Category: Banking

Cash ManagementRisk Management

Why Are Investor Relations So Important?

Following the implementation of GDPR, consumers, investors and businesses around the world are becoming increasingly aware of every communication they receive from a company.

As such, compliance, in all its forms, is now even more important to businesses than ever before, and in the financial and investment space this is as vital as it always has been, if not more so. Whilst it has always been crucial to success in the investment market, now compliance, and assuring investors of compliance, has been bought to the fore.

For example, the recent announcement that the UK Government is suspending its Tier-One Investment Visa Programme, with a view to making important changes to this to combat the risk of money laundering. Bruno L’ecuyer, Chief Executive Officer of the Investment Migration Council, made the below comment on the changes and how these would affect investors.

“The UK government may not have much influence with the European Parliament these days, but it has provided an object lesson in how to manage investor migration sensibly and for the benefit of its citizens.

“According to reports, potential investors will have to agree to undergoing a thorough audit of their financial assets, proving they have control of the required capital for at least two years, and will require audits to be undertaken by suitably regulated UK firms.

“Most notably, it appears the UK government recognises the value of investment migration and desires any investment made by individuals to have a greater impact on the UK economy, which is why it is apparently looking at scrapping its own government bond option in favour of directing investment into active and trading UK companies.”

As Bruno highlights, the importance of audits and transparency in this space is as vital as ever, and firms need to be able to prove to both their investors and the authorities that they are acting properly and are fully compliant with all relevant regulations to ensure their continued success.

This is why investor relations have, over recent years, become a vital aspect of any company, fund or asset manager. Many multinational companies, such as Hitachi, Etsy and the Coca Cola Company all operate their own investor relations departments, showcasing the increasing focus companies are putting on the role.

After all, as client satisfaction and feedback become buzzwords within the corporate space, it makes sense that investor relations should also increase in importance, and many companies and investors are now embracing this side of their business. Through strong communication and specialist support, companies, investors and fund managers can ensure that their investors remain on-side and that they understand that their money is in safe hands.

Cash ManagementFinanceFunds of FundsHedgeWealth Management

BUY YOURSELF A HORSE WITH BITCOIN

Equinox Racing is a London based horse racing syndicate like no other. Focused on delivering immersive experience to its members, Equinox Racing recently opened its horse’s shares to cryptocurrency. From now on, you can use your Bitcoins to buy yourself the thrill of horse racing and the privilege of horse ownership.

 

Rob Edwards, co-founder of Equinox Racing, commented: “There is a huge amount of capital in the crypto world, and not too many tangible opportunities out there. A lot of the people who invested in crypto, particularly in the early days, are punters. They are our kind of people!” 

 

Equinox Racing believes horse racing should not be limited to the chosen few but made available to enthusiasts and new audiences on a wider scale. Having nine horses and about 100 club members and owners to date, Equinox Racing offers a range of exciting experiences. Visit your horse at the stables, speak with the trainer and the jockey, follow his evolution on social media and support him at the race!

 

D Millard from Norwich, Norfolk (horse owner), commented: “Equinox Racing delivers fantastic days out, real prize money winning opportunities, and its stable of horses just continues to grow.” 

 

For the equivalent of £34,99 per month in crypto, which is the average price for gym memberships, Equinox Racing enables you to be part of something greater than a pair of weights. And ownership is available from £150 pounds (in crypto as well)! Thrill, suspense, joy, grace, excitement, exclusivity, are the words that describe the emotions experienced during a horse race.

 

J MacLeod from Ayr (horse owner) commented: “Simply amazing.  My passion for racing has grown now that I have affordable ownership.  I never thought I would be able to own any part of a horse with such a stunning pedigree.” 

 

Equinox Racing is currently expanding its horse’s portfolio and looking at new acquisitions. It is now the perfect time to get involved!

 

More information on: https://equinox-racing.co.uk

BankingFinanceFundsWealth Management

WisdomTree launches Artificial Intelligence ETF (WTAI)

WisdomTree, the exchange traded fund (“ETF”) and exchange traded product (“ETP”) sponsor, has partnered with Nasdaq and the Consumer Technology Association (CTA) to launch an ETF providing unique exposure to the Artificial Intelligence (AI) sector. The WisdomTree Artificial Intelligence UCITS ETF listed on the London Stock Exchange today, with a total expense ratio (TER) of 0.40%.

 

The ETF will provide investors with liquid and cost-effective access to this exponential technology megatrend that is driving efficiencies and new business capabilities across all industries globally and redefining the way we live and work.

 

Christopher Gannatti, WisdomTree Head of Research in Europe says, “We are delighted to partner with Nasdaq and CTA, who are experts in AI and technology markets. We have worked together, leveraging our combined expertise, to re-define the AI investment landscape.”

 

“To capture the full economic value of AI we place companies in three categories; Engagers, Enablers and Enhancers*. When investors think of what this can bring to a portfolio, they should be thinking over a long time horizon and about how advances like autonomously driven cars, a digital workforce, mass facial recognition and other applications of intelligent machines could change the world,” Gannatti added.

 

Rafi Aviav, WisdomTree Head of Product Development in Europe comments, “AI is a revolutionary technology and the market for AI products and services is expected to more than triple over the next three years[1]. This fund offers a unique approach to capturing this expected growth, which is the result of a year-long collaboration between WisdomTree, Nasdaq and CTA.”

 

“The fund broadly represents the upstream[2] and midstream[3] parts of the AI value chain and so balances diversification with a focused exposure on those parts of the AI value chain that stand to gain the most from growth in the AI market,” Aviav added.

 

There is no commonly used classification system that allows one to automatically choose companies engaged in the emerging AI space, so the research for the selection of index portfolio companies is conducted by experts with deep familiarity of the AI value chain and the technology markets more broadly. This ensures the portfolio remains focused on AI opportunities rather than becoming just another broad tech fund.

 

We believe the fund’s unique approach offers the best of both the active and passive investment worlds in accessing the AI megatrend. The fund’s portfolio companies are already capitalising on the AI opportunity across industries and are well positioned for AI’s growth,” Aviav commented.

 

“AI is one of the key ‘ingredient technologies’ over the next decade – deployed everywhere from factory floors and retail stores to banks and insurance offices, creating new opportunities,” said Jack Cutts, senior director of business intelligence and research, CTA. “We’ll see this play out in January at CES® 2019 – the most influential tech event in the world – where AI will be a dominant theme, showcasing the massive potential AI has to change our lives for the better. We’re excited to partner with Nasdaq and WisdomTree to make AI investible.”

 

“Artificial Intelligence is at an inflection point to drive further economic growth and create new areas of opportunity,” said Dave Gedeon, Vice President and Head of Research and Development for Nasdaq Global Indexes.  “The Nasdaq CTA Artificial Intelligence Index serves as an important benchmark for tracking the adoption of AI across a broad range of economic sectors as this influential technology hastens advancements in productivity and capacity.”

 

WisdomTree Artificial Intelligence UCITS ETF: Under the hood

The WisdomTree Artificial Intelligence UCITS ETF tracks the Nasdaq CTA Artificial Intelligence Index.  This enables investors to gain diversified exposure which is focused on companies that stand to gain the most from growth in AI adoption and performance. The index can evolve as new AI trends and companies come on stream through a semi-annual update. The Index is currently comprised of 52 constituents globally with stringent eligibility criteria:

  • Define Universe: Companies must be listed on a set of recognized global stock exchanges and satisfy minimum liquidity criteria and market capitalization criteria to be included in the index.
  • Identify and Classify: Companies are identified as belonging to the AI value

chain and classified into the following categories: Enhancers, Enables and Engagers (see below for definitions.)

  • Determine AI Exposure: The AI exposure for each individual stock is investigated and scored.
  • Top Selection: Only companies with the top 15 scores in each category (Enhancers, Enablers and Engagers) are selected for inclusion, and their weight is allocated evenly in each category.
  • Allocate Weight: In total Engagers comprise 50% of index exposure, Enablers comprise 40%, and Enhancers comprise 10% of index exposure.

*Engagers: Companies whose focus is providing AI-powered products & services.

Enablers: Companies who are key players in this space, with some of their core products and services enabling AI. They include component manufacturers (including relevant CPUs, GPUs etc.), and platform and algorithm providers that power the development and running of AI processes.

Enhancers: Companies who are a prominent force in AI but whose relevant product or service is not currently a core part of their revenue. They include chip manufacturers, and platform and algorithm providers that power the development and running of AI-powered products & services.

 

Share Class Name

TER

Exchange

Trading Ccy

Exchange Code

ISIN

WisdomTree Artificial Intelligence UCITS ETF – USD Acc

0.40%

 

LSE

USD

WTAI

IE00BDVPNG13

WisdomTree Artificial Intelligence UCITS ETF – USD Acc

0.40%

 

LSE

GBx

INTL

IE00BDVPNG13

ArticlesBankingFinanceFundsMarkets

Finding finance from start-up to listing

Mark Brownridge, Director General of the Enterprise Investment Scheme Association:

Securing funding as a start-up is often one of the biggest challenges that new businesses face in the primary stages of set-up. Not only is it often difficult to secure the funding itself, it is even more so when trying to get the right kind of funding for what the specific needs of the business are. Having structures in place to make it as easy as possible for innovative ideas to flourish and become fully-fledged is not only to the advantage of entrepreneurs and innovators.

 

One of the routes that allows this to happen in the UK is through the Seed Enterprise Investment Scheme, which offers investors tax reliefs in order to offset the higher risks involved in investing capital into start-ups. SEIS represents an alternative to start-ups from traditional finance routes such as banks that may not be willing to lend. This is especially useful for those of the small businesses that base their proposition on intellectual property as opposed to physical assets or products. These IP rich companies often have trouble finding support without physical collateral to offer as security.

 

Individuals looking to invest through SEIS can then make decisions based upon individual cases and potential rather than being held back by regulation or corporate policy. Of course, the risk still exists but with tax and loss reliefs, it is much more likely that the risk will be seen to be worth it in the eyes of an investor. Getting ideas off the ground is arguably the most important part of encouraging new businesses and creating new jobs as they grow and expand.

Luke Davis, CEO and Founder of IW Capital: Growing a business from start-up to listing is a hugely challenging proposition at each and every stage of the process. One of the most important points of this is growing and scaling the business from start-up level into a more fully-fledged entity. This jump can seem daunting for even the most prepared of start-ups and this is in no small part due to the challenges in securing funding for expansion.

Knowledge-intensive SMEs that struggle to secure funding without assets to use as collateral for loans, can benefit from schemes such as SEIS and EIS. With an industrial focus on research and development this will be key moving forward with the Governments plans to grow the tech industry. This is reflected in the increased EIS limit for knowledge-intensive companies of £2 million per year, this change has been introduced to provide further encouragement to investors to support IP-rich businesses.

Clearly supporting SMEs is hugely important for the UK economy as they represent the employment of around 16 million people, depending on who you ask, in the UK with this number currently growing at a rate that is three times faster than for big corporations. Fuelling this growth will be key moving into a post-EU economic landscape that will rely even more heavily on domestic business and job creation.

Jonathan Schneider, Executive Chairman of Capital Step: According to a nationwide study titled – A State of the Nation – The UK Family Business Sector 2017-18- family-run businesses account for 88% of all UK firms. They operate in every industrial sector across all of the UK’s regions, employing almost half of the UK’s private-sector workforce. In no small part, the UK’s family and regional businesses represent a significant proportion of Britain’s bottom line.

Family-run and regional businesses form the life-blood of the UK’s entrepreneurial landscape, and to see so many believe that the Government is not looking after this vital sector of the UK’s business community is concerning. Equally – it is apparent that the funding options available to established family-run enterprise seem to be eclipsed – in local communities – by corporate entities who have greater exposure to the most appropriate funding options. The role of the family enterprise, community SMEs and bricks and mortar productivity across the length and breadth of the British Isles must be considered a firm priority for the UK government – deal or no deal.

As both investors and entrepreneurs, we have witnessed countless examples of business owners having to give up control of their companies in exchange for funding. In many instances, even successful founders end up with a disproportionately small reward for their hard work upon exit as a result of having sacrificed too much ownership and control along the way. The Capital Step model is specifically designed to address this issue, by providing flexible capital solutions without existing shareholders having to give up ownership or independence in exchange.

Jenny Tooth, CEO of the UK Business Angel Association: We as trade bodies, policy makers and commentators bear a significant responsibility to assist UK SMEs in what will be one of the most critical periods in their business life, ensuring contingency plans, scalability options, growth strategies and immediate resilience responses to ensure their successful navigation of the seismic impact of Brexit

The UK possesses multiple geographical regions that have blooming industries outside of the capital city, something which makes the UK incredibly unique. In spite of this, a lack of accessibility to and education surrounding finance and opportunities outside of London is creating a gap between what these regions are capable of and how much they’re utilised. As 63% of all Angel Investors within the UK are based in London and the South East, it is undeniable that there is a geographically skewed funding deficit that is hindering the growth of SMEs who are positioned outside of the capital. While potential investors of differing regional demographics may feel isolated from the investing arena, the repercussions for regional SMEs reliant on this kind of funding may limit innovation and employment growth outside of the capital.
 
The UKBAA has focused a significant amount of attention on increasing regional investment, with the implementation of many angel hubs throughout the UK, especially in Northern regions. However, there is still a long way to go to fully utilise the untapped potential found within these areas. This can only be done when it is popularly recognised that there are significant investment opportunities outside of London. 

ArticlesBankingFinance

Fast growing asset based finance sector presents clear opportunities for challenger banks

Author: Kevin Day, CEO, HPD LendScape

ABF sector is growing fast

Asset Based Finance (ABF) has seen record levels of lending in recent years, with more firms than ever choosing to use this funding option. This trend is a sign of how ABF is increasingly taken seriously as a viable source of finance, which is becoming more widely accepted among businesses. Driving this growth in ABF are the larger, more established banks, but they have been increasingly focusing on large corporates. This provides an opportunity for challenger banks to expand their operations into the mid-market, and although the varying quality of credit among SMEs means it’s an exercise they should do with care, the potential returns are well worth it.

Funding record set last year

Last year set a lending record for the ABF, which largely comprises invoice financing and asset-based lending (ABL), with funding reaching £22.2 billion, an increase of around 5% compared to 2016, itself a previous record. The total number of businesses accessing ABF was 40,333 in 2017, while the number of clients with a turnover of more than £10 million increased to over 5,000, up 7% on last year. In total ABF finance now supports companies with total turnover of around £300bn.

Big banks freeing up the mid-market

Catalysts for the growth of the sector are the big lenders, major banking groups and other established financial institutions. However, a feature of their expansion is that they are moving up the credit scale, with a shift of focus to those companies with a more secure, conservative financial profiles. Many of the big banks are no longer willing, or perhaps even able, given the capital requirements, to lend to small and mid-cap size firms. But the move of these mainstream lenders up the credit quality spectrum has not reduced the needs of SMEs, many of which have limited financing options for common growth challenges, such as the need for investment into new products or moves into new markets.  

Clear opportunity for challenger banks….

Some challenger banks are already active in the ABL sector. For instance, asset finance accounts for over 20% of Aldermore’s lending portfolio, with a further around 4% accounted for by invoice financing. Secure Trust is another challenger that has been building its business in the ABL sector. However, the retreat from providing ABL to SMEs, gives challenger banks an opportunity to target the corporate mid-market and further accelerate their expansion in ABF.

…But they should proceed with care

Although the prospects are promising for challenger banks to boost ABF to SMEs, they should proceed with care. Credit quality is more variable in the mid-market and companies’ revenues, cash flow and costs can be a little more unpredictable as they are more sensitive to changes in market direction or client losses. So challenger banks should be sure that their due diligence and research on businesses looking for ABF is rigorous, including closely examining the credit quality of the accounts receivables, sales concentration and the aging of the accounts receivables.

Private equity-backed businesses offer further potential

Another area challenger banks and other alternative lenders should consider targeting are private equity backed companies. The flexibility that asset-based lending provides to a private equity borrower, such as scalability, works well for acquisitions. Additionally, what ABF can offer which is compelling for those needing finance as well as financial sponsors, such as private equity, is the flexible but limited covenant structure, greater debt capacity, and often a lower price. In the private equity arena, innovative transaction structures involving ABF have the potential to provide sponsors with an alternative to more typical and complex approaches, such as those involving Revolving Credit Facilities.

SMEs seeking to refinance from new lenders

Typically, businesses already using ABF as part of their funding strategy would typically refinance using the same lender. However, in the last few years there has been a trend for borrowers to turn away from their incumbent lenders and explore alternative options, including challenger banks, which can often offer more sophisticated and attractive financing terms. Challenger banks should capitalise on this trend by SMEs to consider a greater variety of re-financing options to further expand their ABF operations.

Technology can play a key role

For both challenger banks and other boutique financial institutions seeking to enter the market, as well as SMEs looking to access ABF, the influx of new technologies is a definite plus. These new technology options mean ABF is increasingly accessible for even the smallest SMEs as increased speed of service allows companies to receive the funds they need quickly due to sophisticated data capture and analysis techniques. For institutions such as challenger banks solutions such as the HPD LendScape® platform help to automate and streamline ABF processes, making it easier for banks to lend and enabling businesses to manage their loans and provide their collateral data for analysis via a single platform, making the process easier to manage for resource-pressed SMEs.

ABF market in the UK is evolving 

ABF is maturing fast in the UK, both in terms of invoice financing and asset based lending and this is likely to continue. An increasing range of companies are seeking to access the funding, while an ever expanding range of lenders is targeting the sector. Challenger banks could play a key role in this trend, with their more innovative, flexible tech-driven approach. With 33% of UK GDP coming from SMEs, if challengers were to significantly expand their ABF finance that would give a considerable funding boost for businesses and a growth uplift for the economy.

 

Website: https://www.hpdsoftware.com/

ArticlesTransactional and Investment Banking

The rise of ‘quantamental’ investing: where man and machine meet

Asset managers adopt new approach in era defined by automation, algorithms and big data

As soon as the financial crisis started to recede, Jordi Visser knew something had to change. Algorithms were starting to rule markets, and hedge funds like the one he managed were confronting a tougher era. 

So Mr Visser, chief investment officer of Weiss Multi-Strategy Advisers, started to rethink how the $1.7bn hedge fund could survive in a less hospitable environment. The solution was to evolve and meld man and machine. “We are competing against computers these days, so we had to become more efficient,” Mr Visser said. Mr Visser and Weiss are not the only ones making some adjustments— with varying degrees of gusto — to a new investing era defined more by automation, algorithms and big data.

Analysts have dubbed marrying quantitative and fundamental investing “quantamental”, an admittedly ugly phrase, but one that many think will define the future of the asset management industry. These initiatives are proliferating across the investing world, from small boutiques to sprawling asset management empires. In January, JPMorgan’s $1.7tn investment arm set up a new data lab in its “intelligent digital solutions” division to try to improve its portfolio managers, rather than replace them entirely with algorithms. “It augments existing expertise. We don’t just . . . try to come up with strategies out of thin air,” said Ravit Mandell, JPMorgan Asset Management’s chief data scientist. “There’s stuff that happens in the human brain that is so hard to replicate.”

The 18-strong unit focuses on everything from automating and improving humdrum tasks such as pitch books and digital tools for customers, to more high-end demands such as product creation and improving JPMorgan’s investing prowess. The data unit has already used a form of artificial intelligence known as a neural network to analyse years of corporate earnings call transcripts to identify which words are particularly sensitive for markets, or might augur trouble.

That frequent uses of “great” and “congratulations” are generally good for a stock price, and talk of debt covenants and inventory overhangs are bad, might be obvious to any human fund manager, but they can only listen to or read a limited number of transcripts. A machine can scour thousands.
JPMorgan Asset Management’s data scientists are creating an alert system that will ping its portfolio managers whenever transcripts are particularly positive or negative, and voice analytics that mean they can even detect worrying signals in someone’s intonation.

Some investment groups are starting to use technology to spot well-known behavioural biases. For example, Essentia Analytics crunches individual trading data and looks for common foibles, such as fund managers’ tendency to over-trade when on a losing streak, or hang on to poor investments for too long to avoid crystallising losses. When that happens, fund managers get sent an automated but personalised email signed “your future self” reminding them to be aware of these pitfalls.

“A computer can remind you to follow your own process,” said Clare Flynn Levy, Essentia’s founder. “It’s like a little light on your car dashboard flickering to remind you you’re running out of oil.” Weiss’s chief data scientist Charles Crow has built something similar for the hedge fund: a digital “baseball card” system that analyses and ranks its portfolio managers according to 17 parameters, such as stale positions or movements in correlations, and alerts them to any issues.
In parallel, Weiss’s top managers have a dashboard to allocate money to various teams, showing which ones are good at timing, but poorer at portfolio construction, or are expert stockpickers but have sectoral biases. This helps Mr Visser monitor for hints of crowded trades. There are plenty of “quantamental” sceptics. Many pure quants are doubtful that traditional asset managers can master anything but the rudimentary, commoditised parts of their craft. Meanwhile, many traditional investors argue that it is an overhyped fad that is feeding shorttermism.

Recommended 

Even fans admit that the cultural shift needed to fully embrace these new techniques by largely middle-aged investors is so significant that it could take years before the full potential of “quantamental” investing is realised.

“Behavioural change is the hardest part,” said Ms Flynn Levy, herself a former money manager. “I think an entire generation of fund managers have to age out of the industry before we really see big changes.”

Nonetheless, few money management executives doubt that technology will play an everincreasing role, and many are hopeful about the potential to invigorate the industry’s often patchy investment results.

For example, it appears to have helped Weiss last month, when many hedge funds were clobbered after having been sucked into technology stocks. Mr Visser declined to comment on performance, but an investor document seen by the Financial Times indicates that Weiss’s main fund sidestepped most of October’s torrid markets, and is up 6.3 per cent so far this year.

Mr Visser admitted that not all the hedge fund’s portfolio managers were thrilled at the new measurements, tools and expectations, but argued that the quantitative tools were fair, objective and necessary. “They either want to get better and embrace it, or they fight it,” he said. “But it’s a case of adapt or die.”

Copyright The Financial Times Limited 2018. All rights reserved 

ArticlesCash ManagementFinanceWealth Management

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

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

 

 

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

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

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

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

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

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

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

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

Car finance top tips: 

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

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

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

ArticlesCash ManagementFX and PaymentLegalStock Markets

Keeping your Payment options open, by Anderson Zaks

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

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

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

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

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

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

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

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

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

data quality
Banking

Tackling the Challenge of TRIM

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

by Martijn Groot, VP of Product Management, Asset Control

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


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

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

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


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

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

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

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

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


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

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

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

Bond Investment
Transactional and Investment Banking

Bonds remain firm fixture in portfolios moving into 2019

Bonds remain firm fixture in portfolios moving into 2019

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

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Algotechs
Transactional and Investment Banking

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

The digital revolution has forever changed the investment world

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

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

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

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

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

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

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

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

Company Details:

Company: Algotechs

Website: www.algotechs.com

Telephone: +44 20 38 689 901 

Support Email: [email protected]

banking brands
Banking

Bet on emotion in the battle of the banking brands

Bet on emotion in the battle of the banking brands

Yelena Gaufman, Strategy Partner, Fold7

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

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

 

Building on trusted foundations

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

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

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

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

 

Branding for growth

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

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

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

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

 

Demonstrating your worth

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

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

 

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

 

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

 

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

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

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

Robotics and AI
Banking

Future-Proof Your Portfolio with Robotics and AI

Future-Proof Your Portfolio with Robotics and AI

By Travis Briggs, CEO, ROBO Global

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

 

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

 

  • Cybersecurity (+45% in 12 months)

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

 

  • Healthcare (+28% in 12 months)

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

 

  • Logistics Automation (+22% in 12 months)

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

 

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

 

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

 

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

private banking
Banking

How the changing world of financial services is affecting private banking

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

Alex Cheatle, Ten Lifestyle Group, CEO

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

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

Building trust in the information age

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

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

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

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

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

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

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

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

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

Forging emotional bonds through to the next generation

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

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

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

policy makers
Transactional and Investment Banking

Developed World Policymakers Place Their Bets

By, Graham Bishop, Investment Director at Heartwood Investment Management

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

Bank of England: A surprise reaction to unsurprising news

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

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

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

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

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

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

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

Bank of Japan: The rebel without a change

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

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

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

Why Direct Lending is so Attractive to Investors

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

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

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

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

Direct lending offers an attractive investment opportunity, gaining:

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

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

Why direct lend?

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

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

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

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

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

A gap in the market was seized

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

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

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

Direct lending isn’t a passing fad

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

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

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

Europe is catching up

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

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

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

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

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

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

An increasing number of investors

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

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

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

Untapped potential

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

Are there any downsides to direct lending?

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

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

What does the future hold?

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

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

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

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

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

Exo Investing
Transactional and Investment Banking

Recent launch of Exo Investing

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

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

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

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

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

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

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

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

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

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

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

FairFX
Banking

FairFX launches international business account

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

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

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

The new Fair Everywhere account allows you to:

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

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

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

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

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

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

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

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

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

FairFX
FX and Payment

9 top International Payment tips for businesses

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

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

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


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


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

 

  1. Know what you want

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

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

 

  1. Review your current payment package

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

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

  1. Select a transparent, convenient and consistent service

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

 

  1. Understand the market you’re operating in

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

 

  1. Maintain your standards

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

 

  1. Watch the way your employees pay

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

 

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

 

  1. Benefit from the best rates

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

 

  1. Ask an expert

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

 

  1. Set up a stop loss or limit order

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

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


Ian Stafford-Taylor, CEO
of FairFX said:

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

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

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

5 Benefits of Investing in Contractors
BankingTransactional and Investment Banking

5 Benefits of Investing in Contractors

5 Benefits of Investing in Contractors

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

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

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

 

1. Affordability

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

2. Flexibility

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

3. Expertise

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

4. Attitude

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

5. Availability

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

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

Are banking biometrics about to take off?
BankingSecurities

Are banking biometrics about to take off?


Are banking biometrics about to take off?

We’ve all been there; sitting at a computer struggling to remember a password, or entering the wrong pin number at a cash point while a queue forms behind you. Thanks to the rise in biometric technology, consumers can look forward to a decreased reliance on remembering alphanumeric passwords.

Through the integration of the technology into smartphones, people around the world have been using their fingerprints to unlock their devices for years and today millions of people are familiar with biometrics and its benefits. The recent unveiling of the iPhone X and Apple’s facial recognition system moves things one step further.

These applications have shown consumers how easy it is to use their biometrics to access their personal devices. This has created a consumer who is comfortable with the technology and have it integrated into other elements of their life, like banking or at the checkout – a point reinforced when looking at a recent study, where 86 percent of consumers said they are interested in using biometrics to verify, identity or to make payments. The financial sector has begun to react to this growing level of acceptance.

MasterCard recently announced its commitment to guaranteeing that every one of its customers will have access to biometric authentication services by April 2019 – a decision made off the back of their own research with Oxford University, which found 92 percent of banking professionals wanted to introduce biometric ID, and 93 percent of consumers would prefer biometric security to passwords. As we have seen before, new technologies challenge traditional business models and transform the way organisations interact with their customers – this is no different.

Many established financial institutions and economies around the world are now getting behind biometrics. In India, NCR has been involved in a nationwide rollout of next-generation ATMs offering biometric user authentication, in addition to cash recycling and other features that could prove beneficial for banks and customers.

Bahraini Fintech firm Eazy Financial Services offers the next step in the evolution of biometrics journey of creating a seamless customer experience. The company has been working with NCR on the region’s first biometric payment network. The system will allow consumers to register their fingerprint with their bank and use this biometric data to initiate ATM or point-of-sale transactions, removing the need for a card. The combination of security and convenience this technology delivers is an attractive proposition for a customer.

Today’s digitally driven consumers want the way they shop and bank to be consistent across every channel, including how they identify themselves when making a payment. As biometric identification increasingly becomes standard across smartphone devices, the combination of these two technologies is starting to win the battle for hearts and minds when it comes to simplicity, convenience and seamlessness across all channels.

However, there are still some hurdles to overcome as far as biometric technology is concerned, particularly when it comes to customer acceptance and security. One of the biggest causes of failure for technology is low adoption, and even though the figures show that consumers want to see more of the concept, the solution must be simple, logical and easy to use it if it’s to be adopted.

Like any burgeoning technology, biometric authentication still has its fair share of challenges to meet and questions to answer. But these obstacles are quickly being overcome, partly through the work of mobile phone manufacturers, which is paving the way for biometrics to become a vital component of the 21st-century payments landscape.

private debt
BankingTransactional and Investment Banking

A better way for investors to capitalise on private debt

A better way for investors to capitalise on private debt

Simone Westerhuis, LGB Investments

As fixed income yields disappoint, secured loan notes issued by growth businesses could be an attractive avenue for investors, whether they be wealthy individuals or family offices, writes Simone Westerhuis, Managing Director, LGB Investments.

Despite the recent rising rate environment, interest rates are still very low by historical standards and as a result private debt has emerged as one of the chief opportunities for investors searching for yield. This is especially true of high net worth individuals (HNWI) and family offices, as, faced with long-term low interest rates, meagre bond returns, poor hedge fund performance and fluctuating equity markets, they have increasingly turned to alternatives: real estate, private equity and – perhaps most strikingly – to the private credit markets to secure the returns they need for their portfolios.

HNWI and family office investors are particularly well positioned to benefit from the growing appetite from businesses for non-bank funding. According to Preqin’s 2017 Global Private Debt report, the average current allocation of a private debt investor stands at 4.7 per cent of assets under management (AUM). Family offices allocate more than double this figure – 10.7 per cent of AUM – to private debt, more than any other type of investor. This, as Preqin notes, can be attributed to “fewer restrictions, increased flexibility and an appetite for higher returns compared to other asset classes”. In contrast to conventional fund managers, HNWIs and family offices are less tightly regulated and view secondary market liquidity as less important.

But as the private debt market has become more popular, its composition has shifted over the past decade. Up until about the mid-2000s, activity was mainly dominated by distressed debt and mezzanine financing. More recently the trend has been towards direct lending.

Marrying small and medium-sized growth businesses with financing from wealthy individuals, family offices and the mass affluent has considerable appeal on both sides. From the growth businesses’ perspective, it bypasses some of the difficulties that come with borrowing from banks that have retrenched in the post-financial crisis climate, making them inflexible and sluggish counterparties. Without the ability to turn to the corporate bond market to raise funds, SMEs are often willing to pay a premium for increased flexibility and speed of execution.

From an investor’s perspective, meanwhile, direct lending can seem a compelling proposition. One of the main advantages is diversification and the prospect of earning uncorrelated returns to the equity markets. At a time when stock markets have produced strong returns for over a decade one may wonder how long this trend could last. The other is the potential for higher yields relative to the public bond markets. Direct lending offers an attractive, steady cash flow in a climate where quantitative easing has driven bond yields down.

But there are also risks that need to be carefully considered. There is, of course, the heightened credit risk that comes from lending to growth businesses, coupled with the fact that that private debt has yet to be tested in an economic downturn. An important consideration is the intermediary or platform that investors use to manage their loan portfolios. While P2P platforms have simplified the distribution process, they could potentially pose a higher default risk to investors who have little insight into the quality of companies they are directly lending to. When a borrower defaults, the investor often finds himself helpless to take any action directly.

Going through investment funds or trusts, meanwhile, may provide more protection against defaults through established debt recovery procedures. But the risks can vary markedly depending, for example, on whether the manager chooses to use leverage to boost returns and cover fees. The key to success will often depend not only on the manager’s ability to analyse risk, but also on its access to deal flow and ability to fix problems when they occur.

LGB Investments has helped develop another variant of the direct lending instrument: secured loan notes. These are secured, fixed-rate instruments with maturities ranging from six months to five years. Issued by SMEs and growth businesses under the terms of a programme, which enables repeated issuance, they often have seniority in a borrower’s capital structure. Most importantly, loan note programmes will have a designated Security Trustee who holds the collateral for all noteholders on trust and will take action on behalf of noteholders when difficulties arise.

To date, the main investors in these secured loan notes have been individual wealthy investors and family offices, although they are also increasingly catching the attention of institutions. There are a number of reasons investors have found these instruments to be attractive. An obvious one is their relatively high yields and short maturities. The notes offer investment returns of around 6-10 per cent per annum, with the interest rate determined by the credit standing of the issuer and investor demand. By contrast, publicly traded corporate bonds typically generate yields of 2-5 per cent in the current climate. Secured loan notes Issues are commonly listed on a recognised stock exchange to take advantage of the Quoted Eurobond Exemption from withholding tax on interest.

We find that another real advantage is that the programmes offer frequent re-investment opportunities and can often accommodate reverse inquiries from investors sitting on cash. Investors have an opportunity to really familiarise themselves with an issuer and can increase their allocation to a name over time. Robust security arrangements help assuage some of the concerns investors to growth businesses might have about taking on excessive credit risk.

Through our Corporate Finance department, LGB & Co. has established secured loan note programmes for 20 mid-market companies raising close to £100 million to date from HNWIs, family offices and institutions. A recent example was the £40m loan note programme for Reward Finance Group Limited, one of the UK’s fastest growing alternative finance providers. Our research suggests there is substantial room for expansion and that the UK’s immediate addressable secured loan note market is worth around £500m.

Investors do need to carefully evaluate the risks of lending to SMEs – whether through secured loan notes or through other instruments – against their investment goals. But as part of a balanced and diversified portfolio, we believe that in an environment where low yields are the norm and alternatives such as hedge funds are underperforming, secured loan notes offer an attractive way to tap into private debt markets.

investment
BankingTransactional and Investment Banking

Storefronting in investment banking – technology and the rise of ‘window-shopping’

Storefronting in investment banking – technology and the rise of ‘window-shopping’

Abhijit Deb, Head of Banking & Financial Services, UK & Ireland, Cognizant

People’s interactions with their banks have undergone an extraordinary transformation. From the emergence of app-only challengers such as Monzo to the evolution of physical branches, technology has dramatically changed the age-old relationship. However, compared to typical high street interactions, the investment banking landscape has always been markedly different, sustained by services such as capital raising and M&A advisory. Thanks to this structure, there has never been any pressure on such firms to vary the products offered to clients.

Since the repeal of the Glass-Steagall act, a piece of legislation that separated commercial banks from their retail counterparts and the annulment of which is considered by many to be a primary cause of the financial crisis, members of the former group have become powerhouses trading on information and access to credit. In this context, huge organisations such as JP Morgan and Merryl Lynch can draw on low-cost funding without having to interact with other banks not affiliated to them. However, combined with increased competition and the cost of regulation, recent rhetoric around breaking up the power of Wall Street has caused speculation  that the act will be re-instated. Ten years on from the financial crisis that the act’s repeal supposedly ignited, these factors are putting commercial banks and the existing industry model under pressure.

Investing in technology

While the core services around equity, debt, structured finance and M&A will endure, many of the ‘low touch’ activities carried out by investment banks are being commoditised by technology. These are typically people-intensive processes such as regulatory reporting, risk management and product control. Thanks to automation, the next 10-15 years may present a vastly different landscape in which only the most highly customised, ‘high touch’ services are handled by humans. For example, investment banks could offer customised product and pricing systems for the average institutional customer, using a fraction of the time and human intervention that is needed today.

Furthermore, services such as Know Your Customer (KYC) that are core, but non-differentiated, are becoming simplified and now take minutes rather than days, in the same way that retail outfits such as Monzo have achieved. Some organisations are already using blockchain-based platforms for instant settlements, mitigating credit and counterparty risks simultaneously and paving the way for ‘exception-only’ intervention. In fact, a recent Cognizant study found that 90% of financial services executives say their firm has identified or is currently identifying processes and functions that can be automated through the technology. Even ancillary services such as research can be easily personalised for institutional and high-net-worth clients using automation, based on buying behaviour patterns. Most novel for investment banks, technology is enabling greater collaboration between banks. Using smart algorithms, organisations can select a syndicate of lenders, giving a corporation easier access to funding, through reverse auctions taking place in real-time. Lead by mass automation, investment banks are experiencing the same kind of digital disruption felt by their retail siblings.

The dawn of the storefront model

Beyond these basic process efficiencies, technology in our view has heralded the arrival of a ‘storefront’ model in investment banking, something usually associated with the retail banks. The defining factor of this is the level of personalisation provided, in this case, to institutional clients, high-net-worth individuals and even sovereign entities. Compared with the one-size-fits-all approach of old, clients are now presented with an array of product combinations depending on their requirements, in the same way that consumers would take out a loan. For example, a bond-issue could feasibly be as easy as buying a mortgage, while a mezzanine financing deal could be carried out via a series of simple, context-dependent steps to profile, risk-score and approve the financing. Therefore, we are seeing specialist investment banks without a retail arm become sophisticated ‘virtual windows’, through which clients of all risk profiles and needs will be able to shop for services.

As this model gains traction, institutional clients will also be able to ‘test-drive’ trading portfolios and other products with simulated returns. This access to sophisticated software that banks provide their clients gives them an additional incentive to buy. It is only a matter of time before similar platforms for trading and risk management are opened up to clients, in the same way that Amazon allows us to preview a book before buying. Organisations such as Goldman Sachs are leading the way in this field, tailoring their services and marketing themselves as tech firms in the business of banking. This new model forces investment banks to re-consider how they price and design products, although they often take advantage by charging a premium for personalised products, something that increases alongside the value of the customer. While it is likely to be the smaller, more agile investment banks that move down this path first ahead of larger outfits, change is coming for organisations of all sizes.

Equally interesting is how this trend will impact the fortunes of traditional investment banks that are now foraying into more mainstream consumer banking, a prime example of which is Goldman Sachs with their Marcus  lending platform which is soon to come to the UK in 2018. In Goldman’s case they will cover online deposits and extend to lending over time, seeking to both take on established high street players as well as create a more sustainable customer-base. And once traditional sell-side firms venture into the retail space, we should start to see the full extent of this ‘store-fronting’ for a wider cross-section of customers across investment and retail banks.

Crossing the bridge to personalisation

Depending on the extent that this route is chosen, the new model will require an overhaul of an organisation’s technology infrastructure and the way they price, sell, execute, clear and maintain products, all the way through from customer experience to back-end design. Investment banks are increasingly in a position where they must adapt and differentiate, or find themselves racing to under-cut competitors on price.

Ironically, while recent years have seen a huge focus on a ‘customer experience’ revolution in consumer finance, it is the sedate world of investment banking that is primed for change. Moving away from a world of bland trading and towards more tailored offerings may result in a bigger shop window with more products than retail banks, but the impact will be similar as technology simplifies the buying experience for institutional clients. This is undoubtedly a seismic shift for the industry. Whether incremental or something that happens all at once, we will see a fundamental change in how investment banks interact with their clients. Whatever the speed of transition and style of delivery, they must remember that the primary goal is to provide customers with the most intuitive service possible.

Duke Energy Renewables enters New York
BankingTransactional and Investment Banking

Duke Energy Renewables enters New York, purchasing one of the largest solar projects in the state from Invenergy

Duke Energy Renewables enters New York, purchasing one of the largest solar projects in the state from Invenergy

– The 24.9-megawatt solar site on Long Island is under construction

In its continuing efforts to bring affordable, renewable energy to customers across the United States, Duke Energy Renewables is acquiring the 24.9-megawatt (MW) Shoreham Solar Commons project on Long Island from Invenergy.

The project, currently under construction by Invenergy, is located in Brookhaven, New York, about 60 miles east of Manhattan. It is being built on the grounds of the former Tallgrass Golf Course and is expected to be complete in the second quarter of 2018.

The Long Island Power Authority (LIPA) will purchase the power under a 20-year agreement.

“We are excited to enter New York with a renewables project that offers many benefits to the state and local community,” said Rob Caldwell, president, Duke Energy Renewables and Distributed Energy Technology. “The solar project will help meet the energy needs of LIPA’s customers while delivering tremendous economic and environmental benefits.”

The project is expected to create more than 175 local jobs during construction and generate between $700,000 and $900,000 in annual tax revenue for the local community.

The energy generated from this project is estimated to displace 29,000 tons of greenhouse gas emissions annually and create nearly 1 million megawatt-hours of clean, renewable energy over its lifetime. Also, with the redevelopment, Invenergy is planting an additional 2,000 trees on the site.

“Duke Energy has a reputation of excellence and we are pleased to help them and their stakeholders meet the increasing demand for affordable, renewable energy,” said Invenergy’s EVP and Chief Development Officer Bryan Schueler. “Repurposing the former Tallgrass Golf Course into a solar site eliminates the use of pesticides and fertilizers on the property, protecting Long Island’s fresh water aquifer and providing environmental benefits in addition to the generation of renewable energy.”

Invenergy recently closed construction financing for the project with MUFG, the administrative agent and lead arranger.

Duke Energy Renewables will close on the transaction post-construction, pending federal and local approvals.

Duke Energy Renewables

Duke Energy Renewables primarily acquires, develops, builds and operates wind and solar renewable generation throughout the continental U.S. The portfolio includes nonregulated renewable energy and energy storage assets.

Duke Energy Renewables’ renewable energy includes utility-scale wind and solar generation assets which total 2,900 MW across 14 states from 20 commercial wind and 63 solar projects. The power produced from renewable generation is primarily sold through long-term contracts to utilities, electric cooperatives, municipalities and commercial and industrial customers. Learn more at https://www.duke-energy.com/renewable

Follow Duke Energy (NYSE: DUK) on Twitter, LinkedIn, Instagram and Facebook.

About Invenergy

Invenergy drives innovation in energy. Invenergy and its affiliated companies develop, own, and operate large-scale renewable and other clean energy generation and storage facilities in the Americas, Europe and Asia. Invenergy’s home office is located in Chicago and it has regional development offices in the United States, Canada, Mexico, Japan, Poland and Scotland.

Invenergy has developed more than 15,900 megawatts of projects that are in operation, construction or contracted, including wind, solar and natural gas power generation projects and energy storage facilities.

Jasper Capital International Becomes Second China-Based Signatory to Hedge Fund Standards Board
BankingTransactional and Investment Banking

Jasper Capital International Becomes Second China-Based Signatory to Hedge Fund Standards Board

Jasper Capital International Becomes Second China-Based Signatory to Hedge Fund Standards Board (HFSB)


Jasper Capital International (”Jasper”) has become the second China-based signatory to the Hedge Fund Standards Board (HFSB), an organization that brings hedge fund managers and investors together to set standards for the hedge fund industry. As prudent stewards of client capital and as part of a commitment to adhering to the highest international standards, Jasper welcomes the HFSB’s effort to enhance global industry standards and facilitate investors due diligence.

About HFSB

Established in 2008, the HFSB is a standard-setting body for the alternative investment industry and custodian of the Hedge Fund Standards. The HFSB provides a powerful mechanism for creating a framework of transparency, integrity and good governance which improves how the alternative investment industry operates, facilitates investor due diligence and complements public policy.

The HFSB and the Standards are supported by managers accounting for over US$ 1tn in AUM. In addition, the HFSB’s Investor Chapter includes over 60 major international investors, including pension and endowment funds, sovereign wealth funds and funds of funds.

About Jasper

Jasper Capital International is a diversified, systematic investment firm founded in 2013 in Shenzhen, China. The Co-Founders were partners at its predecessor firm, Jasper Asset Management, a U.S. hedge fund headquartered in New Jersey. Jasper’s logic-based investment approach deploys a successful discipline to capture opportunities in the Chinese equity markets. As an industry leader with extensive local and global investment and risk management experience, Jasper offers investors multiple strategies designed to capitalize on China’s domestic market inefficiencies and future Chinese growth.

Jasper currently manages US$1.5 billion across four strategies: long-only bias, long/short equity, market neutral and seasoned equity offerings. Each seeks to maximize risk-adjusted excess returns by applying a rigorous, scientific methodology to strategy identification and research, back-testing and implementation.

 

Multifaceted
BankingTransactional and Investment Banking

Multifaceted, Passionate and Professional

Multifaceted, Passionate and Professional

Judy Joost is a multifaceted, passionate marketing and communications professional with 8+ years of experience. She is an ambitious, result-oriented, creative individual with the motivation to succeed at any level or industry while continuing to feed her desire to learn.

Judy Joost is known for being a well-organized, detailed-orientated self-starter. She promotes a positive team attitude and has the ability to balance competing demands to meet deadlines in a fast-paced environment.
Her areas of expertise are:

• Marketing;
• Corporate communications;
• Project management and;
• Client/customer service

Judy’s specialties include: event planning/execution; trade show management; internal/external communications; social media management; direct mail campaigns; e-mail Marketing; data analytics; content development; brand standards; collateral materials; create/execute high-level marketing plans; executive level PowerPoint presentations; web content management plus writing and editing.

She has used the following software: Adobe Creative Suites: InDesign, Photoshop and Illustrator; MS Office; Abila (Avectra) CRM; Joomla CMS; SharePoint; WordPress; iContact; Salesforce and Eloqua – Marketing Automation Tool.
Judy’s Certification in Digital Marketing Fundamentals from the University of Vermont covers: Search Engine Optimization (SEO); paid search; email marketing; display advertising; social media; mobile marketing and analytics. Judy is currently living and working in New York City.

Additionally, Judy has managed the BT presence at the National Retail Federation conference including a customer reception taking place on the last night. She has generated 100+ new leads, created over $62m in pipeline and gained press coverage from around the globe (United States to Asia).

Judy’s responsibilities include:

– Execute marketing activities in the Americas.
– Working closely with the Americas based global banking and financial markets and retail and consumer package goods sales teams in the execution of day-to-day, short and long-term sales and marketing strategies across both verticals.
– Liaising and collaborating with the Americas marketing team on shared projects and campaigns providing GB&FM/Retail perspective.
– Leading account based workshops in terms of content, sales enablement and follow up.
– Developing specific campaigns with a digital first mindset.
– Managing relationships with key stakeholders up to and including GB&FM/Retail Americas’ executive leadership and external partners.
– Working closely with the central digital marketing team out of the U.K. to promote the company’s increased use of social and digital media as well as managing the relationship with third-party public relations and media agencies both in the Americas and globally.

Company: BT
Name: Judy Joost, Marketing Manager Global Services
Email: [email protected]
Web Address: home.bt.com
Address: 620 8th Avenue, 46th Floor, New York, New York 10018
Telephone: +1 212 205 1935

 

Great Expectations Ahead
BankingTransactional and Investment Banking

Great Expectations Ahead

To celebrate the success of Azizi Bank winning the Finest in Finance – Best Bank in Afghanistan award, Mohammad Salem Omaid, President and CEO writes about this bank’s amazing array of services, plus their emphasis on Corporate Social Responsibility (CSR) activities, as well as women’s emancipation in the workplace.

First of all, I must say that it is a moment of tremendous pride and honour for me on behalf of Azizi Bank, Afghanistan (the largest bank in the country), to win this prestigious Finest in Finance – Best Bank in Afghanistan award from the team at Wealth & Finance International. These sentiments were expressed sincerely by my colleagues Samrat Dutta and Mohammad Osman Nowrozi when they visited the offices of the esteemed Wealth & Finance International magazine on 29th March to collect their trophy for this prestigious award. They greatly enjoyed their visit to the UK, enjoying the stunning countryside viewed from the train and the City of London equally.

This award means a lot for me Azizi Bank, which I believe is the place to do banking in Afghanistan, with our superior customer service approach, state-of-the-art technology in line with banks from other countries. We are currently in a growing phase, and we have great expectations for the future, indeed we dream of becoming the best quality bank in Afghanistan, providing nothing but world class services.

We need such international recognition to build upon our brand and sustain its strong image. I am once again gratified to your esteemed organisation in recognising a bank from the Islamic Republic of Afghanistan for this prestigious award. I believe that Afghanistan should be viewed in a positive way, and be supported by bigger banks in other countries.

In terms of my own background, I have been associated with the bank since its inception. I started my career as a teller – and I then moved into various positions which included credit and finance – before becoming the President and CEO in August 2016. I have also served as the Azizi Bank’s Deputy CEO for 5 years. I have been widely responsible in developing local human resources and personally founded the capacity building programme at the bank.

In addition – I have a doctorate in Financial Management from one of the leading Indian University – plus an MBA with specialisation in Banking, Risk Management and Finance.

Azizi Bank and its role in the banking sector
Azizi Bank is a commercial bank in the Islamic Republic of Afghanistan set up in 2006. It has been the vision of Mr. ‘Mirwais Azizi of the distinguished Azizi Hotak Group and their family, to set up an establishment in the country that provides banking services to all sectors of the population. This came at a time when banking services in the country were having challenges of their own, after the time of the Taliban regime.

The bank was initially set up with a capital of $5 million and 25 employees. Today – we have statutory paid up capital of more than $80 million with the central bank – and employ more than 1500 members of staff. The bank remains the largest banking group in Afghanistan today, with more than 145 branches spread across the country. Presently, Azizi Bank is the market leader in the country in terms of absolute business, percentage share and network.

Azizi Bank banking products
Azizi Bank is currently offering all types of banking products as per the customer needs and requirements. We offer current and savings accounts in four currencies – AFN, US Dollars, Euro & GBP. The following are the other products and services currently being offered by Azizi Bank, apart from the vanilla CASA:
• Fixed deposits with attractive rates in AFN and US Dollars;
• Salary savings & current accounts for corporates and institutions;
• Trade finance products which includes – bank guarantees, letter of credit and term loans;
• Business loans;
• Treasury products;
• Domestic and international remittances;
• Master credit and debit cards, ATM cards;
• Master pre-paid cards and;
• Western Union and SWIFT.

The bank, by the second quarter of 2017, will increase its CASA variants by introducing products targeting children, students, women, senior citizens and high net-worth corporate individuals.

The bank also offers the following services:
• Internet and mobile banking;
• 24-hour call centre facility;
• Instant account opening at all branches;
• Biometric finger print recognition at branches for enhanced security;
• Green channel at branches for fast and efficient cash dealings;
• Dedicated priority counters and lounges for VIP customers;
• Dedicated relationship manager for VIP and high net worth customers;
• ATMs, cash dispensers and video kiosks (the latter is coming soon);
• Branch less banking through POS devices and;
• Extended branch business hours.

We are evaluating further digitalisation process to enhance the level of service for customers, by introducing more innovative features and services in line with the best practices at the other international banks, thereby creating an impetus in the individual and national growth of the country.

Social responsibility in the community
Azizi Bank is extensively into Corporate Social Responsibility (CSR) activities. In 2016, amongst other activities, we donated the first digital library at the esteemed Kardan University, which was inaugurated by HE – the Ambassador of India to Afghanistan. We have also ensured that we support the underprivileged section of the society, especially the NGOs supporting the orphanages.

Apart from other activities, we contributed to the development of the Women Breast Cancer Hospital in Kabul this year on the occasion of the International Women’s Day. We are entering into a MOU with the Ministry of Women Affairs, Islamic Republic of Afghanistan on various projects of the ministry which will also include efforts to improve educational opportunities for women.

In addition, we will shortly be organising an event for women entrepreneurs where we will be announcing customised small scale loans for this group at a reduced rate of interest, to support their empowerment in the country. We have also launched a special programme in collaboration with the provincial municipalities to plant trees for a greener Afghanistan.

The First Islamic Bank in the Republic of Afghanistan
We are converting our 100% subsidiary bank – Bakhtar Bank – into a full-fledged Islamic Bank by the end of first quarter of 2017. This will be the first Islamic Bank in the country. The total bankable population in Afghanistan is around 12% of the 32 million who live here.

Being in an Islamic country – this strategic move will further increase the banking population – and will play a pivotal role in our financial inclusion programme.

Women’s emancipation in the workplace
More than 16% of our workforce are women, all of whom play a quiet but effective role in their empowerment and emancipation. We have been constantly encouraging women to break the shackles and join the main stream. We have tied up with local agencies, backed by the USAID projects in the recruitment of talented women into the system.

The bank has always encouraged women to take up leadership positions. Indeed, we have women leading few of the major branches as branch managers and as deputies at some of the key departments in the head office, in addition to the other roles being managed at the branches and other departments.

Human resource capital
Our human resource capital consists of more than 1500 employees. The management team here has a mixture of youth and experience. We have a strong in-house state-of-art training department, who provide all kinds of training and refresher programmes, right from the orientation of new employees and basic banking up to international trade and credit programmes.

In order to provide international exposure, we also send our work force for training abroad in countries such as the UAE, India and Pakistan. Our board of supervisors and the board of management includes expatriates from the US, India and other countries with an average experience of more than 18 years in the banking, financial and administrative sector across the globe. Their experience, mixed with the local enthusiasm in developing a better brand, have certainly played a significant role in the undoubted success of Azizi Bank.
Customer satisfaction and feedback
We have a systematic approach towards customer satisfaction at our branches. The branch staff are provided with regular training on customer service and delivery TAT. We have introduced a customer level feedback programme on the quality of services we provide. The call centre department makes regular calls to the customers to ascertain the quality of services provided, and updates management on the feedback and action taken on any anomalies.

Azizi Bank have been awarded the Best Bank – Customer Service and Best Retail Bank, 2016 award by the International Finance magazine, London and South Asian Partnership Summit, Sri Lanka respectively last year.

We have been receiving quite encouraging responses from our customers. The bank has seen a transformation change on the level of customer service provided over the last 18 months. Amongst all the banks in Afghanistan, Azizi Bank have the highest customer acceptance on Facebook, with a rating of 4.5 on a scale of 5. Azizi Bank is also widely accepted on the other social media pages. Last year, we received an award from an international firm for being the best socially acclaimed bank in Afghanistan.

Opportunities and challenges in the future
Azizi Bank has completed a tough and challenging, yet quite interesting journey of more than 10 years of existence in the country. We are foreseeing opportunities for the bank rather than any challenges. Success cannot be achieved unless you beat all the challenges. Our team is committed and ready to face all the challenges.

We have already incorporated the Vision 2020 plans and have very positive feelings about that, something that reverberates throughout all of our energetic team here. We have engaged one of the top US based international consultancy firm – Alvarez & Marshall, to strategise our vision of sustained growth in a systematic and phased manner.

On these premises, Azizi Bank has developed its strategic plan, with a keen eye for progress and development. The bank has planned an aggressive growth strategy through reconstitution of the sales team and various marketing strategies, i.e. tie-ups with corporates, various international joint venture initiatives for investment in the country etc.

Accordingly, Azizi Bank has drawn up our financial plan projecting strategies for growth. In its Vision 2020 initiative, the bank will witness a significant growth on all sectors thereby maintaining its position as clear market leaders and catering to the customer requirements and expectations.

Azizi Bank has initiated several measures, aimed at vigorous marketing efforts specifically branding of the bank, co-branding with other organisations, tie ups, technological innovations with an eye to cater and partner all in the developmental cycle. The bank is getting engaged in expanding the business activities into other areas through cross sale of other products, i.e. insurance products, acting as collection agents for bill collections to several service providers.

The future of the banking industry
Banking services are the economic backbone for any nation. One of the important aspects of unifying people and bringing peace in this nation – is developing the economy – and making people financially secure and independent. Azizi Bank is playing a major role here. The job market has seen a reasonable improvement over the last 3 years. Many employment opportunities are created from the government. There are several international NGOs working in the country, who believe in taking the energetic and the talented youth of the country. The mass exodus from the country have reasonably decreased over the last year.

Performance of the bank is of course dependent on various eco-political factors. In a country of Afghanistan’s stature with political insecurity, with instability looming in the minds of all there is less capital inflow as donors are uncertain of investment outcomes, as it is difficult to predict them.

However, given the present prevailing situations, and the World Bank survey reports, optimism is prevailing in selected infrastructural sectors of the economy, indeed there are prospects of substantial growth. There is much promise for foreign direct investments, and tremendous scope for the developmental of mining, quarrying (with one of the world’s richest resourceful countries), low inflation, improving education rates, more and more integration of the provinces with the capital, more sponsored infrastructure and more economic benefits trickling down owing to economic integration with other countries etc.

Real GDP growth is projected to increase to around 3.90% in 2017, from its present position of 3.10% in 2016. It is expected that these economic benefits will trickle down to the entire population. The economy will continue to be stable in the next 2-3 years.

With the economic depression, apart, a substantial quantum of investments has been planned for road infrastructure, the power sector, power transmission lines, power generators, electricity generation, the agriculture, IT, oil and gas sectors and so on are estimated to be in the tune of $2 billion.

In closing, I would like to stress that Azizi Bank will be the bank of the future in Afghanistan. As it strengthens its presence, Azizi Bank continues to review compliance, risk management skills, systems and processes and where appropriate – it aims to enhance these further.

The commitment applies to Azizi Bank’s relationship with its shareholders, customers, employees, suppliers, regulators and the community in which it operates. In addition to our vision 2020 plans, Azizi Bank will expand its presence to neighbouring countries and will open new offices in India, China, UAE, Turkey and other neighbouring CIS countries over the next 1-3 years. Finally, I would like to say that I strongly believe we are the bank of the future.

Company: Azizi Bank
Name: Mohammad Salem Omaid, President and CEO
Email: [email protected]
Web Address: www.azizibank.com
Address: Azizi Bank, Head office
Ankara Square, Opp Turkish Embassy
Main Road, Kabul, Afghanistan
Telephone: 93 (0) 701 80 15 15

Driving Force
BankingTransactional and Investment Banking

Driving Force

Opening its first location in 1972, today Meineke operates nearly 1,000 locations across the globe. It is also a member of the Driven Brands family, the largest automotive aftermarket franchisor with more than 10 brands and 2,500 locations. Meineke offers overall car care maintenance and repairs to customers, with services including fluid, filters and belts as well as brakes, tires, suspension and steering.

Ed Pearson is Vice President of Franchise and Sales Development for Meineke. He tells us more about the franchise’s objectives and tells us a little more about its recent successes. “Our goal is to provide a total car care experience to our customers. We’re in the relationship business, not transactional, and because of that our customers continue to come back time after time.

“Many people have a preconceived notion of the automotive industry, especially when it comes to repair and maintenance centres. At Meineke, we are constantly breaking that mould with new and innovative solutions to increase not only traffic to our centres but customer retention for our franchisees. We’ve developed and utilised new tools like online scheduling, the Meineke rewards app, and Revvy, a device customers plug into their car, to make our services more easy and accessible for customers in the communities we service.

“Additionally, from a corporate level, we are continuing our growth in the fleet sector by leveraging the current $100 million fleet footprint of our sister brand in the rental car, fleet management, private and government space, to provide even more work to our franchisees. Because of these initiatives, we’ve had a lot of success growing within our existing franchise base, which truly speaks to the strength and longevity of the Meineke franchise opportunity.”

A key aspect of Pearson’s job is to grow the Meineke brand with the right franchise partners. “To have a successful brand you have to have strong franchise owners,” he explains. “With my team of development managers, we work across North America and Puerto Rico to scope out and award licenses to those top prospects.”

It is clear to see why Meineke is such a lucrative investment opportunity. As a needs-based business, Meineke is predictable and sustainable for the long-term. “We won’t experience huge upticks or downticks,” states Pearson. “When a franchisee opens a location, costs will be kept to a minimum because of proper project coordination. Some 80 percent of new openings are through the conversion of existing buildings, rather than being built from the ground up, which keeps the investment amount low. In this regard, Meineke is versatile in its real estate model.

When franchisees don’t lose money in real estate, they’re faster to break even and become cash flow positive.

“Meineke has success under its belt as it celebrates 45 years of automotive experience and brand recognition. The name “Meineke” is instantly recognisable for most. We’ve figured out what works from business plans to day-to-day management and it’s that kind of knowledge and experience we pass onto our franchisees. This opportunity is right for franchisees looking for a brand name and a proven, predictable and scalable model. Many of our owners have multiple locations because we are designed for growth. Our IT platform allows franchisees to monitor the health of one or multiple locations without being on-site.”

With regards to potential franchisees, Pearson tells us that, whilst they look for a diverse range, an important aspect of a good franchisee is a that they are committed and an integral part of the franchise.

“All of the business systems and tools Meineke has cannot be auto-piloted by an absent franchisee. In order to achieve success, our franchise owners have to be committed contributors to their centre(s), which can be defined in a variety of ways but regardless the person we want will take charge of his or her business. We want someone who’s able to follow a system, as we’ve established and will provide our proven playbook for success.

“You don’t need to have been a mechanic in order to become a franchisee, in fact 90 percent of our prospects have zero automotive experience but they recognise Meineke’s scalable and dependable business systems. The majority of people applying today are C-level individuals from the corporate world, having had direct reports, management experience and profit and loss knowledge. Many have led by example their whole lives. All of these skill sets easily transfer to being a successful Meineke franchisee.

“Initially, we want to make sure the prospect is educated on the Meineke franchise model – what we do, our systems, our emphasis on customer service and our relationship-focused system. Obviously, there are financial requirements, real estate reviews and operational interviews to make sure expectations are the same on both ends. We get to know the prospective franchisee so we can ensure a long-lasting relationship.”

As Meineke continues to revitalise its business systems there are becoming increasingly more opportunities for franchisees to become successful. Pearson embellishes on what the future holds for the brand and its franchisees.

“We are continuing our growth and dominance within the automotive aftermarket through technology initiatives like our KPI dashboard and online scheduling application which cater to a more modern customer. Additionally, through our parent company Driven Brands we are able to leverage the power behind our parent company to provide franchisees not only with fantastic support teams but continued opportunities to not only grow their business but save more money through fleet and procurement partnerships.

“Our association with Roark Capital has given us the ability to share best practices with some of the biggest brands in franchising, furthering our goal to continue being the consumer’s first choice for all of their car care needs. Lastly, because of economic situations and cars being built to last longer, with the average vehicle around 11.5 years of age, people are choosing to keep and maintain their cars, which are both great factors for our business. Competition is always a challenge that we’re mindful of, but with over four decades in the automotive aftermarket we pride ourselves on always staying one step ahead.”

For more information on franchising with Meineke, please feel free to get in touch with them with the contact details provided here.

Company: Meineke Car Care Centers Name: Ed Pearson Email: [email protected] Web Address: www.meinekefranchise.com Address: 440 S. Church Street Suite 700 Charlotte, NC 28202 Telephone: + 1 866 675 7687

The Real Estate Market
BankingTransactional and Investment Banking

The Real Estate Market

Stephan Gietl is the COO and CFO of the company and focuses on all legal, operational and number work for the firm. He tells us more about the firm and the rationale behind its inception.

“Initially the company focused on acquiring distressed assets and, as markets started to recover in 2012, the company was an early mover with luxury waterfront high-rise developments in Edgewater, Miami, amongst others The Crimson, which name has been derived as reminiscent to the great time at the AMDP program at Harvard University. The Crimson is one the only luxury boutique waterfront condominium development in Edgewater featuring a unique lifestyle only a boutique development can deliver.”

The company is currently in the middle of its 284-unit residential development 50 Paramount in Sarasota, Florida, which is slated for its grand opening in November 2017.

“The company has delivered to its investors exceptional returns up to 60% IRR due to its highly professional and diligent approach in executing projects,” explains Stephan.

“The company’s credo spending significant time on every detail of a project, rather than relying on consultants has dramatically paid off to all stakeholders of the company. The company is highly committed to achieve outstanding results from a design & quality perspective. As such the company is delivering with its 50 Paramount project, rental units which have been designed by interior designers and caters features such as integrated shower niches, opposite faucet control, glass enclosed showers and amongst others island kitchen design which usually can only be found in high end hotels or condominiums. Besides the development activities the company offers a full integrated real estate service such as Brokerage and Property Management. In the last couple of years, the company has created assets exceeding $200 million.”

Stephan tells us more about the dedicated staff members, who play a crucial role in the firm’s overall success.

“We select our staff very carefully,” he says. “We try to match the growth of our firm with the growth potential of our employees. We are proud that that we have a very high retention rate of all our personnel and a very international team to boot.”

Customers are often very impressed by the professional handling of each development step and appreciate the attention to detail that McKafka gives, as well as the quality of the final product. “We are never overpromising and deliver according to our specifications,” explains Stephan.
With regards to the future, Stephan foresees challenges ahead which the company will tackle head on, in order to retain its success rate.

“As the real estate market has turned very hot in the recent 18 months it is currently most difficult to identify reasonably priced development opportunities.

“Looking at the wider picture, changes in interest rates is the single most relevant driver for the next 12 to 24 months.”

Company: McKafka Development Group Name: Stephan Gietl Email: [email protected] Web Address: www.mckafka.com Address: 20900 NE 30th Ave., AVENTURA, FL 33180 Telephone: +1 305 331 5936 (cell)

Interaction in Investing
BankingTransactional and Investment Banking

Interaction in Investing

Described by the co-founders as the “e-Harmony for real estate fundraising,” Peloton Street is focused on how technology can make the process of marketing deals and deploying capital more efficient by helping the investment community focus only on the opportunities that are right for them, so they can close more deals faster.

Across the corporate landscape, data-driven solutions designed connect people have been hugely successful, with everything from flat sharing to dating supported by a range of online platforms created specifically to support users in connecting with one another. However, so far nothing of this kind has been offered for the private capital markets and specifically commercial real estate finance industry; which is where Peloton Street comes in.

Peloton Street’s online platform uses data science and machine learning (a subset of artificial intelligence technology) to help facilitate actionable results and engagement between members of the investment community – a solution analogous to how online dating platforms helps 41 million Americans find “friends, dates, and relationships, and everything in between.”

By reliably collating the criteria used by investors when evaluating and deploying capital into such deals, both sides of a transaction are better ensured the outcome they are seeking. Investors are shown only the deals that they most likely to invest in, while dealmakers can focus their marketing efforts on the leads that are most likely to invest in their deal – instead of “carpet bombing” everyone out there when raising capital. Tabish explains, “The process of raising private capital is not all that different from dating and searching for a soul mate – except, that the first date in context of what we’re doing is meeting with an investor.”

Peloton Street’s artificially intelligent matching platform looks at thousands of professional investors and calculates a match for deals based not only on an assessment of investors’ preferences and similarity to other deals that they may have participated in the past but also their interaction with any new deal flow presented to them through the platform. “We believe that this behaviour is foretelling of how an investor feels about a particular deal – it’s just like the first date… if he or she is just not that into you from the get-go, then you’re probably better off looking elsewhere.”

Drawing on a vast wealth of expertise by working professionally in commercial real estate finance and investing for over 12 years, Tabish has a strong knowledge of the industry. It is how he and his technical co-founder – Neville Jos, a 20 year old computer science prodigy with a passion for data science who has been coding since the age of 12, conceived the idea for Peloton Street. Originally founded in 2013 as a crowdfunding platform with a different team, Tabish and Neville pivoted
Peloton Street to the current value proposition about a year ago after restructuring the company. “We learned the hard way that syndicating private real estate investment opportunities online was not really a scalable business model” – at least, not one that necessarily benefited from the use of technology to generate revenue.

“We found ourselves dealing with all of the same social and regulatory ‘mishigas’ that traditional investment bankers have to deal with when marketing a deal. It just wasn’t going to work; and, rather than burn through our seed round raised from friends and family, we decided to pivot and not have to deal with a lifetime of awkward dinner table conversations.”

Together, they are still working on the original mandate of helping investment capital flow to the most deserving deals, but by tackling another problem that is becoming increasingly prevalent in the commercial real estate industry. “Discretionary capital for investment is the Holy Grail, but it’s gotten a lot harder to raise today. Investors have become smarter and are more sophisticated; and, so many of them like to call the shots.”

Tabish explains that the new regulations introduced following global recession are inadvertently responsible for this new norm. According to him, the financial services industry “underwent a disaggregation that no one really likes to talk about;” however, the diaspora of financial professionals displaced during recession “have seeded a whole bunch of new companies, instead of seeking gainful employment elsewhere.” Smaller players, such as boutique private equity firms and family offices, are gaining market share and are now at the helm of an increasing number of transactions each year.

The increasing number of finance professionals “hanging their own shingles” is in part likely responsible for why capital from private unregistered securities now outpaces the amount raised through publicly registered securities (totalling more than $2 trillion in 2014). “More and more people are chasing after private capital, which in our opinion has actually made it harder to raise capital and do deals,” Tabish surprisingly explains.

“While the market is seeing more activity, this deal flow lacks homogeneity and creates a steeper learning curve for investors.” The definition of a “good deal” is highly subjective, often based on the divergent investment criteria. This environment has motivated even more investors to eschew the fund format in favour of deploying capital on a deal-by-deal basis, simply to stay in control. Peloton Street sees a significant market opportunity in using its technology to help facilitate more actionable engagement between these “users” and “providers” of capital, as players on both sides scramble to source deals and deploy capital.

Peloton Street is a FinTECH start up that uses big-data to help real estate dealmakers and investors come together and transact. We caught up with Co-Founder and CEO Tabish Rizvi to learn more about this innovative and dynamic firm.

Since commercial release of the beta platform in late October last year, Peloton Street has been signing up about 1 to 2 new users a week and having conversations with several more interested in learning more about how the platform could help them with their equity and debt fundraising efforts. “It’s going to take a little time for people to wrap their heads around how an online platform can shortcircuit the process of identifying the right investor for a deal – something that has traditionally taken weeks and months to do. The same thing happened to online dating sites and online discount brokers two decades ago,” says Tabish.

After gathering feedback from a core group of users, Peloton Street recently introduced simpler subscription-based pricing where users can pay $79, $129, or $199 depending on the features that best suit them. “We are immensely thankful to our first 50 users, who have in effect helped us put the finishing touches on the airplane as we fly,” explains Tabish. Peloton Street has been selected to join the Spring 2017 cohort of AREA.build, one of the world’s leading real estate tech incubators based in New York City; and, is “looking forward to working with and learning from the accomplished advisors and extended network. It is our opportunity to learn from the best-of-the-best in the industry.” Tabish is keen to build upon this opportunity and grow the business, all while executing effective marketing campaigns and supporting a growing client base over the coming months and years.”

Company: Peloton Street Name: Tabish Rizvi Email: [email protected] Web Address: pelotonstreet.com Address: 79 Madison Avenue, 2nd Floor, New York, NY 1001

Lloyds Bank trials British Sign Language translation technology
BankingSecurities

Lloyds Bank trials British Sign Language translation technology

New technology provides innovative way of interacting with Bank literature Lloyds Bank has become the first financial services company to undertake a trial with Signly – a British Sign Language (BSL) translation tool. Lloyds Banking Group’s Innovation Labs trialled the technology to understand how Signly could offer an alternative option for up to 250,000 people in the UK who use BSL each day. Since undertaking the trial, the Bank is now looking to test the technology with a wider group of customers.

BSL is a unique language with its own sentence structure and contains a number of key differences to both spoken English, and Signed Supported English (SSE). This means that for customers who use BSL as their first language, many communications are often hard to understand.

Signly enables customers to scan Signly-enabled literature on their smartphone which provides translations into BSL through augmented reality. The trial incorporated Signly’s functionality into both written and online material, enabling hard of hearing and deaf customers to use BSL to understand the financial material they were being shown.

In addition to trialling Signly functionality, Lloyds Bank currently provides a wealth of ways for customers to interact with their bank. These include Text Relay and SignVideo, a signed video service which provides deaf customers with access to an online interpreter. For those with visual impairments, customers can access large print, braille and recorded literature.

Nick Williams, Lloyds Bank’s Consumer Digital director said,

“We are always looking for new ways to support our customers and trialling this new technology is a great example. Alongside SignVideo, Text Relay and our interpreting service, Signly provides a new tool to make it easier to engage with the Bank. Improving our services to make them simple and intuitive for all our customers is key to removing barriers of financial exclusion.”

BankingTransactional and Investment Banking

21 Credit Unions Benefits from Lloyds Banking Group Development Fund

As part of its commitment within its Helping Britain Prosper Plan*, Lloyds Banking Group is awarding a further £1m in grants to an additional 21 credit unions through the Lloyds Banking Group Development Fund, run in partnership with the Credit Union Foundation.

Established in 2014, the Fund is designed to strengthen the financial position of credit unions and give them the capacity to develop new strategies for sustained and effective growth and to provide additional much-needed responsible lending to communities across Britain.

The Fund features two kinds of grant: large awards between £50,000 and £100,000 and seed funding awards between £10,000 and £20,000.

Eleven credit unions will receive large awards, intended to provide a contribution to a their reserves and help remove barriers to growth and innovation, with another ten receiving seed funding awards to help make the changes they need to apply for a large award in a subsequent year or to pay for the costs of merger. Recipients of awards were selected by an independent grants panel.

As well as Lloyds Banking Group’s £4million investment over four years to the Fund, it also signposts customers it is unable to help, where appropriate, to their local credit union and provides volunteering support.

Robin Bulloch, Managing Director, Lloyds Bank & Bank of Scotland at Lloyds Banking Group said: “We undertook the largest survey of credit unions to date and they told us the most important role we can play in the credit union movement is as a funder. We are committed to being the leading supporter of credit unions in the UK, and our Development Fund underlines our public commitment to help Britain prosper. The £4million fund will help the sector to lend an additional £20 million to their customers1.

Liz Barclay, Chair of the Credit Union Foundation and Development Fund Grants Committee said: “The Credit Union Foundation is proud to work in partnership with Lloyds Banking Group. Their £4 million investment over four years is innovative and pioneering and now that we’re into the third year of the scheme we’re seeing a big impact on sustainable credit union growth. Credit unions provide an ethical and affordable financial service to some of the hardest to reach and most financially excluded communities in the UK. We’re seeing good quality applications for these capital awards from credit unions committed to expanding and improving the services they offer those communities.”

Simon Kirby, Economic Secretary to the Treasury, said:

“Credit unions play a vital role in their communities, providing access to affordable credit for those who need it most. This funding from Lloyds will extend the reach of the sector even further and I look forward to seeing other banks following suit.”

BankingTransactional and Investment Banking

Darlingtons Solicitors: Raising the Bar

Darlingtons Solicitors: Raising the Bar

Darlingtons Solicitors LLP is a London based law firm with a reputation for dynamism and practical advice, valued by both business and individual clients throughout the city and beyond. We invited Partner Debbie Serota to tell us more.

Established in 1999, Darlingtons is a fast growing boutique law firm in London, a modern practice with 50 staff. Covering a wide range of specialisms, the firm serves clients ranging from investors and entrepreneurs to long established, international businesses. Debbie talks us through the firm’s core practice areas and how it aims to provide excellence in these areas.

“At Darlingtons our corporate and commercial team deals with a full range of corporate transactions and advisory services. We are regularly involved in sale and purchases of businesses or assets and shares, MBO, MBI, corporate restructuring, contracts and commercial, advising shareholders and directors on corporate issues. The team also specialises in advising directors and shareholders in relation to disputes that have arisen between themselves and fellow shareholders and directors. Our reputation is built on commercial, practical and insightful advice.

“Expertise and experience are key to our success, but not far behind is the working relationship between lawyer and client. We are dynamic and proactive, taking the time to understand how clients operate and what their objectives are, resulting in structured and tailored advice at the right cost and according to the client timescale.”

Legal practice is changing rapidly, clients are ever more discerning, with perceptions of service quality as well as advice quality just one example of the changes. Debbie outlines how the firm’s ongoing focus remains firmly on providing valuable services in the future.

“Clients have historically seen accountants and not lawyers as their primary trusted advisors. Whilst there are good reasons for this, lawyers are also valuable business advisors, not just to instruct when a transaction is needed or for a contract or a dispute. As lawyers, our challenge is to build proactive, valued business advisor relationships with clients and to remain adaptable and flexible to changing market and clients needs.” Company: Darlingtons Solicitors LLP

Name: Debbie Serota
Email: [email protected]
Web Address: www.darlingtons.com
Address: Darlingtons House, Spring Villa Park, Edgware, Middlesex, HA8 7EB
Telephone: 0208 951 6666

Banking Industry Should Learn from Telecoms Sector in Approach to Product Sales
BankingTransactional and Investment Banking

Banking Industry Should Learn from Telecoms Sector in Approach to Product Sales

Emily Farrimond, Director, Baringa Partners says: “The news that HSBC – who historically placed a strong emphasis on its local branch presence – has closed over 200 branches this year is just the latest in a series of branch closures across the industry as banks react to changes in customer behaviour and the need to reduce operating costs. However, ongoing closures is not sustainable and a new approach to product sales is needed. The banking industry should learn from the telecoms sector and create ‘The BankStore’, the Carphone Warehouse of banking.

“The BankStore would allow customers to compare the prices of retail banking products from a range of providers under one roof. Sales assistants would be able to provide independent advice on a range of products and customers would then be able to buy from any provider. If customers then want to purchase additional products from a different provider, they wouldn’t have to provide any further information as it would all be registered with The BankStore.

“As well as increasing competition in the banking industry, a key focus for the regulator, The BankStore would also support vulnerable customers who do not have access to digital channels or do not feel comfortable using them. The question is, will banks take the lead or will a new challenger step up to the plate?”

Lloyds Banking Group - Member of the Council for Digital Inclusion
BankingTransactional and Investment Banking

Lloyds Banking Group – Member of the Council for Digital Inclusion

Lloyds Banking Group is now playing a vital role in the Department for Culture, Media and Sport’s Council for Digital Inclusion.

Chaired by Matt Hancock, Minister of State for Digital and Culture, the Council brings together
representatives from government, the voluntary and private sectors to work together to create the
environment for more people to become digitally engaged and make the most of opportunities
offered by the internet.

In particular, the Council will focus on increasing levels of basic digital skills and reducing the
number of people in England who do not regularly or never access the internet at all.
Nick Williams, MD, Consumer Digital for Lloyds Banking Group is joining the quarterly sessions
and is acting as an adviser to help deliver the Council’s aims and work.

Still in its infancy, the Council has laid out some early action plans and ensuring it plays a pivotal
role in making sure organisations in social housing, charity, banking, telecoms, retail and
government work together to commission and deliver initiatives to increase digital inclusion.

Nick said, “I’m delighted that Lloyds Banking Group is playing an important role in this Council. It’s
staggering that an estimated 12.6 million adults in the UK still don’t have basic digital skills, which
means people are missing out on improved job opportunities, better health and social and financial
inclusion.

“Our research in both our Consumer Digital and Business Digital Indexes show that clearly there is
more we all can do to ensure individuals and businesses are aware of the opportunities available
to them just by being online. For example we found that the average person could save £744 a
year by shopping around for online deals.”

Minister of State for Digital and Culture Matt Hancock said: “It’s essential everyone in the UK
has digital skills to create a society that works for all and keep our businesses competitive in a
fast-changing world.
“We’re taking action to help, which is why we set up the Council for Digital Inclusion to bring
together leaders from business, charities and government to help more people realise the benefits
of being online.

“We have also recently committed to make sure all adults in England who need it can receive free
training in basic digital skills.”
As well as being part of the Council, Lloyds Banking Group has also been asked by the
Department for Culture, Media and Sport to lead a ‘task and finish’ group to specifically increase
the digital skills of small businesses and charities in England.

The ‘task and finish’ group was set up following an audit by the Digital Inclusion Delivery board that
identified a lack of digital skills provisions available.

The group is made up of key cross sector leaders who will pool resources, create partnerships
across sectors and devise initiatives to help reduce the gap in basic digital skills for small
businesses and charities.

Nick adds, “Our 2016 Lloyds Bank UK Business Digital Index shows the link between digital
maturity and organisational success, and we know that the most digital businesses are more likely
to see increased turnover – so this cross sector group, focused on helping increase basic digital
skills, is crucial to increasing the awareness of the benefits and the motivation to increase digital
skills.”