By Mark Jenkins, CFO at MHR International
It’s not all about reporting the numbers anymore – it’s about understanding what they mean for strategic decision making!
When someone wants to know what’s going on in a business, finance is usually the best team to ask as they have organisational-wide insights on both costs and operations. Finance has access to this information as they are the ones entering historic data into journals and collating this information into monthly reports. However, it’s time for this form of ‘Groundhog Day’ accounting to come to an end – rather than simply inputting figures into spreadsheets, finance should be using these figures and important business insights to help inform the strategic decisions needed to ensure a healthy and resilient business.
Relying on manual methods of data collection not only stifles the productivity of highly trained professionals but also increases the margin for errors. And, with reams of spreadsheets to analyse, often there’s little time left to uncover hidden pattens or trends. However, it doesn’t have to be this way! Rather than providing C-Suite with a top-line view of the numbers, the adoption of financial analytics software can offer a far more comprehensive analysis of cashflow. This not only enables faster, more informed decisions which, in turn, maximises revenue opportunities but it also gives businesses the tools needed to adapt and change strategies when faced with challenging scenarios. Ultimately, the availability of this analysis means decision-makers can drive the organisation forward without needing to rely on the figures in a report created last month or their gut instinct.
Don’t run before you can walk
Planning analytics tools can help finance teams obtain data more quickly and in a consistent format, aiding their ability to design and build profitability models while improving cashflow visibility. From a cost point of view, this means being able to calculate internal rates of return earlier, supporting the more efficient spending of cash. From a business perspective, this provides the insights needed to adapt to market changes and/or bring in new revenue streams e.g., developing new products, tapping into alternative markets, mergers, and acquisitions etc. However, before implementing an analytics tool it’s essential to have the right data and processes in place as poor data cannot offer any meaningful outcomes.
While it has always been best practice to ensure data accuracy, the pandemic has highlighted its importance more than ever as many companies have been operating with tighter margins and cashflows. Therefore, process optimisation and data cleansing should be performed before using an analytics solution. The latter involves identifying and removing corrupt, duplicated, or inaccurate data from the system. This, itself, can be challenging, as the process is time-consuming, laborious and requires an element of introspection to ensure poor quality data isn’t working its way back into the system. This can be daunting for businesses who don’t have the resources or funding to initiate this project – yet the benefits far outweigh the costs as only accurate data can help inform the strategic decisions needed to create opportunities and mitigate financial risk. Aside from this, it also ensures the company is audit ready, mitigating the risk of potential hefty penalties or fines.
Improving financial literacy
Another hurdle is making sure everyone in the organisation is onboard and aware of the advantages financial analytics can deliver. Think of it in terms of an insurance policy. It helps finance keep sight of what going on in the business, identifying trends and informing strategies, meaning it can help predict problems before they happen. As previously mentioned, some companies choose not to adopt an application due to lack of resources but, on the other hand, others that are operating best practice procedures such as effective data management might assume it is not needed until a crisis occurs. Additionally, there may also be a reluctance for finance to move out of their comfort zone. With the majority of these professionals proficient in Excel, it can be a vicious cycle to break. Yet, there is room for both spreadsheets and analytics; it’s about knowing which tool is right for the job. As many businesses will know, there is more to accountancy than just putting numbers in a box. Embracing analytics can compliment their talent for interpreting and analysing figures not just for the entire organisation but also at a departmental level.
While it might prove challenging to overcome some of these barriers, the pandemic has forced steps to be taken in the right direction. Rather than finance and senior management driving initiatives to improve cashflow, it has now trickled down the layers of the business. With limited bandwidth, every department needs to be cost and revenue conscious, and must find ways to generate financial efficiencies. In other words, they need to be ‘mini accountants’. A double-pronged approach is necessary to achieve this. Firstly, analytics tools will ensure the right information is being passed to each part of the business, breaking down data silos. Secondly, and to ensure each department is well equipped, CFOs should take on a consultancy role and champion use of the software and its benefits.
A leap of faith
There’s a full spectrum of businesses at different stages of their digital transformation journey, and it’s clear that there can be numerous obstacles to navigate when adopting an analytics solution. However, taking a leap of faith can result in significant rewards. Rather than looking at the short-term cost of purchasing the software, think about the returns such as scenario planning for cashflow, quantifying the impact of using different strategies, and teaching departments to take greater financial responsibility. This, combined with being an agile and flexible business will not only speed up the ability to make strategic, informed decisions ensuring survival in times of a crisis but also that each opportunity is being capitalised on.
HOW MERCHANTS CAN IMPROVE THE ONLINE PAYMENTS EXPERIENCE
By Alan Irwin, Senior Director of Product at Global Payments UK
The dramatic increase in online shopping over the past 18 months has encouraged many businesses to invest in developing their omnichannel shopping experiences. The reasons vary – some are keen to capitalise on the trend of older shoppers migrating towards ecommerce and some are trying to make up for loss of sales in brick-and-mortar stores during the pandemic. It is also true that many businesses are shifting their models to sell direct to consumers to avoid high marketplace fees and are therefore building their ecommerce channels for the first time.
The checkout experience is arguably the most important and delicate part of the ecommerce transaction, as it can make the difference between a happy customer likely to return, and a shopping cart abandoned out of frustration and confusion. A survey from March 2020 suggested that 88% of online shopping orders were abandoned, i.e. not converted into a purchase. A seamless, customer-centric online payment experience is therefore critically important in ensuring completed transactions. But with so many payment providers available, what should businesses be looking for when trying to keep friction to a minimum?
Keep clicks to a minimum
Less touchscreen interaction equals less abandonment. Adapting the payment page to fit any device and supporting popular mobile digital wallets like Google Pay ensures a seamless, stress- and hassle-free checkout experience for the customer and keeps clicks to a minimum. Friction can present itself in the most minor features – for example, when the customer is navigating the payment form, the appropriate keypad should be shown to the customer when required. It’s much easier to enter a card number using the dial pad instead of switching between QWERTY keypad layouts.
Simplifying online forms with autofill and tokenisation also significantly reduces friction at checkout and shortens necessary time taken. Ensuring checkout forms are tagged correctly for “autofill” is a great way to offer customers a single-click to input the payment, shipping, and billing data that they have stored in their browser profile. Similarly offering a guest checkout option will help convert customers who are in a hurry or looking for a one-off purchase. This can also be achieved by offering to store the payment details (called ‘tokenisation’) for express repeat and one-click purchases.
Make it easy to understand
A tailored payments approach can increase both domestic and international global sales. By offering a checkout experience in the customer’s language, the option to pay in their currency of choice, and use their preferred method of payment (whether it’s PayPal, Alipay or card), businesses can build loyalty quickly and put customers at ease. It is equally important for merchants to ensure they always display simple direction and information about next steps to instil confidence and prevent customer drop-off. The customer should be informed of what is happening at every stage in the process, for example, whether they will proceed to SCA (Secure Customer Authentication) next or go straight through to completion.
In addition, validating forms in real-time means merchants can highlight potential errors to the customer early on, and payment providers should provide this functionality. This could be an invalid expiry date, an incorrect digit in the card number or incorrect CVV number based on card type. When issues are only flagged at the end of the process, this forces the customer to go back through the steps to figure out the error. Real-time signposting of problems removes this potential friction and reduces the potential for a declined transaction.
Ensure seamless security
Merchants should work with a payment partner who offers the right blend of security and compliance management without it coming at a cost to the end-to-end checkout experience for the user. Instilling trust and security in your checkout flow while utilising the right solutions to drive seamless authentication flows will increase customer confidence and help prevent drop-off.
The greatest level of security and control comes from either utilising hosted payment fields that the
merchant can natively integrate into their checkout flow, or a hosted payment page where they can
manage the look and feel. Showcasing your brand on the checkout page with trust signals and logos also adds to building trust with the customer.
Staying ahead of regulations is also important. Secure Customer Authentication (SCA) will soon be mandatory in the UK for all eligible digital transactions, and this doesn’t have to be a friction-full process. Tools like Transaction Risk Analysis (TRA) and Exemption Optimisation Service (EOS) can quickly score transactions and drive exemptions where there is the right blend of transaction risk.
The devil is in the details
These three rules for successful ecommerce checkout experiences may seem straightforward, but it is important to apply them at a micro level. It can take only one minor point of friction to cause a customer to abandon their cart, and this will inevitably be replicated across other similar customers. It is critical to identify friction points early on and anticipate customer needs throughout the process. Discussing these points and any opportunities to improve customer checkout experience with your ecommerce team and payment provider is an important first step towards ensuring your entire shopping experience remains competitively seamless and loyalty is won. It may be that your payment provider cannot address them, in which case it could be time to move on in order to stay competitive.
NAVIGATING FINANCIAL SERVICES IN 2021: LOW-CODE TO THE RESCUE
Nick Ford, Chief Technology Evangelist, Mendix
Financial services are the poster child of great digital transformation: today, Britons can pay from their watches, check their balance directly from their phone at any time and even automate trading. This level of innovation isn’t only about customers: traders are able to operate faster than ever before thanks to better predictive analysis and forecasting tools, and finance teams are able to collaborate from anywhere in the world.
While we embrace all this innovation, it’s easy to forget that the reality of the sector is incredibly complex. The radical changes induced by COVID-19 have highlighted how challenging maintaining innovation today really is, while putting more pressure on IT teams to accelerate the digital transformation of the sector even further.
On top of this, the sector is one of the most affected by Brexit. Mendix’s Navigating the UK Landscape research found that businesses in the financial services sector have serious concerns about the impact of Brexit on their industry. Many believe that Brexit has damaged the reputation of the UK as a centre of finance (67%) – as well as creating functional challenges for businesses in the country.
Many financial services organisations are turning to technology, and specifically low-code, to deal with these challenges. This piece will look at how firms in the sector can use low-code to navigate the new world.
A sea of challenges
Financial services are complex: there are thousands of products to choose from, from savings to investment and mortgages. These services are then managed by lots of different companies, creating an additional level of complexity: banks, fintechs, brokers, wealth management specialists, government bodies… the list goes on. To add yet another layer, there’s a network of regulations, which change over time, forcing IT leaders to constantly keep on top of the latest evolution in the sector. Knowing these is only the first step: every time new laws are implemented, the sector needs to adjust to them, and that can mean anything from revising security protocols to radically changing the way information is processed, transmitted or audited.
This may already look complicated, but the real complexity starts underneath, in the realms of processes that the IT manages to keep the company operating as normal. It would be fair to say that the mission of financial IT leaders is often underrated: they deal with antiquated systems dating back decades, inadequate data management processes and minute security and compliance considerations every day, simply to keep the business afloat. Add to this the need to get all staff to work remotely during the lockdown, and the already time-poor IT leaders are now completely swamped.
Brexit also makes things difficult for financial services organisations. Two thirds anticipate costly and complicated processes for crossborder payments and investments, while 59% believe it will be harder to attract foreign investments. Ultimately, 61% admit they will no longer be able to support some of their customers because of the transition.
Tech as a raft
While the sector is mired down with complex processes and inadequate tools, it also needs to deal with a major challenge: fierce competition for tech-savvy customers. Now, all banks, investment firms and wealth management companies are investing in tech to help them cope with new customer demands for easier access to their capital and increased transparency. Two thirds have deployed digital projects to make the business more flexible as a result of Brexit, with data management (62%) and digital processes (62%) particular focal points.
And this is not just about pleasing digitally minded customers: it’s also about improving productivity and operational efficiency, harnessing data, and solving compliance challenges. This balancing act between priorities is gathering pace and spreading across the business: today, IT teams must deliver innovation that’s fast, reliable and secure, and that supports many divisions — all at once. It’s a big challenge, but it’s one that IT leaders are willing to tackle head on: two thirds of IT leaders believe the value of digital transformation initiatives outweighs their inherent risk. Yet, IT leaders know that rushing would be a mistake: although IT teams face high demand for their support, most would not prioritise speed over caution, even if they could innovate faster. This measured pace ensures that financial organisations are delivering the right solutions at the right time, reducing the risk of service disruption and security challenges.
Low-code to the rescue
To manage all these priorities, the IT team needs to look beyond its own team to create revenue-generating services that truly answer the clients’ needs – and it needs to empower all developers with the right tools to do so. This improves collaboration between IT and customer-facing staff to design services that suit the needs of the customer base, while reducing the pressure of an already-stretched IT team. Enter low-code: most leaders (58%) say that low-code has enabled the development of new applications to support their companies post-Brexit.
One example of this is a Financial Institution, which perceived its digital user experience lacking and engaged low-code to install a new user experience for its portal, consumer and wholesale digital services. It was able to do this in just eight months, providing numerous benefits to stakeholders.
Low-code software development provides a simple solution to address these constraints and challenges: based on a visual approach for building applications using drag-and-drop components, it enables non-technical staff to participate in creating business applications, even if they have little to no coding experience. Working separately or in close collaboration, professional developers and business-side “citizen developers” can create, iterate, and release applications in a fraction of the time it takes with traditional methods, all under the watchful governance of IT to ensure their applications comply with enterprise standards and architecture.
A low-code approach allows for flexible, iterative app development for many use cases in the financial services sector, including legacy application upgrades to comply with new regulations, apps supporting smart banking or portfolio management, and mortgage application management. With low-code, the financial services industry has the right tools to untangle its complex processes, simplify its evolution and focus on its core mission: keeping the economy thriving.
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