Connect with us

Finance

FINANCE PREDICTIONS FOR 2021

By Dr Vic Arulchandran, CPO at Nivaura

 

The year 2020 saw many technology trends accelerated due to the global pandemic. Now that we’ve seen many organisations adopt digitised processes, this momentum shows no sign of slowing. Two predictions that I think gained momentum in 2020, but will come to fruition in 2021, are the adoption of low-code tools and the digitalisation of capital markets.

 

The low-code / no-code movement has been gradually gaining momentum behind the scenes for the past couple of years. 2020 was the year we saw it really step into the spotlight, when demand for digital products dramatically accelerated due to COVID-19. Organisations that already utilised low-code platforms found themselves in a far better position to efficiently digitalise and automate service offerings and operations than competitors who had not yet embraced low-code. Indeed, Forrester has predicted that by the end of 2021, 75% of application development will use low-code platforms, up from 44% in 2020.

 

What we’ll see in 2021 is a wave of new entrepreneurs. By this, I mean we’ll see founders who are not developers creating their own applications. Low-code platforms make services and applications available, so that any eager entrepreneur can put together services to create an entirely new offering.

 

Dr Vic Arulchandran

There are three main reasons why tech-savvy entrepreneurs will leverage this trend. Firstly, low-code tools are like building blocks, they are easy to put together to create applications. This also means that parts can be added or taken away with the click of a button if necessary. Compared to code, where parts would need to be modified or completely rewritten in the event of proposed changes to the end product, this is far more efficient. Secondly, because of their building block nature it means that entrepreneurs do not have to become specialist programmers to create their own products and apps. This also removes restrictions on developers who are skilled in some coding languages but less so in others. Finally, they also present the opportunity to automate certain tasks that are time consuming and repetitive. Some organisations have already begun to tackle this using machine learning and RPA.

 

Separately, while many sectors have embraced digitisation, financial services in particular, primary capital markets workflows have remained largely unchanged. They are the final frontier for digital evolution in the financial industry. In 2021, this will change. Many projects are already underway, developing artificial intelligence implementations and use cases for dramatically reducing the time and human capital required for activities such as bond issuance, as well as the risk level associated with human intervention in transactions.

 

Today, capital markets workflows generally remain overly complicated, with high manual touchpoints in the issuance process causing issues further downstream in unstructured data flows and post-trade errors. Developing dynamic workflow tools that employ low code / no code principles and utilise AI will have huge benefits for primary markets, not only enabling the generation of deeper insights and delivering increased efficiency to a multitude of tasks, but ultimately democratising access to liquidity.

 

This extends to many other sectors too, including healthcare – where AI will be used to assist with diagnostics and procedures, sales – through AI recommendations and chatbots, and entertainment – gaming uses AI to create human-like challenging opponents that dynamically adjust to the environment and the user skill level.

 

Finance

FINANCIAL INCLUSION WITHIN DIGITAL PAYMENTS

NICK FISHER, GENERAL MANAGER, SALES AND MARKETING UK, JCB INTERNATIONAL (EUROPE) LTD.

 

The shift towards an economy that removes physical cash has long been on the horizon in many regions. Sweden is an example of a country rapidly heading this way. Two years ago, just 1% of Sweden’s GDP was circulating in cash compared to 11% in the Eurozone, and research by the Swedish Retail and Wholesale Council showed half of the nation’s retailers saying that they probably would not accept cash after 2025.

 

In 2019 in the UK, cash payments decreased by 15%, although physical money was still the second most frequently used method comprising of 23% of all payments. The Financial Inclusion Commission in the UK states that there are over 1 million people that do not have a bank account, and the World Bank estimates that there are some 1.7 billion adults globally that still lack access to a bank account.

 

The finance industry has collaborated over the years to develop various credit products for affluent communities. These customers are considered a lower risk. However, institutions should continue to prioritise the advancement of services to serve an audience which remains – ‘unbanked’. Research by EY showed that financial inclusion could improve GDP by up to 14% in more rural, developing economies like India, and by 30% in frontier markets like Kenya. While the positive reasons for fully embracing digital payments and eliminating physical cash are plentiful, including lower payment processing costs for the retailer and customer convenience, physical cash provides the ‘unbanked’ with the ability to function day-to-day with a legal tender.

 

To establish digital solutions for the unbanked, payment players should adopt an inclusive mindset. The race towards a digital cash society will naturally get closer to the finish line with the passing of each generation, but governments could lend a hand to the unbanked by encouraging financial institutions to sponsor organisations that provide legal quasi digital cash products. In my opinion, the financial industry has an important part to play in developing low cost solutions to support the unbanked with authentication tools – such as biometrics and risk tools to manage real-time credit risk reporting with anywhere accessibility.

 

In both developing and developed countries, QR codes can play a superhero role as they offer simple, low-cost ways of processing payments on basic mobile phones. In June last year, we collaborated with FIS to enable cross-border QR codes in the APAC region. The ‘Worldpay from FIS 2020 Global Payments Report’ found that digital wallets, at the time, accounted for 58 % of regional ecommerce purchases and were expected to reach almost 70 % percent by 2023.

 

In developed regions, we are issued with a formal identification when we are born, no matter our circumstances, and this comes in the form of a birth certificate or, later in life, a passport. This does not always happen in developing countries as resources are often limited. Yet, advances in biometric technologies, such as fingerprint or palm vein may offer a solution to the requirement for proof of identity to open a bank account or to create a mobile wallet. Biometric organisations, payment leaders and innovators, such as Google Pay and Apple Pay, have partnered to make this a reality, despite the initial cost implications for development.

 

In summary, understanding the reasons for why some prefer physical cash, and others prefer digital cash, provides holistic learnings to achieve a society that ultimately uses digital cash only. Empathy is paramount for building customer-centric commerce. For me, at least, a world without physical cash cannot be considered responsible, or fair, until everyone can be accommodated.

 

Continue Reading

Business

THE EFFECTS OF JOB HOPPING ON YOUR RETIREMENT OUTCOME

By Neli Mbara, Certified Financial Planner at Alexander Forbes

 

Job hopping – defined as spending less than two years in one position –  is a very controversial subject. It can be an easy path to a higher salary but can also be a red flag to prospective employers, not to mention your future financial goals if you are cashing in your retirement fund every time you make a move.

When changing jobs, whether it be once a year or once every decade, one has to make decisions regarding career growth and retirement plans which affect one’s long term financial plans. One of these decisions is ‘what to do with my retirement fund?’

Neli Mbara

For many people, the first thing that comes to mind is using their pension money to pay off their debt. Alexander Forbes Member Watch statistics show that 91% of members do not preserve their retirement savings when changing jobs. As we are living in times where most household income is used to finance debt, most people use job hopping to gain access to their retirement funds, and use this money to pay off debt. However, a quick fix and instant gratification comes at a price, which in this case could be a delay in your retirement plan.

Your retirement savings are simply for that, your retirement, to pay you an income once you stop working.

 

Early access of your retirement fund can result in:

  • Not having enough money at retirement – this is simply because most of us are already not saving enough for retirement
  • Robbing yourself off the compound interest you could have potentially earned from the investment.
  • Never making make up for the lost benefit
  • Creating a bad habit that will delay you from achieving your retirement plan and desired income at retirement

It is easy to cash in your money from a retirement fund at resignation but it is much harder to make up for the lost benefit (capital cashed in plus interest). Calculations show that for you to make up the lost benefit depending on your retirement age and investment time horizon, you will likely need to invest more than double your contributions towards a retirement fund.

Since only 6% of the South African population are reported to have accumulated enough to retire comfortably, without having to sacrifice their standard of living, you will most likely have to invest much more towards your retirement fund to make up for the lost savings.

Therefore, leaving your retirement fund invested and preserved in a preservation fund is the recommended option when changing jobs, as this keeps you committed to your retirement plan.

Changing jobs is a life-changing event, and it is therefore important that you seek advice from a professional financial adviser who will guide you in your retirement planning ensuring that your retirement needs are taken care of, by providing solutions that help you to ensure your financial wellbeing.

 

Continue Reading

Magazine

Trending

Banking2 days ago

WHAT BANKS NEED TO KNOW ABOUT OBSERVABILITY

By Abdi Essa, Regional Vice President, UK&I, Dynatrace   More aspects of our everyday lives are taking place online –...

News2 days ago

FINANCIAL SERVICES MUST FIX THEIR MISSED OPPORTUNITY AS CONSUMERS DEMAND MORE ENGAGING DIGITAL EXPERIENCES

Less than one-third (30%) of consumers believe the Financial Services firms they interact with now deliver a better digital experience...

Finance6 days ago

FINANCIAL INCLUSION WITHIN DIGITAL PAYMENTS

NICK FISHER, GENERAL MANAGER, SALES AND MARKETING UK, JCB INTERNATIONAL (EUROPE) LTD.   The shift towards an economy that removes...

Business6 days ago

THE EFFECTS OF JOB HOPPING ON YOUR RETIREMENT OUTCOME

By Neli Mbara, Certified Financial Planner at Alexander Forbes   Job hopping – defined as spending less than two years...

News6 days ago

VIRGIN MONEY EXPANDS PARTNERSHIP WITH FINTECH LIFE MOMENTS

Virgin Money is expanding its partnership with FinTech data expert company, Life Moments, to focus on the development of the...

Finance6 days ago

THE MAJOR CHANGES SET TO RESHAPE THE WORLDS OF FINANCE AND FINTECH IN 2021

By Michael Magrath, Director of Global Regulations & Standards at OneSpan    2020 was a formative year for the world of...

News6 days ago

FORMER HSBC COO JOINS BOARD AT REGTECH DISRUPTER

Andy Maguire takes seat on Napier’s Advisory Board   Fast growing RegTech company, Napier, which provides next-generation anti-money laundering (AML)...

Business7 days ago

DISRUPT TO SURVIVE IN FINANCIAL SERVICES, BUT BEWARE: YOUR TEAM MUST BE IN SHAPE FIRST

Michael Chalmers, MD EMEA at Contino   COVID is forcing extraordinary change in the financial services industry. It’s happening fast, already...

Banking7 days ago

NEARLY HALF OF BUSINESSES NEED MORE ASSURANCE ON DATA SECURITY TO ADOPT OPEN BANKING

Financial services businesses in the UK and Netherlands call for better education, training and increased guidance on data security issues...

News7 days ago

THE FUTURE OF THE UK’S FINANCE FUNCTION

By Ryan Demaray EMEA MD for SMBs at SAP Concur   With businesses feeling the pressure of both the pandemic...

Finance7 days ago

BUDGET 2021: PREDICTIONS

The spring Budget announcement is next week, with the Chancellor Rishi Sunak set to reveal new measures on March 3. After...

Banking7 days ago

CAN SELF-SERVICE BANKING SAVE THE BANKING INDUSTRY?

Mark Aldred, Banking Specialist at Auriga   2021 should be about making the lives of customers easier by tailoring the...

News7 days ago

FINANCIAL HEALTH PLATFORM LEVEL SECURES LANDMARK ESG DEAL WITH TRIPLE POINT

First-of-its-kind credit facility will incentivise Level to drive positive financial behavioural change for UK employees   Level Financial Technology has...

Finance7 days ago

FORECASTING FINTECH IN 2021

Fady Abdel-Nour, Global Head of Investments and M&A at PayU   2020 will go down in history as a pivotal...

Finance7 days ago

2021 — THE YEAR FINANCIAL SERVICES COMPANIES WILL NEED TO DRASTICALLY RETHINK THE WAY THEY MANAGE DATA

By Douglas Greenwell, Head of Commercial Strategy, Duco   There’s no denying that 2020 was a year of historic change...

Wealth Management7 days ago

HOW DO YOU ADAPT YOUR INSURANCE PRICING STRATEGY IN THE FACE OF INCREASED PRICE COMPETITION?

By Ketil Kristensen, Senior Advisor, Insurance, SAS   Many countries in Europe have in previous years experienced increased price competition...

Business7 days ago

THE CHANGING ROLE OF TODAY’S CHIEF FINANCIAL OFFICER

By Laura Wiler, Vice President, Finance and Business Operations at Sage Intacct   The CFO role is changing. Today, the...

Banking7 days ago

DATA: THE MUCH-NEEDED PROCUREMENT ADRENALINE SHOT, HELPING BANKS REMAIN COMPETITIVE IN THE RACE FOR INNOVATION

By Toby Munyard, Vice President, Efficio Consulting   Like a flip-switch, the pandemic saw many industries pushed over the innovation...

Finance1 week ago

2021 FINANCE SPEND PREDICTIONS

by Andrew Foster, VP Consulting EMEA, AppZen   As we enter a new year filled with ongoing change and uncertainty,...

Business1 week ago

FIVE PITFALLS PROFESSIONAL SERVICES MUST OVERCOME DURING THE PANDEMIC

By Andy Campbell, global solution evangelist at FinancialForce   The pandemic’s impact on the global economy has, and is continuing...

Trending