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GLOBAL STUDY: PEOPLE TRUST ROBOTS MORE THAN THEMSELVES WITH MONEY

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Research shows growing confidence among consumers and business leaders that robots handle finance tasks better than people

2020 has changed our relationship with money, people now trusting robots more than themselves to manage their finances, according to a new study by Oracle and personal finance expert Farnoosh Torabi.

The study of more than 9,000 consumers and business leaders in 14 countries found that the COVID-19 pandemic has increased financial anxiety, sadness, and fear among people around the world and has changed who and what we trust to manage our finances. In addition, people are rethinking the role and focus of corporate finance teams and personal financial advisors, according to the research.

 

COVID-19 has created financial anxiety, sadness, and fear 

The global pandemic has damaged people’s relationship with money at home and at work.

  • Among business leaders, financial anxiety and stress increased by 186 percent and sadness grew by 116 percent; consumer financial anxiety and stress doubled and sadness increased by 70 percent.
  • 90 percent of business leaders worry about the impact of COVID-19 on their organization, with the most common concerns centering on a slow economic recovery or recession (51 percent); budget cuts (38 percent); and bankruptcy (27 percent).
  • 87 percent of consumers are experiencing financial fears, including job loss (39 percent); losing savings (38 percent); and never getting out of debt (26 percent).
  • These concerns are keeping people up at night: 41 percent of consumers reported losing sleep due to their personal finances.

 

People see robots as a better way to manage finances

The financial uncertainty created by COVID-19 has changed who and what we trust to manage our finances. To help navigate financial complexity, consumers and business leaders increasingly trust technology over people to help.

  • 67 percent of consumers and business leaders trust a robot more than a human to manage finances.
  • 73 percent of business leaders trust a robot more than themselves to manage finances; 77 percent trust robots over their own finance teams.
  • 89 percent of business leaders believe that robots can improve their work by detecting fraud (34 percent); creating invoices (25 percent); and conducting cost/benefit analysis (23 percent).
  • 53 percent of consumers trust a robot more than themselves to manage finances; 63 percent trust robots over personal financial advisors.
  • 66 percent of consumers believe robots can help detect fraud (33 percent); reduce spending (22 percent); and make stock market investments (15 percent).

 

The role of finance teams and financial advisors will never be the same

To adapt to the growing influence and role of technology, corporate finance professionals and personal finance advisors alike must embrace change and develop new skills.

  • 56 percent of business leaders believe robots will replace corporate finance professionals in the next five years.
  • 85 percent of business leaders want help from robots for finance tasks, including finance approvals (43 percent); budgeting and forecasting (39 percent); reporting (38 percent); and compliance and risk management (38 percent).
  • Business leaders want corporate finance professionals to focus on communicating with customers (40 percent); negotiating discounts (37 percent); and approving transactions (31 percent).
  • 42 percent of consumers believe robots will replace personal financial advisors in the next five years.
  • 76 percent of consumers want robots to help manage their finances by freeing up time (33 percent); reducing unnecessary spending (31 percent); and increasing on-time payments (31 percent).
  • Consumers want personal financial advisors to provide guidance on major purchasing decisions such as buying a house (45 percent); buying a car (41 percent); and planning for retirement (38 percent).

 

Our relationship with money has changed, it’s time to embrace AI to manage finance

The events of 2020 have changed the way consumers think about money and have increased the need for organizations to rethink how they use AI and other new technologies to manage financial processes.

  • 60 percent of consumers say the pandemic has changed the way they buy goods and services.
  • 72 percent of consumers say the events of 2020 have changed how they feel about handling cash, with people feeling anxious (26 percent); fearful (23 percent); and dirty (19 percent). More than a quarter (29 percent) of consumers now say that cash-only is a deal-breaker for doing business.
  • Businesses have been quick to respond as 69 percent of business leaders have invested in digital payment capabilities and 64 percent have created new forms of customer engagement or changed their business models in response to COVID-19.
  • 51 percent of organizations are already using AI to manage financial processes, compared with 27 percent of consumers.
  • 87 percent of business leaders say organizations that don’t rethink financial processes face risks, including falling behind competitors (44 percent); more stressed workers (36 percent); inaccurate reporting (36 percent); and reduced employee productivity (35 percent).

 

Supporting Quotes

Felicity Burch, Director of Digital and Innovation at the CBI, said: “The pandemic has been a watershed moment for technology adoption. The financial services sector has innovated swiftly to support customers at a difficult time, and it’s fantastic to see businesses and consumers alike recognising the potential AI has for managing money. Trust will underpin the successful adoption of emerging technologies, and so firms must be taking steps like embedding robust governance processes, engaging employees, and addressing unfair bias in data.”

“Managing finances is tough at the best of times, and the financial uncertainty of the global pandemic has exacerbated financial challenges at home and at work,” said Farnoosh Torabi, personal finance expert and host of the So Money podcast. “Robots are well-positioned to assist – they are great with numbers and don’t have the same emotional connection with money. This doesn’t mean finance professionals are going away or being replaced entirely, but the research suggests they should focus on developing additional soft skills as their role evolves.”

“Financial processes in our personal and professional worlds have become increasingly digital for many years and the events of 2020 have accelerated that trend,” said Juergen Lindner, senior vice president, global marketing, Oracle. “Digital is the new normal and technologies such as artificial intelligence and chatbots play a vital role in managing finance. Our research indicates that consumers trust these technologies to accelerate their financial well-being over personal financial advisors and business leaders see this trend reshaping the role of corporate finance professionals. Organizations that don’t embrace these changes risk falling behind their peers and competitors; hurting employee productivity, morale and well-being; and struggling to attract the next generation of AI-empowered finance talent.”

 

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NutreeLife triples production with finance from Siemens Financial Services

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Plant-based snack manufacturer NutreeLife has massively increased its production capacity with the help of a hire purchase solution from Siemens Financial Services (SFS).

Founded in 2017, NutreeLife is a rapidly growing company which produces vegan protein bars, snacks and other healthy vegan products. Following a significant increase in demand, the manufacturer wanted to invest in a new production line.

As Patrick Mroczak, MD and CEO at NutreeLife Ltd explains, “We were ready to invest in the next stage of business development. We needed new equipment to meet demand but we also wanted to preserve our cash flow to deal with the volatility of the pandemic.”

To protect the business’ working capital, SFS suggested a hire purchase arrangement. Under the agreement, NutreeLife could acquire the equipment immediately and with no upfront costs. Instead, SFS tailored the arrangement so that the company could spread the cost over 5 years in regular payments and at the end of the arrangement NutreeLife will automatically own the equipment outright.

Under the hire purchase solution, the manufacturer also met the conditions for the UK government’s super-deduction tax initiative, whereby a company investing in qualifying new plant and machinery assets is able to claim 130% of the equipment’s value in year one.

“As a relatively new business, it’s not always easy to gain access to the right finance at a good price but SFS were incredibly accommodating. They really understood the benefit of the technology for our business and helped us unlock the investment,” adds Mroczak.

With the new equipment and technology installed, NutreeLife has been able to triple its production and turnover, and expand operations in tow.

“Despite the ups and downs of the pandemic, the new production line has helped us to keep things moving. As demand rises we’ve been able to take on much more staff and use our working capital towards stockpiling raw materials when needed.”

And the business’ success has not gone unnoticed. NutreeLife was awarded Small Business of the Year at the 2021 Lancashire’s Be Inspired Business Awards (BIBAs).

“Working with SFS has truly opened up news avenues of business for us. The team is so fast and responsive and clearly dedicated to finding the best solution for our machinery needs,” comments Mroczak.

Kirsty Talmage-Rostron, Business Development Manager – UK South at Siemens Financial Services comments, “It’s always exciting to work with an innovative award-winning manufacturer like NutreeLife. Despite the challenges of COVID-19, we’ve been able to help the business rapidly develop and look forward to continuing to support this growth strategy as the business expands into new markets.”

 

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HYDR DEVELOPS INVOICE FINANCE PLATFORM TO INTEGRATE WITH MAJOR CLOUD ACCOUNTING SOFTWARE PROVIDERS

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MANCHESTER – UK – 17th January 2022 – Fintech start-up, Hydr has developed its proprietary invoice finance platform to integrate with more major cloud accounting software providers including Sage and QuickBooks.

After launching exclusively with Xero in May, the Hydr platform can now be accessed by millions more SMEs in the UK who want to leverage their unpaid invoices to optimise cash flow and help fuel their growth.

Users of Sage, FreeAgent, KashFlow, QuickBooks and Xero who sign up with Hydr can get paid almost immediately for the work they have completed and invoiced, rather than having to wait out long payment terms and even having to consider extending their borrowings to maintain working capital.

Customers who link their account to the Hydr platform can expect a class-leading, seamless integration. No duplication of data is needed, they simply continue to raise their invoices with their cloud accounting provider as normal and Hydr will do the rest, funding approved invoices within 24 hours.

Hydr co-founder, Nicola Weedall said, “We’re so pleased to have achieved this product milestone. The impact of long payment terms and late payments is affecting millions of small businesses in the UK; many are navigating CBILS repayments and ramping up post-Covid trading which can put a strain on working capital. We feel so strongly that getting paid early is the best way of optimising cash flow, far better than extending borrowings.”

Hydr co-founder, Hector Macandrew said, “Invoice finance in years gone by has often been complicated and time consuming to apply for, complex to manage and opaque in pricing. It is absolutely ripe for disruption and cloud accounting and open banking has made this reinvention achievable. With our simple, transparent and fairly priced proposition, it is now more accessible and attractive to small businesses than ever. We encourage more businesses to consider it.”

Hydr helps small businesses optimise their cash flow with fully digital onboarding that takes just 15 minutes. Hydr’s platform connects with a company’s data and financial information creating a seamless digital experience without the need for the company to submit any additional paperwork. Funding decisions are given in real time and Hydr pays 100% of the value of an invoice (rather than the traditional 70-90%) within 24 hours, minus a transparent, fairly priced fixed fee. Once quoted, the fee never, ever changes and includes credit insurance.

Hydr works with small businesses registered in England in Wales that sell products or services to other businesses (B2B).

 

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