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Finance

PAYMENTS IN A TIME OF SOCIAL DISTANCING

James Booth, VP, Head of Partnerships, EMEA


It’s not news that the global pandemic has seen dramatic changes in consumer behaviour. People who have previously resisted shopping online now have little choice and are signing up to e-commerce sites by the millions.

The effects of COVID-19 on the economy are complicated, but this is mostly positive news for e-commerce. In just one week at the beginning of April 2020, US e-commerce merchants saw orders rise by 54% compared to the same week in 2019, and revenue rise 37% [1]. In the UK, Germany and France — according to a study by Kantar — up to 80% of shoppers are now making at least half of their purchases online [2]. In China, JD.com, the country’s largest online retailer, saw sales of common household goods quadruple during the peak of the outbreak there [3].

So, how can merchants best serve new (and existing) customers right now? How can merchants position themselves to emerge from this crisis stronger, with a larger share of new customers?

 

Here are our top 5 tips on how to stay set for growth:

1. Streamline the user experience of your e-commerce shop

The internet is enabling a lot of the ways we are getting through this crisis. More retailers are establishing online shops, which means that the competition is getting fierce. A new vigour is being applied to UX. Merchants must work harder than before to find and eliminate leaky points in the customer journey; maybe it’s clearer navigation or better imagery, or it could be something else. According to PYMNTS, the share of consumers who report using their mobile devices to enhance their in-store experiences has increased from 49.6% to 72.1% during the last year. Make sure that you’re designing your site to be mobile-friendly (if not entirely optimised for mobile) so that you’re able to convert as many of these opportunities as possible.

 

2. Analyse your cart abandonment rate

Average cart abandonment rates are estimated between 60% and 80%. There are multiple reasons a customer could be leaving their purchase behind: shipping costs are too high, they found a better price elsewhere, delivery preferences weren’t available, or there was lack of detail on the shipping costs or return policy, among others. It’s important to know what factors are causing customers to bail out of purchases.

 

3. Remove all unnecessary complexity at the point of checkout

For instance, allow customers to pay without first going through a lengthy account creation process. Recent PPRO research found that over half of US and UK respondents agree they would stop a purchase if the checkout process is too complicated. And 37% of UK consumers avoid using merchants that require repeat entry of payment credentials. This is an especially important point to make for your new online customers, those who have previously been loyal to brick-and-mortar shops; add tips or instructions in plain language during the checkout process and give them reassurance of what will happen at each step of your checkout flow.

 

4. Consider new markets

Eyeing an expansion across borders? Or perhaps adding another market? Now is the time. More and more customers are online, looking for products or services that suit their very specific needs. A shopper might look across borders for what they want: stronger brand loyalty, the better quality products, payment methods accepted, and more. You could be reaching untapped markets by offering the right mix of goods, UX, local payment methods, and delivery options.

 

5. Find out what local payment methods customers in each target market prefer

According to Baymard, 20% of abandoned carts are due to a failure to offer the customer’s preferred way to pay. With over 450 significant local payment methods across the globe, each country will have different payment cultures. APAC is dominated by e-wallets like Alipay, WeChat Pay and GrabPay. LATAM consumers are reliant upon cash-based payment methods like OXXO and Boleto Bancario, or locally issued credit cards. Work with your payment service provider to activate as many payment methods as possible at your checkout. Prioritise those methods used and trusted by new and prospective audiences.

There is every reason to believe that many of the people who are shopping online for the first time, buying new types of products online, or simply buying more will continue to use e-commerce far more than they did before, even after the crisis ends. Evidence from Wuhan suggests that even after lockdown ends, customers may continue to be cautious about returning to shops, restaurants and other brick-and-mortar outlets [4].

Merchants must offer customers a great experience now. The businesses who do will end the lockdown period with a larger and more loyal customer base than those who neglect the user experience, and specifically the payment experience.

 


1. https://www.techrepublic.com/article/map-shows-how-covid-19-has-a-major-impact-on-e-commerce
2. https://internetretailing.net/covid-19/covid-19/surge-in-ecommerce-will-outlive-corona-across-europe-consumer-research-suggest-21231
3. https://www.bigcommerce.co.uk/blog/covid-19-ecommerce/#product-categories-shifting-during-covid-19
4. https://www.bloomberg.com/news/articles/2020-04-15/wuhan-s-life-after-lockdown-isn-t-business-as-usual?sref=cHWJcN7x

Finance

TIPS TO PROTECT YOUR CASHFLOW DURING THE COVID-19 PANDEMIC

By Rita Cool, Certified Financial Planner at Alexander Forbes Financial Planning Consultants

 

The full impact of the COVID-19 pandemic is as yet unknown, but individuals have already begun to have their lives disrupted by the country’s economic shutdown, with retrenchments, salary cuts and forced unpaid leave making them take stock of their financial position.

The basic principles of financial planning are especially relevant at this time, but in the short term, cash flow is more important to many people.

To help safeguard you and your family’s financial security, here are some tips to follow to make sure you’re making your money work hard for you:

  • Draw up a budget – this is especially relevant if you’re worried about possible retrenchment of yourself or your partner. This will help you know how much you need to cover your basic living expenses and where you can save money. Don’t only look at what you need to spend money on, but also when you think you will need that money. Perhaps you paid school fees upfront at the beginning of the year, or your car registration is only due again next year.

    Rita Cool

  • Check your bank fees. Are you in the best structure for your needs? Are you paying for services that you never use? Consider moving banks to get a better deal.
  • Banks have waived the Saswitch fee payable for withdrawing cash at another ATM other than your own bank, but if you’re doing this, be aware of when this switches back as you can end up paying almost double the bank fees.
  • Did you know that you start paying interest immediately if you draw cash from a credit card and that you do not get three or six months’ interest free?
  • Go through your house while you have extra time and identify potential items which you could sell, as this will free up cash.
  • Where possible, pay cash for items as the interest rate on hire purchase items is very high and you pay around 20% more for those items than the sticker price. If you cannot afford the item and you don’t need it right now, wait.
  • Look around for bargains online rather than driving around. There are some good sales on, and you can support businesses that need your help.
  • At the same time, be aware of spending extra cash you could be saving towards your financial safety net. There are lots of deals available, so balance the need for the 70% off bikini or new laptop with being cautious about the future.
  • Use store coupons and discount vouchers. The main food retailers have loyalty programme structures that can be tailored to your specific spending patterns. Make sure you claim point or vouchers but look out for monthly costs to belong to a rewards program. Ask yourself if your monthly savings validate the cost. Optimally a reward scheme shouldn’t cost you money.
  • Check with your insurance company if your premium can be reduced because you’re driving less during lockdown.
  • Check your current insurances. Do an insurance rebroke. Make sure you are covered for what you need and take things off the list that you do not have any more and add what you have bought since the last update. Make sure you are not under or over insured and that your premium is market related. The cheapest premium isn’t always the best so be aware of exclusions and excesses and make sure you can afford the excess if you need to claim.
  • In most cases you can reduce your monthly insurance premiums by not having a cash pay-out in the future. If you want a pay-out, save the extra premium in an investment product, not a risk product.
  • Be wary of consolidating debt. You might pay a lower interest rate but it might well be over a longer period so the total interest paid will be higher. If you have debt issues, set up a debt plan with dates and goals to reduce the debt little by little. Do not give up.
  • Be aware that payment holidays are not a free loan, you still owe the money and you’re paying interest on it. Check with your service provider.

 

Remember that the pandemic will pass. Try not to panic as this may lead to rash financial decisions, which could have an impact on your finances later down the line.

 

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Finance

FIXING THE FLAWS IN FINANCIAL SERVICES’ DATA MANAGEMENT

Simon Cole, CEO at Automated Intelligence, a cloud-based data compliance and governance solutions provider to the financial services sector, warns FS firms must address the data issues flagged and created by the Covid-19 pandemic

When the pandemic started, organisations within the financial services sector were faced with three key questions. How do we do homeworking?  How do we go remote?  How do we manage this?

In trying to answer these questions, the business continuity measures taken by FS firms were not up to scratch. Mistakes that could have been avoided were made. To start off with, users had to be given the necessary equipment to make remote working happen and they had to have access to the infrastructure needed, such as broadband. Users also had to have access to the information and data needed to do their job. And this is where they started to run into trouble. While software applications like Zoom and Microsoft Teams made it possible to stay connected, the systems in place were not adequate to facilitate secure data management practices en masse.

These are the downsides that need to be addressed.

 

Where’s the governance?

Historically, firms operating in the financial sector have been slow to adopt cloud technology, preferring to store sensitive data on premise, in order to mitigate perceived risk. As such, through the lockdown, much of the data people need access to is not in the cloud, but is stored in applications or file servers.

Adding to the issue, the VPNs of many organisations don’t have the capacity to allow large numbers of users online. This lack of VPN availability has forced FS firms to allow users access to GDPR sensitive data multiple times, with little or no method of tracking in place.

In order to acquire the information they need to do their jobs while out of the office, employees have been copying, downloading and sharing files that now exist outside of the corporate firewall, without any governance or security considerations. Such data is now, for all intents and purposes, in the wild, making it harder to bring back under control. Teams working remotely don’t have the corporate governance and security protocols that they would have when working in the office.

So, being forced to work remotely, at short notice, has impacted compliance and governance in a very negative manner. The way data is being handled greatly increases the chance of a data breach occurring. It also flies in the face of FCA regulation, and in particular GDPR where personal data is being used. While the FCA might be a little more lax in light of the current challenges right now, this will change when data breaches start to occur and customers start asking questions. Poor choices now will not be a reasonable excuse to avoid future fines.

If this crisis has shown us one important thing, it’s that the slowness of financial services firms in adopting cloud technology, which made it significantly harder for them to access and use data, has hurt business continuity, security and privacy.

 

Better Data Practices

So, how can organisations take control of their data? For many this means deploying it to the cloud in a rapid manner, whilst retaining security and governance practices. It is possible for organisations to make data accessible if the technology is deployed correctly, allowing all the necessary controls to remain in place. Having the short-term decisions correctly in place and making them under an umbrella of good governance and accountability, ensures that you don’t suffer knee jerk reactions and risk losing control of data.

By keeping on top of your data as much as possible, you significantly reduce the opportunity for chaos to happen. That starts with making it available on a safe and secure platform. At a time like this, it is imperative that organisations have a good understanding of their data. Information asset registers should be kept up to date to track where their information is, where it’s being used and the purpose for which it’s being used.

For our clients, we are now using AI to help them assess and understand their data, flag any risks their data is posing to their organisation, and help them mitigate that risk. By implementing the right systems this can all be automated, and there is nothing stopping organisations from doing this with next to zero impact on their userbase.

Remote working is becoming the norm: It has been proven to work and organisations will start reflecting on how much office space and connectivity they really need. As such, organisations are being forced to act now and adapt their data governance and compliance practices to suit the ‘new normal’. Waiting until the pandemic passes is not an option.

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