Category: Banking

Virtual Debit Card
ArticlesBanking

8 Reasons to Use a Virtual Debit Card

Virtual Debit Card

Using debit cards for payment and purchases across the globe has gained popularity since their launch in the 1980s. Today, people appreciate the benefits of paying online transactions with ease.

Like other businesses, technology has allowed the finance industry to advance the use of debit cards, hence, the emergence of virtual debit cards. They differ from the traditional plastic rectangular cards because they only exist in digital form on online portals or mobile phones.

The following highlights some of the benefits of virtual payment cards:

 

1. Safe and Secure Payments

Virtual debit cards are typically hard to copy or steal. Unlike the traditional ones that criminals can clone or steal, virtual debit cards are impossible to tamper with. Account theft is among the top e-commerce frauds criminals use to steal debit cards and then use them in making purchases without the account owner’s knowledge. However, it’s impossible to steal information from virtual debit cards as they don’t have physical copies, ensuring the security and safety of your payments.

 

2. Fast and Easy Acquisition

The traditional debit cards can take days to arrive at your residence. Apart from the card creation process, the issuing company might need more days to verify your identity. Placing an order for the physical debit card from abroad or before a long weekend can also prolong the waiting period before you can start spending.

Meanwhile, virtual cards arrive immediately after completing the application process as it doesn’t require on-site production. You only have to check and confirm the card details, allowing you to start using it without waiting for days on end. They’re also accepted by almost all vendors and utilities, ensuring their reliability as a payment option.

 

3. Convenience

Virtual cards are also convenient as they eliminate the hassle of using a company card. It allows you to make quick purchases through your mobile phone without looking for a card you might have misplaced somewhere in your house or under your purse. This mobile element makes for a seamless shopping process while protecting your information.

 

4. Ease of Cancellation

You might want to make only one or two purchases from a card. This includes purchasing something from websites you don’t fully trust or performing one-off purchases that you don’t want to reflect on your bank statement. This is where virtual debit cards come in handy because they let you create an account and perform your purchase, then immediately cancel the card with no strings attached.

 

5. Controlled Spending

Virtual debit cards are an excellent choice for specific spending activities because they can allow you to control how much you spend on your card. They are ideal for businesses that offer their staff personal spending limits or parents who limit the online purchases of their children.

 

6. Staff Empowerment

Virtual debit cards are also ideal for businesses with employees who make purchases on behalf of the establishment. However, tracking the spending habits of each employee using one physical card can be a tiring task. In addition, there would be too much paperwork if you need to issue a card to every employee.

With virtual cards, you can issue multiple cards to your employees in one go. Thus, you can easily track the spending of each team member. With this, your business can progress as the virtual company card eliminates the need to wait for a physical debit card before you can start making purchases. Implementing limitations like spending limits also guarantees that employees would only buy necessities.

 

7. Cash Flow Tracking

Some businesses often deal with a messy cash flow when making payments to suppliers and vendors before a specific period. Virtual cards allow you to track the flow of payments made and know the available funds through the data in the system, thereby improving the efficiency and transparency of your payment processes. Indeed, virtual debit cards are gradually taking over payments for many businesses.

 

8. Eco-friendly

The use of virtual debit cards can reduce your carbon footprint because it eliminates the manufacture of a physical card. It might not seem much, but this makes sense when considering the number of expired physical cards thrown away daily. Therefore, you promote a positive impact on the environment by using them because they only exist digitally on phones or online.

 

Conclusion

The introduction of virtual cards, an improvement of the traditional physical cards, is due to the continuous advancements in technology. Most shoppers and businesses welcome their use in making purchases due to their many benefits. Thus, virtual debit cards can guarantee a fast, safe, secure, and seamless shopping experience.

Investment Account
ArticlesBanking

Saving Through Investment Accounts: 4 Options You Should Know About

Investment Account

Big moments in life require a purposeful plan toward saving money. This is true whether you’re hoping to purchase a home, plan a big wedding, send your kids to college, or retire early. 

However, it’s not as easy as simply putting money aside. If your savings aren’t earning any interest, you’re not only missing out on an opportunity to make more money but you are, in fact, also losing it due to inflation.

The trick is to find the right balance between risk and interest-earning potential. In particular, you want to choose a low-risk option that will yield a substantial return over time. Fortunately, there are many options that offer exactly that. Here are the pros and cons of the four major low-risk options:

 

1. Education Accounts

The most popular payment option for post-secondary education expenses is a 529 savings plan. These tax-advantaged savings plans can be opened on behalf of the beneficiary (college-bound teens) — and anyone can contribute to it. However, the account owner — not the beneficiary — ultimately retains control over the funds.

  • Pros: The 529 savings plan involves fairly low maintenance and is easy to set up. There are no contribution or high aggregate limits, and contributions are considered gifts to the named beneficiary. The income grows tax-deferred, and distributions are tax-free — as long as they’re used to cover qualified education expenses.
  • Cons: If the distributions aren’t qualified, they will incur an income tax, as well as a 10% penalty (there are a few exceptions, though). Investment options included in the 529 plan are limited to a static portfolio that should reduce the risk. Account fees can vary significantly, so make sure to choose a low-cost 529 plan that will cover your family’s specific needs. 

 

2. Standard Brokerage Accounts

This type of account offers a wide portfolio of investment opportunities, such as stocks, bonds, mutual funds, and more. Brokerage accounts are subject to taxes, and you must be age 18 or older and have a Social Security number or tax ID to own one. This is a good choice if you plan to save for more than five years.

  • Pros: You can open a brokerage account as an individual or share it with a spouse or a relative. There’s no limit on contributions, and you’re free to withdraw your money at any time.
  • Cons: Ultimately, you’ll need to pay taxes on the interest or dividends your portfolio earns, as well as any gains made by selling your assets.

 

3. Retirement Accounts

Similar to standard brokerage accounts in terms of investment opportunities, retirement accounts differ in taxation and withdrawal conditions. The most popular retirement accounts are traditional IRAs and Roth IRAs. Some companies offer 401(k) investment opportunities, in which your employer matches any contributions you make up to a certain amount; it’s usually 5%. To qualify for an IRA, you have to have earned an income.

  • Pros: The greatest benefit of IRAs is that your funds grow tax-free. Plus, traditional IRA contributions are tax-deductible. Of course, there are some limitations to this rule, so make sure to research them.
  • Cons: Contributions to an IRA are limited, and your money will be tied down until you reach retirement age — unless you’re willing to pay a penalty to access these funds early. There are some exceptions to early withdrawals. After age 72, you’ll have mandatory withdrawals with high penalty fees if you don’t utilize them (50% + taxes).

 

4. Children’s Investment Accounts

Each of the previous options requires that the owner is age 18 or older. However, there are also a few options for custodial accounts that can be owned by minors. 

The two main types of children-owned accounts are custodial brokerage accounts and custodial IRAs. Assets in custodial brokerage accounts can be typical investments (i.e., stocks, bonds, cash, etc.) or even tied to real estate. Once placed into the account, the funds cannot be transferred to another beneficiary, but they can be used for any purpose. 

Conversely, children are eligible to open a Roth or traditional IRA if they’ve earned an income through a custodial IRA. The funds are not taxable, and there are no withdrawal penalties.

  • Pros: These types of accounts are easy to set up, and there are no income or contribution limits. There are also no penalties for early withdrawals and no restrictions on how the funds should be used. The income is taxed at child rates and the contributions are tax-deductible. 
  • Cons: Custodial accounts count as a child’s asset, so they might not be eligible for financial aid such as student loans or grants. And once the child owning the account becomes an adult, they will be liable for taxes on income gained at the regular tax rates.

 

Choose the Right Investment Savings Account for Your Needs

Finding the best savings options that fit your circumstances may not be limited to one type of investment account. In fact, you may decide to split your savings into short-term and long-term options, giving you more flexibility to save for goals you’re anticipating in the next few years. Once you’ve assessed all your available options, you’ll gain greater clarity on the best route to guide you and your family toward financial freedom.

Traditional Banks vs. Online
ArticlesBanking

Traditional Banks Must Innovate to Survive

Traditional Banks vs. Online

Philippe De Backer & Juan Gonzalez

Arthur D. Little

The traditional banking sector is in serious trouble. In an age where the digital economy is kicking over the traces of the old world, customers are falling out of love with conventional high street banks and are starting to embrace new, more agile financial service providers.

If traditional banks are to survive and remain relevant, urgent action is needed to transform their business into one that is more suited to the demands of the 21st century consumer. They have to move on from just exploiting their pre-existing markets, and instead embrace innovation and develop an ‘ambidextrous’ mindset and culture.

 

Banks challenged by new entrants

The magnitude of the challenge facing traditional banks is immense, with the signs of a financial revolution everywhere. For instance, Europe’s three largest ‘neobanks’ – Revolut, N26 and Monzo – have 23 million registered users between them and that number is continuing to grow. The scalable business models of the neobanks give them an easy advantage. Their lower cost structure, lower capital requirement and greater flexibility in introducing products make them nimbler and more adaptable to changing consumer demands.

There are also incursions into the market from businesses that look very different from traditional financial institutions. For example, Amazon Cash enables customers to load money from their Amazon account on to a card and use it to buy products at physical retailers. Google has launched a physical debit card linked to a Google Wallet account. And the Apple Pay app further removes consumers’ mental association between day-to-day financial transactions and traditional banks. Meanwhile, supermarkets and high street brands have become post offices, banks, and bureaux de change.

 

Adopting an explorer mindset

To survive and potentially thrive, traditional banks need to adopt an ‘ambidextrous’ approach. That means balancing short- and long-term priorities and exploiting existing markets while experimenting with new ones – capitalizing on historical strengths while also embracing radical change.

The problem is that banks have remained in ‘exploit’ mode for too long, the consequences of which are now catching up with them. Now, they have to learn from businesses with an ‘explorer’ mindset if they are to continue to remain viable. These are firms focused on experimentation, risk-taking, discovery and innovation. They are more flexible and comfortable in the presence of uncertainty than their exploiter counterparts, creating an environment from where interesting innovations can emerge.

Neither exploration nor exploitation is inherently good or bad. The key is to achieve a working equilibrium between the two. The ambidextrous bank must balance short-term value drivers with the need for innovation to drive growth and transformation.

 

Becoming ambidextrous

To become truly ambidextrous, traditional banks will need to do much more than just reduce costs or add more features to existing products and services. It will necessitate a total rethink of its business model to enable the bank to differentiate itself in a marketplace that, on the one hand, is becoming increasingly commoditized, and on the other, is transforming beyond recognition.

Against this challenging backdrop, the most important thing that banks can do is find the right person to lead them to an ambidextrous future. This appointment needs to be an inspirational and entrepreneurial leader who understands the need for transformation and is willing to take risks and think differently – rather than merely maintain the status quo.

He or she must be a mix of innovator and optimizer: someone who can resolve the exploration-exploitation dilemma by replicating the drive and technology innovation of a digital start-up, through risk-taking and experimentation – while simultaneously squeezing the most from the organization in the short-term.

It’s also vital that new blood is brought in at the executive level to nurture and stimulate the ambidextrous mindset. There should be a widespread mix not just of age and gender, but of technology skillsets and digital acumen too, all of which are critically important in challenging a board’s traditional assumptions that hold it back from change.

Timid board members who hide behind the excuse that transformation initiatives will disturb business-as-usual miss the point. In a world of neobanks and digital fintech, disrupting business as usual is precisely what needs to be done. And if they feel they cannot, or prefer not to, participate in this, then they should make room for someone who’s willing to do what’s necessary.

In the wider economy, it’s easy to spot ambidextrous businesses: Amazon and Alphabet are clearly two companies that have blended left- and right-brain capabilities to spectacular effect. Yet there are also companies in the financial services sector that have also combined the efficient exploitation of traditional markets with digital risk-taking and service innovation.

A great example of this is DBS, Singapore’s largest bank, where radical change has been driven by Piyush Gupta, a CEO with an explorer mindset. With Gupta at the helm, DBS has taken a leap into the digital future. By adopting the cultural vision of a ‘27,000-person start-up,’ DBS has successfully repositioned itself, developing new products and services and delivering the type of growth and financial performance that has seen it go from a traditional regional player to being recognized as one of the world’s most forwarding-thinking and innovative banks.

To remain competitive in this new world of digital finance, the traditional banking model has to change. But banks will only succeed if they see this transformation for what it is: a fundamental reconfiguration. It is not a gradual, incremental set of improvements – instead, it’s a total shift in both mindset and operations.

As such, creating an appropriate culture must be a top priority for the CEO of any truly ambidextrous organization. He or she must also ensure that innovation permeates every cell of the business as part of the transformation process.

For while there’s still money to be made in traditional financial services, it soon won’t be sufficient to support the huge and unwieldy corporations that conventional banks have become. Banks must innovate and diversify now, or face obsolescence.

 

Philippe De Backer is managing partner and global practice leader of financial services at Arthur D. Little. Juan Gonzalez is a Partner at Arthur D. Little. They are co-authors of Disruption: The Future Of Banking And Financial Services.

Online Banking
ArticlesBanking

Growth of Digital-only Banking Customers Stalls for the First Time

Online Banking

The number of people saying they have an account with a digital-only bank has stalled for the first time in 4 years, new research from personal finance comparison site finder.com shows.

Around a quarter of the population (27%), equivalent to 13.9 million people, say they currently have an account with a digital-only bank, which is the same figure as last year. This is the first time during 4 years of tracking digital banking adoption in the UK that Finder’s poll has shown the figure flatlining.

But growth appears to have been slowing for a while, with the number of digital-only banking users rising from 9% in 2019 to 23% in 2020 before a more modest rise last year, when it rose to 27%.

 

The reasons behind traditional banks’ fightback

3 in 10 (31%) respondents said they have absolutely no intention of opening a digital-only bank account in the future and gave reasons why.

The top factor was that over half (55%) of these people feel like they have always been treated well by their current bank. Similarly, around 1 in 6 (16%) also said their traditional bank had been helpful during the COVID pandemic.

As the world begins to return to normal, the second most common reason was that customers prefer having the option of face-to-face communication with their bank (35%).

A worrying finding for the digital-only banks is that a quarter (25%) of those not intending to switch cited a lack of trust in new banks as the reason.

 

Growth still on the horizon for digital-only banks though

Despite the slowdown in new recruits, digital-only banks can still look forward to welcoming 18% of the population over the next 5 years, according to the research. This includes 1 in 10 (10%) UK citizens who plan to open an account within the next 12 months.

If everyone followed through with their intentions, 44% of the population would have a digital-only bank account by 2027, equalling a whopping 23.2 million people.

For the fourth year running, the top reason for those who have gone, or intend to go digital-only with their banking is convenience (27%). Linked to this, 1 in 4 (24%) wanted a new account and thought doing so with a digital bank was the easiest option.

1 in 5 (21%) said they want to transfer money more easily, and 18% thought the apps of digital-only banks are better.

A lack of trust isn’t just a factor for those who prefer traditional banks – 1 in 10 ( 11%) customers, or potential customers, of digital-only banking say they don’t trust traditional banks.

 

Young generations continue to be the biggest market for digital-only banks

Digital banks are still most popular with younger generations, with 41% of Gen Z saying they have a digital bank account and a further third (34%) intending to get one within the next 5 years. This would mean that by 2027, three-quarters of gen Z (75%) could have a digital bank account. The silent generation (born between 1928 and 1948) remains the generation that is least keen on digital-only banks. Just 7% said they have an account currently.

Commenting on the findings, Michelle Stevens, banking specialist at the personal finance comparison site finder.com, said: 

This is the first year that our research hasn’t seen growth in the number of people using digital-only banks and it’s clear that traditional banks are adapting to an increasingly digital landscape. This seems to have played a significant role in the dropoff of new customers for digital-only banks as their first-mover advantage in the app space gets diminished. 

Traditional banks such as Halifax have also seen net gains after improving their digital products and offering switching incentives – including to existing customers – something that digital-only banks haven’t done yet. Halifax has just won Finder’s Banking Customer Satisfaction Awards for 2022, with some customers in our survey praising its app.

It isn’t all about digital though as there’s also a significant number of Brits who value having a physical branch to visit and trust traditional banks more. While the digital-only banks may not be able to compete with having a presence on the ground, they will be concerned at the lack of trust some customers appear to have in them.

World Banking
ArticlesBanking

Brand Value of World’s Largest Banks Grows for First Time in Three Years

World Banking
  • HSBC remains UK’s and Europe’s most valuable banking brand at US$18.0 billion.
  • World’s top 500 banking brands turn tide on brand value contraction for first time in three years, going up by 9% to all-time high of US$1.38 trillion
  • Worth over US$450 billion, Chinese banks make up one third of total brand value in Brand Finance Banking 500 2022 ranking; ICBC retains title of world’s most valuable brand
  • US banks account for 5 of top 10, with Bank of America nation’s most valuable
  • 30 new entrants this year, with Cadence Bank fastest-growing, up 181%
  • Ambitious climbers in smaller markets including Vietnam’s MBBank and Poland’s mBank both doubling in brand value
  • Indonesia’s BCA reclaims title of world’s strongest banking brand, scoring 94/100 and elite AAA+ rating, followed closely by South Africa’s Capitec and Russia’s Sber

The world’s top 500 banking brands have turned the tide on brand value contraction for the first time in three years, observing a 9% year-on-year brand value growth to reach an all-time high of US$1.38 trillion, according to the latest report by Brand Finance published in The Banker magazine today.

Every year, leading brand valuation consultancy Brand Finance puts 5,000 of the biggest brands to the test, and publishes nearly 100 reports, ranking brands across all sectors and countries. The world’s top 500 most valuable and strongest banking brands are included in the annual Brand Finance Banking 500 ranking.

The brand value of the world’s largest banks shrunk by 2% by the beginning of 2020 (US$1.33 trillion) and a further 4% by 2021 (US$1.27 trillion). Initially caused by economic uncertainty and interest rate movements, the situation was exacerbated by the pandemic, which saw profit and interest rates take a hit.

However, as nations continued to adapt to COVID-19 and economies rebounded over the last year, loan loss provisions were much less significant than initially forecasted by industry experts. Furthermore, improved digitalisation by banking brands, coupled with a strong government intervention and economic recovery around the world resulted in a higher than expected industry profitability in 2021.

While this year’s overall brand value growth is undoubtedly a positive sign for the industry, it signifies a meagre 2% increase from US$1.36 trillion, which was the combined pre-pandemic brand value of the world’s top 500 banking brands in 2019. Particularly in Europe, banks are still feeling the effects of COVID-19, where weak profits are not helped by cost inefficiency and insufficient investments in digital technology.

David Haigh, Chairman & CEO of Brand Finance, commented:

“As banks continue to battle the fallout from the COVID-19 pandemic, the importance of a solid brand is more significant than ever. Banking products are becoming more commoditised, and banks will need to continue differentiating themselves from other competitors in the market, through the use of their brand, particularly in the face of an emerging threat from challenger brands and decentralised finance in the future.”

“Many of the world’s largest banking brands have come through the worst of the pandemic stronger – a testament to the role they have played in supporting the real economy through the past 12 months,” said Joy Macknight, editor of The Banker. “Banks’ digital transformation efforts over recent years meant they were able to respond faster to client needs, as well as deliver new products and services, which has boosted banks’ reputations in the eyes of their retail and corporate customers.” 

 

Chinese banks dominate ranking 

Chinese banks maintain the lead in the Brand Finance Banking 500 2022 ranking, accounting for one third of total brand value and worth a cumulative US$454.4 billion. While their global counterparts saw drops in brand value over the past two years, Chinese banks remained largely impervious to these issues. A significant factor to this success was not only the nation’s timely response to the virus, but also the early and continued investment into digital development, allowing Chinese banks to continue engaging with their customers with relatively little disruption. Over the past year, China’s economy has continued to recover steadily despite a complex and ever-changing domestic and international environment. In the first half of 2021 alone, the nation’s  GDP increased by 13% year-on-year.

The world’s largest bank by total assets, ICBC’s brand value has increased by 3% to US$75.1 billion, making it the world’s most valuable banking brand again as well as the 8th most valuable brand across all industries in the Brand Finance Global 500 2022 ranking. Over the past year, ICBC has continued to fare well with consumers and expand its portfolio, opening branches in foreign markets such as Mexico, Argentina, and most recently Panama. ICBC continues to outshine its competitors, holding a healthy brand value lead ahead of China Construction Bank (up 10% to US$65.5 billion) and Agricultural Bank of China (up 17% to US$62.0 billion), which rank 2nd and 3rd, respectively.

Declan Ahern, Valuation Director at Brand Finance, commented:

“Chinese banks have performed extraordinarily well this year, with no signs of growth slowing down for years to come. This was undoubtedly aided by the country’s timely response to the pandemic, which reduced the level of economic disruption observed by its counterparts in Europe and the United States.”

 

US banks account for 5 spots in top 10

US banks account for almost a quarter of the total brand value in the Brand Finance Banking 500 2022 ranking, worth a cumulative brand value of US$313.7 billion. Of these 76 brands, Bank of America (up 12% to US$36.7 billion), Citi (up 7% to US$34.4 billion), Chase (up 5% to US$30.1 billion), Wells Fargo (down 6% to US$30.1 billion), and JP Morgan (up 23% to US$28.9 billion) have held on to their spots in the top 10 of the world’s most valuable. 

Dropping 1 spot in the ranking to 8th position, Wells Fargo is the only bank in the top 10 with a contracting brand value. Wells Fargo continues to be undermined by the account fraud scandal, where it emerged that the bank had forged millions of savings and checking accounts on behalf of its clients without their consent. The scandal continued to bring about financial and legal consequences in 2021.

 

Regional leaders

Looking beyond East Asia and North America, HSBC (12th, up 6% to US$18.0 billion) is the most valuable banking brand in Europe, Singapore’s DBS (39th, up 11% to US$8.7 billion) leads the way in Southeast Asia, State Bank of India is number #1 in South Asia (43rd, up 29% to US$7.5 billion), and Itaú (51st, up 30% to US$6.6 billion) dominates in Latin America.

The largest financial institution in the Middle East and Africa, QNB has consolidated its position as the most valuable banking brand in the region, observing a healthy brand value growth of 16% to reach US$7.1 billion. QNB also rose three spots to 45th place overall, now firmly situated amongst the 50 most valuable banking brands in the world.

 

New entrants

30 newcomers have joined the Brand Finance Banking 500 2022 ranking this year, with new entrants such as Greece’s Piraeus Bank (brand value US$176 million), Israel’s Mercantile Discount Bank (brand value US$188 million), and Kenyan Equity Group (brand value US$388 million) hailing from smaller and emerging markets.

Of these new entrants, Saudi Arabia’s SNB (brand value US$3.2 billion) is situated firmly in the top 100, in 94th position, making it the highest-ranked new entrant. A significant rise in profits as well as emphasis on its sustainability initiatives have helped nudge SNB onto the world stage, with the brand recently announcing its plans to create a platform focusing on long-term investments in sustainable economic activities.

With an eyewatering brand value increase of 181%, Cadence Bank has re-entered the ranking as the fastest-growing brand of 2022, reaching a brand value of US$403 million. The US-based bank has recently entered into a merger agreement with BancorpSouth Bank, which held a brand value of US$266 million in the 2021 iteration of the Brand Finance Banking 500 ranking. As part of the agreement BancorpSouth has rebranded to Cadence Bank. The merger aims to provide more customer and relationship-focused financial services to Cadence Bank’s extensive customer base across the southern US.

 

Ambitious climbers in smaller markets

Looking at country level, with an overall brand value growth of 49%, Vietnam’s banking sector is one of the fastest growing in the world. All Vietnamese brands in the Brand Finance Banking 500 2022 ranking have experienced growth or add to the country’s total as new entrants. It has been a very fruitful year for Vietnamese banks, which have observed continuous growth in their balance sheets and income statements, with both deposits and loans issued growing. This has been bolstered by the nation’s recovery from the pandemic, which was well-managed by the government, resulting in strong economic growth.

Among these brands, MBBank is also one of the fastest-growing in the Brand Finance Banking 500 2022 ranking, up by a staggering 113% to US$642 million. The brand has continued to innovate, particularly in the digital space by partnering with leading tech company, Software AG, to provide high speed online services for its customers. Similarly, Techcombank (up 80% to US$945 million) has invested heavily in cloud infrastructure as part of its strategy to nurture long-term relationships with clients. In addition, the strong growth in the Vietnamese banking sector has brought two new entrants to the top 500 this year, namely HD Bank (up 53% to US$248 million) and Saigon Hanoi Bank (up 63% to US$211 million).

The story is similar for the Polish banks in the Brand Finance Banking 500 2022 ranking, which have seen an overall brand value gain of 40% year on year. PKO Bank Polski (up 22% to US$2.2 billion) remains most valuable, followed by Bank Pekao (up 31% to US$1.2 billion), mBank (up 105% to US$999 million), Millennium (up 55% to US$487 million), and Alior Bank (up 53% to US$351 million).

Of these banks, mBank has recorded the best performance – doubling in brand value over the past year and placing among the top 5 fastest-growing banking brands in the world. The rapid gain is a result of the brand’s fantastic scores in Brand Finance’s original market research conducted among customers of Polish banks. As the nation’s first internet bank, mBank has paved the way for Poland’s banking industry through investments in the digital space, allowing it to serve customers in a more accessible and efficient way.

 

BCA as sector’s strongest

Apart from calculating brand value, Brand Finance also determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity, and business performance. Certified by ISO 20671, Brand Finance’s assessment of stakeholder equity incorporates original market research data from over 100,000 respondents in more than 35 countries and across nearly 30 sectors.

According to these criteria, Indonesia’s BCA is the strongest bank in the Brand Finance Banking 500 2022 ranking, following a +2.5 point increase to reach a Brand Strength Index (BSI) score of 94.0 out of 100 and an elite AAA+ brand strength rating.

As one of the biggest banks in the ASEAN region and Indonesia’s largest lender by market value, BCA has performed strongly across key metrics, particularly those pertaining to customer satisfaction. In Brand Finance’s original market research, BCA outperformed its peers for reputation and quality, and scored highly for value for money.

Over the last year, the brand has undoubtedly been bolstered by significant investments in its digital banking arm, as the quality of digital platforms remains an important factor in customer perceptions of banking brands. BCA shows no signs of slowing down in the coming year, recently outlining its plans to list BCA Digital on the Indonesia Stock Exchange.

Declan Ahern, Valuation Director at Brand Finance, commented:

“BCA’s performance is an excellent example of the importance of customer relationships in building brand loyalty and reputation. The brand has consistently scored favourably across brand strength metrics for the last few years, now reclaiming its spot as the strongest banking brand in the world.”

South Africa’s Capitec Bank has claimed the spot of the second strongest brand in the Brand Finance Banking 500 2022 ranking, boasting a BSI score of 92.4 out of 100 and a corresponding AAA+ brand strength rating. Despite having only been around for 22 years, Capitec Bank has already overtaken many of South Africa’s traditional banks, becoming the second largest bank by market cap. The brand continues to position itself as the nation’s leading retail franchise, delivering a low-cost alternative to traditional banks, and has already built a strong, loyal customer base. This helped boost Capitec Bank’s rank as 6th in the world for familiarity, 3rd for its quality of services, and it was noted as the 5th easiest bank to deal with. As the brand continues to uphold a customer-centric business model focused on providing low costs and high interest rates on deposits, it remains poised for further success.   

Russia’s Sber rounds of the top 3 strongest banking brands with a BSI score of 92.3 out of 100 and a corresponding AAA+ brand strength rating. In addition, Sber has been named the strongest brand in Europe across all industries, having overtaken Ferrari in the brand strength classification of the Brand Finance Global 500 2022 ranking.

The Russian banking and technology giant has recently launched new digital investor services such as portfolio selection and investment consulting on its mobile application. At the same time, Sber is continuing to develop a digital ecosystem for its variety of services that go beyond banking, now ranging from e-commerce and logistics, to telehealth and streaming. While relying on an impressive consumer base of more than 100 million, Sber is aiming to diversify further into a new demographic of Gen Z users with a new digital services offering.

Bank Fraud
ArticlesBanking

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

Bank Fraud


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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

 

 

The evolution of fraud

 

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

 

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

 

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

 

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

 

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

 

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

 

 

The state of COP

 

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

 

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

 

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

 

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

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

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

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

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

 

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

ArticlesSecurities

Top Cyber Threats Facing Financial Services Firms

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

 

Ransomware

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

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

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

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

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

  • Keep a regular backup and recovery plan

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

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

 

Data Breaches

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

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

 

Phishing and Social Engineering

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

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

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

 

DDOS attacks

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

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

 

Insider threats

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

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

 

Conclusion

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

Debt Provision
ArticlesBanking

New Solution to Taking the Guesswork Out of Bad Debt Provision

Debt Provision

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Women in Business
ArticlesBanking

Metro Bank Reveals How the Pandemic Has Made the Loan Process More Accessible for Women

Women in Business
  • Lack of funding, mentoring & child care key issues for women in business

  • Metro Bank reveals how the pandemic has made the loan process more accessible for women

  • Metro Bank’s Investing in Women Code helping to transform women’s businesses

 

The Government wants to increase the number of female entrepreneurs in the UK by 50 percent by 2030 – the equivalent to nearly 600,000 businesses led by women. This target followed the 2019 Review of Female Entrepreneurship which reported on the barriers faced by women starting and growing businesses in the UK.

The three key barriers to growth were identified as women being unaware of funding available; a need for more local mentoring and networking and greater family care support.

The UK’s community bank, Metro Bank, has a dedicated team tackling funding, mentoring and networking for female business leaders.  The team is reviewing all aspects of the Bank’s products and services to make them more accessible to women across a range of backgrounds.  Drawn from colleagues across the business, the team has also worked with external bodies to ensure they are maximising the opportunities for women in business and encouraging start-ups to get off the ground.

“We know from industry research that not only are fewer businesses led by women​, but also female-led businesses receive less funding at every stage of their entrepreneurial journey and are less likely to scale up in size and turnover,” explains Kerry Reynolds, head of Metro Bank’s investing in women committee.  “We are specifically trying to address these issues by targeting female-led industries and providing more opportunities for women to build businesses skills and increasing our business networking events to help women meet advisors and find mentors.

Metro Bank is working to ensure colleagues have a greater awareness of the issues that women running businesses face including running education events led by female business owners and presentations from external bodies like UK Finance.  Ironically the pandemic also helped.

As Kerry Reynolds explains; “We quickly realised that by being forced to short circuit the loan process when we supported the Government’s pandemic Bounce Back Loan scheme – women found using our 24/7 portal more convenient, less formal and scary. We are now looking to offer this short circuited process going forward, cutting our reliance on the more formal face to face meetings and presentations of old.”

Each Metro Bank store has a dedicated local business manager to support all local businesses and start-ups in its community.  The business managers give practical support for business customers – be that the complementary use of an office in the store to conduct business meetings or advice on the business. Lisa started Daisy’s Dog Empawrium selling accessories for dogs. When the pandemic hit, her Metro Bank local business manager, Kelly helped Lisa get funding to switch her business model to online and she hasn’t looked back since.

Raising money for growth is a key issue facing lots of business owners.  Metro Bank offers an invoice finance lending facility – literally as a company raises an invoice they can borrow against it, before the invoice has been paid.  This proved to be the perfect solution for Debi Scott based near Exeter.  Debi was experienced as a logistics recruiter and in 2012 bought part of a franchise from Driver Hire which helps businesses find the help they need.  Debi soon realised she would be infinitely more profitable if she owned the whole franchise, but as a single person with sole responsibility for her mortgage, was not keen to take on any more traditional debt.  Debi approached a number of banks, but found Metro Bank the most innovative and responsive.  “By borrowing against the invoices I raise, my business presents a more diverse, less risky portfolio and invoice finance lending also circumvents gaps in cash flow helping me to keep the business on a more even keel.”

An established publican based in Liverpool, Fiona Hornsby decided to launch a new pub right in the middle of a pandemic at the end of 2020.  “Not an ideal time to launch a pub I grant you, but the site came up and it was too good an opportunity to miss.  Metro Bank has always been very supportive and whilst I managed to fund the purchase without taking on any more debt with the bank, I knew their continued support would make growing the business easier as I have an excellent working relationship with their local business manager.”

Metro Bank business customers also receive free membership to Enterprise Nation. Enterprise Nation provides access to its 100,000 members with networking advice and support through blogs, webinars, business news and services. Blogs include advice on everything from how to impress a lender, how to successfully speak in public to the five tax mistakes to avoid as a company director. A full calendar of webinars includes everything from how to start up a business with no start-up funds to pricing your products and services.

Banking Customers
ArticlesBanking

How to Ensure Safe Onboarding Procedures of Clients’ Customers?

Banking Customers

Non-banks have been choosing BaaS (Banking-as-a-Service) due to the difficulty of getting and maintaining a banking license, which calls for meeting all the necessary requirements, like KYC (Know-Your-Customer). Chief Compliance & Risk Officer at ConnectPay, Thibaud Catry, says that it takes mutual cooperation and a strong in-house compliance team to ensure the safety of clients’ customers’ onboarding procedure.

Banking-as-a-Service (BaaS) platforms have been gaining more traction in the market as they streamline non-banking businesses’ entry into the financial services sector. Alongside the fully developed banking infrastructure, a BaaS provider takes on the responsibility to adhere to any regulatory requirements, including Know Your Customer (KYC), aimed at preventing money laundering activities and helping to better understand the customers, as well as manage risks more prudently.

Since BaaS uses KYC to onboard their client’s customers, Thibaud Catry, Chief Compliance & Risk Officer at ConnectPay, has outlined key aspects necessary to ensure that this process runs smoothly: a strong in-house compliance team and mutual collaboration.

To provide banking services companies must obtain a banking license, which is both hard to get and difficult to maintain. The necessary infrastructure to carry out transactions and handle funds can cost millions, while using BaaS is usually a fraction of the price — making these platforms a more cost-effective solution.

Infrastructure aside, businesses find it hard to enter the financial market due to strict and ever-changing regulations, which also differ depending on where in the world companies are trying to provide banking services. When choosing BaaS, non-bank entities acquire both the necessary framework as well as the assurance that they are running an operation in compliance with mandatory AML requirements and KYC, which becomes the responsibility of a BaaS provider.

The reason for constant adjustments in regulations is to combat constantly emerging new threats — in the case of KYC, their intent is to minimize illegal activities like money laundering and fraud. According to Catry, these developments are part of the various challenges that BaaS face when trying to safely carry out their clients’ customers’ onboarding process.

“Each industry has its own challenges, from geo-risk to new modern payment methods providing an additional level of anonymity and fast-changing regulatory landscape. Compliance professionals need to adapt to these nuances, learn about market changes and the potential risks linked with these transformations. When it comes to KYC, some of the main obstacles while onboarding clients’ customers emerge from poor data and record management, which both result in potential risks going undetected.”

To avoid these mishaps, Catry emphasizes the need to focus on compliance specialists. ConnectPay followed this strategy when creating their own new BaaS product, making sure that these experts made up a substantial part of the team.

“For example, a third of ConnectPay’s staff is just the KYC department. It takes quite a number of qualified professionals to keep up with all of the changing requirements and sort through all of the client’s provided data to make sure that their customers are identified and assessed correctly,” Catry emphasized. “It’s not enough to check and verify a customer just once — a BaaS provider needs to conduct ongoing monitoring to detect any possible risks and react accordingly. This is a detailed procedure which requires a number of specialists at work and, considering the current regulatory environment, financial institutions in Europe cannot afford to work with a weak compliance team.”

Although regulatory procedures are the BaaS’s responsibility, it cannot effectively meet all the necessary requirements alone. In order to make sure that everything is running smoothly, Catry says that mutual cooperation is a must.

“Using an intermediary is always a challenge for any FI. At ConnectPay, the team focuses on working with their partner to ensure that the standards they are applying regarding KYC procedures are at a minimum at the same level as ConnectPay’s standards. When it comes to ensuring the safety of onboarding client’s customers, strong cooperation, direct line of communication, and sharing best market practices is key.”

ConnectPay is constantly investing in its compliance department, making sure that all activities of the company are adhering to regulatory requirements. Additionally, any unethical business practices are eliminated during the thorough screening process, ensuring that all of the company’s customers are working inside the legal framework.

Woman in a cafe paying contactless through mobile on a card machine
ArticlesBanking

The Evolution of Frictionless Payments

Woman in a cafe paying contactless through mobile on a card machine

 

Frictionless payments are essential for e-commerce platforms to reduce the barriers between online shopping and completed checkouts. The buying process needs to be easier for both the customer and the seller, as an enjoyable user experience causes higher conversion rates and fewer abandoned shopping carts.

Effective frictionless payments are essential for both large and growing businesses, where the checkout process eliminates waiting times, creates a faster checkout experience, and reduces the barriers and steps towards a completed sale. Ultimately, frictionless payments should feel like a natural part of the customer experience.

Understanding how frictionless payments have developed and reviewing the history of buying processes allows us to recognize how businesses will be able to continue their growth in the digital age. Here, we explore the evolution of frictionless payments and predict how businesses will drive higher conversion rates and create better customer experiences in the future.

 

1950: Debit and credit cards

While the credit card was developed in the mid-twentieth century, it was only in 1973 when the system for using card payments was computerized. This frictionless payment reduced transaction times to just one minute and gave rise to the era of electronic consumer payments. Computerized payments would eventually allow for future online transactions to take shape, where e-commerce businesses could contact banks to finalize payments with ease. In 1994, Stanford Federal Credit Union was the first financial institution to offer online internet banking, leading the way for online transactions to begin in 1995.

 

1999: 1-Click

Bookseller turned global conglomerate Amazon patented an online transaction process called ‘1-Click’ in 1999. This allowed customers to buy products with just a click of a button. No items are added to a shopping cart, meaning that customers can buy a product in a flash. Voila: no shopping cart abandonment. Personal details and your bank account details are stored online, safely assuming that users are content with the same delivery address and bank account being used for every transaction.

The patent has since expired, meaning a flurry of businesses can now utilize this frictionless payment method. Given the global average rate for shopping cart abandonment is 69.8 per cent, skipping over the shopping cart means that e-commerce businesses can maximize their conversion rates and generate more sales through this simple process.

 

2003: Chip, pin, and tap

Going back to credit and debit cards, a more recent development contributed to the evolution of frictionless payments. In 2003, the introduction of Chip and PIN in the UK allowed cards to store data in a small chip on the face of a card. This data could then be accessed using a four-digit PIN, authorizing the payment. The American conversion to chip and PIN was announced in 2012 and completed in 2015.

Not only did this process increase efficiencies for both customers and businesses by automatically authorizing payments rather than signing a receipt, but it also curated a secure form of payment. Only those with access to the card and the secret PIN could access the account. This demonstrates how frictionless transactions can be made easier, but importantly, more secure at the checkout.

Contactless payments were introduced in 2007, further making the checkout process even easier. Today, one in five card payments is now contactless.

 

2011: The mobile revolution

As mobile phones became smaller, they became as much an essential accessory like a wallet or purse. They’re with us all the time. It’s unsurprising, therefore, that these handheld devices have become ingrained in the checkout culture. Leading mobile manufacturers, Google, Apple, Android, and Samsung all launched digital wallets between 2011 and 2015, allowing users to complete transactions in place of their debit or credit cards.

These transactions had the added security benefit of authorizing payments through a fingerprint or facial scan. Furthermore, these digital wallets could be used in-store or online, storing your personal data to automatically fill in those arduous forms with personal details, delivery addresses, and billing addresses. This helps to further speed up online sales and transactions.

 

Now and the future…

As online transactions become easier and quicker on the customer side, some obstacles for businesses to achieve a completely frictionless payment remain. Businesses must ensure that every transaction is genuine, blocking attempts of fraud and abuse.

As the popularity of digital wallets and one-click buying continues to develop, innovative ways to maximize sales without being affected by fraud have been developed. Commerce protection platforms, such as Signifyd, drive automated decisions on the best transactions, approving more good orders and recovering lost revenue from chargebacks. This streamlines the customer experience, limiting the need for authentication forms and processes. Overall, commerce protection platforms feel like a natural part of the checkout process, going unnoticed by customers, and they can increase conversion rates by four to six per cent on average.

 

Frictionless payments will continue to improve, creating better customer experiences and improving business performance. As more sales move online, and while transaction speeds and efficiencies increase, it’s important to tackle attempts of fraud and abuse. At every stage of the evolution of frictionless payment, new processes are helping to make every transaction safer and more worthwhile for customers and businesses.

A pink piggy bank wirth coins around it, sitting on a wooden surface
Online Payments
ArticlesBanking

Limited Access to Baltics’ E-commerce Market Addressed with New Tailored Payment Option—banklinq

Online Payments

The continuing global e-commerce boom highlights old issues of Local Payment Methods (LPMs) some regions, like the Baltics, still face. Offering a region-tailored solution, Nikulipe, a Fintech company, is launching a new LPM to tackle the problem.

E-commerce in 2020 has seen an impressive surge as worldwide retail online sales saw a 27.6% growth rate with sales reaching over $4 trillion. This upward trajectory is expected to continue—by 2023 global e-commerce is predicted to be worth a sound $6.5 trillion, up by 22% from 2022 estimates. The Baltics are no exception in this—Lithuania’s e-commerce revenue is projected to reach $889 million in 2021, while Latvia and Estonia are expected to reach $345 million and $405 million respectively.

The continuing e-commerce boom, however, brings back one of the key problems some regions still face—current LPM (local payment method) options do not reflect the needs of global merchants, this way limiting the access for them and potential consumers.

The Baltics region is experiencing this issue as well. More than 65% of Baltic shoppers have a preference of paying through online banking, which has become the dominant payment method in the region. However, only around 20% of them have a credit card—roughly 17% of Lithuanians and Latvians, and 29% of Estonians—bringing limitations to consumers in terms of shopping on international e-commerce platforms, as well as restricting market access for international merchants; well over 60% of Europeans tend to abandon their shopping cart, if they cannot pay with their favourite payment method. In addition, global payment providers which service the Baltic states, are often unaware of the market needs, offering access only to a small traditional and challenger bank network.

One way to address this issue is by offering an innovative payment method, specifically tailored for the region, that would be able to connect global merchants to the Baltics market in an easy and hassle-free way. Nikulipe, a Fintech company creating and connecting Local Payment Methods to access Emerging and Fast-Growing Markets, is the first one to undertake the issue that the Baltics are facing, by launching a new product for the region—banklinq.

Banklinq will be the first Local Payment Method to address regional complexities by combining the local know-how and global experience, helping international merchants become more familiar with and trusted by local shoppers, paving the way to access new user markets.

“By connecting the largest number of leading local financial institutions in Lithuania, Latvia and Estonia, including major traditional and challenger banks, we are easing the access for international merchants that are looking to expand their businesses and reach new customers, but are limited by regional intricacies, like regulatory processes,” explains Frank Breuss, CEO and co-founder of Nikulipe. “Incorporating region-specific payment solutions puts businesses one step ahead in the game as the local knowledge goes a long way with customers, who are used to certain ways of paying for goods and services.”

Built upon open banking and adhering to EU regulations, banklinq will offer a payment option that covers all relevant banks in the region, bringing the Baltic consumers to global merchants. One convenient API ensures an efficient market entry without being caught up in technicalities, as the local regulatory landscape, processing, collection, reconciliation, settlement, remittance and other processes will be navigated by banklinq experts.

“The Baltics is one of the fastest-growing e-commerce markets in Europe, contributing to the worldwide e-commerce growth rate of 26% last year,” observes Breuss. “This growth is attracting a number of new businesses to the region, but the current Local Payment Methods are, unfortunately, not fit for international merchants and make it more difficult for them to access the market. We want to change that.”

The growth that the global e-commerce continues to experience is, in turn, bringing back some of the rooted issues in Local Payment Methods which have not been addressed yet. The Baltics being one of the regions facing these problems as well, the region-specific solution like banklinq could be the answer to the limited access international merchants and consumers experience in Lithuania, Latvia and Estonia.

Close up of a person's hand as they use an ATM
Three young work colleagues stood together, looking at their phones and smiling
ArticlesBankingPrivate FundsTransactional and Investment BankingWealth Management

Minted Launches Market-First Precious Metals Savings App

Three young work colleagues stood together, looking at their phones and smiling

Minted, an FCA licensed UK-based fintech company, has launched a new savings app, aimed at making precious metals accessible to all. The platform’s easy-to-use app allows customers to invest as much or as little as they want each month, and to withdraw their physical gold if they wish.

 

The brainchild of founders Hamzah Almasyabi and Haroon Siddiq, Minted is tapping into a national savings mindset and breaking down traditional barriers to investing in gold. Through the platform, savings plans start from as little as £30 per month, with users buying gold of the highest purity from an LBMA approved delivery partner. Minted also provides customers with free insurance and the option to store their gold for free in a high-security London vault.

 

Gold is well-known globally as a ‘safe haven’ asset, which holds its intrinsic value and performs well compared to equity investments on a short and long-term basis. At a time of significant stock market volatility and low interest rates, gold offers investors stability and growth potential.

 

Minted’s app has been designed with user experience in mind, making it easy to open an account and start saving. The app allows users to control regular savings plans and see detailed insights into account balances. Once they have saved enough for a gold bar, customers can then withdraw or sell their physical gold, if they choose. Users can pay by credit or debit card, as well as PayWithMyBank and other e-wallet options.

 

Becky Hutchinson, MD at Minted, said: “Right from the start, we wanted to make investing in gold a possibility for absolutely everyone. There is no reason why it should still be thought of as the preserve of the extremely wealthy or experienced investors. These are uncertain times and investing in precious metals can provide stability and the prospect of strong growth.

 

“We’ve worked hard to ensure that our app is easy to use, intuitive and gives customers just the right amount of information to guide their investment decisions. The fintech sector is evolving rapidly and the boundaries are constantly being pushed in terms of the investment products and services coming to market. It is extremely important to us that our platform stands out from the crowd.”

 

Unlike other investment options, which simply offer investors exposure to gold prices, Minted’s customers actually own physical gold and can withdraw or sell at any point they choose. By investing incrementally, even customers with relatively little disposable income can build their own precious metals portfolio over time. Currently, Minted offers gold bars ranging in size from 10g to 1kg and is set to add other precious metals to its platform.

 

Hutchinson continues: “People may have various reasons for choosing gold: diversifying their investments, building an emergency fund, putting away money for their families in a safe place or simply saving enough to splash out on a big purchase. We believe Minted offers options for everyone, and we are extremely proud to be bringing this new product to market.”

 

Minted’s platform is live in the UK. Visit www.theminted.com for more info or search for ‘Minted’ on the App Store and Google Marketplace.

Open Banking
ArticlesBanking

Finastra and Salt Edge Collaborate to Provide a More Personalized Banking Experience

Open Banking


Combined offering provides instant PSD2 and global Open Banking compliance for an open, secure and personalized banking experience

Finastra today announced its collaboration with Salt Edge to improve the speed of compliance with the Payments Service Directive 2 (PSD2) and other global Open Banking standards, for banks and Electronic Money Institutions (EMIs) worldwide. The integration of the Salt Edge Software-as-a-Service (SaaS) solution, Open Banking Compliance, with Finastra’s core banking solutions, Fusion Essence and Fusion Equation, enables institutions to build the necessary architecture to support end-to-end banking requirements and compliance through one Application Programming Interface (API). The integration is carried out via Finastra’s open development platform, FusionFabric.cloud.

In an increasingly competitive global marketplace, banks and EMIs are under pressure to optimize their core processes, increase profitability, reduce the time to market for new products, and continue to innovate and personalize their offerings. The opening up of data has provided a good foundation for achieving this. In fact, Finastra’s State of the Nation research found that, globally, 94% of professionals at financial institutions agree that Open Banking is important to their organization, with 63% reporting that it has enabled them to improve customer experience and 59% stating that it has helped attract new types of customers. However, complying with PSD2 and regional Open Banking standards can be a time-consuming, expensive and complicated task.

Dmitrii Barbasura, Co-Founder & CEO at Salt Edge said, “Finastra’s commitment to unlocking the power of finance for everyone supports our goal to simplify all components of Open Banking and PSD2 compliance for both financial providers and end customers. The partnership extends our network coverage from our existing      customers to Finastra’s wide customer base, while the pre-integration of our combined best-in-class solutions allows end customers to benefit from more inclusive financial services thanks to Open Banking.”

Open Banking Compliance provides full coverage of regulated markets with cross-bank and pan-European API standards, such as Open Banking UK and The Berlin Group in the EU, as well as newly regulated markets such as AustraliaBrazil and the GCC. The comprehensive set of APIs gives Third-Party Providers (TPPs) access to instant and secure account information, payment initiation and a full-stack developer portal. Additionally, the integration provides added security, with a TPP verification system and mobile-first application to comply with strong customer authentication (SCA) and dynamic linking requirements.

Anand Subbaraman, General Manager, Banking at Finastra said, “Salt Edge has a proven track record of success with more than 100 API implementations for financial institutions globally. Bringing Open Banking Compliance into our suite of core banking solutions makes compliance quick and seamless for both Finastra and Salt Edge customers, while giving them the tools to create better and more personalized products and services. For the end user, the benefit is a much quicker, more secure and relevant banking experience that truly accommodates their needs. We are excited to partner with Salt Edge and welcome them into our ecosystem.”

Smart Investments
ArticlesBankingFinance

4 Smart Investments You Can Make in College

Smart Investments

Early investing is an opportunity to set yourself up for greater wealth over the long-term. And you don’t need to wait until you get a career to do it. There are ways that college students can invest now, and some of them require very little input. People think of investing for things like retirement, but investments can fund other things as well. You could leverage investment income to travel, pay off debts, send your kids to college, and so much more. While some investments should be set aside for retirement, others can be used to enjoy life with.

 

Real Estate

Imagine living rent-free in college. If you can purchase a home, this is possible. You get roommates, and they foot the bill for the mortgage. After college, you can expand your real estate portfolio, sell it, or even continue living in it rent-free. Real estate is always considered a good investment because it’s an asset that appreciates in value if it is well-taken care of. If you purchase a multi-family home, there is even greater opportunity. Investing in duplexes and four-plexes can give you a place to live while also bringing in an income from renting out the other units.

 

Retirement Fund

Even an extra $100 a month into a Roth IRA can be a great way to store up for the future. You can start one of these as soon as you turn 18 as long as you meet the income requirements. It’s one of the easiest ways to invest for the future before you start your career. Once you get into the working world, you may be eligible for things like a 401K and company matching. These investment accounts can increase your wealth and give you a comfortable nest-egg to retire with. Some people retire earlier than others because they invested earlier.

 

Cryptocurrency (Maybe)

Right now, cryptocurrency is gaining in popularity, but is it a wise investment? Let’s look at what it is. In essence, cryptocurrencies are units that are backed by a technology company, a technology process, or a technology product. There are also meme coins like Dogecoin that are popular, but don’t have anything tangible to back it. Cryptocurrencies run on the Blockchain and in many ways are similar to stocks in that they rise and fall in value, can be sold, and traded to get something different.

Cryptocurrencies leave many people feeling like it’s just gambling. While others see the value in the technologies and what they can do for people. If you plan to invest in some cryptocurrencies, it’s best to think about it like the stock market. Don’t put anything in that you can’t afford to lose. Do your research to find crypto coins with good use cases. And don’t put all your eggs in one basket. Just like a stock portfolio, cryptocurrency investments should be diversified.

These are a great investment for college age students because the barrier to entry is low. You can put in amounts as low as a few dollars to start. There are apps and videos explaining how it all works, and some apps even give you free coins to learn more about cryptocurrencies.

 

Education

The last thing that college students want to think about is more education, but it’s a very wise investment for many students. In education for instance, teachers with a Master’s degree can command up to $3,000 more in salary in their first year of teaching. This rate increases significantly as the years of experience go up. It also qualifies them for positions in education that are not available to those with only a Bachelor’s degree. Nurses who complete a BSN to DNP program for instance are able to practice medicine under a Physician. They have an immense opportunity to diagnose and treat sickness.

Why is education such a good investment? It’s because once you get it, it cannot be taken away and you will always have it. College students should consider education in fields that are in high demand with a good outlook on income potential if they want to maximize their investment.

 

Conclusion

The keys with investing in college is to never invest money you can’t afford to lose and to diversify your investments. This means investing in different kinds of things. A diverse investment portfolio will be an asset during college and beyond. 

Crypto Bitcoin
BankingMarkets

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

Crypto Bitcoin

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

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

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

How is Fintech Transforming Banking in Central Asia?

Fintech Banking


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

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

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

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

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

 

International remittances

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

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

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

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

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

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

 

Empowering the region with Islamic fintech

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

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

 

Creating a digital ecosystem in Central Asia

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

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

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

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

 

Fuelling growth and innovation through tech

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

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

Abdullo and Zuhursho - ALIF
Abdullo Kurbanov and Zuhursho Rahmatulloev, co-founders of Alif
Cash Flow
ArticlesBankingCash Management

How To Improve Your Business’ Cash Flow Through Invoice Factoring

Cash Flow


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

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

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

 

What Is Invoice Factoring?

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

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

 

Why Is Cash Flow Management Important For Your Business?

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

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

 

How Does Invoice Factoring Improve Your Business Cash Flow? 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

The Wrap-Up

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

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

FinTech Payments
ArticlesBanking

Emerging Markets Lead in Adoption of Latest Fintech Payment Solutions

FinTech Payments

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

 

Rise of online purchases in Emerging Markets

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

 

Mobile payment—key to e-commerce success

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

 

Pandemic-influenced trends are here to stay

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

Five Things You Need to Know Before Sending Money Abroad

Money transfer globally

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

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

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

 

1. Secure your email address

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

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

 

2. Avoid public wi-fi

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

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

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

 

3. Research the app you’re downloading

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

 

4. Keep your operating system up to date

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

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

 

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

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

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

 

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

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

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

Entrepreneur
ArticlesBanking

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

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

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

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

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

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

 

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

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

 

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

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

 

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

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

 

UK Budget
ArticlesBankingCash ManagementFinance

Budget’s ‘Super-deduction’ Capital Allowance Offers Logistics Sector A Golden Opportunity

UK Budget
By Tim Wright, Managing Director of Invar Systems
Chancellor Rishi Sunak’s Budget announcement of a capital allowance ‘super-deduction’ could be a game-changer for many warehouse owners and operators.
The super-deduction, which will apply for two years, allows firms to claim 130% of their expenditure on approved plant and machinery against their tax liability. There is no list of qualifying expenditure, but just about any equipment that one might install in a warehouse or distribution centre appears to be covered and, importantly, ancillary expenditure such as building alterations and electrical system upgrades to allow equipment installation are specifically included.
The Chancellor’s aim, beyond kick-starting the post-Covid recovery, is to address the UK’s chronic underperformance in productivity growth, which was less than stellar even before the 2008/9 financial crisis (2.3% per annum), and since then has essentially flatlined at 0.4% per annum. Discussing the validity and meaning of productivity data notoriously starts heated discussions amongst economists but in the warehousing sector the issues are very real and quantifiable.
The gorilla in the room is of course the inexorable rise of e-commerce, currently representing 30% or more of trade in many retail sectors, and with similar expectations for on-demand fulfilment of orders increasingly seen in business and industrial purchasing. Clearly, fulfilling two dozen orders for individual items is immensely more laborious than serving the same volume by shipping whole cases or pallets – by a factor of 15 according to one US study – inevitably driving down productivity per hour worked.
E-commerce has also driven up product variety, and, critically, the volume of returns to be handled. Yet this comes at a time when securing and deploying warehouse staff is becoming increasingly problematic: many businesses have been heavily dependent upon European labour, which is unlikely to be earning enough to qualify to work in the UK post-Brexit, while creating Covid-safe working in labour-intensive areas is a major challenge. Along with rises in the minimum wage, this is pushing labour rates up.
In addition, increasing capacity by adding more space is not an easy option – e-commerce operators, and businesses hedging against supply chain disruption are snapping up all the available space in what is generally agreed to be an ‘under-warehoused’ country.
These challenges, although increasing, are not new and nor is the obvious solution ­– automation. But apart from the ‘marquee brands’ such as Amazon and Ocado, who have been able to invest large sums in green-field developments, the warehousing sector has been slow to adopt automation, and where it has, the tendency has been to create unintegrated ‘islands of automation’ at particular pain points.
However, for real productivity improvement a warehouse or fulfilment centre needs to address all its many interdependent activities simultaneously:  KPIs in receiving, in put-away, in picking, in packing, labelling and dispatch, as well as, in health and safety.
Importantly, this means a complete rethink of how the warehouse operates. A particular focus will be a move towards ‘goods-to-person’ operations, rather than having people spending most of their time walking unproductively between locations.
It’s easy to understand why many businesses have been reluctant to commit to change. Until quite recently, warehouse automation was ‘hard engineering’ – it involved not only major investment all in one go, but installation caused disruption, even complete shutdown, and was considered inflexible. Any change in requirements could only be accommodated by further significant investment and upheaval.
Happily, these constraints no longer apply. The development of autonomous mobile robots (AMRs) in particular has been a game changer, as has been the creation of easily reconfigurable sortation systems, re-locatable or even fully mobile pick faces, smart automated packing stations, and a raft of supporting technologies such as pick-to-light, along with Warehouse Management Systems that are becoming ever more capable, yet easier to adapt and use.
Such solutions are scalable and can be introduced flexibly, as funds allow. What’s more, they can be readily reconfigured to integrate with subsequent investments, largely off-line through the software, rather than by disruptive re-engineering that requires shutdown. They are also genuinely scalable – in many cases, simply adding more AMRs to the system can accommodate future growth or extension.
Rishi Sunak’s ‘super-deduction’ capital allowance offers the logistics sector a golden opportunity to invest in performance enhancing automation, giving fulfilment operations the boost to productivity needed to cope with the surge in ecommerce orders. It’s an opportunity not to be missed.
ArticlesTransactional and Investment Banking

How to start your investment journey and increase your income

How to start your investment journey and increase your income

Looking to save money for a down payment on your first house? Not sure how to invest that new inheritance? Or perhaps living through a global pandemic has inspired you to start an emergency fund?

There is never a “perfect time” to begin investing. While diversifying your assets may be the last thing on your mind this year, the good thing is that all you have to do is start. Let’s explore some ideas that will inspire you to begin your investment journey, no matter how much money you have in the bank.

 

Open A High-Interest Savings Account

If you have extra cash you are not using for your immediate expenses or that stimulus check is starting to burn a hole in your pocket, you may consider opening a high-yield savings account. With a high-yield savings account, you can start investing with any amount and still have the option to access the cash quickly in the event of an emergency.

There are many banks that offer options for high-yield savings accounts online that still allow access to cash if needed. Opening a savings account is a risk-free way to begin your investment journey, and there’s no better time than now to get started, no matter your age. Thanks to compound interest, your money will grow much faster than if it were sitting in your checking account, and you’ll be less tempted to spend it!

 

Invest In Real Estate

If you’re looking to diversify your assets, investing in real estate is a low-risk and lucrative alternative to investing in the stock market. When you invest in real estate, you are purchasing a house, condo, or apartment with the intent to find tenants and collect the rent as a profit each month.

Many investors prefer real estate as it provides a tangible, physical asset that can be accounted for and controlled. Real estate also has the potential to appreciate over time as your property’s value goes up, allowing for an additional profit upon eventual sale. If you are considering flipping a house to sell for a profit or investing in a rental property to diversify your assets, consider getting an investment property loan to get started. Just be sure that if you’re investing in a property to become a vacation rental property, you also invest in a luxurious interior to increase your return even more!

While this seems like a no-brainer investment option, there are risks involved with real estate as well. This is less of a casual investment, as you’ll need to do quite a bit of research to get started, and rental properties cannot be quickly liquidated if you need extra cash. You also need to consider additional costs such as hiring a contractor for repairs or a property manager to handle the upkeep of your building, not to mention the potential headache of dealing with renters. Despite all this, the stream of passive income and the advantage of owning a tangible asset that can only appreciate over time, make a real estate investment well worth the risk.

 

Invest In The Stock Market

Many would recommend you invest your hard-earned money in stocks, and experts predict the stock market has the ability to give you the highest potential return over time. When you buy stocks, you are essentially buying a tiny piece of a given company, and the stock market gives an average of 10% annual return on investments according to the S&P 500.

 A benefit to investing in stocks is that you can choose to get as involved as you want or stay hands-off in your investment strategy. If you are interested in the stock market and have the confidence to make your own judgments, it can become a fun pastime choosing where to invest your money. If you aren’t confident yet in your knowledge of the stock market, it’s easy to get started with a beginner-friendly app like Fidelity or SoFi.

The downside in this investment option is that there is some risk involved; the value of stocks can decline over time, and making an unlucky investment can actually cost you, which is the opposite of what we want! If you like the excitement of a little risk or prefer a hands-on investment approach, the ebb and flow of investing in the stock market may be for you.

There are so many options when it comes to investing your money, and the first step is knowing what type of investment is right for you. Start exploring one of these ideas to increase your income and begin your investment journey today!

Helicopter money
ArticlesBanking

The Economic Crisis, The Role of Central Banks & Whether Helicopter Money Can Save The Day

Helicopter money

Gregory Perdon is co-Chief Investment Officer at Private and commercial Banking, Arbuthnot Latham

The world’s central banks (US Federal Reserve, Bank of England, Bank of Japan and the European Central Bank) play a crucial role in the global economy. Broadly speaking, they serve as both policy maker and lender of last resort and their objective is to help keep their respective economies in balance.  

Central banks monitor carefully the economy and the financial system and pay particular attention to the speed and temperament of growth. What do they want to see? Monetary officials like when the temperature of inflation and the economy is not too cold nor not too hot, think of it like goldilocks, namely ‘just right’. But when growth begins to overheat, that’s often when they jump into action to help cool things down. Equally when crisis hits, central bankers tend to be the first we call upon to help put out any financial fires.

 

How central banks manage the economy?

Well, they don’t really manage the economy; businesses and consumers do that through their buying and selling; banks do so via their lending decisions – but monetary officials still maintain a tremendous amount of influence over the economy.  One way they exert control is by setting interest rates. For example, when central banks lower borrowing costs, businesses and individuals tend to ‘feel richer’ and can divert capital they would have allocated to servicing debt into investments, hiring and spending (or at least in theory).

Central bankers can also allow lenders to increase their leverage levels, meaning banks can lend more money – which can free up the balance sheet to make more profit (assuming there is demand for lending).

Finally, through communicating (what central bankers call forward guidance), they can telegraph to the markets their intentions, enabling businesses, lenders and traders time to prepare and position.

 

Central banks and Quantitative Easing (QE)

What tools are left in the toolbox after interest rates have been cut to zero and capital ratios relaxed? Well when the conventional is exhausted, they go unconventional – and that’s exactly what the Fed did after the global financial crisis in 2008 – they took it to the next level via large scale bond buying programmes, otherwise known as quantitative easing (QE). 

That’s money printing, right?  Wrong, that’s a myth. QE is but a maturity transformation exercise during which the central bank buy bonds (taking them out of circulation) and replace them with cash. 

This floods the market with liquidity, pushing the price of bonds higher and the yield lower (a condition market participants refer to as financial suppression). This can drive investors into other higher yielding assets such as corporate bonds, listed stocks and property – thus creating demand for financial assets which in turn inflates their prices (or at least stabilises them). But it can also lead to the hoarding of cash.

And the Fed didn’t stop there, during the financial crisis and in their coronavirus pandemic response they also bought (and continue to buy) residential mortgage bonds. Are they interested in building a portfolio of properties and/or foreclosing? Of course not, they do this to ensure mortgage rates stay low – which creates a sense of confidence and encourages home ownership by making housing more ‘affordable’. And it has worked, look no further than the housing market data from sales to starts to prices to sentiment, it’s been a healthy market.

 

If central banks aren’t printing money, who is?

It’s the commercial/private banks (and shadow lenders) who perform the alchemy of money creation, not government. Every time a bank issues a new loan, one must think about it like a leveraged deposit. When one bank issues a loan, it becomes the deposit of another financial institution and it’s this multiplier which in essence creates new money. And of course, they also control the destruction of money – when loans are retired and credit contracts. 

But it’s not so simple, there needs to be lending opportunities in the markets and confidence in the system in order for banks to have the appetite to lend and the pricing needs to be perceived by the borrowers as attractive in order for businesses to accept the terms.

 

The role of governments

Coming back to crisis fighting, monetary policies can only take us so far but if we want to go the full distance, we need fiscal support.  Fiscal policy is the domain of governments, elected politicians, those individuals and committees who control taxation and spending.

Government bodies also set regulations and employment laws which can have a significant impact on the daily decisions made by businesses around the country. For example, if a government wants to orchestrate a short-term boom, they can deregulate and slash taxes (but pay the price of potential environmental damage, social unrest and/or higher government debt later).

But what happens when central banks run out of ammo, governments become desperate to foster growth, banks can’t lend and/or businesses don’t want to borrow?

 

Can Helicopter Money save the economy?

If conditions get bad enough, central banks and governments can throw out the rule book, circumvent the private sector, take to helicopters and go ‘all-in’. We have all heard about helicopter money, but what is it? Heli-money is fundamentally different to QE in that there is no exchange of assets. It is merely a one-way forgivable transfer (unlike QE which is a two-way exchange [but not forgiven]). In a stylised example, the government issues bonds which the central banks buy and then cancel, in turn allowing the government to issue cheques that could then be deposited into bank accounts for citizens to spend.

The attraction of implementing Heli-money is high, because it can, in theory, be used by politicians to potentially ‘address’ growing inequality. Helicopter money can appear to help a broader base of family income statements in a very ‘democratic’ fashion whereas QE has appeared to only help those having a big balance sheet. BUT it’s only optical.

 

Helicopter money isn’t the answer to our financial woes

The reason why QE is not a free lunch is because the money ends up back in the form of reserves, and central banks (such as the Fed) end up paying interest on reserves and excess reserves (to preserve the floor in rates), so it’s not really free.

Secondly, once the bonds are paid for and then ‘written-off’, the central bank may have its equity wiped out. Don’t forget a central bank has a balance sheet just like any other financial institution.

Finally, it may just not be legal nor is it clear who decides the size of the ‘one-off offering’ thereby putting the independence of the monetary authority in question. In order to promote financial stability and a well-functioning economy, we need to ensure central banks remain strong, solvent and independent. 

Alternative Investments
ArticlesFinanceTransactional and Investment Banking

Beginner’s Guide to Alternative Investments

Alternative Investments

Alternative investment assets like collectibles, art, cryptocurrency and loans are attracting an increasing number of retail investors by offering low buy-in, high returns and efficient diversification options

Every few years the line between traditional and alternative investment opinions is re-drawn, as many alternative investment options become more and more mainstream. Everything outside the traditional investment options that are typically accessed through traditional financial institutions –  falls into the category of alternative investments. They do not include, what is now considered traditional investment options: ETFs, gold, bonds, pension funds, and others.

Alternatives category may include both physical and virtual assets, spanning real estate, art, fine wines and aged alcohol, rare items, cryptocurrency, loans, private company debt or ownership, and collectibles. There is no limit to collectible investments, as value can be found in designer sneakers, baseball cards, or even Barbie dolls.

Alternative investments can create both long-term appreciation and immediate income streams. One of the most active investor groups in alternative investing is retail investors – in other words individual investors, who want to take an active role in propelling their own financial success.  One of the most active groups, drawn to alternative investments is a millennial cohort, who exert skepticism about the power of pensions to really secure their retirement, as well as a propensity to learn to operate an alternative portfolio. Technology now allows to ensure sufficient diversification with only a few clicks, and to branch out into immediate passive income or short-term high-return opportunities. 

Five most popular alternative asset classes

1. Real estate. Part of the real estate investment market can be considered a traditional asset class – after all, even banks own real estate and hold on to it as a long term investment strategy. It’s an all-time classic to store value and a potential tool to expand earnings during positive market cycles. The biggest disadvantage of real estate are the big upfront costs and relatively low liquidity, if ownership is outright. That said, the modern – alternative investment options have become available in the real estate market, including real estate investment trust (REIT) and partial or fractional ownership ventures. Retail investors can now invest in various real estate projects by owning a part of its development and then receiving interest once it is developed.

2. Art, valuables, and collectibles. Once again, just like property ownership, some collectibles like fine wine or paintings are quite traditional – accessible to exclusive investor circles, with very high-buy in cost. The alternatives that are accessible to a wider audience, like baseball cards, or designer sneakers are easily researched on online marketplaces, like eBay. Some items can be owned outright in physical form, requiring some care and protection. But it is also possible to fractionally own any of the collectibles, including in-game items and virtual goods with residual value. This asset class has unpredictable returns with relatively difficult average appreciation, but can outperform other asset classes as an insurance. Companies like Masterworks and Otis are allowing retail investors to purchase shares in fine art pieces or unique collectibles. 

3. Crypto-assets. A hot and highly volatile asset class, which allows for both passive buy-and-hold strategies, and for trading. The chief advantage of cryptocurrencies is the relatively easy entry, with the potential to operate and hold the assets in a personally protected wallet, instead of relying on brokers or other third parties. Challenger banks, like Revolut, or  payment platforms like Paypal have integrated digital asset trading on their platforms – making it even more accessible. With recent cryptocurrency popularity, a new alternative investment asset class became popular – NFTs (Non-fungible tokens) – which are centered around collectibles, such as digital artwork, sports cards, and rarities. One trending platform would be NBA Top Shot, a place to collect non-fungible tokenized NBA moments in a digital card form.

4. Loans. Interest-bearing investments in packaged loans can bring transparent, predictable returns that outperform traditional investments. While investing in loans gives short-term returns, loans should be viewed as long-term investments. This asset class has a low entry point, while some platforms, like Mintos also sort potential investment in loans with a risk tolerance profile. It is important to diversify investment in this asset class in order to achieve stable income over time.  Investing in loans is also accessible to multiple economic areas.

5. Private company investments. Private equity and company loans are asset classes sometimes reserved for accredited investors. Because of the risky nature of private companies, some of the investments are only available to accredited buyers. Private equity is also off-limits to most retail buyers, due to its riskier nature and the higher barrier to entry. Loan investments can sometimes circumvent this limitation, by offering business loans for partial ownership and relatively low sums. More accessible option, albeit not very liquid, would again be fractional investment, or crowdfunding, which is available through platforms like Crowdcube.

Final thoughts 

Alternatives are bound to grow. Research by Prequin shows robust growth of alternative investments, to as high as $14 trillion in 2023. The Prequin report covers private wealth managers, but alternative investments are also open to retail owners, due to their variety and enhanced technological access.

The growth potential of the alternative investor sector also means adequate liquidity and price discovery will happen as more buyers join in. Fees are one of the hurdles that diminish the real returns of investment, but the more apps and investment hubs pop up, the more competition to offer low fees, increase service quality benchmark and attract investors.

Expand business
ArticlesBankingTransactional and Investment Banking

Looking for the Right U.S. City for Your U.K. Business Expansion? Here’s What You Need to Know

Expand business


We are used to reading about U.S. businesses expanding to Europe. We often overlook the growing trend of
E.U. based businesses expanding to the U.S. There are many good reasons a U.K. company, in particular, would be interested in expanding to a location across the pond. Those reasons include, but are not limited to the following:

  • Virtually no language barrier

  • Cultural familiarity

  • Similarity between currencies

  • Relatively stable and predictable political system

  • Robust economy relative to other places

Although the U.S. is a mess right now relative to more stable periods from the past, it is still a viable capitalistic republic with a functional economy ripe for a strong rebound. Coronavirus is not just a U.S. phenomenon. We are in a pandemic. Everyone is having to deal with it at some level. There is also political unrest in much of the world. The U.K. is still unpacking what it means to no longer be a part of the E.U. 2020 was a reality for everyone. The real emphasis is on how we recover worldwide. U.K. businesses and U.S. consumers can benefit each other in the recovery process. When looking for a U.S. expansion city, here are a few things to consider:

 

A Livable City

Before looking too closely at any single metric, what you need is a livability assessment. Is the city the kind of place where your potential customers would want to live? If expanding to New Jersey, you wouldn’t just look at the housing market in Jersey City. You would assess the overall reality of living in Jersey City.

Livability scores are based on a variety of factors. Two of the most important factors to consider are crime and housing prices. Boston, NYC, and San Francisco are not the most livable solely on the basis of stratospheric housing costs. But a place like Jersey City would still be in the running because of the high safety index and reasonable cost of living. Obviously, there is more to consider. When you are opening in a new city, you have to consider more than your market. You also have to consider your workforce. Your employees might not be able to afford to live in a city where the cost of living is too high. When you move your business to a city, you become a part of that city and that community. Pick a city where you wouldn’t mind calling home.

 

A Stable Economy

One of the markers of a stable economy is a survey of foreclosures in the area. It is clearly a bad sign when the foreclosure rate is moving in the wrong direction. You can also look at the price range of properties in foreclosure. If the upper end of the housing market is suffering high foreclosure rates, that is a much bigger problem than foreclosure at the lower end of the range. That is where most foreclosures would be anyway.

You also need to look at economic markers over time. A place where things are great one year but horrible the next will not be a good location on which to base the economic future of your company. It is better to expand to a place that has slightly less money, but is more stable and predictable.

 

Transportation Infrastructure

What is the average commute time for workers in that city? Long commute times indicate poor transportation and housing options. Commute times would be shorter if people could live closer to work. If people are commuting from two cities away, that says something about livability.

It also has indications for retail success. Ease of moving about in a city affects who can shop at your stores. If it is hard to get to, it will be hard to attract customers. Look for a place where there is good public transportation and walkable neighborhoods.

There are many good reasons to consider expanding your business to the U.S. Just be sure to pick a city that is highly livable, economically stable, and easily navigable.

credit
ArticlesBanking

The True Impact of Credit On Your Everyday Life

credit


There’s a common misconception that credit doesn’t matter until you’re applying for a mortgage, credit card, or personal loan. Truthfully, most people don’t even review their credit history until they need to borrow money or a line of credit. Although having a good financial record does apply in these circumstances, it’s just the tip of the iceberg. Ultimately, a consumer’s credit is used in many different areas of their lives. 

 

Character, Risk Level, And Financial Responsibility

Creditors, lenders, retailers, and service providers use credit reports to assess potential customers. There are risks involved in loaning money, credit, products, or services. If consumers don’t repay their balances in a timely fashion, these establishments suffer a loss. As such, getting a general idea of a person’s creditworthiness helps businesses to make an informed decision. 

Whether you know it or not, your credit score and history tell a lot about how you handle your finances. It showcases your level of character and financial responsibility, which dictates your risk level. If your credit is less than satisfactory, it can have a significant impact on your everyday life. Continue reading to learn more. 

 

Renting An Apartment

A good credit report is indeed necessary to acquire a home loan. However, did you know that it can also affect your ability to rent an apartment? Though you’re not borrowing any money to secure a property lease, you are making a promise to pay your rent on time. Landlords rely on rental payments to maintain the mortgage, keep the property intact, and cover other expenses. If you don’t pay, this puts them in a bind. If your credit check shows that you don’t pay your bills on time, it could backfire. Some applicants are rejected and unable to find a suitable place to live. Others are required to pay a higher deposit as a means of security for landlords. 

 

Utility Services

Water, electricity, and gas are some of the basic necessities of everyday life. However, you may not know that your credit history has a significant impact on your ability to get utility services in your home or apartment. Utility companies need to know that you’re going to pay for these services. So, they review your credit report for more information. If you have a low score, past due balances, and collection accounts, this sends up red flags. If you’re not turned down for services altogether, chances are you’ll be required to pay a sizable deposit to get started. The utility company holds the deposit in an account that’s used if you fall behind on the bill. 

 

Loan And Credit Card Interest

Your credit score doesn’t just help determine if you get approved for a loan or credit card; it’s also a determining factor in how much you’ll pay in interest. The higher the interest rate, the more expensive it is for you to borrow money. Over the lifetime of the loan or credit card account, consumers can spend extra hundreds if not thousands of dollars in interest alone. How much more money you’ll pay, is determined by your creditworthiness. Someone with a credit score of 650 is going to pay more for a mortgage, student loan, or credit card than someone with a score of 750 or higher. 

 

Getting Things In Order

As you can see, your credit impacts a lot more than you think. Whether you’re trying to rent an apartment or get utility services setup, your credit is evaluated to determine your character, risk level, and financial responsibility. Essentially, a person with poor credit will have a difficult time acquiring things they need. Even if they do, chances are they’re going to pay a lot more. That’s why consumers are encouraged to use financial management practices and resources like no credit check online loans to improve their credit. 

Life is already challenging enough. Why make things harder if you don’t have to? Now that you have a clearer understanding of how your credit impacts everyday life, you can take steps to turn things around for the better. 

Money transfer
ArticlesBankingTransactional and Investment Banking

Top 10 International Money Transfer Companies You Need to Know

Money transfer

The relevance of international money transfer companies is growing fast. It’s because slow and expensive bank wire transfers are a big problem for many people. Businesses need cheaper transfers for making and accepting payments. International investors need them as much as small business owners. Losing up to 3% on each transaction (bank transfer cost) can make their investments unviable. Most of all, migrant workers need these transfers as the cost of remittances matters a great deal for them and the global economy. There are also international travelers and other people who mostly use these services for convenience.

All in all, the demand in this market is high and it’s no surprise that dozens of money transfer providers sprung up all over the world. However, not all of them are equally good and trustworthy. As this industry is not well-regulated yet, it’s essential that you choose a provider with extreme care. The following International Money Transfer Top 10 list will help you find the best provider based on your needs. Bear in mind that while there are many great companies that offer affordable transfers, they also have specializations. Therefore, you should consider the type of transfers you need in order to choose the best company for you.

Top 10 International Money Transfer Companies to Fit Every Customer

Western Union

Western Union is, possibly, the most well-known yet most disliked money transfer provider worldwide. No matter negativity surrounding this company, it deserves a place on any top list for international money transfer companies because no other company can reach this far. In fact, for many migrant workers Western Union is the only available option.

This is a money transfer provider focused on remittances and it has an unmatched network of offices worldwide. The company supports 145 different currencies and offers in-person cash pickups even in the most remote places. Literally, there are Western Union money transfers in areas where no other international money transfer companies operate and even banking is severely limited.

That said, Western Union transfers are very expensive. They are the most expensive in the industry. The level of customer service and overall customer support is also not very good. The company has thousands of negative reviews on platforms like Consumer Affairs and BBB Customer Complaints.

The exact cost of the transfer depends on the currency, destination, and transfer amount. The company itself is highly trustworthy and regulated by multiple authorities. Western Union has been in business since 1851. It remains one of the most reputed names in the industry despite high transfer costs.

MoneyGram

MoneyGram is another reputed and remittances-oriented veteran in the money transfer industry. This company was founded in 1940 and it keeps growing and improving even through the current crisis. MoneyGram transfers are also quite expensive. However, it’s on the top 10 international money transfer companies list due to its wide global reach. The company offers cash pickups and supports 58 currencies for online transfers. Note that more currencies are supported if you make a physical transfer through a shop.

There is no minimum transfer amount, so MoneyGram is well-suited for small remittances. But transfer fees and currency exchange rates offered by the company are rather unfavorable. The cost of a transfer can reach 10% to some more remote destinations, like Ethiopia. Also, MoneyGram has multiple negative customer reviews.

It’s important to note that MoneyGram is a licensed and one of the most reliable international money transfer companies. It’s also regulated by multiple financial authorities, like the FCA. Therefore, for all that these transfers aren’t cheap, you can be sure they are 100% safe.

Xoom

Xoom is another great money transfer provider for remittances. It allows you to send transfers, no matter how small, to 131 countries and supports 79 currencies. Xoom earned its place on the top 10 international money transfer companies list due to the fact that it offers cheaper remittances. It also has a very good mobile app and is generally a user-friendly service.

However, at the moment Xoom allows you to send money only from Canada and the USA. Within those countries it’s also a very popular service for small personal transfers. These transactions are very cheap and fast. International money transfers through Xoom will cost more as the transfer amount increases. That’s why it’s a good service for remittances but not the best choice for large investment or business transfers.

TransferWise

TransferWise is currently the biggest among the “new generation” of international money transfer companies. It’s valued at $5 billion, which means it’s grown by about $1,5 billion in the last year alone. This company offers the cheapest international small transfers you can find today. Due to its fixed currency exchange margin and the minimum transfer amount of $1 it’s perfect for remittances and other small personal transfers. However, note that TransferWise doesn’t offer discounts for high-volume transactions.

The company is innovative and growing fast, including its global coverage. It’s also transparent in its pricing and highly safe. It’s regulated by multiple financial authorities, including the FCA. It’s also one of the few licensed to work in the US.

The level of customer satisfaction for TransferWise is very high. The mobile app and online transfers are very user-friendly.

Notably, TransferWise offers some of the lowest foreign currency exchange rates for international money transfers. These rates are unmatched for small transfers. The only reason it’s not currently the leader of the top 10 international money transfer companies list is that TransferWise’s global reach is not yet as wide as Western Union. However, considering its rate of growth and popularity, this might change soon.

OFX

OFX is one of the most notable international money transfer companies today due to the high versatility of its services. This is an online-based company with 10 offices worldwide and 115 bank accounts. Due to this, OFX can offer cheap and fast international money transfers to both businesses and individuals.

The minimum transfer amount with OFX is $100 and the company offers rather low exchange rates and fees. This is why it’s well-suited for small transfers. But most importantly for businesses and investors, OFX has flexible margins. Therefore, the larger is your transfer, the cheaper it will be.

Moreover, the company has a corporate desk and offers very helpful services for businesses and investors. This includes hedging and dedicated currency guidance.

Customer satisfaction rate for OFX is high and the company is regulated by the FCA and other relevant authorities. All transfers are available at zero fees and the company is transparent and traded publicly. Its yearly turnover is around $20 billion. As online international transfer companies are, in essence, currency wholesalers, the large volume is what allows them to keep FX rates low.

One small issue that customers report with OFX is that waiting times for support can be long.

Payoneer

Payoneer is somewhat limited in its functionality and types of transfers you can make through it. However, it offers such a great balance of price and ease of use that it deserves a place among the top 10 international money transfer companies. It also must be noted that the company is constantly growing and improving. Just recently it announced a $3.3 billion deal with SPAC: Betsy and it’s going public. Already Payoneer offers very fair currency exchange rates and transfer fees. The new announcement shows that we can expect it to get even better soon.

Payoneer money transfers have a huge global reach and the comp-any is popular with online merchants, expats, travelers, etc. There are no good high-volume discounts. That’s why it’s not the best for large transfers. However, it’s an excellent solution for quick and cheap small-to-medium transfers. 5 million people are using Payoneer already and the majority of customer reviews are positive.

One of the best Payoneer features is that it allows freelancers to easily withdraw payments they accept from clients through a Mastercard. The solution is also a good choice for SMEs that need to accept payments from multiple countries.

AirWallex

AirWallex is one of the international money transfer companies targeting the eCommerce sector. This company offers secure and reasonably affordable transfers and is rather popular worldwide. Please note that one cannot use AirWallex as a private client to make small transfers. However, online merchants can benefit from this service greatly as it’s secure and regulated by many authorities, including FINTRAC, FCA, ASIC, and HK Customs and Excise Department. Exchange rates offered by the company are very good.

At the moment, AirWallex supports 50 currencies. It’s open for business clients from Europe, Singapore, Hong Kong, Australia, and China. There is no minimum transfer amount and fees are very low.

There aren’t many customer reviews of this company available online. However, those that exist are mostly positive. AirWallex was founded only in 2015. But it managed to build a solid reputation of reliability within its niche. It’s also known to have a very good app. The company is growing steadily and already has eight offices worldwide and over 300 employees. Its turnover has reached $3 billion a year and it currently plans expanding to the US market.

WorldFirst

WorldFirst is one of the online money transfer industry veterans. Recently this company has undergone a major overhaul. It was purchased by Alibaba Group and with this huge influx of funding it managed to rise fast. Today WorldFirst offers the best FX margins in the entire industry. It’s one of the best solutions for making large transfers at a fixed margin. Due to its close association with Alibaba, the company also offers a wide range of useful services for eCommerce merchants.

All in all, WorldFirst is near the top 10 international money transfer companies because it’s nearly impossible to find a cheaper and more reliable solution for businesses and independent investors. It’s not the best option for small transactions because the minimum transfer size is $1000.

The company is transparent in its pricing and supports over 130 currencies. It has multiple offices worldwide and accepts clients from all over the world, except for the USA. Customers usually praise low rates as well as great service. WorldFirst is rather innovative and its apps are highly advanced but easy to use.

In fact, using WorldFirst international money transfers is so easy you can make a transaction in a few minutes. The registration process takes less than a minute. The company’s global reach is unmatched by any of its direct competitors (Currencies Direct, Moneycorp, TorFX).

Moneycorp

Moneycorp is among those international money transfer companies that are rapidly growing and improving today. Just recently it announced joining Shortlist to provide simple and affordable payments for freelancers. This is a good reminder that despite being an industry veteran (founded in 1962) the company thrives on innovation. Its annual turnover is near $40 billion now and Moneycorp prides itself on working with high-wealth clients.

This is one of the top 10 international money transfer companies that are perfect for investors and businesses. The company offers lower rates for large transfers and many additional services, including guidance from currency experts. Note that Moneycorp has won numerous awards and has the highest D&B rating in the industry.

The minimum transfer is only $50, which makes it possible to use Moneycorp for small private transfers as well. However, the provider has the best rates saved for customers who make high-volume transactions. The company has offices in several European countries, the US, the UAE, Hong Kong, Brazil, and Australia. It’s regulated by multiple authorities, such as the FCA, ACPR, and FINCEN. It supports 120 currencies and over 90% of all customer reviews are positive.

Currencies Direct

Currencies Direct is another of international money transfer companies that work primarily with high-wealth clients. It offers many helpful services for investors and business owners. This includes offering expertise on global real estate investments.

The company has a $7.5 billion annual turnover and 22 offices in different countries. It offers some of the best exchange rates for high-volume transfers. It also offers a very efficient and friendly multi-lingual customer support service.

The minimum transfer with Currencies Direct is $100 and the company charges no transfer fees. It’s regulated by the FCA, SARB, FINTRAC, and FinCEN. It also has a Level 1 D&B rating and supports 39 currencies.

Bottom Line: International Money Transfer Companies Are Changing the World

As globalization is growing billions need to be transferred worldwide every year for business and personal purposes. Money transfer companies with their cheaper and more efficient transactions are going to become the new norm for international payments. This means that we can expect more competition in the industry, which will prompt even better offers.

Saving money
ArticlesBankingRegulationTransactional and Investment Banking

Simple Ways to Save Money That Often Go Overlooked

Saving money

One of the most fundamental concepts of generating wealth is knowing how to save money. When you master the art of stretching your earnings further, you have more resources to invest and save towards a more secure future. While shopping around for the best price, using coupons, and other common savings tactics are ideal, other strategies go overlooked, costing you hundreds of dollars each year. Continue reading to learn more. 

 

Skip ATM Fees

When you need access to cash, the ATM is the fastest way to retrieve it. It saves you from standing in long lines at the bank and allows you to get money 24/7. Be that as it may, you incur a fee when you use ATMs outside of your bank’s network. The fee might only be $2-5, but when you calculate that over the number of times you use the ATM in a month, it adds up. Not to mention, most banks charge an additional fee for using out-of-network ATMs. You can save several dollars every year by merely using no-fee ATMs or making purchases using the debit card linked to your bank account. 

 

Overdraft Protection

Even the most financially organized person can overlook a bank transaction. You forget that your cell phone bill is on automatic withdrawal. The funds aren’t available in your checking account. The payment gets returned, and you’re left with a $25-$35 fee to cover. While setting reminders can reduce the chances of overdraft fees, there’s another solution – overdraft protection. This is an “insurance” policy offered by banks where transactions totaling more than your available balance are honored or paid using a linked savings account, saving you hundreds in fees each month. 

 

Rebates

Using coupons or taking advantage of sales when making a purchase are common ways to save money, but they’re not the only solutions. Most people tend to overlook rebate opportunities. Though not applied at the time of purchase, rebates can quickly add up. If you frequently shop online, applying for an Amazon rebate could save you hundreds of dollars on everyday purchases. Believe it or not, there are several cashback and rebate programs you can sign up for to save on everything from groceries to apparel. 

 

Buy Generic

As a consumer, you’ll always pay for the brand’s name and reputation, from your medications to your clothes. For example, a pair of athletic shoes from Payless shoe store will cost you less than a pair you purchase from Nike. Since Nike is the more popular brand, it will always be more expensive than a generic brand from your local retailer. However, if you dig deeper, you’ll learn that these shoes are made in the same factories using the same materials, ultimately providing you with the same quality. So, it’s safe to say that you would save yourself hundreds if not thousands of dollars by being open-minded about generic or lesser-known brands. 

 

Timeliness

When it comes to wasting money, timeliness is a huge factor. When you don’t pay your bills in a timely manner, you incur late fees, penalties, and sometimes added interest. Depending on how frequently you practice this behavior, you could be watching hundreds of thousands of dollars go down the drain. You can remedy this problem by ensuring that you pay your bills on time. Set up automatic payment plans or set reminders to ensure that you have the available funds to cover the bill. If you’re having difficulty keeping up with the due dates, talking with service providers about making adjustments is recommended. 

As the saying goes, “A penny saved is a penny earned.” On the surface, these habits may not seem like much. Incurring a $2 ATM or $35 overdraft fee, spending more on a popular brand, or missing the deadline for a utility or credit card bill seems minuscule, but if you were to add it up over the course of a month or year, chances are you’d be surprised. Keep more of your money in your pocket by developing better financial habits and taking advantage of the resources available to help you save more each day.

Female Investor
ArticlesBankingTransactional and Investment Banking

Here Is What Your Company Can Do to Attract More Women Investors

Female Investor

Women make up about 50% of the population while controlling only 30% of the wealth. This is the worldwide statistic that is set to dramatically change in the right direction over the course of the next decade. As bad as the numbers appear, they actually represent good news. This is a big improvement that is set to continue. Women’s growing wealth prompts the need for changes in the banking sector. That said, it is not all good news. MSN goes on to say:

“Although a third of the world’s wealth is under women’s control today, four in ten wealthy women are currently not involved in the management of their family finances compared to only one in ten men.”

Dramatic change is afoot. And that foot will be wearing Prada. More women are bursting through the glass ceiling, as well as the glass walls and glass doors. You want to be on the right side of history, as well as the right side of your growing female clientele. Here is hot to make sure they do business with you as opposed to your competition:

 

Speak Directly to Women

It is never the right thing to address someone indirectly. If you have a question for a woman, don’t ask her male partner or associate. Speak to her directly. Advertisers often make this mistake. Your marketing does not need to talk down to women. It needs to talk directly to women.

If your healthcare services include women’s health issues, you need to make sure you are speaking to that target audience. If you don’t know how to do that, bring in a healthcare public relations firm that can. If you want to target investment products to women, you are in luck. You have an audience that is rapidly growing. They already want to do more investing. You just have to craft your message so that you are making a direct appeal to the customers you want to attract.

One of the best ways to draw and not repel women investors is to put women in charge of the sales and marketing efforts. Men are used to talking to other men in ways that would be counterproductive when talking to women. The best way to speak directly to women is to let a woman do the speaking.

 

Go Where the Market is Ready

Gender egalitarianism is not alive and well in many parts of the world. Change is happening everywhere. But that change is much slower in some places as opposed to others. If you want to attract more women to your investment platforms, start in the places where more women are empowered to respond to your message.

Women investors in loans rose by 43% in Europe in 2020. Europe has a long history of empowered women. It is a good place to find women investors. The U.S. requires a bit more nuanced effort. Women control a great deal of wealth in the States. 20201 saw the swearing in of the first female vice president. It is overcoming a checkered past with regard to women’s rights. But the market for women investors is set to explode as millions of women become more empowered. Go where the market is ready to reap the greatest rewards.

 

Provide More Offerings Suitable for Women

One of the best things Apple did with Apple Watch was to make two sizes. They never marketed the smaller watch for women. But since women tend to have smaller wrists, it is a sensible option. It is a product useful for women without it being festooned with pink flowers.

When possible, design products to be unisex. When not possible, include an option suitable for the other 50% of the market. If you want women to invest in your company, make it a company that offers something for everyone.

Women are 50% of the population. It will not be long before they are at least 50% of the controlling influence of wealth. Their investing power is here, and growing. You can partner with this new generation of investors by appealing directly to them, being there when the market is ready, and giving them a reason to invest in your company by having offerings suitable for everyone. 

Afghanistan Currency
ArticlesBankingFinanceForeign Direct InvestmentIslamic Finance

Securing Stability & Success in Afghanistan’s Economy

Afghanistan Currency

As the largest commercial bank in Afghanistan, it may have also proven difficult for Azizi Bank to simultaneously ascertain the title of best commercial bank. Yet, that is exactly what this outstanding financial institution has done, and has rightfully been awarded that title of 2020’s Best Commercial Bank, Afghanistan in this quarter’s issue of Wealth & Finance International Magazine. Join us as we find out more about what the bank has to offer, what makes it so unique, and why it is deserving of this international recognition.

Azizi Bank is the largest commercial bank in Afghanistan, and it has been maintaining that position since its inception in 2006. Being the country’s largest banking group, there is a Pan-Afghanistan presence that stretches across more than thirty provinces and a headquartered office in Ankara Square in Kabul. The work of Azizi Bank started with the professional and entrepreneurial commitment of its founder, Mr Mirwais Azizi of the Azizi Hotak Group & Family and is presently under the leadership of a young and dynamic Chief Executive Officer Dr. Prof. Mohammad Salem Omaid. What makes Azizi Bank unique is the fact that its professional customer service and the sense of belonging that every client and customer has. Each and every employee carries with them this sense of welcoming and belonging, and strives to ensure that all interactions with customers are done so in a way that makes them feel like they are a part of the family feel that the bank presents. In addition to this, there is a wealth of digital innovation and product excellence on show here also. Azizi Bank has invested significant time, money, and manpower into ensuring that every product is designed to suit a client requirement, and this commitment distinguishes the bank to be the most distinctive and superior bank across Afghanistan.

For almost fifteen years, Azizi Bank has been managed under the governance of a very competent and effective Board of Supervisors, who brings a vast repertoire of knowledge and experience in their various fields, and are internationally acclaimed in their respective work. At the management level, there is a brilliant mix of youth and experience, which leads to both innovation and stability across the board. Today, Azizi Bank has more than fifteen hundred employees, and with a fifteen percent female work force, it is playing a quietly effective role in women’s emancipation and empowerment across Afghanistan. Aside from Azizi Bank, there are another eleven banks in the country, including two banks from Pakistan. The total banking deposit is approximately USD 3.2 billion, with all assets totalling approximately five billion USD.

As a country, Afghanistan has witnessed strong economic growth and developing in banking systems when compared to the previous two decades. Growth in the financial sector, specifically within the banking sector itself, was considerable. Thus, national income increased, and there was massive promotion in many of the other macroeconomic factors, including exchange rates, inflation, balance of payments, government revenues, investment, international trade, industrial production, and employment levels. Azizi Bank has always played a pivotal role towards each and every reform of the Central Bank of the country, and has marked itself out as a pioneering force of financial inclusion programs and branchless banking. Recently, in a bid to further bolster these initiatives, Azizi Bank has signed an MOU with the Afghan Postal Service to provide branchless banking through their more than four hundred and fifty post offices covering the country and some of its most remote locations.

The team at Azizi Bank is also made up of the bankers of choice for some of the major UN agencies, such as UNICEF, WHO, and WFP, who are present and working in Afghanistan. Azizi Bank is all about enabling these agencies to make their payments and disbursements to the far and rural areas of the country. Furthermore, this outstanding bank is the only bank in the country to have a mobile wallet solution, called AZIPAY, for all types of payments, including paying utility bills, education fees, groceries, and airline tickets. There is even excellence with the more comprehensive financial inclusion initiatives, with Azizi Bank having converted one of its subsidiary banks into a full-fledged Islamic Bank in the country. This is the first and only full services Islamic Bank in the country to date. With Afghanistan having more than 99% of its population being Muslims, such a change will definitely pave the way for more people coming into the banking fraternity, thereby improving the financial inclusion ratio of the country.

Since its inception, there have been several core founding values that have been the focal point of the bank and its championing of sustained financial growth in Afghanistan. Azizi Bank has always believed in innovations, and has never stepped back away from investing in innovative technological initiatives. The bank also has the best in class management board and senior management in the country, comprising of experienced bankers with an averages of more than two decades’ experience from the United States, India, Pakistan, Africa, and Europe. Azizi Bank has also always believed in the learning and development initiatives towards capacity building, and have built a comprehensive policy on the same. These structural reforms have brought in change within the bank to a large extent, and have always made it unique compared with other peer banks working in the country.

As has already been conveyed above, Azizi Bank prides itself on being a technology-driven back that makes full use of some of the latest technological innovations from across the world. With society moving towards more digitalization than ever before, the customer’s perceptions have changed on what they can access and want from their banking services. Afghanistan in particular is a country where more than half of population has a smart phone, and there is greater opportunity for banks to invest more into technology than ever before. Azizi Bank has foreseen this opportunity prior to its competitors and peers, and is now in a position where it can adapt to the ever-changing present and future. One of the ways in which the bank has taken the initiative and seized the day regarding innovative technology is by being a prominent voice on several developmental projects aimed at meeting financial customers’ expectation all across Afghanistan.

Providing technologically-savvy services banking services is the goal for many institutions, especially now that the world is moving towards an increasingly digital society. With the gradual transition towards advanced digital banking, there comes a greater need for traditional banks to keep up with modern systems and innovative ways of doing things. Azizi Bank has also initiated different tailor-made products for both deposits and advances meant for different levels of society, including accounts for children, students, women, senior citizens, retail businesses, small and medium enterprises, and entrepreneurs to name just a few. Despite the wealth of innovation on show at Azizi Bank, there have also been challenges presented by the COVID-19 pandemic.

The arrival of the pandemic meant that Afghanistan, which is a predominantly import-driven economy, witnessed a surge in the cost of commodities, thereby affected the normalcy of life and common people. Industries of all sectors and types were affected, and so was the fate of the financial sector as well. In essence, the economy and economic growth of the whole country took a massive hit. There has been some impact on Azizi Bank amidst the pandemic, which has sustained itself almost a year and still counting. With the initial lockdown in place for the first few months of 2020, business was seriously hampered, though there was no significant decline for deposits. Where Azizi Bank really was affected was new business. Overall trade finance and the recovery of loans has been another key area affected by the pandemic, although the Central Bank of Afghanistan did come out with a detailed recovery plan to aid the situation and get the country back on its feet as soon as possible.

Pandemic or otherwise, Azizi Bank did have a strategic business plan in place, as well as a disaster recovery plan considering the geography of operation. The bank is always prepared and ready to face any sort of adverse situation, including this current crisis. As a bank, Azizi Bank also took steps and made plans even before the government made any sort of official announcement in terms of business contingency, staff contingency, and operational contingency initiatives and operations. Azizi Bank took immediate steps to ensure total safety and stability for itself and its staff, even before the lockdown was announced. All mediums of communication were used to reach staff and the public, and the bank stopped all meetings, conferences, customer gatherings, and training. In the immediate aftermath of the announcements made by many world governments, including Afghanistan, Azizi Bank formed a committee to analyse and make plans to curve this emergency situation.

Safety precautions including complete sanitization, thermal meters, face masks and gloves, and more were initiated at all the branches for both customers and staff alike, whilst plans were also made to rotate the staff so as to avoid close proximities. Expatriate staff members were also encouraged to work from home where possible, thereby minimising the risk of transmission and infection. Armed with these various safety measures and initiatives, life will eventually return to normality for Azizi Bank. However, with the ongoing political uncertainty still prevailing and international donors reluctant to pump in additional funds, this latest COVID-19 scare will definitely affect the overall growth of the Afghanistan economy. Stability will take time, but Azizi Bank will see it through.

Outside of the financial work carried out by Azizi Bank, there is also a deep-rooted and ever-present commitment to charity work and community-based initiatives. Azizi Bank is the only banking institution in Afghanistan that has a sustained CSR Policy and Responsible Banking. For the team, they consider CSR as one of the most important aspects of growth, and the institution also supports the important cause of the government in terms of sustainability initiatives. Supporting society as a whole is equally important, and there are a great many ways in which Azizi Bank does this too. The bank’s involvement on CSR initiatives has made a great impact across society and for the brand of Azizi Bank.

In working on these initiatives, the bank has been quite active for the last five years on various initiatives across the country and has therefore received considerable amounts of appreciation from the government and wider society. From a community service perspective, Azizi Bank has supported multiple hospitals and homes in terms of providing medicines, essential utilities, infrastructure development, food materials, stationeries, and organising blood donation camps. The team at Azizi Bank have also focused their time on various environmentally sustainable and green initiatives. Working in this area, the bank has endeavoured to stand out by starting a green initiative that involved planting thousands of trees across Afghanistan. Alongside this, there are also campaigns on saving water and pollution control, two of the most prominent environmental sustainability issues faced by many all over the world.

Azizi Bank has recently partnered with the National Environmental Protection Agency (NEPA) of the government of Afghanistan, and this partnership will surely lead to collaborative work on various other initiatives aimed at increasing environmental sustainability. Finally, the last core area that Azizi Bank works in outside of its own four walls is that of community support. Azizi Bank has always sought to provide free training sessions to local college graduates and management students alike, with topics ranging from banking and finance, to the inner workings of an economy, and much more. Whilst this is a community support initiative aimed at giving finance students the best possible knowledge around, it also doubles as the perfect recruitment opportunity. Qualifications is one thing, but Azizi Bank also encourages fresh graduates to push their way to the forefront of the industry and make an impression with their dedication and commitment to understanding finance.

Ultimately, Azizi Bank is far more than just an exceptional institute of finance. Rather, it everything a country could possibly want from a bank that seeks to be innovative, be a unifying force that invests in the future, and delivers outstanding financial services to everyone in the country. Azizi Bank is constantly redefining its own success, and is fully deserving of this latest success from Wealth & Finance International Magazine as being recognized as 2020’s Best Commercial Bank in Afghanistan.

Few Words about the bank’s CEO – Dr. Prof. Mohammad Salem Omaid

A result oriented proficient starting his professional journey with Azizi Bank in 2006 as a Finance Officer and successfully ascending the steps to become the President and CEO. In his career span of more than 14 years, Dr. Omaid handled diverse roles having rich & extensive experience in Finance & Accounting, Corporate Accounts Trade Finance, Corporate Credit Financing, Operational Banking, Investment Banking and Retail Banking. Initiated several measures, Bank Products, Technological products aimed at promoting the bank and its objectives. Dr. Omaid’s contribution towards refining the banking structure in the country earned him appreciations & accolades not only from the Govt. & Public body within the country but also from the international agencies worldwide.

Dr. Omaid’s experience and knowledge for a sustainable growth earned him several international accreditations and he is also the only afghan conferred with the honorary professorship of Academics, Oxford. He is also the Member of the Europe Business Assembly, UK, The World Confederation of Businesses, USA and an active member of BAFT, USA. He is also associated with the ICC, Banking Commission, Afghanistan and is the Chairman of the Afghanistan Banks Association.

He is also the recipient of the Asian Banker “Young Banker” Award in 2017, being the only one from the Central Asian Region till date. In 2020, Dr. Omaid is conferred with the Professional Doctorate by the European International University, Paris for his endurance, commitment and leadership in shaping a bank in Afghanistan as per international standards.

A visionary leader and a highly respected citizen in the Islamic Republic of Afghanistan.

For more information, please contact Samrat Dutta at www.azizibank.af