Category: Articles

Articles

FAIR CREDIT PROVIDER FAIR FOR YOU REACHES £10 MILLION LENDING HIGH

Flexible credit provider Fair For You has provided a total of £10 million loans since it was established in 2015. Approximately £650,000 in loans has been issued in October 2018 alone, the highest amount ever issued in a single month. 32,000 loans have been granted by the company overall.

 

Fair For You was founded by Angela Clements to combat high-cost weekly payment stores. Through providing fair, flexible and affordable credit, the company ensures vulnerable, low-income families never have to go without essential household items.

 

The not-for-profit company has had an immeasurable social impact. According to an independent calculation by the Centre For Responsible Credit, Fair For You’s work has led to a £16 million poverty premium saving.

 

Fair For You’s work has garnered the attention of celebrities and business professionals alike, who are keen to make a stand against universal credit. Actor and founder of End High Cost and Credit Alliance, Michael Sheen, and MoneyMagpie Director, Jasmine Birtles, are just two of the company’s supporters.

 

On hearing about Fair For You’s financial success, Michael said:

 

I’ve just heard the excellent news about Fair For You providing a total of £10 million in loans since the company was founded. That’s £10 million of fairly and responsibly distributed finance to those who otherwise might have been trapped by a high cost credit provider to buy essential items for their homes. I’m a huge supporter of Fair For You, their values and the fantastic work the team does to combat unfair high cost lending and protect the financially vulnerable. The social impact of Fair For You is immeasurable, and I look forward to seeing the company grow and their work continue long into the future.’

On average, customers save £527 per item when choosing Fair For You over rent-to-own providers. Not only does Fair For You save people money, but it reduces the crippling stress and anxiety felt by those facing financial strain. Jasmine Birtles has witnessed first-hand the great work Fair For You does:

 

I’ve met many Fair For You customers who need an alternative to high-cost credit, particularly in emergencies; from the washing machine breaking to their child sleeping on a mouldy bed. Fair For You helps thousands of families every month and more people should know about their service, and avoid the debt trap that high-cost credit providers put them into.’

 

Speaking of Fair For You’s success, founder Angela Clements said:

 

This is the first time in a generation that a lower income consumer-led, unique credit solution has been created. Off the back of our Firm of the Year win at the Consumer Credit Awards, we’ve secured a partnership with Dunelm, who joins the likes of Hotpoint in backing our organisation. This is an exciting milestone for us, and I anticipate more growth as we continue our goal of creating a mainstream alternative to high cost credit in the UK.

Articles

BORROWING £50 MORE FOR A CAR LOAN COULD SAVE YOU UP TO £1600 IN INTEREST

Borrowing more for a car loan could save you money, according to research by What Car? 

 

 

Borrowing just £50 more for a new car loan can make it cheaper than taking out a smaller loan according to new research by What Car?, the UK’s leading consumer advice champion.

Analysis of the UK’s leading high street lenders suggests that borrowing the extra amount could save motorists up to £1600 over the course of the repayment period.*

Loans of £5000 typically have lower interest rates than smaller loans. For example, the repayment total of a £5000 loan from TSB over four years comes in around £1300 cheaper than the repayment of a £4950 loan over the same period.

Similarly, at Lloyds the repayment on a £7500 loan over four years is £1601 less than the repayment for borrowing £7450.

What Car? editor Steve Huntingford said: “We would always recommend borrowing as little as possible, but where the loan amount is close to the threshold for a lower interest rate, borrowing as little as £50 extra could save you 10 times that amount, so borrowers should do their homework.”

This trend was most commonly seen when analysing borrowing of amounts between £4500 and £8000.

Research shows that UK motorists are increasingly using finance options to aid with the purchase of cars. Within the first six months of 2018 there was a rise of 8% in car finance lending, with it topping £10 billion.**

However, while taking out a slightly bigger loan can save you money, there is a cut-off point, with loans of more than £8000 costing the borrower more the more they borrow.Savvy shoppers are able to capitalise on these trends by not only borrowing smartly, but by using the What Car? Target Price on What Car? New Car Buying to ensure they get the best deal. 

Car finance top tips: 

Shop around – compare the types of finance available and choose the best option available to you

Don’t stretch yourself – only borrow within your means, making sure you can afford the repayments

Additional charges – be aware of additional charges and always read the small print of your loan to be sure you don’t end up with any nasty surprises

Articles

Vodafone signals reassuring performance as it maintains fundamental dividend

  • Shares trading up 7% in early trading despite first half loss of €7.8bn as investors share relief at dividend upkeep

  • Still too early to evaluate new CEO’s performance but signs are encouraging as digital transformation accelerates and demand is high

  • We currently recommend Vodafone as a ‘buy’ for medium risk investors

As Vodafone updates the market, Helal Miah, investment research analyst at The Share Centre, explains what the news means for investors:

“After a terrible share price performance since the start of the year, Vodafone provided a more reassuring set of half year results today. As expected, it reported lower group revenues and a reported loss of €7.8bn (which was significantly lower compared to last year) as a result of asset impairments and the loss on disposal of various businesses, mainly Vodafone India, while there were also foreign exchange headwinds. There was the issue of higher levels of competition in Italy and Spain during the period however, investors should appreciate that the organic and adjusted figures were quite encouraging. Organic service revenues headed higher by 0.8%, while there was good momentum in fixed broadband.  Demand from the emerging markets and Internet of Things helped to keep data demand heading higher. Overall, these numbers were better than what the market had anticipated and investors will be somewhat relieved to see that the share price this morning is trading higher by roughly 7%.

 

“Nonetheless, the rally in the shares may be better explained by the fact that the dividend has been maintained, which many investors felt could have been chopped given the reported losses and the tough trading conditions the group has faced in various regions this year. The interim dividend was upheld at 4.84 eurocents while management intends to pay 15.07 cents for the full year.  Investors will also have been further reassured as the management narrowed their adjusted organic EBITDA growth to +3%. However, investors should acknowledge that the dividend for the time being is unlikely to grow further as the management have stated that it will only be raised when the net debt to EBITDA reaches 2.5-3x, currently it stands at roughly 4.5x.

 

“We are still in the early days of Nick Read’s tenure as CEO, so it will be hard to judge his performance just yet. He has though, made some encouraging signs as he stated his focus will be on greater consistency of commercial executions, accelerating digital transformation, radically simplifying the operating model to generate better returns from the group’s assets. Together he expects this to drive revenue growth and lower operating costs by at least €1.2bn by 2021.

 

“For investors in Vodafone, this morning’s results will have provided a little relief to the downward pressure on the shares we have seen this year. It will also have eased worries of the dividend which is very attractive, currently in excess of 8%.  With the shares this low, we take the view that the shares are attractive priced for some investors taking a contrarian approach and seeking income while willing to accept a low to medium level of risk.”

Corporate Finance and M&A/DealsEquityFinanceForeign Direct InvestmentInfrastructure and Project Finance

Mobeus invests £9M in fast-growth customer experience specialists, Ventrica

Ventrica, a European, award-winning, outsourced contact centre, has attracted a £9 million investment from Mobeus Equity Partners. Ventrica provides intelligent, multi-lingual and omni-channel outsourced customer service to a range of global ‘blue-chip’ brands.

“Ventrica is right in the sweet spot for the growing outsourcing contact centre market”

Southend-based Ventrica was founded in 2010 by Dino Forte and has undergone rapid growth, doubling in size over the last two years. Ventrica is an innovation leader in the changing sales and customer service sector. As e-commerce continues to grow, especially in the retail space, and customers expand their communication channels from the phone to email, social media and webchat, companies are increasingly looking to specialists to provide around the clock customer-facing support. Ventrica works closely with its clients, leveraging its people, technology (including support for Artificial Intelligence and Automation) training and resourcing expertise to provide a high quality service, across multiple channels, that supports their brand and their values. 

Ventrica is already one of Essex’s top employers and now plans European expansion

Ventrica is a key employer in Southend and in 2017 the company launched a second site in the town. Employing over 450 staff, and growing to 600 this year, it is one of the town’s major private employers. With support from Mobeus, the company plans further investment to expand its footprint in the UK and Europe to support its growing multi-lingual client base that serve customers across global markets. However the strategy is to remain medium-sized.

Danielle Garland, Mobeus Investment Manager, said, “Ventrica is right in the sweet spot for the growing outsourcing contact centre market – it is large enough to deliver multilingual and leading-edge technology solutions to its blue-chip clients but small enough to be dynamic and innovative and to provide the personalised service its clients require. As more clients onshore back to the UK, Ventrica is very well placed to continue to deliver very strong growth.”

Dino Forte, Ventrica CEO, added, “Mobeus stood out as the right partner because of the team’s immediate enthusiasm for, and deep understanding of, our offering at Ventrica. We have a significant market opportunity and are winning new customer contracts at an increasing rate and of an increasing scale. With Mobeus as a partner, we are well positioned to strengthen our team to support our significant growth whilst also allowing us to better focus on our existing clients which will be our key priority moving forward. 

Mobeus Partner Ashley Broomberg worked with Danielle Garland who sourced and led the transaction on behalf of Mobeus. Guy Blackburn, Mobeus Portfolio Director, has joined the board to support Ventrica in achieving its full potential. Dino Forte was advised by Sarah Moores and Rob Dukelow-Smith (Forward Corporate Finance). 

ArticlesCash ManagementFX and PaymentLegalStock Markets

Keeping your Payment options open, by Anderson Zaks

EPOS, MobilePOS, Pin on Glass, Pin on Mobile – there’s a lot to choose from for today’s merchant. Adina Ahmed, Chief Technology Officer at Anderson Zaks explains some of the latest options.

“In many emerging economies, people are by-passing traditional bank and card accounts altogether and adopting mobile payments”

Mobile phones have revolutionalised the way we live today. The way we communicate, watch TV and other online entertainment, and, the way we shop. The next obvious step, is the way that we manage our money and pay for goods and services. But these days, it isn’t just settling the bill in a restaurant, or buying something enticing in the sales, with contactless people are paying for their morning coffee, and with PSD2 and the associated deregulation, they will soon be able to make direct payments to each other. In many emerging economies, people are by-passing traditional bank and card accounts altogether and adopting mobile payments in much the same way that they have missed out broadband landlines – it’s a whole layer of infrastructure that they simply don’t need. 

The payment market in China is a prime example where most people don’t have a credit or debit card, or plastic of any kind. They have leapfrogged straight to mobile apps and user friendly ecosystems that seamlessly blend social media, ecommerce, payment and other finance functions. Consumers in China now rarely carry a wallet or cash, and even buskers display a QR code so that people can leave tips. 

Consumers in the UK, particularly younger people that are now coming into the workplace (millennials) expect to pay for everything contactless, many don’t carry cash. This presents a problem for the smaller retailer or merchant. How do they take payments without a full blown EPOS system? There are a whole range of options now opening up to merchants in the UK, and as evidenced in China, they don’t need a heavy IT implementation with all its associated costs, nor are they tied into long contracts with banks or card providers. 

PIN on Glass (POG) solutions are already available in the UK. As the name suggests, PIN on Glass has evolved from the traditional PIN pad so that merchants can now use a touchscreen device to capture the PIN. There are a range of versatile devices, referred to as SmartPOS, that have been designed for this very purpose. Typically run on Android, they have additional security features baked in, a scanner for bar codes and QR codes, and can print receipts. The beauty of these devices is that they can run with a user-friendly app, enabling smaller merchants to operate using the device as a standalone solution, without the need to have a full blown EPOS solution.

These purpose built POG terminals connect directly to a bank, to accept payment. They are sleek and modern, and the apps that run on them are intuitive and easy to use for both staff and the consumer. The devices run with all current card technologies including swipe and contactless, providing an all in one solution so that the merchant doesn’t need a computer in the shop or at whatever location they need to take payments. 

For independent software vendors (ISV), POG devices enable them to migrate their existing POS solutions to a smaller, portable device, opening up the market to much smaller merchants than they might have otherwise targeted. 

At Anderson Zaks we are already working with several ISVs to incorporate our payment platform into their PIN on Glass solution. 

High Net-worth IndividualsWealth Management

Under the radar cyber attacks costing financial services companies $924,390 and getting worse

EfficientIP’s DNS Threat Report reveals alarming 57% attack cost rise in last 12 months

Global DNS Threat Report, shared by EfficientIP, leading specialists in network protection, revealed the financial services industry is the worst affected sector by DNS attacks, the type cyber attackers increasingly use to stealthily break into bank systems. 

Last year, a single financial sector attack cost each organization $588,200. This year the research shows organizations spent $924,390, to restore services after each DNS attack, the most out of any sector and an annual increase of 57%.

The report also highlights financial organizations suffered an average of seven DNS attacks last year, with 19% attacked ten times or more in the last twelve months. 

Rising costs are not the only consequences of DNS attacks. The most common impacts of DNS attacks are cloud service downtime, experienced by 43% of financial organizations, a compromised website (36%), and in-house application downtime (32%). 

DNS attacks also cost financial institutions time. Second to the public sector, financial services take the longest to mitigate an attack, spending an average of seven hours. In the worst cases, some 5% of financial sector respondents spent 41 days just resolving impacts of their DNS attacks in 2017.

While 94% of financial organizations understand the criticality of having a secure DNS network for their business, overwhelming evidence from the survey shows they need to take more action. Failure to apply security patches in a timely manner is a major issue for organizations. EfficientIP’s 2018 Global DNS Threat Report reveals 72% of finance companies took three days or more to install a security patch on their systems, leaving them open to attacks. 

David Williamson, CEO, EfficientIP, comments on the reasons behind the attacks. “The DNS threat landscape is continually evolving, impacting the financial sector in particular. This is because many financial organizations rely on security solutions which fail to combat specific DNS threats. Financial services increasingly operate online and rely on internet availability and the capacity to securely communicate information in real time. Therefore, network service continuity and security is a business imperative and a necessity.”

Recommendations
Working with some of the world’s largest global banks and stock exchanges to protect their networks, EfficientIP recommends five best practices:

Enhance threat intelligence on domain reputation with data feeds which provide menace insight from global traffic analysis. This will protect users from internal/external attacks by blocking malware activity and mitigating data exfiltration attempts.

Augment your threat visibility using real-time, context-aware DNS transaction analytics for behavioral threat detection. Businesses can detect all threat types, and prevent data theft to help meet regulatory compliance such as GDPR and US CLOUD Act.

Apply adaptive countermeasures relevant to threats. The result is ensured business continuity, even when the attack source is unidentifiable, and practically eliminates risks of blocking legitimate users.

Harden security for cloud/next-gen datacenters with a purpose-built DNS security solution, overcoming limitations of solutions from cloud providers. This ensures continued access to cloud services and apps, and protects against exfiltration of cloud-stored data.

Incorporate DNS into a global network security solution to recognize unusual or malicious activity and inform the broader security ecosystem. This allows holistic network security to address growing network risks and protect against the lateral movement of threats.

data quality
Banking

Tackling the Challenge of TRIM

Tackling the Challenge of TRIM – How Banks Can Make Sure their Data Quality Processes are up to Scratch

by Martijn Groot, VP of Product Management, Asset Control

The Targeted Review of Internal Models (TRIM) is underway and banks across the eurozone will already be feeling the effects. Supervised by the European Central Bank (ECB) and first launched in 2017, the initiative is designed to assess whether the internal risk assessment models used by banks meet regulatory requirements and whether their results are reliable and comparable.


What is TRIM?
As part of the programme, the ECB is reviewing the banks’ models, providing them with ‘homework’ to improve their processes, and then returning to inspect. In carrying out this process, however, the ECB understands that detailed discussions with banks about their risk assessment models will be of limited value if they can’t trust the data being fed into them.

TRIM builds on the results of the Basel Committee for Banking Supervision’s BCBS 239 document, published in 2013. While BCBS 239 laid out 14 risk data aggregation principles for banks to abide by, it was quite generic. TRIM is more specific – especially around data quality aspects and measurements.

In fact, TRIM provides a range of governance principles for developing a data quality framework that covers relevant data quality dimensions including timeliness, completeness, accuracy, consistency and traceability. 


The Principles of TRIM
In order to comply with TRIM, banks need to demonstrate they can trace the price they have used historically for a model or for a financial instrument valuation through the data supply chain back to original sources. They also need to know what processes have been carried out on the data, including checks that have been conducted, what the sources are, what were the original parameters and data quality rules, and have they been changed over time? Traceability is the term used to describe this in the TRIM document but data lineage, effectively the data lifecycle that includes the data’s origins and where it moves over time, is the broader term more widely employed in data management.

TRIM also contains important reporting guidelines –  including that banks will need to report on how often they have proxied their market data inputs or risk calculations. 

Doing this also defines a process for how the bank has derived and validated this proxy. Is it really a comparable instrument? Does it behave similarly to the original instrument?

In other words, in line with the focus on data quality in TRIM, it is important that banks are regularly validating their proxies. Finally, to ensure they have a better grasp of the quality of the market data they use in risk calculations, they also need to ensure they have a handle on how much data is stale per asset class.

Typically, today most banks would struggle to comply with many of the data quality guidelines TRIM lays down. Most have no data quality or control frameworks in place or, at best, assess quality in different isolated silos. As such, they don’t have the ability to report daily on key data and metrics. They may have implemented checks and controls but generally they have little real insight into data across the whole chain.  Very few have a full audit trail in place that describes how data flows from sources through quality checks and workflows into the financial models, and that does not just track data values but also the rules and the rule parameters acted on it.


Achieving TRIM Compliance
So how can banks meet the TRIM guidelines? Banks first need to get the basic processes right. That means putting a robust data governance and data quality framework in place. To do that, they need to document their data management principles and policies. They also need to agree on a common data dictionary and understand more clearly exactly what they are measuring, including how they define financial products across the group and the control model for the whole lifecycle. 

The next stage will see banks putting the technology that enables them to achieve this in place. Organisations first need a data management system that has the end-to-end capability to gather, integrate and master key data, derive risk factors and publish them to different groups. That should provide banks with a single funnel and consistent set of data and data quality metrics that support TRIM compliance.

For banks that are able to achieve all this, TRIM compliance is just one of the benefits they can expect to see. In fact, some of the remediation they will have to do to comply will also be required for key regulations, including the Fundamental Review of the Trading Book. However, for many, TRIM is their current focus and with the programme expected to run until 2020, banks know there is still work to do to meet its guidelines.

Bond Investment
Transactional and Investment Banking

Bonds remain firm fixture in portfolios moving into 2019

Bonds remain firm fixture in portfolios moving into 2019

  • Nearly three quarters of advisers are either looking to write more bond business in the next year 
  • The majority of financial advisers (55%) believe onshore bonds play an important role in the advice they give to clients
  • Financial advisers are recognising the benefits of writing bonds, with three in five (61%) stating they are more useful than most advisers believe

Nearly three quarters (73%) of financial advisers said they were either considering or planning to increase the amount of bonds they write for clients in the next year, with exactly a quarter (25%) stating they would definitely increase the amount they write, according to new research from Canada Life.

 

Richard Priestley, Executive Director of Canada Life UK, commented: “Despite the complex, rapidly evolving landscape, the popularity of bonds with advisers shows no signs of slowing. Bonds continue to remain a firm fixture in portfolios, with many advisers recognising the importance and usefulness they hold as a defensive investment option for their clients.

 

“It is unsurprising that more financial advisers are recognising the benefits of bonds, such as top slicing relief, compared to a year ago. However, with 2019 on the horizon, advisers who have yet to consider writing more bond business for their clients in the next twelve months would be wise to consider this option.”

 

The majority of financial advisers (55%) believe onshore bonds play an important role in the advice they give to clients. While three fifths (61%) say bonds are more useful than most advisers believe, a slight increase from 2017 (60%). The number of advisers recommending international bonds to their clients has also risen slightly year-on-year, up from 17% in 2017 to 18% in 2018.

 

Financial advisers are also increasingly recognising the benefits and value of bonds, compared to twelve months ago.

 

Over two thirds (67%) of financial advisers cite tax deferral options as an advantage of using bonds, up significantly from just under half (49%) last year. Meanwhile, over three in five advisers (62%) say top slicing relief is one of the main advantages of writing bonds, a substantial increase from 48% in 2017.

 

Of those planning to write more bonds in the next twelve months, two in five (40%) advisers plan to write a mixture of both onshore and offshore, while over two fifths (42%) intend to only write more onshore bonds.

 

Finance

Scrutiny on the Data Supply Chain

Scrutiny on the Data Supply Chain

by Martijn Groot, VP of Product Management, Asset Control

The idea of a ‘supply chain’ is most commonly associated with the manufacturing process, however, the concept is now increasingly being applied to the way that financial services firms manage data. While businesses across the financial services space deal with growing volumes of raw data, rather than raw materials, the parallels are striking.

As with any supply chain, being able to trace materials or data across the whole process is very important. In the data supply chain, financial services companies need to understand and to audit what happens to the data across the process, who has looked at it, how it has been verified and they also need to keep a full record of any decisions that are made. Ultimately, they need to ensure traceability, that they can track the journey of any piece of data across the supply chain and see both where it has been and where it finally ends up.   

The benefit for financial services firms who reach the end of this data supply chain is that the result of this process supports informed opinion that in turn drives risk, trading and business decisions. 

Bringing the data together in this way is important for many financial services firms. After all, the reality is that these businesses, today even more than pre-crisis, typically have many functional silos of data in place, a problem made still worse by the preponderance of mergers and acquisitions taking place across the sector in recent times. Typically today, market risk may have its own database, so too credit risk, finance stress testing and product control. In fact, every business line may have its own data set. Moreover, all these different groups will all also have their own take on data quality. 

More and more financial services appreciate that this situation is no longer sustainable. The end to end process outlined above should help to counteract this but why is it happening right now? 

Regulation is certainly a key driver. In recent years, we have seen the advent of the Targeted Review of Internal Models (TRIM) and the Fundamental Review of the Trading Book (FRTB) both of which demand that a consistent data set is in place. It seems likely that the costs and the regulatory repercussions of failing to comply with this will go up over time.

Second, it is becoming increasingly costly to keep all these different silos alive to support it. A lot of these silos are internally developed systems. The staff who originally developed them are often no longer with the business or have a completely different set of priorities, so it makes for a very costly infrastructure. Finally, there is a growing consensus that if a standard data dictionary and vocabulary of terms and conditions are used within the business, and there is common access to the same data set, that will inevitably help to drive a better and more informed decision-making process across the business.


Finding a Way Forward

To address these issues and find a way of overcoming the data challenges outlined above, organisations can begin by ensuring that they have a 360˚ view of all the data that is coming into the organisation. They need to make sure they know exactly what data assets there are in the firm – what they already have on the shelf, what they are buying and what they are collecting or creating internally. In other words, they need to have a comprehensive view of exactly what data enters the organisation, how and when it does and in what shape and form.

Firms need to, therefore, be clearer not only about what data they are collecting internally but also what they are buying. If they have a better understanding of this, they can make more conscious decisions about what they need and what is redundant and prevent a lot of ‘unnecessary noise’ when it comes to improving their data supply chain.

They also need to be able to verify the quality of the data of course – and that effectively means putting in place a data quality framework that encompasses a range of dimensions from completeness to timeliness, accuracy, consistency and traceability.

To deal with all these data supply chain issues, of course, businesses need to have the right governance structure and organisational model in place. Consultants can help here in advising on processes and procedures and ensure for example that the number of individual departments independently sourcing data is reduced and there is a clear view in place of what is fit for purpose data.

The Role of Technology

Technology can play a key role, of course, in helping organisations to get a better handle on their data supply chains. For most businesses, a primary requirement is to have good data sourcing and integration capability in place. This means systems that understand financial data products but also the different data models and schemas that are in place to identify instruments, issuers, taxonomies and financial product categorisations.

The chosen solutions should also be able to quickly and easily move between one set of identifiers and classification schemes to another. Organisations also need the capability to support the workflow process and workflow integration to effectively manage a process whereby users can easily interact with the data either to include their own data in the integration or to check the result of various screening rules that affect the quality of the data.

Businesses also need a data reporting capability. Technology chosen to fulfil this role must be capable of providing metrics on the impact of all the different data sources the organisation has bought, what benefits it has achieved from those sources; what kind of quality are they and what gaps are there in the data, and where is the organisation in providing this data to business users for ad-hoc usage.

Beyond understanding and monitoring their supply chains and ensuring that an auditing and traceability element is in place, financial services businesses must also guarantee that data governance and data quality checking is fully implemented. After all, to get the most from their data supply chains they must make the data itself readily available to users to browse, analyse and support decision-making processes that ultimately contribute to driving business advantage and competitive edge.

TravelPerk
Finance

TravelPerk announces 39m GBP Series C investment

TravelPerk announces 39m GBP Series C investment led by Kinnevik to transform 1 trillion GBP business travel market

TravelPerk, the Barcelona-based startup which has become the fastest growing ‘Software as a Service’ company in Europe, has secured 39 million GBP in Series C funding from some of the world’s most successful technology investors including Kinnevik, Yuri Milner and Tom Stafford. This new funding will enable the firm to expand into new markets and accelerate its dramatic growth towards its ambition to become the world’s leading corporate travel management platform.

According to the Global Business Travel Association, 50% of business travel happens outside of company policy often because existing platforms are outdated, can’t offer the choice or prices of consumer sites, and require travel managers and finance teams to endure multiple platforms, emails and calls back and forth to manage a single trip – costing companies valuable time and money, while frustrating employees and preventing growth.

TravelPerk is solving this problem by simplifying the process for hundreds of thousands of travelers from some of the world’s most influential companies including Uber and Transferwise – cutting the time needed to manage a trip from 3 or 4 hours to just 10 minutes. By streamlining the process, TravelPerk is saving companies more than 20% in annual travel costs.

The company’s unique platform hosts the world’s largest bookable travel inventory, and brings all the necessary tools and resources to manage trips from booking to accounting into one simple, smart, consumer-standard interface. The platform allows travelers to quickly and seamlessly compare, book and invoice cars, trains, flights and hotels from a wide range of major providers including Booking.com, Expedia and Airbnb – with 24/7 support.

TravelPerk CEO Avi Meir said: “We believe business travel should be as simple as personal travel – if not easier. As businesses grow beyond borders, organising trips is one of the most painful and unnecessary obstacles they face to expanding.

“TravelPerk is breaking new ground to propel business travel into the 21st century, disrupting a mammoth and outdated 1.3 trillion USD market – ensuring distance is never a barrier to future growth.”

“We are proud to have the backing of investors with a unique track record of supporting other market disruptors that have transformed entire industries.”

In this latest round, the company is also being supported by existing investors such as Felix Capital, Target Global, Spark Capital, LocalGlobe, Sunstone and Amplo, who back market-changing unicorns including Slack, Trello, Farfetch, Deliveroo and Delivery Hero.

Since being founded in 2015 by CEO Avi Meir and CPO Javier Suarez, TravelPerk has increased revenues by 700% growth year on year, and has now raised nearly 75m USD in total funding.

This new injection of funding will equip TravelPerk to expand into new markets, enlarge its client base by working more with small enterprises and augment its technology offering including integrating travel and expenses management into the platform.

Having tripled the size of its team in the past year, TravelPerk is opening its first office in the UK, and is soon also to build bases in Berlin, Amsterdam and Paris. The UK business travel market was worth 50 billion USD in 2017, and this initial investment will allow TravelPerk to simplify travel for customers such as Aesop, Bowers & Wilkins, Adyen and Farfetch.

Chris Bischoff, Senior Investment Director at Kinnevik, said: “We are excited to invest in TravelPerk, a company that fits perfectly into our investment thesis of using technology to offer customers more and much better choice. Booking corporate travel is unnecessarily time-consuming, expensive and burdensome compared to leisure travel. Avi and team have capitalised on this opportunity to build the leading European challenger by focusing on a product-led solution, and we look forward to supporting their future growth.”

Algotechs
Transactional and Investment Banking

Algotechs’ Algo Trading Software – The True Future Of The Investment Industry

The digital revolution has forever changed the investment world

Algotechs is a software company that generates profits using an algorithm catered to the Capital Market. In September, the firm was featured in Wealth & Finance International’s 2018 Global Business Excellence Awards, receiving the award of ‘2018’s Leading Algo Trading Company’. Following this well-deserved acknowledgement, we spoke with Roy Evans, Chief Marketing Officer at Algotechs, to find out more about this innovative firm and software.

The digital revolution has forever changed the investment world. As technology develops, the sector evolves with it, as firms look to capitalise on the opportunities and benefits of tech adoption. In recent years, this has created a schism as firms keep apace of the latest developments or choose to stick to more traditional approaches of investments and trading. In the wake of this division, few firms have made their mark as dominantly as Algotechs has. As the leading international Algo Trading company, Algotechs represents the cutting edge of a sub sector that has reinvigorated trading for the modern age.

To start the interview, Roy takes a moment to detail Algotechs’ operations. “Our software is based on a complex and intelligently designed mathematical equation. We provide the ability for any interested investor to benefit using the brilliant ATS software. Whether it be a businessman interested in diversifying his financial portfolio, a couple looking to secure their children’s future or an individual planning a better future for himself. Our company strives to allow any interested investor to profit using our software.”

This ties intrinsically to Algotechs’ mission: to provide a service that outmatches human capabilities, and by extension, their human-limitations. “Algotechs’ goal is to provide a software that can make the precise, speedy and accurate trading decisions that are limited when it comes to human capabilities. This is achieved by using an automated system that works based on years of statistical data and Capital Market trends. The software requires absolutely no previous experience or knowledge on the investors part, minimising the time consumption required to execute trades. In addition, there is absolutely no emotion involved in the decision making, no subjectivity, no hesitation or mistakes. It’s all done according to predefined, carefully calculated parameters.”

On the back of this sentiment, the conversation soon turns to the future of investments, and how, perhaps, Algotechs represents an inevitability. Algorithms, AI, machine operated systems are the words that are currently being used in the industry, as they look set to permanently replace human-based trading. Roy fundamentally agrees: “As technology changes and renews itself all the time, Capital Market technology develops as well. Today, Capital Market trading through software is becoming the more dominant option. Human trading is becoming a thing of the past, due to human-limited capabilities. Major institutions, banks and hedge funds already operate mostly using automated systems. Because of this, Algotechs’ automated trading software needs to stay on top of the game by providing precise and powerful transactions that are constantly renewed and improved.”

“While the Capital Market is on an upward trend for the past 10 years, it is relatively easy for the private trader to make profit. When -and there is always a when- the market turns a different direction, most private traders are unable to cope with the reversal of the trend and cannot maintain their successful yields, both because of the time consumption, and the lack of speed required to execute quick, precise and completely accurate trades, which is exactly what our Algorithm was designed to do. It is important to keep in mind, that history has proven that since the invention of machinery, in every confrontation between man and machine – machine has always prevailed.”

As we come to the end of the interview, Roy moves to discuss Algotechs’ future in an industry that seems all but guaranteed to favour their endeavours.  “We see a bright future with our friend referral program, which expands with new clients every day. As a successful company, we trust that our satisfied customers will want to have their friends and family members invest as well. Therefore, we have a friend referral program which provides a bonus for both the client who brings a friend as well as for the friend who joins the company. We definitely see this growing and reaching new heights.

“We have numerous new projects on the horizon, some of which include; rebranding, a new and improved website to come along with it and much more. Stay tuned to find out what other surprises we have in store! It also goes without saying that Algotechs hopes to continue providing consistently high returns and strong clientele service.”

Company Details:

Company: Algotechs

Website: www.algotechs.com

Telephone: +44 20 38 689 901 

Support Email: [email protected]

Pay in the legal sector
Articles

Pay in the legal sector: men vs women

April 2018 was the deadline by which large UK firms (those with more than 250 people in their employ) had to publish their pay data. The government deadline was set in order to explore whether the gender pay gap was still a prevailing issue, and if it was, how badly skewed the pay rates were between men and women.
Law firms were among the first to respond, according to The Law Society Gazette. To investigate the data further, we’re joined by accident at work solicitor firm, True Solicitor:

The April deadline

The British government requested pay data to be published by 4th April 2018. The results can be accessed here. Though it came as no surprise that the pay gap was still prevalent, the sheer scale of difference between men and women’s pay across businesses was quite alarming. The Independent reported on Ryanair’s revelation that women are paid 67% less in their company for example.

Law firm pay

Comparatively, law firms didn’t reflect too badly in their pay data, but there is indeed still a gap. A law firm in South Yorkshire reported that the women in their workplace earned a 15.9% less median hourly rate compared to their male counterparts. However, a London-based law firm saw their women’s median hourly rate at 37.4% lower than men’s.

2018 saw the largest international survey of women in law, with The Law Society receiving responses from 7,781 people. The study found that while 60% were aware of a pay gap problem in their workplace, only 16% reported seeing anything being actively done about it. 74% of men said there was progress regarding the difference in pay between the genders, but only 48% of women agreed with that statement.

Why is there a gap in gender pay?

What factor, or factors, are contributing to the gender pay gap? Is it a difference in bonuses, or are higher job positions less readily available for women?

Women received a median bonus pay that was 20% lower than their male co-workers, according to data published by the previously referenced South Yorkshire law firm. The London-based firm noted a 40% lower median bonus pay for women compared to men. It clear that bonuses are also suffering from the same gender discrimination as standard wages. Furthermore, in terms of job roles, The Law Society’s survey showed 49% of law workers believe that an unacceptable work/life balance is needed to reach senior roles and is to blame for the gender pay gap, so it is feasible that starting a family is deemed a disadvantage for women.

There’s a difference in view between men and women starting a family, says The Balance Careers, with men being regarded favourably when starting a family. But for a woman, having children brings an unfair stigma of unreliability, that they may put their family first. This can cause discrimination when aiming for higher roles within the firm, such as partner positions.

Women in higher roles

Sadly, for women who attain the status of partner in a law firm, the pay gap remains. In fact, according to The Financial Times, female partners in London-based law firms earn on average 24% less compensation than men. 34% of women earn less than £250,000, where 15% of men earn less than £250,000.

Dealing with the pay gap

The BBC published many ideas for how to resolve the gender pay gap. These suggestions include:

• Better, balanced paternity leave — allowing fathers to take paternity leave, or having a shared parental leave, would allow mothers to return to work earlier.
• Childcare support — childcare is expensive! Support for childcare expenses would help both men and women in the workplace.
• Allowing parents to work from home — the ability to work from home while raising a family would open up additional opportunities for women to balance both a career and a family.
• A pay raise for female workers — a simple solution, but a pay raise for women can quickly equalise the pay rate between men and women.

Inheritance Tax
Family OfficesIndirect TaxInheritance TaxReal Estate

Number Of Retail Investors Seeking IHT Advice Set To Rise

Advisers highlight expected increased use of flexible IHT solutions for clients

More than three out of four (78%) financial advisers expect the number of retail investors seeking help for IHT planning to increase over the next three years, according to new research from TIME Investments, which specialises in tax efficient investment solutions.  The findings come as IHT receipts hit a record £5.2 billion in 2017-18 despite the introduction of an additional nil-rate band.

Six out of ten (63%) advisers also predict an increase in the number of IHT products and investment solutions to be launched in the UK.  However, whilst this will offer more choice to investors, it also comes with a health warning – 88% of advisers questioned are concerned that new products will be launched by firms that don’t have the appropriate track record and/or expertise.

Two thirds of advisers predict an increase in the use of Business Relief (formerly known as Business Property Relief) over the next three years to help people reduce their IHT liabilities.  To encourage investors to support UK businesses, the Government allows shares held in qualifying companies that are not listed on any stock exchange and some of those listed on AIM to qualify for Business Relief. This means that once owned for two years, the shares no longer count towards the taxable part of an inheritable estate and are free from inheritance tax at point of death.

The accessibility of Business Relief investments and the range of investment opportunities available help to provide flexibility in IHT planning.  Three quarters of advisers felt that the increasing use of Power of Attorney due to rising dementia rates would contribute to the growth in the use of these flexible IHT solutions.

Henny Dovland, TIME Investments’ IHT expert comments: “The number of families in the UK being caught in the IHT net is increasing.  This represents a significant opportunity for advisers specialising in IHT and intergenerational planning and is reflected in our findings that reveal more specialist products are set to be launched in this market. However, care needs to be taken to ensure any new solutions are fit for purpose.  Our specialist team has a track record of over 22 years in this complex area.”

For further information on TIME Investments and its range of products, please visit www.time-investments.com

pros assist
AccountancyArticles

Not Just Your Accountants, But an Extension to Your Business!

Not Just Your Accountants, But an Extension to Your Business!

Pros Assist consists of a gifted team of qualified practicing members of the Institute of Financial Accountants, notably headed by the Director and Senior Financial Accountant, Alom Rouf. We profiled the firm and Alom to discover more about the innovative services that they provide to their clients.

With over 15 years of experience in private practice, advising sole traders and partnership clients alike, Alom leads the Pros Assist team in offering clients expert advice on a diverse range of business support, including guidance on business planning and funding, advising on project viability, as well as all matters relating to taxation and profit.

With such a diverse team, it enables Pros Assist to provide their clients with selection of specialist services which include; SME business advice, personal & corporate tax planning, financial analysis, company incorporation, bookkeeping & accounting and company secretarial & treasury to name just a few.

Throughout the years, Alom has gained a vast amount of experience in evaluating sole trader and partnership clients, to assess whether they would be better off incorporating. In addition to this, he advises clients on how to extract profits in the most tax efficient way. Also, Alom provides clients with a diverse range of business support, advising on project viability, business planning and funding. As the face of Pros Assist, Alom is a very professional, friendly, and approachable accountant.

The team pride themselves in being dedicated to their clients, ensuring all professional needs are taken care of to the highest standard. All members of staff are highly qualified with up-to-date training, as well as regulated by the Institute of Financial Accountants; to ensure that clients can be rest assured that they are in good hands.

One of the USPs at Pros Assist, is the proactive approach which they take in making themselves available at the client’s convenience. The team understand that SME business owners often work round the clock, so they make themselves available with ease of communication via, emails,
texts, and even social media. The teams mobile contact details are made available to the clients ensuring the highest level of care 24/7.

As for the firm’s three core strengths, these are:

• Flexibility: We make ourselves available when you are available 

• Reliability: All our staff are qualified and professionally trained with several years of experience. 

• Affordability: We work on a Fixed Fee basis, so what we quote you in the beginning is exactly what we charge you in the end.

Pros Assist specialise in business start-ups and looking after owner managed businesses. The firm offers all levels of financial assistance – whether you are looking to form your own company and don’t know where to begin, or you have some experience and want to make some changes, or if you simply require an all-round accountant to deal with all your business affairs.

Looking ahead to what the future holds for the firm, Alom and the team at Pros Assist will continue to provide their award-winning excellent advice and guidance to their clients, helping them to get their business off the ground and established in the industry.

 

Contact: Alom Rouf

Company: Pros Assist Highstone House, 165 High Street Hertfordshire, Barnet, EN5 5SU, UK

Telephone: 020 3697 0878

Web Address: www.prosassist.com

The Next Generation of Traders
Capital Markets (stocks and bonds)Stock Markets

The Next Generation of Traders

This new generation of traders is smart. Find out how traders have evolved with technology

James Mathews, CEO of Learn to Trade

The reality of trading taking place on the floor of the stock exchange, with traders shouting down telephones and punching in orders is long gone. As are the days of having to call your stockbroker and place an order. This perception might continue on TV, but the reality is that the modern trader is equipped with a mobile phone.

This new generation of traders is smart. Empowered by hyper-connectivity’s offer of unprecedented volumes of knowledge and 24/7 access to the market, they are tearing down societal constructs and preconceptions. This generation wants to be its own boss. Social media has become a platform to learn from, emulate and showcase success. Wealth creation has gone mainstream. With the millennial and Gen Z traders being some of the most enterprising members of our society, it’s little surprise that an entirely new generation of traders is now emerging. Characteristically, they are entrepreneurial and in many cases self-starters ready to follow their own paths. But, how has technology made trading and finance more mainstream to these generations?

Crypto as catalyst
The appeal of trading has in recent years been catalysed by the public’s fixation on cryptocurrency. With the allure of quick money, Bitcoin epitomised this fascination. Sage traders sceptically watched as this strange decentralised network of digital tokens became mainstream, while novices made their millions. Yet what goes up must come down, and once its value was done exploding, it started spectacularly falling. But with media hype and fabled success stories, the concept of crypto began to tempt casual observers. The ensuing rush to develop user friendly trading apps made the concept even more accessible to the everyday person.

Contributing to this has been the residual sour attitude toward the financial crisis. People have become more suspicious of and disillusioned with the “so called experts” entrusted with handling their hard-earned money. ‘They’ had nearly brought the global economy to its knees. Further backlash was also brought about from charging a lot of money to trade, whether it be pension funds or otherwise. This combination of discontent and new accessibility drove this new wave of do it yourself trading. 

Celebrity of social
Trading is complex. There’s jargon, complicated explanations, and understanding the thinking that went into a certain trading position can be almost impossible at times. Social media has changed all this too. Now there is an active, always online, accessible community of people to simplify, explain and advise. It’s easy to find out what’s going on in the market in seconds. And what’s more there is the celebrity, a new wave of Twitter traders, amateur and professional alike, who have established themselves as trading gurus to be followed, mimicked and aspired to.

The concept of “piggy backing” on other people’s trading is age old, but never before has it been so prolific. It’s proved to be extremely popular, both as a way of profiting from others’ expertise and as a way of learning. But new traders need to remember that sometimes you might be following a loser, and that making correct trades doesn’t always mean you’re being profitable overall.

Good bye 9 to 5
Trading’s popularity has risen along with the ‘side-hustle’, freelance, and sharing economy. Technology has without question been an enabling force behind all of these, as people strive for more reward and flexibility in their working lives. Indeed, there has been a concerted effort to break away from the traditional construct of 9 to 5. How trading maps to this is clear but it is not without risks. It can be seen to promise a lot, with some traders claiming to live off of one trade a day. However the reality the modern trader is facing is that it is just like any other employment in that it takes persistence, patience and grit. What it does offer though is autonomy and flexibility.

With the ever-increasing interest in the viability of pursuing a career in trading for the millennial and Z generations, an onus of responsibility has formed. We expect that in the next few years we will start to see the wider education focus shift, to start to cover money management and investment too. For far too many who missed out on this knowledge it seems like too little too late. Baby boomers now coming into retirement are left considering whether they have enough to see them through, or how they can manage their own account without having to pay people to do it for them. Increasingly, there will be more of a push from all demographics to have an entry point to the market. But with enough knowledge, experience and foresight to understand market volatility and risk anyone can trade with the technology out there and available to them.

banking brands
Banking

Bet on emotion in the battle of the banking brands

Bet on emotion in the battle of the banking brands

Yelena Gaufman, Strategy Partner, Fold7

The ongoing disruption of banking is a well-documented process, and depending on who you ask the outcome is a foregone conclusion. Though the likes of Monzo, Revolut and Starling offering compelling new visions of financial services, there’s more to these brands’ success than innovation alone.

With an Accenture report released earlier this year suggesting U.K consumer trust in banks is at its highest level since 2012, challenger banks are themselves challenged to prove their credibility and value proposition to a wider audience. Where traditional bank brands appeared to have been outmanoeuvred by digital-first rivals, they may yet steal a march on their disruptors by capitalising on a deeper emotional connection.

 

Building on trusted foundations

Where money is concerned, trust in the authority handling it is critical. Despite nimbler challengers and their ability to jump-start innovation quickly, it’s here that incumbents have the advantage. Their legacy of the brand and the institution behind it stands them in good stead as authorities to trust.

From this trust springs opportunity as existing bank brands can leverage the services they already offer to create walled-garden eco-systems that provide value to a range of customers. When banks really start to make use of the data sharing opportunities presented by legislation such as PSD2, they could leverage an array of services and partnerships to add more value to their customers.

So perhaps the battle isn’t as one-sided as it may have first seemed. But, for both sides, fully harnessing the potential of innovation means first figuring out who they want to be, and who they should be trusted by.

What makes people commit to one brand over another, and can override commodity and convenience? Emotional connection.

 

Branding for growth

Neobanks gained an early lead for the freshness and range of utilities they provide. But being feature-led throws up a new challenge: what defines their work, above and beyond the new and the useful?

As new banking and fintech brands hustle to engage new audiences, they must consider a deeper story to tell than of innovation alone. We need to know what their innovations are for – who are they serving? What role do they fulfil in our lives? The art of defining that story is in tying together the operations of a business with its product or service and a sense of purpose to the wider world.

For banking brands, a compelling brand story becomes a tool for showing new customers what they might want to buy into, but it is also useful for the business itself. Done properly, a well-formed brand becomes a strategic prism through which future business decisions can be understood. Is it right to implement feature X versus Y, based on what you stand for and the customers you choose to serve? Or in a crisis, how do you respond to customers and seek to make things right?

These answers should always come back to your brand and the emotional relationship you wish to maintain with your customers. It’s rarely a one-size-fits-all formula.

 

Demonstrating your worth

But how do you prove brand and purpose? It starts with understanding the context of your offering in the lives of your audience.

The 2000’s were a boom period for web start-ups which used increasing user connectivity to supply a new range of internet-powered services we’d never encountered before. So all manner of sites cropped up offering comparison, aggregation, ecommerce, community, entertainment and much more.

 

But as a highly competitive marketplace emerged for each of these kinds of websites, functionality on its own wasn’t a compelling means of distinguishing one from another. So the businesses behind these services had to think differently about the way they operated.

 

Fast forward to today and the vast field of nascent web 2.0 consumer businesses has shrunk massively. Those which thrive today managed to redefine their role to users, embedding the brand and its offering more deeply in our lives through emotional relationships over and above utility.

 

Rightmove’s recent ‘When life moves’ campaign (disclosure: created by Fold7), demonstrates one means of doing this. The campaign is all about our needs and desires, which change with our life stages, and how our dream of a perfect home changes alongside them. Rightmove tapped into the universal need to embrace change and sought to support its customers in that process as an active collaborator.

So RightMove successfully turned its suite of tools into a means of facilitating the hopes and dreams of its users. The result is a brand which is not just relevant to so many of us, but which we feel comforted and empowered by when we turn to it.

This is a fascinating juncture for both incumbent banks and their newer rivals, as the financial services industry opens up with new opportunity. While older brands have scale on their side and a legacy to leverage, start-ups founded on utility are arguably closer to their customer needs. If they can apply the right brand lens to their work today, we may be looking at a radically different banking landscape in the years to come.

Robotics and AI
Banking

Future-Proof Your Portfolio with Robotics and AI

Future-Proof Your Portfolio with Robotics and AI

By Travis Briggs, CEO, ROBO Global

Robotics, automation, and artificial intelligence—or RAAI—is one of the most fascinating sectors today. After all, who doesn’t get excited when talking about real-life robots and how they are transforming how we live, work and play in our everyday lives? But for investors, RAAI is much more than just a fantastical, childlike look into the future of robots. Just as computers and the Internet created a digital revolution that has transformed nearly every aspect of our lives, RAAI is bringing about a robotics revolution that promises to be even larger and drive even greater change. That’s why, at a time when every investor is seeking ways to help mitigate market risk and help drive the potential for long-term returns, many are looking to robotics and AI to help future-proof their portfolios.

 

What makes RAAI particularly promising from an investor’s perspective is that its applications and technologies are fundamental to the growth of nearly every industry and every geography around the world. Here are just a few examples of how RAAI is transforming ‘business as usual’ while rewarding investors:

 

  • Cybersecurity (+45% in 12 months)

With the rise of the digital age has come a parallel rise in cybercrime—and a fast-growing need for cybersecurity. Today, companies specialize in a vast menu of applications and technologies that use AI to help battle cybercrime such as ransomware, fileless malware, and nation-state attacks. Facebook’s data breach is just the most recent in a long string of major, highly publicized breaches that put users’ personal information in the hands of cybercriminals and resulted in serious financial consequences for the companies that have been hit. Because preventing cyberattacks is a top priority for companies of every size, demand for security solutions is driving up stock prices across this growing sector.

 

  • Healthcare (+28% in 12 months)

Innovations in healthcare robotics have helped drive up and sustain stock prices and investor returns. While the numbers are certainly making investors happy, patients are clearly the biggest winners. Healthcare robotics are making it possible to identify, invent, investigate, and implement technologies that deliver the right treatment to the right patient at the right time—and at the right cost. The wheels are already in motion to use robotics to take patients from symptom to diagnosis to treatment in a single day. Today, a surgical robot can slice a tiny grape into four perfect quadrants, peel the grape to remove precisely 1/100th of a centimeter of skin, and leave the rest of the grape perfectly in tact. This level of sub-millimeter accuracy was unthinkable just a decade ago. Handheld, intelligent computers are being used to sense, compute and record a patient’s health status. At this rate of innovation, the benefits for patients and investors alike are expected to continue to increase.

 

  • Logistics Automation (+22% in 12 months)

Amazon continues to make headlines for its innovations on the warehouse floor, but it’s certainly not alone in its quest to automate logistics processes to help drive down costs and drive up service. Logistics automation has not only had a major impact on customer expectations, but it has also rewritten the list of winners and losers in the retail space. Retailers who are investing in solutions to automate and rethink logistics in the warehouse and across the supply chain are winning market share at a rapid pace. Because logistics automation is expected to dictate tomorrow’s market leaders, the demand for new solutions is on the rise, and the industry as a whole is continuing to push the boundaries of innovation.

 

RAAI is driving fundamental change in unexpected areas as well. Agricultural robots can now determine when an individual plant needs a specific nutrient, is fighting a disease, or is battling an infestation, and can then determine what action to take (such as adding a nutrient to the water for a single plant). They can even be taught how to pick and pack even the most delicate fruits and vegetables with less damage than a human worker. Japan’s robotic caretakers are now being used to support Japan’s overburdened healthcare workforce by helping to manage medical adherence, providing much-needed entertainment and companionship, leading exercise and rehabilitation programs, and more.

 

Artificial intelligence is using the recent flood of Big Data to fuel its own renaissance. Netflix uses AI-generated algorithms to deliver search results that are matched to each user’s viewing habits, driving up sales and saving the company billions of dollars in potential lost revenue. Google relies on AI to translate the massive amounts of data it collects from the posts, comments, and search queries of its more than 1 billion users. From entertainment to insurance to self-driving cars, AI and Big Data are playing a growing and vital role.

 

While many investors are aware of robotics and AI as a market sector, only those who are aware of how deeply these fundamental technologies extend into every area of our world understand the potential it presents from an investment perspective. That reach can’t be overstated. For investors, that makes investing in RAAI an attractive strategy to capitalize on the potential for growth while helping to manage risk and provide attractive, risk-adjusted returns. The result: a portfolio that is truly future-proof by taking advantage of all the future has to offer.

private banking
Banking

How the changing world of financial services is affecting private banking

How deeper and broader relationships can help private banking to thrive in the changing world of financial services

Alex Cheatle, Ten Lifestyle Group, CEO

Private banking in the modern financial services world must continue to engage with its customers by giving them a unique, human experience. But in the information age what does that look like? How do banks make sure they don’t become commoditised in the eyes of their clients? How do they build human relationships as powerful as those created by the great private bankers of the past?

First of all, recognising that customers are not a collection of product buying decisions; not just the person who buys credit cards, invests in the stock market and has a mortgage is crucial. They are individuals that do not relate to their financial services on a product by product basis, nor do they relate to their bank on a product by product basis, unless the relationship is already commoditised. Rather, the uniqueness of each customer means that banks can take a holistic approach, wider than financial services alone, as to how they view and how they treat their clients and their propositions.

Building trust in the information age

In the debate around the state of private banking in the modern world of financial services, some seem to be foreseeing the decline of personalised private banking as we know it. However, in reality, the modern era provides excellent opportunities for private banking that it often shied away from in the past. When many private banks’ unique selling point was secrecy their ability to be wide-ranging about helping their clients was a practical impossibility, given that this made the client relationship with the bank more public and porous. Now, that this has changed, and secrecy is less central to the proposition for most banks, financial organisations are able to offer a wider range of services to their customers that they would have in the past.

One of the main advantages private banks enjoyed was the consistent and immediate human connection, created when the traditional private banker would engage with the client and their family on a personal basis. This created a recognisable connection for clients to their bank and the brand as individuals. Today, when information about banking and investment products and transactional services are just a tap away, people can end up talking to their private banker less and less. The challenge for banks is to find a way to maintain the personalised touch that was previously provided by regular and direct interaction. This can be done in ways that keeps the client interested, and that creates a new way for them to talk to and about their bank, and for their bank to build a trusted relationship with them.

As CEO of the leading lifestyle concierge service that works with HSBC, Coutts and several other leading private banks around the world, I have seen the extraordinary impact that offering non-financial services, both digitally and high-touch, can have on the commercials of private banks and wealth managers.

Being able to be more than just a bank and adding value to client’s lives in the moments that matter most to them creates a deeper emotional engagement that builds the advocacy and the trust that drives the most important commercial metrics from assets under management to client acquisition and retention – and even helps manage difficult ’next generation’ challenges. 

How do you take banking out of the bank and into a social, non-financial setting?

As humans we don’t tend to talk a great deal about our financial services. Most of us can’t remember when anyone they know asked about mortgages or wanted to discuss who their investment advisor was – it’s just not what we do. What we do talk about are our social events with family and friends.  This is where private banking can make headway and create vital personal relationships and advocacy.

Put simply, if I take my friends out for dinner at a restaurant for their birthday and it is a restaurant notoriously difficult to get a table at, my friends will ask me how I got it. Or, if I am able to get tickets for my daughter and her friends to see a concert, and the tickets are being sold at astronomical prices, but I can get them at face value, their parents will ask how I did it. In response, I will say it was thanks to the service offered to me by my bank.  This creates advocacy amongst my peers, friends and family. 

By creating a relationship where the bank knows me well enough to give me this kind of benefit, these services give me invaluable personal and social credit. As a client, I feel happy that I have been listened to by my bank, my trust in them grows because they have been able to get me exactly what I was asking for and I feel proud for being able to provide and share these experiences with my family, friends and colleagues. So, subconsciously I will be advocating for and creating a deeper bond with my bank.

In this way the bank is able to create a trusting relationship with its clients and the client is happy to advocate for the quality of the bank. It has also been shown that a bank that is able to organise a client’s private and social life becomes more trusted in the financial realm too. This leads to growth in assets under management, higher advocacy for the bank and an increase in client retention for the bank, even through the generations.

Forging emotional bonds through to the next generation

 A well-known challenge for private banking in the modern world of financial services is the next generation wealth transfer. This is obviously not a new phenomenon. The next generation have often seen the previous private banker or wealth manager as traditionally Mum or Dad’s bank. Typically, a relationship will pass on to the next generation who have never felt the individual advisor was their banker, there was no emotional connection to them or to the bank and they felt under invested personally in the relationship. By using the information that has been collected about lifestyle services and non-financial benefits provided to the next generations in the family, banks are able to understand the next generation better. The next generation can also be invited to use the banks lifestyle service before they become the main financial decision maker. This builds an emotional connection to the brand, which leads to the next generation being much more likely to stay with the bank.

Though the modern world of financial services is changing for private banking the opportunities are there to be taken advantage of. By using a holistic approach banks can maintain the human and emotional relationship that has always been vital. And, with the modern era of personalised banking and information sharing there is even more opportunity to find out about the next generation and build the brand through them.

For further information about Ten Lifestyle Group Plc, please go to: https://www.tengroup.com/.

financial terms
Finance

Learning the lingo

Learning the lingo: understanding financial terms

A study by the Organisation for Economic Cooperation and Development (OECD), has revealed that only 38% of adults understand know what is meant by the term ‘inflation’. This has led to True Potential Investor creating this useful jargon buster to help us get to grips with the key terms and improve our financial understanding:

Capital
Simply put, capital is another word used for any initial funds that are invested.

Bonds
Companies who need to raise funds to meet a set goal can choose to issue corporate bonds that investors can then buy. The money raised from the investment is held for an agreed number of years. At the end — also known as bond maturity — the investor receives the money they invested plus their guaranteed interest which was agreed at the start.
The government also offers government bonds or ‘gilts’ which work in a similar way to corporate bonds and are used to fund borrowing.

Capital gains tax
This is the tax that is paid on profit that is made on certain types of investment — your ‘capital gain’. You may not need to pay capital gains tax — it depends on the amount of profit you make and whether you use the profit to buy new shares. More information can be found on the GOV.UK website.

Diversification
The process of investing across multiple areas and not just focusing on one is called diversification. For example, you can diversify your investment across a range of investment types — such as shares or bonds, for example — as well as between industries, currencies and countries.
Diversification of your investments could help you to manage the risk and reduces the impact of market uncertainty.

FTSE
The Financial Times Stock Exchange (FTSE) is used to monitor how companies or indices trading on the London Stock Exchange are performing. A number of lists are available, with each showing the fluctuations in share prices over time.

ISA
Individual Savings Accounts — or ISAs — offer a tax-free or tax-efficient option in which to save. There are two main types of ISAs: cash ISAs and stocks and shares ISAs.
• Cash ISAs — like a typical savings account, cash ISAs do not require you to pay tax on any interest that is generated.
• Stocks & shares ISAs — with a stocks and shares ISA, the money is invested with the aim of growing the fund over time. You do not pay tax on dividends.

Inflation
This term describes the amount of money in which goods and services increases over a timeframe. It is measured as an annual percentage change and can impact interest rates and share prices.

Pensions
Pensions are set up to help you put money aside for your latter years. The money you place in the pension fund is invested with the aim of growing it by the time you retire.

There are three main types of pensions:

• Workplace pensions — this type of pension is arranged through your employer. Usually, you’ll contribute an amount each month, with your employer also contributing and the government contributing tax relief too.

Personal pensions — a pension you arrange yourself, which you can contribute to whenever you want.

• State pensions — a state pension is the amount you receive from the government once you reach State Pension age. Details on how much this is and eligibility can be found at the GOV.UK website.

Stocks & shares
Investors can buy stocks in a company. However, these stocks can be broken down into a number of shares, which can also be purchased by investors. Because of this similarity, the two terms are often interchangeable.

The aim with stocks and shares is to sell them on for a greater price than you originally paid. Usually, stock and shareholders receive a proportion of the company’s profits on an annual or bi-annual basis in the form of dividends.

Yield
This term describes the performance of your investment both now and in the future. For example, if you received £5 in interest from £100 placed in a Cash ISA, your total yield would be 5% which is equal to £5.

Cryptocurrency
Finance

Why Cryptocurrency Will Define How We Do Business

3 reasons cryptocurrency is likely to be ‘the future of commerce’

I would rather see the SEC make a methodical decision, with thoughtful guidelines, to approve a cryptocurrency ETF than a rash decision to reject one. And though the agency may not reach a final decision until next year on the proposed SolidX Bitcoin Shares ETF, I think the agency will eventually approve it. The proposal (requiring a minimum investment of 25 bitcoins, or $165,000, assuming a BTC price of $6,500) seems to meet the SEC’s criteria — on valuation, liquidity, fraud protection/custody, and potential manipulation.

Cryptocurrency’s Challenges and Potential
Since 2010, when it emerged as the first legitimate cryptocurrency, bitcoin has been declared “dead” by pundits over 300 times. Critics have cited the cryptocurrency’s hair-raising price volatility, it’s scalability challenges, or the improbability of a central bank ceding monetary control to a piece of pre-set software code. Yet since 2009, bitcoin has facilitated over 300 million consumer payment transactions, while hundreds of other cryptocurrencies have emerged, promising to disrupt a host of industries. Granted, no more than 3.5% of households worldwide have adopted cryptocurrency as a payment method. But I think cryptocurrency will transform how the world does business as developers, regulators, and demographics resolve the following key issues:

1. Approval of a Bitcoin ETF
I think the US investment community will not rest until they satisfy SEC criteria for a bitcoin ETF. Approval would represent another milestone in the validation of cryptocurrencies. This bodes well for the global financial system, because cryptocurrency promises to create financial savings and societal benefits — by streamlining how the world transacts for goods and services, updates mutual ledgers, executes contracts, and accesses records.

2. Comprehensive U.S. Regulation Can Improve Protection, Innovation, and Investment
Demand is mounting for a larger, more comprehensive U.S. and global regulatory framework that protects consumers and nurtures innovation. Those institutional investors who are assessing the cryptocurrency risk/reward proposition are also awaiting regulatory guidance and protections to honor their fiduciary duties. How, if at all, for example, will exchanges be required to implement systems and procedures to prevent hacks and protect or compensate investors from them?

Effective cryptocurrency regulation requires a nuanced set of rules, a sophisticated arsenal of policing tools, sound protocols, and well-trained professionals. I think U.S. regulators will eventually get it right. And if institutions become more confident that regulations can help them meet fiduciary duties, even small cryptocurrency allocations from reputable organizations could unleash a new wave of investment.

3. Bringing the Technology to Scale
Bitcoin and other cryptocurrencies cannot yet process tens of thousands of transactions per second. I think developers working on technology — such as Plasma, built on Ethereum, and the Lightning Network, for bitcoin and other cryptocurrencies — will sooner or later bring leading cryptocurrencies to scale. This could unleash an explosion of new applications, allowing cryptocurrency to integrate with debit and credit payment systems, developing new efficiencies in commerce — whether B2B, B2C, or B2G — in ways we can’t fully anticipate.

4. Developing World Incentives and Demographics
Cryptocurrency adoption as a payment method could grow fastest in emerging markets. Many consumers and entrepreneurs in such regions have a strong incentive to transact in cryptocurrency — either because their country’s current banking payment system is inefficient and unreliable, and/or they are one of the world’s 1.7 billion “unbanked.” Two-thirds of the unbanked own a mobile phone, which could help them use cryptocurrency to transact, and access other blockchain-based financial services.

Data underscores the receptiveness of Developing World consumers to cryptocurrency. The Asia Pacific region has the highest proportion of global users of cryptocurrency as a transaction medium (38%), followed by Europe (27%), North America (17%), Latin America (14%), and Africa/The Middle East (4%), according to a University of Cambridge estimate. Although the study’s authors caution that their figures may underestimate North American cryptocurrency usage, they cite additional data suggesting that cryptocurrency transaction volume is growing disproportionately in developing regions, especially in:
● Asia (China, India, Malaysia, Thailand)
● Latin America (Brazil, Chile, Colombia, Mexico, Venezuela),
● Africa/The Middle East (Kenya, Saudi Arabia, Tanzania, Turkey)
● Eastern Europe (Russia, Ukraine).

Demographics will also likely drive cryptocurrency adoption in the Developing World, home to 90% of the global population under age 30.

Remember The Internet – Investment Bubbles and Bursts Will Identify The Winners
High volatility is inherent in the investment value of this nascent technology, due to factors including technological setbacks and breakthroughs, the impact of pundits, the uneven pace of adoption, and regulatory uncertainty. Bitcoin, for example, generated a four-year annualized return as of January 31st 2018 up 393.8%, a one-year 2017 performance up 1,318% — and year-to-date, a return of down over 50%. Bitcoin has previously experienced even larger percentage drops before resuming an upward trajectory.

In my view, bitcoin and other cryptocurrencies will experience many more bubbles and bursts, in part, fueled by speculators. But the bursting of an investment bubble may signal both a crash and the dawn of a new era. While irrational investments in internet technology in the 1990’s fueled the dotcom bust, some well-run companies survived and led the next phase of the internet revolution. Similarly, I believe a small group of cryptocurrencies and other blockchain applications, including bitcoin, will become integrated into our daily lives, both behind the scenes and in daily commerce.

Although “irrational exuberance” will continue to impact the price of cryptocurrencies, this disruptive technology represents not only the future of money, but of how the world will do business.

policy makers
Transactional and Investment Banking

Developed World Policymakers Place Their Bets

By, Graham Bishop, Investment Director at Heartwood Investment Management

In a busy period for monetary policy news, three of the world’s major central banks held their formal committee meetings this month. What did this mean for investment markets? Graham Bishop, Investment Director at Heartwood Investment Management, the asset management arm of Handelsbanken in the UK, talks us through it. 

Bank of England: A surprise reaction to unsurprising news

The announcement that the Bank of England (BoE) would raise its base interest rate from 0.5 to 0.75% came as little surprise to investment markets, which had almost fully priced in the move. The Bank’s committee members voted unanimously for the UK’s second rate rise since the financial crisis. The committee also agreed to maintain its current levels of corporate and government bond issuances at (£10bn and £435bn respectively), contrary to some earlier media speculation over the potential for quantitative tightening.  

Given that the BoE did exactly as anticipated, and that Carney’s tone at the ensuing press conference was mildly hawkish, the only slight surprise has been the immediate market reaction – a fall in sterling and gilt yields.  While the precise reasons for this response are as yet unclear, it seems that investors were given fresh insight into the BoE’s thought process, with Governor Carney referencing 2-3% as the bank’s estimated neutral rate (i.e. the rate neither accommodative nor restrictive to economic growth). The market’s reaction suggests that it may not entirely agree with these figures. 

Perhaps this is unsurprising, given the lack of visibility ahead for the UK economy. The BoE has also just released its quarterly Inflation Report, in which it claims that CPI inflation is projected to decline towards its 2% target over the next three years. And while a downward trend is a point of general commonality across the BoE’s range of projections, the wide range of potential outcomes put forward means that there is little scope for certainty.

US: Business as usual for the Fed, but fiscal deficits are growing

In another rather predictable announcement, the US Federal Reserve (Fed) held rates steady at its committee meeting earlier this month, while sending a clear message that more rate hikes would be on the way. Amid a rising inflationary environment, in the wake of seven previous hikes, and with presidential tax cuts adding fuel to the fire, the Fed had little to do this time around. Nonetheless, another two rate hikes are expected in 2018.  At only the midpoint of the Fed’s expected rate rise path (according to the committee’s own predictions), the Fed is already close to its neutral policy rate.  

This month also saw the announcement of the US Treasury Department’s debt issuance for the second half of the year, which came in above previous estimates (and with the largest jump since the financial crisis). The Treasury is financing a widening fiscal budget gap on the heels of tax cuts and spending increases, as the government’s deficit blows out towards as possible $1 trillion by 2020. At the same time, the Fed has begun the process of reducing its balance sheet, adding more supply to the Treasury market; while its pace so far has been very gradual, this is expected to pick up. 

US monetary policy on the brink of entering restrictive territory and a rapidly expanding fiscal deficit give us pause for thought should growth falter ahead. For now, the situation is encouraging, but as things evolve we need to think carefully about US equities and related high beta plays.

Bank of Japan: The rebel without a change

The Bank of Japan (BoJ) opted to effectively maintain its current policy on Tuesday, in that it left its benchmark interest rate unchanged. But the BoJ also announced changes to the allocation of its ETF purchases (now favouring the market cap weighted Topix index rather than the price-weighted Nikkei index) as well as slight adjustments allowing greater movement around the 10-year bond yield (20bps either side of zero, as opposed to 10bp). In the latter, markets may have witnessed a small act of monetary tightening by another name. 

The yield on Japan’s 10-year government bonds initially fell following the announcement, but markets changed their mind overnight and yields leapt up to 12bps on Wednesday – their largest jump since August 2016. Equally haphazard was the market reaction to banking stocks – initially negative but with a swift change of heart, as investors seemingly realised the benefits of a move away from a lower yield environment. Further Japanese currency weakness against the dollar was also positive for both Topix and Nikkei indices. This is good news for our portfolios, which slightly favour Japanese equities.

 
Javed Khattak
Finance

A Harbinger of Global Financial Change

A Harbinger of Global Financial Change

Javed Khattak is, among many roles, the Chief Financial Officer for Humaniq, a fintech firm that aims to be the herald of the next generation of financial services. In July, Javed was named as the CFO of the Year for 2018 by Wealth & Finance International Magazine. Following this, we spoke with Javed to find out how he achieved the extraordinary success he celebrates today.

Block Chain

Javed Khattak is a qualified actuary, as a Fellow of the Institute of Actuaries in the UK, and an expert in finance, strategy, risk, investments, technology and start-ups. As a FTSE100 advisor, he is a recognised expert and a strong proponent of blockchain technologies, seeing them as the inevitable next step in the corporate and professional landscapes.

It is, however, his role as CFO of Humaniq that brought him to Wealth & Finance’s attention. Javed starts the interview by outlining the importance of the work he is doing at the firm, “Amongst other roles, I am the CFO of Humaniq, this role has been my primary focus over the last year. Humaniq is a financial inclusion project that, through use of technology in namely blockchain and biometric ID, aims to bring financial services to the unbanked population of the world and has successfully launched in several African countries.”

Perhaps a crucial element to Javed’s work is his advocacy for blockchain technologies, believing them to be the ‘next big thing’; a revolutionary development for innumerable sectors and fields. “Humaniq, and many other innovative ventures, are able to come into existence thanks to this technology. This is in two ways; blockchain first made the initial funding for these companies possible through ICO’s, and alongside blockchain also provides these ventures with the tools and technology to execute their novel ideas and make them a reality.” Through effective utilisation of the technology, Javed sees limitless possibilities with most sectors benefitting from it, including technology, financial services and real estate industries, alongside transforming supply chains and empowering end users (e.g. through control of their personal data).

However, Javed admits that blockchain is becoming stigmatised due to false parties adopting the name to make money quickly; this is a frequent occurrence with an exciting emerging technology but seems to be amplified in the case of blockchain and cryptocurrency. “Blockchain has become a buzz-word which is also attracting the wrong players who are using the opportunity to create outright scams and frauds. We have all seen the various non-blockchain businesses changing their trading names to add the magic word and see their stock prices rise. I believe this will all fade away once the regulators catch up and alongside the non-sophisticated ICO investors or contributors get burnt. Though amongst the noise, there are genuine players of course.”

“Fundamentally, I see blockchain as an enabler. It is still early in the technology’s lifecycle, but once the technology matures, it can and will revolutionise lives. I hope that the blockchain will do what the internet did for information and prove to be the empowering tool that helps decentralise the world’s wealth and resources.”

Javed’s work at Humaniq is only one part of his current workload; he is also the Co-founder and Chief Executive Officer of two companies, Zisk Properties and JKCoach. Javed takes a moment to talk us through his history with them, “I founded Zisk Properties in 2014. Zisk is an innovative property investment business, focusing on providing investment options to people with insufficient savings or a lack of financial understanding to have a more secure future and even get on the property ladder through small steps. It already has a lot of traction, with hundreds of customers and managed to significantly outperform property markets with a weighted average return of just under 20% p.a. since its inception. Having successfully received our UK FCA registration recently, we are in the process of launching in the UK and are already in discussions to launch in UAE by end of 2018.”

“JKCoach was founded several years ago, and is an educational institute that provides coaching, tuitions and diplomas to Pakistani students with the aim to raise the education standards. By end of 2018, we will have over 500 students, with an ambition to expand into the rest of Pakistan and to be able to offer free but quality education to children from families below the poverty line in 2019.”

As you can imagine, being on the executive team of three companies results in a hectic work schedule. For Javed, this is just par for the course, “Busy probably would be an understatement. I am involved in most aspects of the ventures I am leading. Fortunately, having a great team that I can rely on helps a lot. For me, there is no average workday, as each one is very different to the previous one – the only thing that is constant is the number of hours that I am working each day!”

“What I do on any particular day depends on the ongoing projects and work-streams. Example; the past month I have been travelling significantly to speak at or be a panellist at conferences, lead a fundraising round, interviewing and hiring for new roles and spending time with our dev guys for launch of Zisk’s new web platform.”

Javed continues, bringing the interview to an optimistic close; “I am a firm believer in giving back to society – this is why I was initially attracted to Humaniq and precisely why I started Zisk Properties and JKCoach.

“In addition to this, I love technology because either a smartphone or a tablet has become a companion as information is instantly available. Financial services, like money transfers, are more accessible and cheaper. Medical advancements mean a better quality of life and improved longevity for those affected with disease or involved in accidents, and so on. As such, let us all work together to leave a part of us behind through our creativity, fostering new technologies, and not being afraid of challenges – all the while remembering to share happiness, be kind and forgiving to humanity as well as all that is around us.”

Company Details 

Name: Javed Khattak

Web Address: www.linkedin.com/in/javedkhattak

Roles:

CFO of Humaniq

Co-founder & CEO of Zisk Properties

Co-founder & CEO of JKCoach

Investment Director at Stratamis

SteelEye MiFID II
Global Compliance

Reflecting on six months of MiFID II

Reflecting on six months of MiFID II

By Matt Smith, SteelEye

The financial services industry is in the throes of a new era. In January, the biggest overhaul of its operations in the past decade was implemented – the second Markets in Financial Instruments Directive, or MiFID II for short. MiFID II had those in the industry working overtime last Christmas as they scrambled to become compliant for deadline day, but major Exchanges failing to implement the regulation on time, postponement of dark pool caps and reigning confusion meant that, for many, January 3 failed to have the impact that was expected.

In the six or so months that followed, the industry has continued to adapt to this shifting landscape and new elements of the regulation have trickled in. Below, Matt Smith, CEO of compliance tech and data analytics firm SteelEye, explains what’s been happening on the ground since ‘the day of the MiFID’ and what we can expect to see in the future.

 

Best execution

Firms’ best execution requirements under MiFID II are far from over. Regulators have consistently cited execution quality as fundamental to the integrity of the market and, accordingly, MiFID II’s best execution requirements are extensive.

The first of these, RTS28, was implemented on April 30 and required firms to publicly disclose their order routing practices for clients across all asset classes in human and machine-readable reports. This was followed soon after by RTS27, which hit firms on June 30 and requires quarterly best execution reports detailing the ‘sufficient steps’ that have been taken to achieve the best possible results for clients when executing orders. This required the capturing of a remarkable amount of data, a process aimed at increasing transparency and accountability in the industry.

But experts believe it will still be a while longer before the data generated under these reports is sufficiently detailed and consistent enough to have a significant impact on trading behaviour. There have also been problems among firms unsure of what exactly to include in the reports, with many calling for regulators to issue more detailed guidance. Perhaps the next quarterly disclosures under RTS27, due in September, will make bigger waves.

 

Research unbundling

MiFID II’s unbundling rules have, so far, been the most controversial. Under these new rules, firms need to make explicit payments for investment research in order to prove that they are not being induced to trade – meaning free research is no more.

This created a number of hurdles for buy and sell-side firms, which set about creating frameworks to evaluate the materials they produce, distribute and consume in order to understand whether or not it now needs to be paid for under MiFID II. Currently the impact on the market is unclear, but there has been early evidence of an increase in M&A activity as providers tie up their services to expand sector coverage, and the more frequent use of tech to maximise existing research platforms.

The FCA has already announced a review into the application of these new unbundling rules. This is somewhat unsurprising, given that firms were issued with no guidance on how they should negotiate and price their research under MiFID II.

 

Dark pool transparency

One of the major focuses of MiFID II was to force equity trading back onto public stock markets by reducing the use of dark pools in favour of lit book trading venues. Early evidence suggests that the share of trading on lit exchanges hasn’t risen since January, still comprising around 50% of all trades.

But, price swings have fallen, as have trading volumes in dark pools. Additionally, the LSE’s total lit order book ADV rose to £6.2bn in the first quarter of 2018 – the exchange’s highest quarterly performance in a decade. This indicates that MiFID II’s impact on transparency has been mixed. While the overall proportion of trades executed in the dark versus lit venues hasn’t changed significantly, the proportion of LIS trades is higher.

It’s also necessary to factor in the delayed implementation of these new dark pool caps, which were postponed from January to March – meaning their full impact may not yet have been shown, and Q1 summaries will not necessarily illustrate what is currently happening on the ground. We may have to wait longer still to see whether the industry has seen the light, or will continue to operate in the dark.

 

Systematic internalisers

Despite the January rush, systematic internalisers (SIs) haven’t yet been fully implemented under MiFID II. This was due to come in September, by which point any firm labelled as an SI would have to comply with their new obligations, but ESMA announced in July a further delay to the new rules.

Now, derivatives have until March to comply with the requirements and ESMA will not publish its calculations for derivatives until February due to ongoing issues with incomplete and inadequate data. This isn’t a let-off for the entire industry, though; instead of publishing all the rules, ESMA is focusing on completeness for a select number of asset classes and delaying others. Equity, equity-like and bond instruments will still have to be compliant by September 1.

 

Going forward

If MiFID II has proven anything, it’s that compliance is, more than ever, an evolving process not a one-off event. In the coming weeks, months and years MiFID II will remain an ongoing challenge for firms and strategic and operational flexibility will be needed if they are to flourish.

MiFID II absolutely has the potential to have a significant and positive impact on the industry. But collaborative partnerships, innovation and further guidance from regulators are critical to this impact being realised. In July a formal complaint was lodged against the FCA for its silence on MiFID II, and undoubtedly for those firms making the right efforts to comply with the new rules this lack of clarity is frustrating.

 

There is hope in the industry that, once clarification is provided and regulation requirements are gradually met, focus will shift from merely complying, to embracing the opportunities provided by MiFID II’s new framework. As the dust settles and uncertainty fades, a more transparent, competitive and trustworthy industry should, hopefully, emerge. 

marketing roi
Finance

ROI from marketing across various sectors

How ROI Can Vary Across Different Sectors

£115.9 million went towards direct mail marketing and online platforms in the UK automotive industry in 2016. That’s according to figures from Google’s Car Purchasing UK Report from April 2017. Of course, the car industry has a massive budget at their disposal when it comes to marketing, one that not all industries can match. Plus, with so many people vying for a digital presence, the cost of online marketing is rising. Is it really worth the cost? Audi servicing plan providers, Vindis, explores the matter across many sectors.

Automotive industry
Car shoppers are heading more and more to the online world than ever before, according to Google’s Drive To Decide Report. Over 82% of the UK population aged 18 and over have access to the internet for personal reasons, 85% use smartphones, and 65% choose a smartphone as their preferred device to access the internet. These figures show that for car dealers to keep their head in the game, a digital transition is vital.

The report also showed that 90% of car shoppers researched online before buying. 51% of buyers start their auto research online, with 41% of those using a search engine. To capture those shoppers beginning their research online, car dealers must think in terms of the customer’s micro moments of influence, which could include online display ads – one marketing method that currently occupies a significant proportion of car dealers’ marketing budgets.

In fact, 11% of the total UK Digital Ad Spending Growth in 2017 was from the car industry, according to eMarketer, which puts the industry second only to retail. The automotive industry is forecast to see a further 9.5% increase in ad spending in 2018.

But is online really impacted a buyer’s choices? 41% of shoppers who research online find their smartphone research ‘very valuable’. 60% said they were influenced by what they saw in the media, of which 22% were influenced by marketing promotions – proving online investment is working. But traditional methods of TV and radio still remain the most invested forms of marketing for the automotive sector. However, in the last past five years, it is digital that has made the biggest jump from fifth most popular method to third, seeing an increase of 10.6% in expenditure.

Fashion industry
Fashion retailers need to keep an eye on online investments, as the online world is strong for the fashion industry – ecommerce accounted for £16.2 billion in sales for the sector in 2017. This figure is expected to continue to grow by a huge 79% by 2022. So where are fashion retailers investing their marketing budgets? Has online marketing become a priority?

The British Retail Consortium stated that ecommerce made up nearly 75% of all purchases for December 2017. Online brands such as ASOS and Boohoo continue to embrace the online shopping phenomenon. ASOS experienced an 18% UK sales growth in the final four months of 2017, whilst Boohoo saw a 31% increase in sales throughout the same period.

Brands like John Lewis, Next, and Marks and Spencer have set aside millions towards their online presence, in order to make the most of the rise of online shopping. John Lewis announced that 40% of its Christmas sales came from online shoppers, and whilst Next struggled to keep up with the sales growth of its competitors, it has announced it will invest £10 million into its online marketing and operations.

People don’t enjoy the idea of wandering the high street anymore. Instead they like the idea of being able to conveniently shop from the comfort of their home, or via their smartphone devices whilst on the move.

Influencers are becoming a big thing for fashion marketing too; PMYB Influencer Marketing Agency noted that 59% of marketers for the fashion world ramped up their spend for influencers last year. In fact, 75% of global fashion brands collaborate with social media influencers as part of their marketing strategy. More than a third of marketers believe influencer marketing to be more successful than traditional methods of advertising in 2017 – as 22% of customers are said to be acquired through influencer marketing.

Utilities industry
Comparison websites are an important part of picking utilities suppliers for customers, so gaining and retaining customers falls on those websites. With comparison websites spending millions on TV marketing campaigns that are watched by the masses, it has become vital for many utility suppliers to be listed on comparison websites and offer a very competitive price, in order to stay in the game.

Compare the Market, MoneySupermarket, Confused.com, and Go Compare make up the largest comparison sites as well as being in the top 100 highest advertising spenders in the UK. Comparison sites can be the difference between a high rate of customer retention for one supplier and a high rate of customer acquisition for another. If you don’t beat your competitors, then what is to stop your existing and potential new customers choosing your competitors over you?

One of the Big Six energy suppliers, British Gas, has changed its main focus from new customer to retaining customers. Whilst the company recognise that this approach to marketing will be a slower process to yield measurable results, they firmly believe that retention will in turn lead to acquisition. The Gas company hope that by marketing a wider range of tailored products and services to their existing customers, they will be able to improve customer retention.

This priority change is reflected in British Gas’s decision to invest £100 million into their customer loyalty scheme, to reward those who stay with them. The utilities sector is incredibly competitive, so it is vital that companies invest in their existing customers before looking for new customers.

Google’s Public Utilities Report in December 2017 showed how the utilities sector has strengthened online, with 40% of all searches occurring on mobile, and 45% of ad impressions delivered on mobile. As mobile usage continues to soar, companies need to consider content created specifically for mobile users as they account for a large proportion of the market now.

Healthcare industry
Marketing in the healthcare industry is a far cry from any other sector in terms of restrictions. The same ROI methods that have been adopted by other sectors simply don’t work for the healthcare market. Despite nearly 74% of all healthcare marketing emails remaining unopened, you’ll be surprised to learn that email marketing is essential for the healthcare industry’s marketing strategy.

Around 2.5 million people have email as their main communication method, and the number is rising. This means email marketing is targeting a large audience. For this reason, 62% of physicians and other healthcare providers prefer communication via email – and now that smartphone devices allow users to check their emails on their device, email marketing puts companies at the fingertips of their audience.

With one in 20 Google searches being for health content, it’s definitely worth the investment of the healthcare industry to be online. This could be attributed to the fact that many people turn to a search engine for medical answer before calling the GP. In relation to this, Pew Research Center data shows 77% of all health enquiries begin at a search engine – and 72% of total internet users say they’ve looked online for health information within the past year. Furthermore, 52% of smartphone users have used their device to look up the medical information they require. Statistics estimate that marketing spend for online marketing accounts for 35% of the overall budget.

And that’s without considering social media marketing. Whilst the healthcare industry is restricted to how they market their services and products, that doesn’t mean social media should be neglected. In fact, an effective social media campaign could be a crucial investment for organisations, with 41% of people choosing a healthcare provider based on their social media reputation! And the reason? The success of social campaigns is usually attributed to the fact audiences can engage with the content on familiar platforms.

Should you invest?
Online marketing is clearly vital for many sectors, particularly for fashion and car sales. With a clear increase in online demand in both sectors that is changing the purchase process, some game players could find themselves out of the game before it has even begun if they neglect digital.

There’s a lot more to consider, particularly for utilities. Whilst TV and digital appear to remain the main sales driving forces, its more than just creating your own marketing campaign when comparison sites need to be considered. Without the correct marketing, advertising or listing on comparison sites, you could fall behind.

The average firm in 2018 is set to put an estimated 41% of their marketing budget towards online strategies, and this is expected to rise to 45% by 2020, says webstrategies.com. Social media advertising investments is expected to represent 25% of total online spending and search engine banner ads are also expected to grow significantly too – all presumably as a result of more mobile and online usage.

How do you view the investment? If mobile and online usage continues to grow year on year at the rate it has done in the past few years, we forecast the investment to be not only worthwhile but essential.

Sources
https://pmyb.co.uk/global-fashion-company-influencer-marketing-budget/
https://www.prnewswire.com/news-releases/the-uk-clothing-market-2017-2022-300483862.html
http://uk.fashionnetwork.com/news/Online-is-key-focus-for-UK-fashion-retail-investment-in-2017,783787.html#.WrOjxOjFKUk
http://www.mobyaffiliates.com/blog/retail-accounts-for-14-2-of-digital-advertising-spending-in-the-uk-in-2017/
http://www.thisismoney.co.uk/money/bills/article-2933401/Energy-price-comparison-sites-spend-110m-annoying-adverts.html
http://www.thedrum.com/news/2017/03/28/british-gas-shifts-acquisition-retention-marketing-know-the-value-keeping-the-right
https://www.independent.co.uk/news/business/news/uk-companies-online-advertising-spend-10-billion-more-last-year-2016-pwc-a7678536.html
https://www.webstrategiesinc.com/blog/how-much-budget-for-online-marketing-in-2014
https://www.kunocreative.com/blog/healthcare-email-marketing
http://www.evariant.com/blog/10-campaign-best-practices-for-healthcare-marketers
https://getreferralmd.com/2015/02/7-medical-marketing-and-dental-media-strategies-that-really-work/

tax entitlements
Tax

Tax entitlements you could be missing out on

Discover 5 tax entitlements you could be missing out on!

By Tony Mills, Director, Online Tax Rebates​

Whether you’re a CIS or PAYE worker, you may be surprised at what expenses you can claim back and the money you can save in your pay packet each month.

Here’s a simple guide to what tax relief you could be missing out on and how to claim:

 

  • Professional memberships

Not only can signing up to a professional membership help you move quicker up the career ladder – and get paid more – you may also be due money back on any fees.

If you’re a member of a professional body like the Federation of Master Builders, The Chartered Institute of Building or National Federation of Builders for example and pay the subscription fees yourself, you can make a claim…worth 20 percent to a basic rate taxpayer.

If you have not claimed previously, you may be able to make a claim for the last four years. HMRC usually make any adjustments needed through your tax code for the current tax year. If a claim is made after the end of the tax year, this will be repaid by way of a payable order or bank transfer.

 

  • Capital allowances

 Many contractors are missing out on valuable tax relief due to their lack of knowledge around capital expenditure. This can have a significant impact on finances.

If you’re a builder working under CIS, for anything you purchase for business use – such as equipment, machinery and vehicles – you’re eligible to claim capital expenses.

You can claim an allowance of up to 100 percent in the year of purchase on certain items although cars are restricted to 18 percent per annum in most cases. Assets you owned before you started the business may also be claimed if you now use them for your business.

 

  • Tools & Equipment

 Your tools; where would you be without them? If you have to purchase your own tools, you may be due a tax refund on their cost, as well as money back on the costs of maintenance and replacement.

If you’re a PAYE worker, you can make a claim if the same or similar item is not available from your employer. Whereas if you’re a CIS worker, you can claim all tools as an expense.

 

  • Uniform

If you wear a compulsory branded uniform and/or protective clothing at work or on-site, you could be due a one-off rebate for the upkeep. This can be backdated to the last four tax years and received as a single payment, while any future claims will be paid in wages.

Limits on claims vary by industry but the standard flat rate expense allowance for uniform maintenance is £60 for this tax year, meaning basic-rate taxpayers can claim £12 back and higher-rate payers £24. It only takes a couple of minutes online to check using an online calculator.

 

  • Travel

By trade, you’re unlikely to be working from a fixed address every day. The cost of travelling between home and the site you’re assigned to may be claimed as an expense for tax purposes.

 

A workplace is considered temporary if your contract is below 24 months. If your contract length is uncertain, the workplace will be seen as a temporary workplace until you have been there for 24 months, it would then be considered permanent.

Be sure to keep any travel or fuel receipts to make an expense claim via your employer.

 

  • Finally, stay safe…

Don’t fall victim to fraudsters who are sending fake emails and text messages promising tax rebates.

Never hand out any personal or payment details to companies you haven’t approached personally before or to HMRC who will only ever contact you via post or your employer.

Why Direct Lending is so Attractive to Investors
Transactional and Investment Banking

Why Direct Lending is so Attractive to Investors

At a time when investment and wealth preservation is as challenging as ever, direct lending offers an alternative for asset managers looking to invest.

There is a growing trend for non-bank lenders to loan money to companies, cutting out the middleman. Indeed, institutional investment is now the direct lending in the UK as it has been seen as a way to source alternative finance and funding for a variety of industries.

Direct lending started in the UK in 2005 with consumers borrowing from other consumers. Today, borrowers have increased and widened across many asset classes and the types of lenders have also expanded.

Direct lending is often now used to describe P2P lending and this reflects the growing number of diverse lenders keeping up with the high demand from borrowers.

Direct lending offers an attractive investment opportunity, gaining:

– Higher returns than a savings account could
– Lower volatility than stock markets

Likewise, borrowers are attracted by the lower rates and quick loan decisions.

Why direct lend?

Other investment options aren’t as reliable as they used to be so it has become prudent to invest elsewhere.

Stock markets remain volatile and therefore now difficult to find a safe-haven for money.

Add to this the decreasing yields on the usual ‘go to’ investment products and savings accounts that now offer little return.

Furthermore, Q4 2017 saw inflation rise to 3.0% – with the ever threat of increasing inflation. 

Direct lending is also attractive when compared to other credit-grade investment choices:

A gap in the market was seized

Traditional banks have cut back on business lending in recent times, especially to SMEs, as tighter regulations have changed the post-financial lending culture. These tighter regulations aim to reinforce bank capital requirements and reduce leverage.

This has created an opportunity for alternative lenders and this gap in the market is being seized by investors who are offering loans to mid-market companies as an answer to low-yield problems.

Direct lenders can work under more favourable circumstances, therefore taking on the companies with high leverage simply because they don’t have to adhere to capital requirement guidelines. This results in more attractive returns for the investor.

Direct lending isn’t a passing fad

Direct lending was relatively untapped until recently, but research by the Alternative Credit Council (ACC) has led them to predict that global lending is expected to break the US $1 trillion mark by 2020.

The UK direct lending market is substantial and has grown considerably in recent years – with plenty of room for direct lending to continue to grow further.

The UK direct lending market accounted for £4.5 billion of lending in 2017 – this is an increase of 21% in a year.

Europe is catching up

In 2017, European direct lending grew to around US $22bn, alongside the growth of mergers and acquisitions amongst SMEs. With SMEs seeking alternative ways to finance this growth the two are intrinsically linked.

Institutional lenders now account for more than half of the direct lending in the UK – yet the UK media still remain skeptical about the industry. One of the reasons for this is that direct lending is often mistakenly confused with equity crowdfunding in the media.

Direct lending is much more established in the US and Asia and Europe is set to follow. In fact, shrewd P2P investment is helping clients who may not be able to get finance from banks and this in turn is injecting sluggish economies.

The borrowers benefit from loans that are secured and have straightforward and open arrangement fees from the start.

In turn, investors have the potential for attractive yields, low volatility and low correlation compared to other asset classes:

European direct lenders are teaming up to chase bigger deals and more high-profile firms. For example Zenith Group Holdings Ltd and Non-Standard Finance Plc used direct lenders to meet their financial needs.

An increasing number of investors

Direct lending started with asset managers lending to mid-market companies and therefore filling in the gaps left by the banks. Now other types of companies such as P2P platforms are joining in and taking up the market for smaller loans, while the asset managers have the expertise for the larger loans – creating an even more prosperous and thriving investment climate.

In fact, in 2017 there were more than one hundred direct lending platforms facilitating more than £4.5 billion of lending.

In turn, fund managers can offer bigger loans as the money flows, making direct lending more attractive with potential for returning clients.

Untapped potential

There is plenty of untapped potential from retail gatekeepers who have yet to wholly embrace direct lending:

Are there any downsides to direct lending?

The extra leverage that makes direct loans more attractive to a borrower, is also a higher risk to take if the economy takes a dive.

The need for direct loans grew from the banks refusing businesses simply due to tightening of restrictions – these were safe and dependable businesses that were suddenly cut off when previously they wouldn’t have had a problem. However, due to a more competitive and growing direct lending market, a growing number of direct lenders seek out the higher-risk financing to companies in trouble.

What does the future hold?

The rate of growth in the direct lending market is slowing, but this is all for the greater good as a ‘flight to quality’ is predicted as better lending platforms outperform weaker or less scrupulous ones.

However – there is still plenty of room for growth long term as reflected in the forecasting statistics.

In 2018, there will likely be an increase in collaboration between direct lenders and traditional lenders – they will complement each other – with banks seeing direct lending as a source of capital.

Another factor will be the concept of open banking which is spreading with a ripple effect across the financial world. For example, the UK’s Open Banking Initiative promotes the use of open application programming interfaces (APIs) to provide access to bank customers’ transaction data. This is certainly something to watch in the future with regard to how direct lenders can use this valuable data.

Direct lending will certainly experience change as it evolves in the coming years, but it is here to stay as an alternative investment opportunity which offers good returns – and ultimately it is uncorrelated and relatively liquid in comparison to other classes.

Exo Investing
Transactional and Investment Banking

Recent launch of Exo Investing

  • Launch of Exo leap-frogs existing online retail wealth management services in landmark moment in the democratisation of investment technology
  •  Exo’s unique use of AI offers investors  a truly individualised, adjustable ETF portfolio, daily risk management and absolute transparency, for a low online fee

It was confirmed today that the investment backing the development and launch of the ground-breaking ‘Exo Investing’ retail digital wealth management platform included a private investment from Benjamin and Ariane de Rothschild.  

This investment was alongside that from the founders of Madrid-based ETS Asset Management Factory who supply Exo with its Quantitative investing technology and capabilities and the former heads of the La Compagnie Benjamin de Rothschild SA, Daniel Treves and Hugo Ferreira, who is also the Chairman of Exo Investing.   

The launch of Exo Investing earlier this year saw retail private investors gain access – for the very first time – to the same sophisticated AI-powered Quantitative investment and risk management technology developed over 30 years by quantitative investment manager ETS for institutional investors and the wealthy clients of Private Banks.

Acting as an expert ‘investment co-pilot’,  Exo’s use of AI sets  it apart from even the most sophisticated of the existing robo-advice platforms, introducing new standards of control, personalisation and risk management.

Moving away from the traditional model of static products and predefined portfolios, Exo instead builds each investor a personal, adjustable portfolio of ETFs based on their own investment preferences. Each portfolio is then monitored 24/7 and recalibrated as frequently as daily to both the individual’s risk appetite and changing market conditions, continually managing each client’s long term risk.

Lennart Asshoff, CEO of Exo Investing said“This investment paves the way for Exo to continue developing this ground-breaking solution for the retail market. Opening the door for thousands of private investors to the important benefits that Quantitative investment science offers is very satisfying having seen what a pivotal difference it can make to investment outcomes during my years working at ETS.

“This level of individually tailored portfolio and risk management has never been available to the retail investor before.  The wider public have never been more reliant on their personal investments for their future financial security and we want to open the door to a new category of investing for as many people as possible,  making truly personalised investing available at scale.”

Hugo Ferreira, Chairman of Exo Investing said“Exo Investing is an exciting example of how the latest advances in technology – from artificial intelligence to the growth in computing power available through the cloud – can be utilised to democratise access to the best services available. For years we have wanted to find a way to provide the huge financial advantage that ETS’s systems deliver to a much wider audience, and Exo is just that. The Fintech zone has a track record of democratising finance and we are proud of Exo as the latest and one of the more significant additions, this time in the increasingly crucial world of private investing.

“My long career managing risk for large organisations around the world has taught me that to successfully ride out market turmoil like the 1987 crash, the internet crises of 2001 and the sub-prime debacle of 2008, you need humility, discipline, transparency and risk control.  I found these in spades 20 years ago in the quantitative investing models developed by ETS.  Now Exo is utilising AI and recent  increases in computing power to offer the same portfolio management technologies to a far wider market and at a highly competitive price.  This is a watershed moment for the private investor.”      

With a potential market size of more than 3.2 million private investors in the UK,  and armed with an obviously superior yet competitively priced proposition,  Exo is set to shake up the existing online investing market significantly.  No existing platform, of whatever scale, offers the private investor so much for so little. As this fact becomes more widely known by the UK’s mass affluent market, Exo is set to  build enviable scale and accolades for transforming outcomes for the private investor.

FairFX
Banking

FairFX launches international business account

  • FairFX to build upon its banking capability with introduction of the Fair Everywhere business current account
  • Fair Everywhere removes the barriers to do business across borders with multi-currency wallets and foreign exchange fees that save businesses time and money
  • Secure Mastercard cards allow customers to streamline business spending around the world
  • Millions of SMEs will no longer have to be penalised by banks which charge extortionate fees

International multi-currency payments provider, FairFX is today announcing the launch of its new global business current account.

The Fair Everywhere business account brings together FairFX’s expertise in international payments with services designed to make global business banking easier, faster and cheaper for those who don’t want borders to limit their business ambitions.

The new Fair Everywhere account allows you to:

  • Manage all your day-to-day business banking and international money transfers in one current account with balances in Sterling, Euro and US Dollar.
  • Open your doors to the world with foreign exchange rates that are game changing for business’ bottom lines.
  • Bank with a business that works as hard as you do – customers have unlimited access to a UK-based customer support team Monday to Saturday.
  • Spend in over 210 countries worldwide with a chip & PIN secure Mastercard debit card
  • Fit your banking around you with the Fair Everywhere mobile app.
  • Get 3.5% cashback rewards from over 50 UK high street retailers simply for doing business as usual.
  • Automate your bill payments through direct debits or standing orders directly from your account.

The account is initially only available to 1,000 customers with existing FairFX Business customers offered priority access. Other businesses can sign up to join the waiting list. 

Ian Strafford-Taylor, CEO of FairFX said: “The Fair Everywhere account is for businesses that don’t see barriers in borders. We’ve brought together the best of both our banking and currency platforms and kept it simple with a straight forward, all inclusive price of £50 per month for an all singing, all dancing account that works as hard as you do.

“We know that most SMEs are not limited by their ambitions and as such they should not be limited by working with banks that penalise them with extortionate fees, complex pricing structures and poor service.”

“We will be launching additional subscription tiers for businesses turning over different amounts and introducing a pay-as you-go pricing option very quickly, to ensure we provide a flexible service that helps our customers be more effective.”

“With Fair Everywhere, we have taken our winning formula of combining market leading value with unmatched service standards and applied it to the underserved SME banking market. This international business account makes it easy for SMEs to manage their day-to-day finances as well as their international payments at exchange rates that are what we believe to be the fairest around and all from a single account.”

“The Fair Everywhere cards will also be issued by the FairFX Group after the Group became a principal member of Mastercard in 2017, which gives us even more control over our supply chain to enhance the product and customer experience.” 

“This launch is a big step for FairFX towards building out our banking and payments offering, and we’re excited about growing with our customers.”

Visit Fair Everywhere to find out more about the international business account.

Social impact
Sustainable Finance

Younger Entrepreneurs Choose Social Impact As Their Top Business Priority

A new wave of global entrepreneurs are setting up their businesses with the aim of making a positive impact on society, according to a new report from HSBC Private Banking. The Essence of Enterprise report found that the younger generation of entrepreneurs are leading this trend, with 24% of entrepreneurs aged under 35 motivated by social impact compared to 11% of those aged over 55. The report, now in its third year, is one of the largest, in-depth studies into the motivations and ambitions of entrepreneurs, researching the views of over 3,700 successful entrepreneurs in eleven countries. The report also found that this new generation of entrepreneurs is embracing angel investing, viewing it as a way to connect and collaborate with their peers.

A socially minded brand of entrepreneurship

One in five entrepreneurs considers social responsibility, being active in the community, or environmental responsibility as their top priority as a business owner, rather than prioritising areas such as maximising shareholder value or economic prosperity. Those who prioritise social impact have a greater propensity to engage in angel investing, (55% of impact-focused entrepreneurs versus 44% of entrepreneurs who prioritise commercial factors), and report a stronger willingness to rely on mentors for advice and support (75% of impact-focused entrepreneurs versus 66%).

The report also suggests a strong relationship between an emphasis on social impact and entrepreneurial ambition. 33% of the entrepreneurs projecting high growth ambitions state that they started their ventures with the intention of creating positive social impact, compared to 28% of those projecting the lowest growth. This suggests social impact should be seen as an integral part of the recipe of entrepreneurial success, and not separate from it.

A new investment style

Almost half of respondents (47%) have invested in other private, non-listed businesses, funnelling both capital and expertise back to the entrepreneurial community. However, the research reveals that a new younger generation of entrepreneurs is investing at a much higher rate than their older peers, with 57% of entrepreneurs under 35 undertaking angel investing compared to 29% of entrepreneurs aged over 55.

Differences also exist between the generations in how they perceive and approach angel investing. Over half of younger entrepreneurs (57%) view angel investing as a way to connect and collaborate with peers, staying up to date with industry progress and disrupters and to grow their knowledge and expertise.  Entrepreneurs of an older generation view angel investing as a way to diversify and grow their investment portfolio, approaching angel investing in a more informal style, through their own network of personal contacts. 43% of those over 55 view friends as the best route to new business, while 44% of those under 35 turn instead to professional advisers to source new investment opportunities.

HSBC Private Banking Global Chief Investment Officer Stuart Parkinson said: ‘It’s clear younger entrepreneurs want to do good, and we would be wrong to dismiss this as youthful idealism that will act as a brake on financial success.  They know that their business cannot have the impact they want without sustainable growth, and they are focussed on achieving both. They see a similar virtuous circle when it comes to angel investing; they are happy to invest in the wider business community, to contribute to each other’s successes and to learn from one another.”

Differing approaches across the globe

The report also brings to light the differences in the entrepreneurial mind-set in markets around the globe. Entrepreneurs in the Middle East (66%) are the most active angel investors, with the US (54%) and Mainland China (53%) next in line. By contrast, 45% of UK entrepreneurs are angel investors, along with 35% in Germany and 33% in Switzerland.

Regional traditions have paved the way for different approaches to angel investing between these markets. In the US, angel investing is highly professionalised; investors source new opportunities through formal channels, such as financial or professional advisors. In comparison, entrepreneurs in the Middle East source new opportunities informally, mainly through friends (Use financial advisors US 51%, Middle East 38%) (Use friends US 45%, Middle East 53%) They also perceive their role to be supportive, cultivating business development and leadership skills. In the US, entrepreneurs view their role as a challenger, optimising the performance of the management team by challenging their thinking and strategy.

In Europe, investors are more likely than those in other regions to perceive angel investing as a way to grow and diversify their portfolio, rather than as a way to build their network and share expertise.

In relation to social impact, entrepreneurs in the US and China show a greater emphasis on environmental concerns – 8.1/10 prioritise environmental issues in their business planning compared with 6.7/10 in the UK, Singapore, Switzerland and Australia. When asked about their desire to contribute to communities, entrepreneurs from the Saudi Arabia (64%) and UAE (62%) are most likely to reference being active in the community and civil society as important to their business operations compared to the global average of 44%.

vc funds
Equity

Build a better VC and founders will beat a path to your door

More capital seeking hard and fast returns

With returns from traditional asset classes eroded by low interest rates, there’s plenty of dry powder looking to ride the tech wave while it lasts. Amongst the riskier asset classes, (notwithstanding the cash flooding into cryptos and ICOs), VC is becoming an increasingly attractive destination for capital seeking hard and fast returns.

As an indicator, VC assets under managements have tripled in just 3-4 years, while corporate venturing is back with a vengeance. Pitchbook data also shows that recent VC vintages are distributing capital back to LPs at a much faster pace than older ones, as well as carrying down more than 70% of their capital by the third year of investment.

Compared to the return timelines of adjacent asset classes, one can see why VC presents an attractive alternative, especially with the average Private Equity fund taking a staggering nine years to achieve a Distribution to Paid-in Capital (DPI) of 1.0x.

The ‘Halo Effect’ of traditional venture capital

Fund performance data shows only a dozen of the top VC firms generate consistently high profits. Between 3-5 percent of firms generate 95% of the industry’s profits, whilst the big name funds in the upper decile rarely change.

In a world where these firms are only as good as their last unicorn, this creates a ‘halo effect’ around a handful of well-known, long-standing funds, making it much harder for new entrants with no track record to attract exceptional founders. Meanwhile, a VC fund requires a 3x return to be considered a good investment by LPs, creating a lot of pressure to identify outliers and invest in “fund returners”.

So what defines a VC fund’s success? Is it all about picking winners? Do the top funds have a magic-8 ball to predict the next big market, or the hottest new tech? Or are markets there for the taking, with interest from the top funds compounding valuations through a self-fulfilling prophecy? Surely, it’s all down to the agency of brilliant founders, who gravitate towards the funds with the most capital and the best advice?

VC’s differentiation challenge

While it is hard to assess the additionality of advice over cash, at a later stage, picking winners is notably easier: more mature startups are typically generating revenue (though still unprofitable) and have moved beyond the most uncertain market and product development stages. The odds of a successful exit are also higher, with average loss-rates down to 30% and shorter holding periods (six years, on average).

However, it is also harder for funds at this level to differentiate themselves and attract the best founders looking for the ‘smartest capital’ (cash + advice), although normally it defaults to whichever fund offers the highest valuation. So “if the pound in my pocket is no different to the pound in yours”, how can funds articulate their ‘value add’?

Scanning websites of the best-known funds, they highlight their talent network and team of GPs, but it’s the fund’s track record that stands out, but in practice, the additionality of cash plus advice is extremely intangible.

Since 2009, a handful of US funds, (most notably Andreessen Horowitz) have started to buck the trend, working harder for their portfolio, hustling for them, providing introductions to their network of customers, acquirers and next round money. At the same time, the rise of the micro-VCs (investing across the pre-Series A spectrum) has also crossed the channel into the UK and Europe. However, instead of following an identikit model, these funds are finding a better way…

The earlier the better?

Considering the circumstances, investing earlier makes a lot of sense, not least for pursuing fresh pastures, but also for the most capital efficient returns, where investors can justify a higher reward for the increased risk they are taking, following on relentlessly in the winners of each portfolio.

However, the risks aren’t trivial, and according to Pitchbook, the loss rate amongst pre-series A startups is greater than 65%. Mark Suster, an investor at Upfront Ventures, captures this in his “1/3, 1/3, 1/3” principle: He expects one-third of his investments to be written down to zero, one-third to return the principal, and the remaining third to deliver most of the returns.

There’s no shortage of microfinancing available to pre-seed (“idea” stage) startups (crowdfunding, ICOs, angels, grants, accelerators), but it takes more than just cash + advice to build a rocket, and traditional VC funds are not set up to operate at this level.

Breaking the “two and twenty” model

While accelerator models attempt to plug the gap, investing small amounts of cash, and providing advice via their support networks, they don’t provide startups with the rocketfuel they need. There are also more sophisticated ways of investing than placing small cheques on lots of different bets. VC can add a lot at this level, but at pre-seed and seed, the traditional venture capital model breaks down for three main reasons:

  1. From a risk-return perspective, fund economics don’t work. For most funds, it would require an unmanageable number of deals to beat the odds of a 35% success rate, and still return 3x to the the fund.
  2. The traditional VC workflow doesn’t scale: a handful of GPs/investors receiving polished pitch decks and warm introductions from well-networked founders stands in stark contrast to the thousands of “idea stage” submissions, and systematic screening efforts required. There’s a huge amount of serendipity involved, and this needs to be ‘designed in’ at scale.
  3. Most importantly, startups at this stage require more than just cash + advice. Founders need help to build stuff, and that requires resources most funds can’t sustain out of the traditional two and twenty model.

De-risking through operational support

At Forward Partners, we believe there’s a better way to support early stage founders. Charging a higher management fee to LPs (the percentage of their investment that contributes towards a fund’s operating expenses) unlocks a unique value-add in a team of operators. This allows funds to offer tech, growth and product expertise as well as the hands-on help that founders need in their first year of operations.

By offering a ‘scale up team in miniature’ with experience across UX, design, full-stack development, talent, growth, PR and comms, a VC can truly help to mitigate the mistakes made by early stage startups, build stronger foundations for startups.

About Forward Partners:

Forward Partners is the UK’s leading early-stage VC fund, providing a game changing combination of capital and operational support to supercharge tech startups. Our unique model is helping to build the UK’s next generation of talented AI, e-commerce and marketplace businesses.

proserv
Private ClientWealth Management

Preserving a Heritage of Excellence

Preserving a Heritage of Excellence

Proserv is a global leader with a worldwide presence, offering a fresh alternative in the delivery of engineering and technical services to the energy, process and utility markets. We spoke to Andy Anderson, Regional President MEA at Proserv, to find out more about the company and its innovative services.

Andy, could you begin by providing our readers with a brief overview of Proserv Middle East and the services you offer?

“Proserv is a global leader and a fresh alternative in the delivery of engineering and technical services to the energy, process and utility markets, supporting clients throughout the lifecycle of their assets. We operate in six regions throughout 22 facilities and 12 countries, offering 24/7 local support services. Core to the Proserv offering is our ability to manufacture, deliver and support solutions locally through our highly experienced pool of technicians and engineers.

“We have been based in the UAE for over 25 years, largely servicing customers across the energy sector, including offshore and onshore services, equipment design and manufacturing. Proserv has supplied the vast majority of installed wellhead controls in the region through its legacy brands – Brisco, CAC and eProduction Solutions.

“We deliver a broad range of hydraulic safety shut down systems for wellheads, chemical injection systems, downhole and surface sampling systems, from bases across the region; all of which are backed up by a strong technical team who are able to install, commission and maintain equipment in the field.”

Talk us through your approach to client service. How do you maintain the high standards synonymous with the Proserv brand?

“Meeting and exceeding our clients’ expectations is vital to ensuring our ongoing success. We strive to develop and maintain this through establishing business relationships built upon experience, competency and trust. We focus on regular face-to-face engagement with our clients, taking the time to understand their requirements.

“We then revert with a solution that is in line with our company ethos – Ingenious Simplicity. This concept is based upon challenging convention in an industry that continues to ‘over engineer’. Ingenious Simplicity is about being flexible and responsive to clients’ needs, while reducing unnecessary levels of complexity in order to get the job done in a cost effective manner.”

Following on from this, what is it that makes Proserv Middle East unique? How do you distinguish yourselves from your competitors, and present yourselves as the best option for your clients?

“Proserv has an extensive brand heritage spanning over 40 years. Through our acquisitions, we have shown the importance of embracing this heritage alongside a commitment to constantly evolve and develop innovation.

“A key topic in our industry right now is ageing wells, and as a result E&Ps are searching for adequate partners to support their OEM requirements, without full system replacement. Many parts for the old wells are now obsolete or superseded and so Proserv has recognised this and positioned itself as a partner of choice who can re-engineer the part required to maintain production.

“Also, we actively listen and collaborate with our clients to find cost effective solutions for their maintenance and production issues. A great example of this was the development of our cost-effective Smart Box solution. Also, we are currently working on the development of an Asset Enhancement Global Intelligence Solution (AEGIS), which will be released, to our customers this June.

In order to provide quality services, exceptional staff are crucial, so please tell us more about the culture within Proserv Middle East and the things you do to maintain and develop it. What do you look for when attracting new staff and how do these traits help them integrate into your company?

“Our growth is driven by a team of dedicated and talented people who provide the company with expertise in engineering and business, creating pioneering solutions that allow us to remain competitive. As a service EPC, our people are our biggest asset and we nurture an environment that encourages creativity and employee-driven innovations.

“In the UAE, we employ more than 20 different nationalities and unite through a clear set of values. The five values – encompassing teamwork, service, communication, entrepreneurship and right thing, right way, guide each of our decisions and behaviours. When we recruit new people to join our team, we look beyond a person’s technical ability and experience and place emphasis on ensuring a person’s values are aligned to Proserv’s. Internally, we provide training for our staff, encouraging continuous development and learning through our internal ‘Proserv Academy’. One example is our ‘technician training school’ which we have developed and implemented for the needs of our Saudi business. The school will enable many young Saudis to gain the necessary skills to learn and develop as part of the Proserv family.”

As your regional headquarters are in the UAE, can you please tell us a bit more about the opportunities and challenges you experience being based there?

“The UAE has the world’s seventh largest proven reserves of both oil and natural gas, estimated at 97.8 million barrels and 215 trillion cubic feet. There is no doubt that oil will continue to provide income for both economic growth and the expansion of social services for decades to come. In the coming years, natural gas will play an increasingly important role in the UAE’s development – particularly as a fuel source for power generation, petrochemicals and the manufacturing industry.

“The industry itself is going through a difficult transition; CAPEX is not always a viable option for our end user clients and OPEX is typically only being spent to perform safety or production critical work. However, with ADNOC being restructured and the oil price creeping up towards $70 per barrel, new investments are planned for the short/medium term. These challenging times have called for a fresh approach in maintaining operational efficiency, whilst decreasing OPEX through scheduled and maintained inspections, but also longer term planning. Our approach has been to offer services across the complete life of field through locally supplied products and services. We have existing long-term service contracts with our clients, where we have proven we can repair or upgrade existing assets, rather than replacing them, thus enabling them to maintain production and reduce downtime at a fraction of the cost.

“The UAE serves as a Centre of Excellence for Proserv’s growing business and organisational presence in the Middle East and Africa market. Our regional headquarters and equipment-manufacturing facility is located in Dubai, while the service centre is located in Abu Dhabi.”

In your opinion, what are the key advantages to being based in the UAE? Are there any core areas of growth that you believe make it the ideal hub for your business?

“For some time, the UAE has been viewed as an energy hub/gateway for the Middle East region. While many companies located in the UAE solely distribute products made in the USA/EU across the Middle East market, Proserv manufactures and provides services from its local facilities in both Dubai and Abu Dhabi.

“Proserv recognises that the best support for our clients is achieved by local, in country support. The energy industry is a 24-hour operation, and, as such, has a need for timely service capability. We are able to immediately mobilise service engineers/technicians with local visas/work permits to address unplanned events that can cause our clients expensive downtime via lost or reduced production. Also, we provide client specific intelligence solutions to map and track inventory parts, enabling us to provide or quickly call off replacement parts. Our focus remains on world-class respond and resolve solutions.”

Reflecting on the past 12 months, what have been the most prevalent trends in your industry and how has your business adapted around these?

“Last year was a year of innovation for us. Our track record, coupled with our ability to create new value for our clients, allows us to continue to expand our business. The opening of our facility in Saudi Arabia – an Aramco Approved Manufacturing and Service Facility – was a key moment for us back in 2016 with the region very much continuing to be a key growth market for us.”

Looking ahead, what does the future hold for Proserv in the Middle East? Do you have any future plans or projects you would like to share with us?

“Moving forward, Proserv will continue to secure its footprint within the GCC through the establishment of a Manufacturing & Service facility in KSA, as well as investing in expanding our service centre in Abu Dhabi. This will further strengthen our capabilities and capacity to service the increasing demand for our product and services within the region.”

Contact Details 

Company: Proserv Middle East

Address: Jebel Ali Facility, Jebel Ali Free Zone, Dubai, 16922, UAE

Phone: 00971 4 808 3500

Website: www.proserv.com

Select Element
Bowmark Capital
Corporate Finance and M&A/Deals

Bowmark Capital backs buy-out of leading alternative legal services provider

“This is all about access to capital for our next stage of growth,” comments LOD CEO Tom Hartley. “We have been exploring alternative options since the summer of 2017 following our successful merger with AdventBalance in Asia and Australia in 2016.”

Neville Eisenberg, BCLP Partner responsible for LOD, said: “BCLP is extremely proud to have been a pioneer in the alternative legal services market. Nurturing the creation of LOD over 10 years ago, and supporting its growth and considerable influence over the legal market as a high quality provider of flexible legal services, has been an extraordinary journey for us all. We believe that LOD is ideally placed for further growth and that this new investment by Bowmark will help facilitate LOD’s ambitious plans. BCLP has committed to remain close to LOD, partnering with the business for its flexible lawyer needs and we look forward to seeing the results of this exciting new chapter in LOD’s development.”

Bowmark Managing Partner Charles Ind said: “We have been tracking the alternative legal services sector for a number of years and are delighted to have the opportunity to become the principal shareholder in LOD and support the whole LOD team as they build on the impressive growth they have achieved to date.”

Hartley adds, “BCLP has been a great owner, client and partner and this is the logical next step for us to take. LOD has already been a separate entity from BCLP for the last six years, during which time we’ve seen excellent growth.  We want to maintain that expansion by continuing to add new service lines, geographies and technology to our existing offering for our lawyers, consultants and clients. LOD is now in the perfect position to continue to lead the alternative legal services market supported by the capital and expertise of Bowmark.”

DasCoin
Finance

Dascoin Now Listed On Coinmarketcap.Com

Coinmarketcap is used by crypto experts and new adopters alike and is ranked as the 44th most popular website in the US according to Amazon rankings.  DasCoin’s Coinmarketcap listing gives the coin and its associated ecosystem, heightened credibility in the sector.

Michael Mathius, CEO of DasCoin said: “We’re excited to be recognised by Coinmarketcap.com.  This shows how much we’ve developed DasCoin and gives us enhanced visibility within the cryptocurrency space.”

Coinmarketcap lists more than 1,600 cryptocurrency prices among other key statistics about the coins and tokens including:

  • Total market capitalisation
  • Current price
  • 24-hour trading volumes
  • Circulating supply
  • Gain/loss

In April, DasCoin became available to trade on public exchanges CoinFalcon, BTC-Alpha and EUBX with several more in the pipeline.  DasCoin will only be traded on public exchanges that operate the same strict “Know Your Customer” authentication protocols that underpin DasCoin itself.

More than 750 million DasCoin have already been minted since March 2017. Members of the NetLeaders community purchase licenses giving them access to a certain number of Cycles – units of capacity – on the blockchain. These Cycles can either be used for a variety of services or submitted to the DasCoin Minting Queue and converted into DasCoin. There will be a total volume of 8.589 billion DasCoin.

DasCoin possesses and operates best-in-class Blockchain technology based upon BitShares’ distributed ledger technology, known as Graphene.  BitShares is one of the longest ledger in existence and is one of the highest performing ledgers with capacity exceeding 100,000 transactions per second.

Addtionally, DasCoins are not “mined” like those of Bitcoin and other proof-of-work coins. The minting process results in a significant reduction in energy consumption, as well as a more equitable distribution of value.

About DasCoin: DasCoin is a better way to store and exchange value and is the next step in the evolution of money. 

DasCoin is the blockchain-based currency at the center of an innovative digital asset system that seeks to optimize the strengths and eliminate the weaknesses of existing currency systems. It is fast, efficient, balanced, secure and scalable. 

DasCoin is focused on creating a digital currency that delivers superior performance through greater operational efficiency, increased transaction capacity, wider distribution, better governance and greater regulatory compliance. Protected by industry leading security protocols and a permissioned blockchain, DasCoin is a pioneer in the sector with the goal of becoming the world’s first mainstream digital currency.

Website: www.dascoin.com

gdpr
Global ComplianceRegulation

Debunking Five Crucial GDPR Misconceptions

There’s now less than a month to go until the European Union’s (EU) General Data Protection Regulation (GDPR) comes into force, and yet research shows that many businesses are still struggling to understand what they need to do. Worse still, many remain unaware of the full extent of the legal implications of non-compliance – whether deliberate or accidental. A YouGov poll in March found that 72% of British adults hadn’t even heard of the regulation, whilst a study by Crowd Research Partners carried out in April found that just 7% of companies worldwide were ‘fully prepared’ for GDPR’s arrival.

These figures should be cause for concern, since GDPR represents a huge change in the way in which every business uses, manages and protects personal data. It enshrines the sanctity of personal data ownership with the individual, with businesses merely the custodians. And as Jan Phillip Albrecht LL.M, Member of the European Parliament and Vice Chair of its Civil Liberties, Home Affairs and Justice Committee wrote in 2016: “It is paramount to understand how GDPR will change not only the European data protection laws but nothing less than the whole world as we know it.”

With this in mind, here are the five most common myths about GDPR, and some steps you can take to ensure you’re on the way to being geared up for the change.

This isn’t just about the EU

One of the biggest misconceptions about GDPR seems to be that it’s only an issue for companies physically based in the EU. This is not the case. GDPR essentially applies to any business anywhere in the world wanting to sell products and services to EU customers, or monitor their behaviour using personal data. In other words, if you’re based in Dubai wanting to do business with a customer in Germany, then GDPR – or equivalent standards – still apply.

It’s not as simple as following the rules

One of the reasons why GDPR is causing a certain amount of angst – amongst those who have, in fact, heard of it – is that it is principle-based regulation, which means that judgement will be based on whether data has been processed in accordance with designated principles, rather than hard and fast rules. If a company is investigated by the Information Commissioner’s Office (ICO), then the ICO will look at whether ‘effective’ consent has been obtained by the data’s owner and whether that data is deemed ‘current’. This leaves the door open for interpretation, which would be entirely at the ICO’s discretion and involve a legal-based assessment. This means there’s a big job for the legal profession in helping businesses understand and act on their responsibilities.

It’s about more than just compliance

The other source of confusion in all of this is that many companies have assumed that this is a compliance, or even a technical issue, which can simply be left to the relevant team to deal with. The problem is that GDPR is so all-encompassing that any individual handling data in an organisation will undoubtedly require training to understand the regulatory demands and what to do in order to comply. It also means assessing processes for handling a serious data breach and examining every contract – with employees and subcontractors – to ensure that they are GDPR compliant. For some companies, it may also mean hiring a dedicated data protection officer or at the least gaining specialist legal advice on their current practice and system.

Technology is no panacea

Likewise, GDPR is not something that can be ‘fixed’ with technology. A lot of people have mistakenly assumed that GDPR is only concerned with extreme data hacking cases, but the regulation imposes draconian sanctions for a range of other breaches, too. For example, if consent of use has not been properly obtained, or the data is not processed as set out in the regulations, then serious penalties, including hefty fines, could be on the cards. There are also some data breach risks that simply cannot be fixed by technology, for example a staff indiscretion or mistake such as leaving confidential information in a public place. What’s more, GDPR forbids reliance on automated decision making, as typically seen when loan companies refuse customers based purely on an automated credit score. The point is that this regulation demands that companies take a holistic and intelligent approach to the treatment of personal data – it’s not a question of picking and choosing the bits you want to adopt or relying on your systems to do the job for you.

This isn’t just another overhead

It’s hard to overstate the risk of getting this wrong – the potential fines are on a level we’ve never seen before in data protection. Certain infringements are subject to fines of up to €20 million or 4% of worldwide annual turnover – whichever is higher. Severe breaches also run the risk of class actions. But the fines only tell part of the story. The Facebook/Cambridge Analytica privacy scandal wiped around £25 billion off the social media platform’s value in the first 24 hours after the story broke and the reputational fallout continues. Businesses simply cannot afford the reputational damage that could be wrought by such a significant change.

Not sure if you’re in breach of GDPR regulations? Take the GDPR quiz to test your resilience.

Four things you should do straight away:

1. Review your processes for data breach notification, security and risk assessment.
2. Ask yourself whether the data you handle could be anonymised.
3. Review your contracts for GDPR compliance.
4. Consider hiring a data protection officer or seeking specialist legal advice.

http://www.bestcriminaldefencebarrister.co.uk/ 

FairFX
FX and Payment

9 top International Payment tips for businesses

Multi-currency payments provider FairFX has revealed that since the Brexit referendum, the Euro has decreased 13% against the pound increasing financial pressure on businesses who operate cross border.

Uncertainty over future trade agreements alongside fluctuating currency rates have put the spotlight on the cost of doing business internationally and highlights the importance of monitoring foreign currency transactions.

An estimated 17% of UK based SMEs are doing business internationally, boosting their own bottom line, as well as the UK economy.  Whilst international expansion offers access to new markets, ambitions for growth need to be well planned financially, starting with the basics.


35% of SMEs state cashflow is a barrier to growth, making smart currency moves essential when it comes to international payments, and by getting the best value for every international transaction, both business ambition and cashflow can be supported.


FairFX Top tips for getting the best value when making international payments

 

  1. Know what you want

To get the best international payment provider for your business you need to know what you want. Consider how regularly you’ll be sending and receiving money overseas, how many currencies you’ll need to transact in and understand the costs associated with making both singular and regular transactions. 

Fees and charges can vary by transaction type, day, time and speed you require the transaction to be completed in, so list out the different transaction types you may want to make and understand how the fees and charges can vary so you don’t get caught out. Understand how currency rates are set and how they compare to other providers. This can be confusing to unpick so speak to a currency expert if necessary.

 

  1. Review your current payment package

High street banks don’t offer the best value when it comes to international business payments. Using your current banking provider to handle international as well as domestic transactions may be convenient but defaulting to them might mean you’re missing out on better rates and lower fees.

As your business grows and develops, your business banking needs will also evolve and if you’re transacting regularly small charges can add up, meaning you could be paying a high price for an unsuitable service

  1. Select a transparent, convenient and consistent service

If you’re regularly buying from and selling abroad, fees could soon take a portion of profit from your bottom line. Pick a provider whose fees are transparent and made clear upfront so you can better manage your expenses. Look for a service where rates are consistently good – don’t be lured with teaser offers that expire and leave you trapped or unaware of post introductory fees and charges.

 

  1. Understand the market you’re operating in

Keeping track of currency movements can be easier said than done, so sign up for a reliable rate watch service, like the one provided by FairFX which alerts you when currencies you operate in have moved in your favour. This way you can make international payments when rates give you a commercial advantage.

 

  1. Maintain your standards

The rigorous standards you set for expenses and payments at home don’t stop when your employees pass border control, so find a solution where you are confident in who is spending what. Consider prepaid corporate cards which allow you to transact with competitive exchange rates and top-up in real-time, giving your staff the funds they need to travel for work, providing peace of mind and control over expenditure on a global scale.

 

  1. Watch the way your employees pay

When it comes to travel, regardless of whether your staff are hosting meetings or need to cover the cost of their own accommodation and essentials, make sure you’re in charge of the exchange rate they are using for their payments.

 

The FairFX corporate prepaid card allows staff to pay for expenses with the amount of money you have approved them to spend, whilst you can track and report on spending on the integrated online platform, so there is no reliance on employees using their own payment methods, choosing the exchange rate and fees charged and reclaiming the cost from your business.

 

  1. Benefit from the best rates

Exchange rates fluctuate from day to day with the euro currently 13% lower than before the Brexit referendum announcement, a sum that on a large transfer could make the difference between profit and loss. Consider a forward contract to ensure you can benefit from peak rates by fixing international transactions up to a year in advance.

 

  1. Ask an expert

If you are regularly making international payments it is worth finding an expert to help you with services not offered by your bank to help minimise risk and maximise the return of doing business overseas.

 

  1. Set up a stop loss or limit order

Protect your business against market downturns with the aid of a Stop Loss, which will ensure any losses are limited if you’re aiming for a higher rate and the market takes a turn.

Also consider a Limit Order where you set up ‘target’ exchange rates and ask your currency dealer to process the transaction when the rate you’ve set is achieved to give you certainty over how payments will affect your bottom line.


Ian Stafford-Taylor, CEO
of FairFX said:

“Easy access to international currency at market-leading rates whether travelling abroad or sending and receiving payments is vital for businesses breaking into and operating successfully internationally, especially in a market where rates are constantly fluctuating.

“Many small and medium sized businesses settle for high street bank accounts which can charge extortionate fees for international transactions and offer poor service. The right account and sensible planning could add up to big savings, something that SMEs can ill afford to waste in a competitive marketplace

“As future trade agreements post Brexit become clearer businesses could find themselves with heavy workloads as they adjust the way they operate, so finding a trusted payment provider and reaping every possible benefit when it comes to currency will continue to be crucial for success.”

5 Benefits of Investing in Contractors
BankingTransactional and Investment Banking

5 Benefits of Investing in Contractors

5 Benefits of Investing in Contractors

By: James Trowell, head of tax and accounting at contractor specialists, Dolan Accountancy

For most startups, the most common issue they face is cash flow. The need to expand to increase that level of cash flow often involves hiring staff. Whilst this is a positive in terms of managing the ever increasing workload, paying for staff is another story as it absorbs even more of your income. The solution? Look to the flexibility and expertise offered by contractors.

In this article we will explore the top 5 benefits of using contractors to help you grow your business.

 

1. Affordability

The whole process of recruiting and training staff can soon add up cost wise. Recruitment agencies will often charge a fee for filling your vacancy and even advertising yourself can have an associated cost. You’ll also have to consider the cost of your time to train that person up in the role they have filled as well as their actual salary. By hiring a contractor to fill your position, you have the option to choose someone with the expertise or specialist skills that you need so the time needed to train them is often negligible.

2. Flexibility

Unlike a permanent member of staff, contractor’s can work on a project by project basis, so you could just pay for their expertise as you need it. Contractor’s tend to choose this path as they like to be able to set their own hours, which really could be a massive benefit for you. For example if you dropped an email on a Friday night with a list of assignments, you could be coming in on Monday morning to find the list is completed! Remember a contractor is a small business like you and good ones will be keen to meet deadlines, deliver above your expectations with the hope that you will want to engage in their services again.

3. Expertise

Contractor’s are unlikely to have made the move to contracting unless they are experts in their field. This means they keep up to date with the latest industry trends, be that in technology or statistics. This is excellent news for you, as you and your company can benefit for their knowledge. For example they are likely to adopt cutting edge technology and could suggest a new piece of software which could increase your productivity. Not only do you benefit from this knowledge but you also don’t have to pay for them as a salaried employee in the long term.

4. Attitude

When a new member of staff joins a business, they tend to need weeks if not months of training before they can contribute positively to your turnover. Contractors however are used to working on their own and getting on with the job in hand immediately. This means that they ‘hit the ground running’ so you will see a positive input to your business quickly. You will need to be good at setting clear briefs and expectations though, but you shouldn’t need to sit down and explain everything. Instead you can focus on your business knowing your contractor will be completing their projects in the background.

5. Availability

The great thing about using a contractor within your business is that they only need to work for you when required. So if you have a specific project you need some help on, but dont have the capacity yourself, a contractor can come in and fill that gap in the short term. They also tend to build relationships with their employers so that they can be called back in to make additions to their work or start new projects, with the knowledge that both parties have prior experience of eachother.

About the author: James Trowell, is head of tax and accounting at contractor specialists, Dolan Accountancy. Starting off in the admin team at SJD Accountancy James’ role expanded over the years, working his way to accountant and then team manager. Three months ago, Trowell took on the head of accounting and taxation position at Dolan