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HOW TECHNOLOGY IS POSITIVELY IMPACTING COMPLIANCE AND HOW IT IS HELPING TO STREAMLINE PROCESSING TIME AND COST FOR FIRMS

By Joe Woodbury, Director – Investment Management Solutions at Lawson Conner (part of IQ-EQ)

 

Private Equity & Real Estate fund managers are weathering turbulent times. Recent Equity market fluctuations are in a direct correlation that maps to the Covid19 pandemic outbreak peaks and troughs and continued market adaptation is anticipated. To date, financial markets are broadly seen to be taking a cautiously optimistic view of the major government fiscal injections and QE in support of global and domestic markets during the current crises. These government backed interventions are also playing out beyond equities to a renewed and ostensibly invigorated interest towards M&A.

The key during this period of market volatility for fund managers is to take a focused look as to what levers they can pull to maximise their respective strategies in the near and longer term and what may present itself as a springboard to increased profitability and efficiency.

One predominant force multiplier is to look at what automation might deliver in respect of accelerating market capture, driving down fund costs of entry and reducing ongoing fund operational costs and liabilities.

Exploring automation and technology should be a significant focus area for financial equity and real estate fund market managers that are seeking to deliver increased positive impact. That market disrupter – is here right now – RegTech.

Joe Woodbury

These are predominantly software tools, services, processes and outputs that are able to work collaboratively to produce largely automated, streamlined deliverables around Compliance, Regulatory and Transactional work flows for today’s fund manager. Such solutions alleviate much of what could be termed as ‘generic practices’ associated with fund management and thereby allowing resources to be focused on core business activity that generates real growth over and above day to day ‘housekeeping’.

Regulatory and Compliance for Equity markets combines to be both an imperative and a headache for Fund managers and Institutions in maintaining comprehensive and consistent disciplines. The consequences of failure may result in fines, curtailment, suspension or worst case, dissolution. As mentioned earlier, this represents a huge onerous burden in terms of continuous and ongoing maintenance with regards to the constantly evolving and changing mandatory legislation, governance and best practice guidance covering aspects such as geographic disparate regionalisation and financial regionalisation. No small undertaking.

In addition, the constantly evolving steady upward trajectory of rising costs for maintaining adherence to Compliance and Regulatory obligations appears relentless. By embracing and adopting an automated approach, RegTech can introduce and facilitate cost optimisation, simultaneously improving broader governance whilst reciprocally driving up the potential release of time for increased customer engagement and better, more effective utilisation of highly skilled staffing resources.

Realising the benefits of a joined up, largely automated approach, today’s visionary businesses and Fund manager leaders can leverage this game changer, one that will undoubtably permit them to steal a substantial differentiated offering and not merely track leaders.

 

Fund managers are caught between several competing objectives –

  • Increasing client engagement, personalising interaction and delivering value
  • Adequate time to develop the macro business and fund strategy
  • Fast, effective and minimised risk of on-boarding new clients
  • Ease and speed of new fund creation and market entrance
  • On-going regular compliance and regulatory practices accountability
  • Continued maintenance of existing liabilities and risk reduction in the continued servicing of their current client base and fund portfolio
  • Mandatory industry reporting and submission cadence
  • How to scale flexibly, timely and on-demand

Essentially, automation may alleviate up to three quarters of operational practice overheads that are traditionally performed across most low and mid cap funds. Achieving a result of substantially less day to day interaction of what may broadly be termed as ‘generic’ practices, processes and reporting. The question to Fund managers is what might be achieved through automation that allows key resources to engage and focus on the more important strategic business drivers?

Moreover, recent increased scrutiny and safeguards particularly around AML and KYC necessitate the capability of having a robust audit trail and it is here that the automated approach can provide significant benefits that remove much of the continuous operational overhead, both from a staff resources perspective and the broader operational cost implications. Equally, by definition, supporting external audits becomes potentially more efficient and simpler, whilst having the ability to scale on demand.

It is difficult not to under-estimate the number of areas where fund managers can develop increased efficiencies and improved operational engagement achieved through increased automation:

 

  • Facilitating increased time to focus on client personalisation and engagement
  • Proven long term cost savings
  • Improved audit trails and minimised accounting errors
  • Adaptive compliance across changing geographical and financial regionalisation
  • Managed regulatory practices relating to AML and KYC directives
  • Maintaining policy updates
  • Robust and measured audit trails
  • Supports risk reduction strategies
  • Seeks to reduce human error

By embracing increased automation, fund managers can make choices towards a fully integrated solution or may elect to take a more granular approach towards implementation of solution components best suited to their business ambitions. Either way, RegTech represents a scalable solution that Fund managers both need and should – explore.

 

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Business

WHY IT IS MORE IMPORTANT THAN EVER TO SHOP SOCIAL

Dave Linton is an innovator, social entrepreneur, thought leader, mentor of social enterprises, motivational speaker and the founder and Managing Director of multi award-winning Madlug C.I.C which won the social enterprise UK consumer facing award in 2018.  Prior to beginning his journey with Madlug, Dave was a youth worker for more than 20 years and for the past three years he has also become heavily involved in mentoring and raising awareness of social enterprises. Dave is extremely passionate about using Madlug to influence a new young generation of social entrepreneurs.

Have you ever made a purchase because you know it will make a societal impact? Have you ever bought from a company because they proactively promote beliefs and values that align to your own? If so, you’re not alone.

As shoppers are becoming more conscious of the impact of their purchases, corporate social responsibility has become a buzzword for businesses, holding them to account in how they balance money-making operations with activities that benefit society.

This increasing expectation for brands to take a larger role in society helps further customer trust. When I talk with social entrepreneurs and leaders of social enterprises, I hear the same feedback: consumers want their purchases to do more. According to research from Edelman Trust (2019), 64 per cent  of consumers are belief driven buyers – an increase of 17 per cent since 2017. In addition, a report by Nielsen that surveyed 30,000 consumers in 60 countries also found that 66 per cent of consumers were willing to pay more for goods from brands that demonstrated social commitment.

The pandemic has severely restricted economic activities, but it has provided opportunities for businesses to rethink corporate social policies that can help sustainable growth. A recent paper by Accounting and Finance 2021 concluded that firms with excessive debt along with poor CSR performance are worse off compared with businesses that have good CSR performance.

The pandemic also shows the important contribution that social enterprises make to society. With nearly one million people now employed in the social enterprise sector, contributing to more than £24billion to the UK economy, it is a considerable force for good.

In 2015, I set up an ethical business called Madlug. The concept was simple: someone buys a backpack or piece of luggage, a child in care then receives one. We have had amazing opportunities to partner with business all across the UK who want to make a positive difference in the lives of others. IKEA UK contacted us pre- Christmas to order 12,000 Madlug bags to give as gifts to their staff. The social impact of this partnership is going to be huge. Thanks to IKEA, we can give out thousands of bags to children and young people in care throughout all of the UK and Ireland this year.

One thing we can recognise as we continue to live through this pandemic, is the importance of community. From standing together every Thursday evening clapping for our NHS heroes, to shopping for the most vulnerable, donating to food banks and staying home to protect lives, we have seen a seismic shift in people’s societal impact.

The bottom line is, we have to use our time and resources for good. How can your business or brand make the best impact on the communities in which you operate? Is there a charity or social enterprise that your company could partner with to make a change today and sustain a lasting legacy?

 

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Business

CREATING A PEOPLE-CENTRIC WORKPLACE CENTERED ON FLEXIBILITY, EXPERIENCE AND WELLBEING

By Anne Marie Ginn, Head of Video Collaboration, Logitech EMEA

 

The light is appearing at the end of the long, dark tunnel that has been 2020. With vaccination schemes now underway, we can (albeit cautiously) dare to dream of a general return to relative normality. Yet in the wake of the pandemic, neither our personal lives nor our work lives will ever be quite the same.

A wholesale change to working practices, and the nature of how and where we work, is set to be one of the big lasting legacies of 2020. Cal Henderson, co-founder of Slack, recently came forward to say he thinks that the age of the office is coming to an end. In a less extreme view, AWS’ CEO Andy Jassy predicts we’ll see the rise of ‘hot offices’, where employees will mostly work remotely, only coming into the office when they need to work on specific projects. And Microsoft founder Bill Gates predicts the age of business travel is over, with only 50% of business trips set to resume.

As the office evolves it’s clear employers will have to adapt their spaces in line with new, post-pandemic wellbeing and workplace trends, and create an office centred around “super experiences” that makes it a destination in itself.

So, in what ways will working practices change, and how do we see the physical workspace evolving?

 

Re-focussing on the employee

Ultimately, the pandemic has re-focussed the discussion on how employees can best work, and how teams are spending their time. It has also given employers the opportunity to ensure they’re in a better position to help people find a good work life balance.

Yet even after Coronavirus, it’s clear we won’t be working from home forever. The UK government says work from home orders may stay in place until April 2021 and with this in mind a flexible, and hybrid, way of working is set to stay. Employees feel that way too – a recent Simply Communicate survey found only 2% want to go back to the full week in the office.

With the digital tools available and the experience gained over the past 10 months, the idea of everyone being in the office everyday seems old fashioned and unnecessary. People don’t want to travel into an office to then just be sat at their desk for eight hours. What they want is to connect with colleagues, to learn, to be inspired and to share with others.

Whilst getting your head down to work is important, social time and collaboration is equally valued, and central to general wellbeing. For many employees, their work is central to their sense of self, their meaning and purpose, and after a long period of being at home alone, they’ll be yearning for those in-person, face-to-face experiences. This should be placed at the forefront of modern office culture and design.

 

An office designed for the people working in it

Offices will become destinations unto themselves – for collaboration, innovation and strengthening team relationships – and less about desk-based or task-based work. The space should also be vibrant and different.

These offices should offer a mixture of meeting rooms and open operational space, which will promote gathering for teamwork, collaboration and companywide networking events. At the same time, smaller collaborative working areas, enabled by video, will facilitate break away group work for those both physically present and working remotely. Banks of individual cubicles will disappear, and instead we’ll see occasional, dedicated concentration pods for when employees need to get their heads down between meetings. And how about relaxation pods should employees want a quick break and recharge?

Beyond work, offices also need to become social destinations in themselves. A recent JLL study found that nearly half of employees hope their office will prioritise social spaces, such as coffee areas, lounges or outdoor terraces and gardens. Common areas play a central role in nurturing informal work relationships, which improve development opportunities and help career outlook – especially crucial for people early in their work life. These spaces allow employees to maintain the inspiration, energy and social connection that comes with belonging to a physical team and environment – something which many found a real challenge to maintain virtually during the pandemic.

Flexible schedules and shared spaces will also lead to a “rightsizing” of office space, where organisations will rethink their real estate, in what will undoubtedly save costs. Some are even predicting that we’ll see the creation of an office ‘ecosystem’, which will comprise of employees working from offices, houses, and third places such as cafes, coworking spaces, and libraries.

 

Tech and video as the glue for hybrid working

While all of the above will support flexibility, functionality and employee wellbeing, for it to all work it needs high-end peripherals, such as Logitech’s MX Series of high-performance mice and keyboards, and collaboration software to pull it together. This tech needs to help us and not take us away from people, helping our collective mental health in environments that could be potentially isolating.

This human centred approach to work collaboration requires non-intrusive, seamless video conferencing and productivity tools. Through each space in the office, from large town hall style areas, through to smaller huddle rooms, personal workspaces and even satellite offices in the suburbs, these video solutions and smart productivity technologies can help to bring together a team as one.

Fortunately, there are a wide variety of high-quality video tools available that can fit the needs of the modern worker within each individual environment. From large 4K cameras with the ability to pan, tilt and zoom to focus on an individual speaking within a large room, to wide angled huddle room cameras for smaller groups, and webcams with integrated high-quality microphones and optics to make sure remote workers are seen and heard just as clearly as if they were physically in the office.

 

The hybrid opportunity

The hybrid office presents itself with an opportunity to make work better for employees, while creating a more committed and motivated workforce. There’s also potential to save money through reduced office related overheads.

Tied together by smart technologies such as video, this hybrid office has the potential to make employees happier, more motivated and equipped to do their best work. Video will pivot from being the technology we used to survive during the pandemic to the one we use to thrive.

 

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