartered tax adviser and accountant who has advises business owners on entrepreneurial tax reliefs. Jonathan is the founder and CEO of The Tax Guys.  www.thetaxguys.co.uk

Funds

Xolo secures $6.8m in Series A funding, launches “a virtual company” service for modern freelancers

Xolo (formerly known as LeapIN), the online platform for launching and running one-person businesses anywhere in the world has announced the completion of $6.8m (€6m) Series A funding, and a launch revolutionary form of entrepreneurship. The launch of the “virtual company” service will enable millions of professional freelancers around the world to radically reduce the complexity and cost of engaging with national governments and operate in a borderless world. The service will cut the time needed to launch a freelance business from weeks to minutes. 

 

Xolo’s investment round was led by European venture firms Karma Ventures (Estonia), Vendep Capital (Finland), and Leap Ventures (France). 

 

The company has been offering a full suite of services for global freelancers from 2015, including company formation online, access to banking, and full accounting and compliance service. The new “virtual company” product will bring that concept further by removing the last obstacles to launching their business.

 

Allan Martinson, Chief Executive Officer at Xolo, said: “We are focusing on 40 million professionals globally who have chosen to run their business independently. Estimated one million new freelancers start their professional journeys each year. Our ultimate goal is an absolutely seamless service that brings time spent on administrating a freelance business to zero.”

 

Xolo will now offer two products: Xolo Go and Xolo Leap. Xolo Go will allow launching a freelancing business in mere minutes as “a virtual company”, complete with a dedicated bank account, invoicing, expense management and payouts. Xolo Leap allows launching an EU-registered company with full banking service, accounting and tax compliance based on Estonia’s innovative e-Residency concept. 

 

“Administrating independent professional business in a traditional way may take up to two days a month. Our aim is to cut that down to near zero by offering an incredibly simple online platform that merges company formation, banking, accounting, and other services. We’re taking care of the bureaucracy so that millions of talented professional freelancers can focus on running their businesses,” Martinson continued. 

 

Xolo has thousands of customers around the world who use it as a subscription-based software-powered service, with 93% recommending the service that processes over €10,000,000 in customer revenues every month.

 

“Xolo is the quickest and easiest way to launch and run a one-person freelancing business in Europe. Our largest markets are Germany, Spain, France, the UK, Ukraine and Turkey. Our typical customers are software developers, management consultants or designers. Many of them are describing launching on Xolo as a life-changing event,” said Martinson.

 

“We are fascinated by Xolo’s vision of powering the revolution of free work. This, combined with the company’s proven service and talented team, is a formula for success,” said Margus Uudam, the partner with Karma Ventures. 

 

Sakari Pihlava, a partner at Vendep Capital, said: “Xolo is building something revolutionary – an interface between the micro-businesses and the governments that eliminate the complexity of reporting and compliance”.

 

Karma’s Margus Uudam and Vendep’s Sakari Pihlava will join Xolo’s board.

 

Xolo was founded in May 2015 when its founders had the urge to revolutionize the way microbusinesses are set up and managed. Using this funding, it aims to expand its operations across Europe and globally to allow more entrepreneurs to join the market.

Regulation

How Regulations Are Driving FinTech Growth

By Mark Hepsworth, CEO Asset Control 

As London Fintech Week kicks off, regulation in banking and finance, and the pressure and challenges it places on many traditional financial institutions high on the agenda. Regulation including MiFID II, SFTR and FRTB helps drive fintech growth as banks look to partner with specialist providers who can provide cost-effective ways to help firms remain compliant and make the most of their data in the process. 

 

These reporting requirements place intense demands on banks in terms of the level granularity they need to provide about their data as well as on the processes by which reports and business applications are supplied with data. Banks not only need to report more detail but also track additional contextual information around data including its sources, its quality checks and the lineage, i.e. the data’s origins, what happened to it and where it moves to over time.

 

Given the complex application landscape of many firms, this is challenging to do using only in-house resources. Fintech firms bring technological innovation to the party and have a key role to play as firms look to make the most of their data and look to lower the cost of change. Fintechs have evolved their approach based on cross-industry learning and combine expert knowledge with technological innovation.  They can provide a cost-efficient way for banks to deal with regulation and manage the many changes they need to make. 

Banks automated early and have a history of siloed decision-making and budgeting by business line when it comes to technology infrastructure. This has led to a sometimes bewildering technology landscape consisting of vast amounts of business applications, which in turn has made regulatory compliance and risk management more complex. Risk management is, after all, concerned with gaining an aggregate number that applies to the whole firm. It needs to have an enterprise perspective and that requires data integration which most banks are not specifically set up to deliver today.

 

This history of local department level automation complicates the job of managing regulatory change which is by its very nature typically at an enterprise level.  It is yet another reason why the overall regulatory problem is so large for banks and why there is an urgent need to draw on the help of specialist fintech partners.       

 

Key services that fintechs deliver to banks to streamline the process of regulatory compliance include: packaged integration; delivering a trusted quality management process; access to quality-proofed consistent pricing and reference data and easy onboarding of data feeds.

 

The last-named is especially challenging today given the increasing data-intensity of regulatory reporting and decision making. New content offerings speak to data-hungry business users but need to be integrated into reporting workflows.  Often content providers add new detail and also evolve the delivery format. Many of the traditional content providers have moved from an end-of-day, batch file-based delivery background to more interactive and intraday sourcing using modern application programming interfaces (APIs). 

 

That presents both opportunities and challenges to banks. Rather than waiting for a file to arrive from data vendors, firms simply call the API in real time to get the information they need. However, the challenge is that to truly gain advantage from these sourcing options, they additionally need the data management and integration that supports them, out-of-the-box with no manual intervention. They must also ensure they keep track of these requests and prevent unnecessary duplicate sourcing, which creates additional noise by generating multiple copies of the same data.

 

In line with this, the intensity of new regulation is far from the only problem facing banks today. There are also dealing with a range of other operational challenges including the need for improved efficiency, cost reductions and rationalisation of their technology stacks and the shift to cloud, which are also driving them to seek out the services of fintechs.

 

This requirement is often fuelled by a push to stay ahead of the competition in delivering services to their own banking customers, together with changes in the rules of engagement as business processes become more virtualised. Whatever the precise driver, the upshot is that fintech services are in greater demand.

 

Even going beyond this, however, Fintech Week may be a good time to consider that rather than just drawing on fintechs to help them with their inhouse work, banks might also consider going one step further and opting for a managed services approach. For banks there are a raft of benefits. First it enables them to shift a portion of the delivery risk to the supplier. They no longer have to go through the whole process of buying a service, implementing the solution, taking out a database licence or investing in cloud resources and creating a project team.

 

Second, when it comes to running the operation and changing they can pre-agree service levels and report against business-relevant KPIs. In other words, they buy the technology benefits with a service wrapper around it.  Managed services also allows them to start small and expand rather than necessitating a full-scale in-house implementation from the word go.   

 

That should be an important discussion point during Fintech Week. Banks need to focus on data management and data integration more than ever to meet the latest wave of regulations and drive competitive edge.  Partnering with fintechs and opting for a managed services approach enables them to do this efficiently and well, while reducing implementation and operational risk into the bargain. 

MarkHepsworth, CEO Asset Control
Mark Hepsworth, CEO Asset Control
WeSwap
Cash ManagementFunds

WORLD’S FIRST P2P CURRENCY EXCHANGE PLATFORM WESWAP HITS 500,000 USERS, LAUNCHES £2.3M FUNDRAISE

This morning, WeSwap, the award-winning peer-to-peer currency exchange platform, announces that in tandem with the launch of a £2.3 million funding round on leading investment platform Seedrs, it has hit 500,000 users. This raise will support the Series B investment round led by IW Capital, WeSwap’s lead investor, who has invested an additional £3.7 million in the travel money start-up, including £1.7 million of equity in this round.
 
Today’s news follows the company hitting a staggering £250 million in global currency traded on the platform since its launch in 2015, making the company the first peer-to-peer travel money fintech in the UK to do so. With award wins including Best Travel Money Provider at the 2018 and 2019 British Bank Awards, the fintech front runner has firmly cemented its role as one of the UK’s leading case studies for scale-up growth, fortifying a loyal and ever-expanding user base whilst maintaining the edge on product innovation and user experience.
 
WeSwap continues to hit remarkable milestones since its launch – presently, the currency exchange platform has over 30 travel industry partnerships, as well as booking flow integrations with online travel partners and numerous innovative travel-money products including:
 

  • A WeSwap pre-paid travel card
  • Card payments and withdrawals in over 195 countries and territories
  • Rate tracker
  • Smart Swap (where a user can pre-select an exchange rate at which they would like to execute a currency exchange)
  • Next day Travel Cash delivery
  • Buyback service

 
This is WeSwap’s third raise on Seedrs, having previously attracted over £3.5m from 3,868 investors.
 
Jared Jesner, CEO and Founder of WeSwap commented: “We have an incredibly loyal and engaged user base, something we’re truly proud of and will continue to honour with a great service. We are delighted to open up this latest round of funding, supplementing a series of debt, equity and private investment routes that have aided us in achieving some great milestones that we’re really proud of. This latest round will allow us to launch a range of new WeSwap product innovations and expand into Asia.”
 
For more information, please visit: www.seedrs.com/weswap3

Funds

Pimberly looks to expansion and sets sights on $10 million target

Pimberly looks to expansion and sets sights on $10 million target

SaaS firm helps companies manage all forms of product data

Manchester – Pimberly, the Manchester-based SaaS Product Information Management (PIM) and Digital Asset Management (DAM) platform provider, has moved into scale mode, investing to accelerate growth and achieve an ARR target of $10 million. The tech firm passed its $1 million annual recurring revenue (ARR) milestone earlier this year.

Pimberly’s PIM platform acts as a central hub for all omnichannel product data, including descriptions, specifications, sizing, pricing, availability, imagery and videos for multiple brands, currencies and geographies. Its automation and intuitive “No-Code” UI significantly streamlines ERP/eComm workflows. This helps retailers, distributors and manufacturers to seamlessly expand into new marketplaces and territories, as well as rapidly increasing time to market and the agility of their products and services.

The company has secured contracts with leading UK brands including, JD Sports, Freeman Grattan, Regatta and Card Factory, as well as international clients such as Brightstar in the US, Mconomy in the Netherlands and WhiteAway in Denmark.
Pimberly’s rapid growth follows investment from NorthEdge Capital and the UK Government. This has enabled the company to double its headcount to 40 over the last 12 months. The team is now in the process of expanding its headquarters, taking two floors within St James’s Tower in central Manchester and investing in more staff for product development, go to market and customer success.

Martin Balaam, CEO of Pimberly, said: “As new Enterprise B2B SaaS companies will know, getting your first paying clients is a huge milestone, enabling you to focus on getting to the nirvana of the $1m ARR target – I’m thrilled that Pimberly has been so well received by businesses. To surpass this target and focus on scaling to $10m ARR so quickly is just awesome”.

“It’s also a real indication that companies are increasingly focussing on their eComm/online strategies to fuel growth and can see the value that automated and effective product information management can have on their operational efficiency, their customer service and their bottom lines. This is a hugely exciting time for tech in the North West and we’re delighted to be a part of its success.”

Banking

Fast-tracking the evolution of banking with AI

By Tiffany Carpenter, Head of Customer Intelligence Solutions at SAS UK & Ireland

How intelligent decisioning solutions can help you stay relevant in the era of digital banking

Fierce competition, advances in technology, and consumer expectations for hyperpersonalised services are forcing the financial services sector to evolve. To adapt to rapid market developments, many banks and insurers are launching ambitious digital transformation projects. But do they actually deliver results?

The short answer: not often. In a recent study, McKinsey & Company found that fewer than one-third of organisational transformations succeed at improving a company’s performance, and a staggering 70% of large-scale change programmes don’t reach their stated goals. That’s a lot of effort and upheaval for very little reward. So what can we learn from this unsettling trend?

Common pitfalls

Every business and digital transformation strategy is unique, but there are four avoidable mistakes that financial services companies repeatedly make when approaching digital transformation:

  1. Misunderstanding the challenge

Whilst almost every financial institution has some kind of digital transformation strategy in play, many are focused on the technical aspects of digitisation and adapting to new channels and tools.

For example, many business leaders believe that digital transformation is mainly about replacing manual processes with automated workflows. That’s why there has been a rush to invest in robotic process automation (RPA) across the big banks and insurance players.

However, while automation can play an important role at the implementation stage, digital transformation is much more about reimagining traditional business models to succeed in new, fast-changing digital economies. In a banking context, that means redefining products and services to reflect the realities of a market where the customer is king.

  1. Pursuing disjointed initiatives

When rolling out digital transformation projects, banks often focus on innovation in individual functions or departments without considering how changes on one side of their business will affect other areas.

That’s a problem because banks have traditionally been structured along vertical product lines such as current accounts, savings, mortgages and credit cards, and horizontal business functions such as marketing, technology and finance. As a result, change programmes inevitably get stuck in the interdepartmental crossfire.

Instead, digital transformation initiatives must seek to disrupt the complex legacy operating model of the traditional bank and replace it with a more holistic, customer-focused approach.

  1. Making data unreachable

The letter “d” in digital transformation should stand for data. Without the ability to collect, store and access data, and the tools to refine it into actionable insights, banks won’t be able to leap ahead of their competitors.

For example, in an effort to serve business units with fast access to key information, many banks have established centralised data lakes. While this approach succeeds in eliminating individual data silos, it often ends up replacing them with a single large silo that is equally inaccessible.

Placing all data under the stringent governance of the IT department can make it very difficult for other business units to access and analyse time-sensitive data quickly. This can limit the value of insights and diminish the return on investment for large-scale change initiatives.

  1. Enabling cultures of resistance

The most challenging aspect of transforming any business is inspiring its employees to become advocates for change. Inertia, doubt and cynicism from people within the bank can stop transformation initiatives dead in their tracks.

That’s why setting a clear vision for change and encouraging employees to experiment with new ways of working is essential for banks to achieve a smooth adoption of new technologies and processes.

Shopping for success

In designing successful transformation initiatives, banks and other financial institutions can learn a lot from companies in other sectors that have harnessed analytics to avoid falling foul of these common pitfalls.

Take Shop Direct, which is not only the parent company of retail brands such as Very and Littlewoods, but also one of the UK’s largest nonbank lenders. While the company had thrived for many years on its traditional catalogue-based sales model, it realised that the future was not in paper. To pivot the business and remain relevant, it had to establish an online presence – and fast.

Shop Direct knew that moving its retail and financial services businesses over to an online-focused operating model would not be easy, but it had a secret weapon: vast amounts of data on customer buying habits, sales information and inventory records.

Within 12 months, Shop Direct built a solution based on intelligent decisioning software from SAS that was capable of mining useful insights from more than two years of data of customer interactions. By combining historical data with real-time context such as browsing behaviour, the company can now make instant decisions to tailor the user experience for each customer: personalised sort orders, personalised recommendations and real-time credit risk decisions.

Intelligent decisioning in banking

Similarities between the challenge faced by Shop Direct and the current ambitions of traditional banks are striking. Banks face an urgent need to reinvent their traditional business models for the digital world. Moreover, banks also possess huge volumes of customer data that they can analyse to find valuable insights about how to enhance existing services and develop new products.

AI and machine learning technologies have the potential to help traditional banks transform – but analytics on its own is not enough. Banks need to harness the insights generated by analytics to automate decisions at scale.

This means basing analysis not just on departmental data sets, but on all the information the bank possesses. It needs to include both historical transactional records and live data streams that provide immediate context on customers’ behaviour and actions. Furthermore, the analytics needs to take place in real time and drive automated actions to respond to immediate customer needs in order to truly affect the customer journey.

Corporate GovernanceGlobal ComplianceLegalRegulation

The main steps to follow for opening a business abroad

Before starting a business in a foreign jurisdiction, it is important to follow a number of steps that will ensure a good understanding of the local company formation principles and laws as well as the cultural or business particularities. Opening a company in Dubai will be different from starting a business in Germany and investors should be informed of the general incorporation conditions in the jurisdiction where they decide to base their business.

Know the local company formation rules

Company incorporation is jurisdiction-specific, meaning that each country will have its particular set of rules for the incorporation and the registration of the business, as well as for obtaining permits and licenses for running the company.

Investors who open a business or a foundation in the Netherlands will need to comply with the Company Law in the Netherlands and register the company with the Chamber of Commerce or KVK.

Some countries offer more attractive business conditions, compared to others, especially for startups, in terms of company taxation and the overall ease of doing business. Researching the particularities of a jurisdiction is the key for finding a suitable business location.

Request professional aid

In some situations, reaching out to a local law firm or professional company formation specialist can be a good solution. Investors in the United Kingdom can also request professional defense solicitor services if they have been the victims of criminal business acts while performing an economic activity in that country.

Research the market

Understanding the local needs and preferences, as well as performing a targeted market research, can be a key ingredient for businesses that are successful in foreign markets. Due diligence is important when starting a business abroad. For example, when opening a luxury car rental business in Dubai, investors can start by analyzing the competition, the market particularities and the preferences of the clients in order to determine how their services can meet the needs of the clients.

Researching the conditions for doing business and the general steps for company formation, understanding the business and cultural differences as well as getting to know the market and the clients are all good steps when deciding to open a business abroad.

Banking the Unbanked - Wealth & Finance Interational
BankingCash Management

Banking the Unbanked

Banking the Unbanked

  • About 75% of adults earning less than $2 a day don’t have a bank account
  • More than 2.5 billion people around the world don’t have a bank account
  • The poor face bureaucratic, travel distance and cost barriers

Millions of people around the globe lack power, credit and internet which result in them being unbanked. Being unbanked means not having access to the services of a bank or similar financial organization.The challenges are manifold; from not being able to receive deposits from an employer, to no credit history and being excluded from lending, to lacking the ability to safely save money or transfer money.

In 2014 there were 2 billion unbanked people. Account ownership is almost universal in high-income economies, hence, all unbanked adults live in developing economies. China and India, despite having relatively high account ownership, claim large shares of the global unbanked population because of their size. 225 million adults living there are without an account. China has the world’s largest unbanked population, followed by India (190 million), Pakistan (100 million), and Indonesia (95 million).

 

What are the challenges in banking the poor?

Three quarters of the world’s population, living in poverty, are unbanked. This is not just because of poverty, but also due to the cost, travel distance and amount of paperwork involved in opening an account. Our bank account number is almost as intrinsic to our identity as name and date of birth. Getting a job, renting a house and having an internet connection at home would be nearly impossible without some sort of financial inclusion.

Yet today the unbanked population stands at a staggering 1.7 billion globally, according to data released by the World Bank.

“Providing financial services to the 2.5 billion people who are ‘unbanked’ could boost economic growth and opportunity for the world’s poor,” said World Bank Group President Robert B. Zoellick. “Harnessing the power of financial services can really help people to pay for schooling, save for a home, or start a small business that can provide jobs for others. This new report on the world’s ‘unbanked’ makes the case: the more poor people are banking today, the more they are banking on their future.”

 

What further challenges stop people using a bank?

FairPlanet researched further, and even with access to a bank, evidence suggests people will still not trust the bank, the service is unreliable, and withdrawal fees are prohibitively expensive. People are not inclined to borrow because they do not want to risk losing collateral. While expanding access to various banking services (for instance, by lowering account opening fees) will benefit a minority, broader success may not be obtainable unless the actual service quality is vastly improved. Moreover, there are challenges on the demand side. Increased work needs to be done to understand what savings and credit products are best suited for the majority of the unbanked living in poverty.

 

Problem solving?

Blockchain payments allow for cheaper money transfers and lower account fees while upholding security and transparency. Open banking allows for new players to enter the field and begin assisting the underbanked in ways that have never before been allowed, and blockchain technology is poised as a key component in the entire process. With are a few companies emerging in this field and companies, such as FairPlanet, that host these payment methods, we can see a push for financial inclusivity. Serving adults who live on less than $5 a day is not only possible at scale—to a large degree, it is already happening.

Articles

What are the top ways to save on everyday spending?

We’re always on the lookout for ways to save money, especially after our bank balances have taken a hit over the festive period. Of course, there are the traditional ways of saving such as budgeting and setting aside a certain amount of funds each month. But, without overly restricting your leisure activities, what everyday changes can you make to spend less?

1.      Spend less on your energy bill

Make small everyday changes to lower the cost of your energy bill.

Did you know that 4% of your energy bill is attributed to cooking? Work on lowering this if you can. Your oven stays warm for a long time after you’ve switched it off. Try turning it off 10 minutes before you’re finished cooking to save on energy.

Instead of turning your thermostat up during the colder months, layer up instead to save on pennies! Switching down by just one degree Celsius can save you £85 per year — it all adds up. When it comes to showering, cutting your shower time down to 5 minutes instead of 15 minutes can save you £98 per year — less singing and faster washing!

2.      Storing food properly

When we’re packing food away in the fridge or freezer, we usually don’t think about how it’s stored. But, the way that you put away your goods can have an impact on your energy bill.

If you pack your freezer more tightly, this keeps more of the cold air in when you open the door. This means that the appliance doesn’t have to work as hard to lower the temperature again. The same applies for the refrigerator too — a full fridge requires less energy to stay cool than one that’s empty. If you’re struggling to pack your fridge or freezer full, filling it with newspaper can do the job.

3.      Save money booking holidays

Even when we’re trying to save money, we all deserve a holiday now and then! The good news is that you can save money by following a few top tips the next time you book a vacation.

Try and fly out on a Friday if you can, this can save you 18% on your airfare compared to if you flew out on a Sunday. Taking into consideration the average cost of a flight and the fact that the average Brit goes on holiday three times a year, you could save £85 annually by following this top tip.

Be calculative about when you book your holiday too. You can save £36 per year by booking your trip on a Monday as flights are 5% cheaper.

Consider packing more economically too. You can save £144 per year by only taking hand luggage on your flights. Squeeze more into your suitcase by rolling clothes and packing garments in your shoes.

4.      Meal prepping

Being prepared when it comes to grocery shopping and planning lunches for the week can help save on cash.

Even making a shopping list before you head to the supermarket can help. In fact, 60% of people who take a shopping list to the supermarket said it saves them money. It stops you buying things that you don’t necessarily need and helps you stick to your budget.

Create a meal plan for the week too. This means that you’re only buying what you need and don’t need to spend money on unexpected lunches out. Statistics have shown that you can save an impressive £1,300 per year by preparing lunch at home rather than eating out during the week.

5.      Eco-conscious coffee drinking

There are a few ways that you can be eco-conscious about your coffee drinking while saving money.

First of all, you can start by making your coffee at home when you can. You can save £507 per year by making your coffee at home instead of buying one each day from a retailer. If you prefer coffee from the store, why not take your own cup? This is helping the environment and you can save £150 per year as many high street retailers now offer 50p off coffee when you present your own cup.

 

Make the small changes above and watch your pennies turn into pounds this year! For more saving tips, check out True Potential Investor’s Life Hacks interactive.

PensionsWealth Management

What are the top ways to save on everyday spending?

We’re always on the lookout for ways to save money, especially after our bank balances have taken a hit over the festive period. Of course, there are the traditional ways of saving such as budgeting and setting aside a certain amount of funds each month. But, without overly restricting your leisure activities, what everyday changes can you make to spend less?

1.      Spend less on your energy bill

Make small everyday changes to lower the cost of your energy bill.

Did you know that 4% of your energy bill is attributed to cooking? Work on lowering this if you can. Your oven stays warm for a long time after you’ve switched it off. Try turning it off 10 minutes before you’re finished cooking to save on energy.

Instead of turning your thermostat up during the colder months, layer up instead to save on pennies! Switching down by just one degree Celsius can save you £85 per year — it all adds up. When it comes to showering, cutting your shower time down to 5 minutes instead of 15 minutes can save you £98 per year — less singing and faster washing!

2.      Storing food properly

When we’re packing food away in the fridge or freezer, we usually don’t think about how it’s stored. But, the way that you put away your goods can have an impact on your energy bill.

If you pack your freezer more tightly, this keeps more of the cold air in when you open the door. This means that the appliance doesn’t have to work as hard to lower the temperature again. The same applies for the refrigerator too — a full fridge requires less energy to stay cool than one that’s empty. If you’re struggling to pack your fridge or freezer full, filling it with newspaper can do the job.

3.      Save money booking holidays

Even when we’re trying to save money, we all deserve a holiday now and then! The good news is that you can save money by following a few top tips the next time you book a vacation.

Try and fly out on a Friday if you can, this can save you 18% on your airfare compared to if you flew out on a Sunday. Taking into consideration the average cost of a flight and the fact that the average Brit goes on holiday three times a year, you could save £85 annually by following this top tip.

Be calculative about when you book your holiday too. You can save £36 per year by booking your trip on a Monday as flights are 5% cheaper.

Consider packing more economically too. You can save £144 per year by only taking hand luggage on your flights. Squeeze more into your suitcase by rolling clothes and packing garments in your shoes.

4.      Meal prepping

Being prepared when it comes to grocery shopping and planning lunches for the week can help save on cash.

Even making a shopping list before you head to the supermarket can help. In fact, 60% of people who take a shopping list to the supermarket said it saves them money. It stops you buying things that you don’t necessarily need and helps you stick to your budget.

Create a meal plan for the week too. This means that you’re only buying what you need and don’t need to spend money on unexpected lunches out. Statistics have shown that you can save an impressive £1,300 per year by preparing lunch at home rather than eating out during the week.

5.      Eco-conscious coffee drinking

There are a few ways that you can be eco-conscious about your coffee drinking while saving money.

First of all, you can start by making your coffee at home when you can. You can save £507 per year by making your coffee at home instead of buying one each day from a retailer. If you prefer coffee from the store, why not take your own cup? This is helping the environment and you can save £150 per year as many high street retailers now offer 50p off coffee when you present your own cup.

 

Make the small changes above and watch your pennies turn into pounds this year! For more saving tips, check out True Potential Investor’s Life Hacks interactive.

Legal

The facts behind PCP

Being realistic, we all have a bit of Hyacinth Bucket instilled in us — in that rivalry with our neighbours is something that is preconditioned within us. When the hypothetical family from number 28 parade the street in their new Mercedes GLE, doing somewhat of a victory lap, Google is just seconds away as we scout our next big purchase.

Getting the opportunity to drive the car of your dreams, for many of us, will either be completely financially unviable, or be the root cause of a serious marital dispute. But, as John Paul Getty once remarked, “if it appreciates, buy it. If it depreciates, lease it.” Many throughout the UK have taken the once-oil tycoon’s advice and done just that.

AA research suggests that after three years, a car will have depreciated by 60% from its original showroom price tag, and that is if the car is averaging 10,000 miles per year. The biggest losses come in the first year however, with a deduction of around 40% being made by the end of the first 365 days. Obviously, there are different ways of putting the brakes on depreciation. Keeping the car clean, regular servicing in accordance with manufacturer’s guidelines, and one eye on the mileage gauge, will all go a long way in reducing potential losses.

But is there another option to consider?

PCP

A personal contract purchase (PCP) is proving itself to be a popular option amongst those who pick finance, with 78% of those choosing the agreement. Admittedly, it goes against everything our parents have told us to do, in regard to owning our own car, but if you can battle those initial demons, then we’re here to show you why this might be for you.

Cost

Fronting the cash for a brand-new car is not something we can all do with apparent ease, as in reality not everyone has tens of thousands of pounds kicking about in their spare bedroom. With PCP, the payment is broken down into three major chunks. Firstly, you’ve got the initial deposit which is usually 10% of the car’s showroom value. Secondly, the monthly payments which will include enough to cover the depreciation costs incurred throughout the contract. Finally — and this is where things change  once the final payment of the contract has been made, you get the option to either return the car or take a new one on a new contract. Or, you can pay a balloon payment and then the car is yours.

By taking out a PCP lease, the monthly repayments are significantly lower than they would be with a finance deal. The option then presents itself is to drive a car that you would initially have deemed to be significantly out of your price range. Therefore, if you don’t have a big deposit and want lower monthly repayments, then this might be exactly what you’re after.

Mileage

Congestion charges, heavy traffic, and the cherry on the top of the cake — parking. Three reasons many drivers in the UK have steered away from the daily commute in the car and opted for public transport. A decade ago, our decision when purchasing a car will have depended hugely on our day-to-day usage — but when that isn’t the same, why should the choice be?

The average annual mileage of a car in the UK is 7,900. One drawback of renting your car through PCP is that is that when initially taking out the contract, you are given a mileage restriction and if you exceed this, you will be penalised. If, however, you would consider yourself to be one of those average UK drivers, then PCP offers no qualms. The opportunity to purchase a new contract once your current one is up means you aren’t going to have spent your days driving around in an old car with high mileage.

The beauty of PCP, particularly if you don’t use your car for your daily commute, is you can effectively buy a weekend car. When purchasing a new car outright, you are restricted by the constant reminder that you will have this car for the foreseeable future. With PCP, you can buy the car that caters exactly to the needs of your evenings and weekends. For example, an SUV if you go camping with the kids most weekends throughout the summer, or a two-door roadster, if your Sundays are filled by coastal runs. And, if your circumstances do change, you can simply exchange the car.

Not only has PCP offered motorists a car they would never have been able to otherwise afford, it has in some sense saved the British car market. For the past three years, the number of new car sales in the UK has stayed above 2.5million units per year, in comparison to 2011 when it was only 1.9million.

Premium brands such as Audi, Mercedes, BMW and Jaguar Land Rover have all performed outstandingly through the system. This is due to the fact these cars hold their value better, and therefore depreciation is less, ultimately benefiting both dealer and driver. Mercedes reported a 100% upturn in UK sales since 2010.

The statistics makes sense, with more and more dealerships offering customers the opportunity to own a new car for £99 a month, when their total gym membership and mobile phone contract equates to more — well, it’s a no brainer.