Business

THE FUTURE OF SAVVY TECH PURCHASES IS KNOWING WHEN TO BUY

There’s no mistaking the impact technology has had in our lives. Once a novelty, technology has now infiltrated every aspect of modern society, and technological advances continue to bring new dimensions to modern living. Yet for all the good that technology brings us – and despite the costs associated with production falling year-on-year – purchasing electronics is often a significant investment.

According to new research by Carphone Warehouse, the average price of electronics in the last year is just shy of £500 at £497.70. Consumers looking to make savvy savings on big tech purchases must both understand what the industry average is for the product category they’re interested in, and learn when prices will be lowest so they can make the purchase at the right time. The electronics retailer outlined the following tips for consumers looking to take stock of technology prices.

Know what the average price is, so you can spot the biggest savings

The first step to being able to haggle a better price is knowing what benchmarks to look out for. While you can choose to go under or over the average price – high-end models are often priced significantly higher than average, after all – it can still be useful to know what to compare prices against. The average smartphone currently retails at £527.60, laptops at £680, TVs at £712.31 and digital cameras at £782.60.

As mentioned, there are significant differences between the price of budget and top-end items. For example, while you could get a budget phone such as the Nokia 1.3 for just £65, an Apple iPhone 11 Pro Max could set you back £1,249. Similarly, while a low-end camera like the Nikon Coolpix B500 costs around £205, the camera behemoth that is the Canon EOS 5D Mark IV clocks in at a whopping £1,700.

Before you buy, consider any upcoming sales

Once you’ve figured out what you want and the price you’re willing to pay, it can be tempting to make your purchase immediately – for fear of missing out, if nothing else. However, using the sales to your advantage could result in some nifty savings, while keeping abreast of the consumer retail industry could also help you buy at just the right time. Below is a short rundown of some key dates to keep in mind:

January: The start of the year usually sees retailers clearing their Christmas stock, with smartphones, cameras and TVs offered at sale prices. January is also when the Consumer Electronics Show (CES) is held; an event in which new cameras are often announced. If you spot a gem in the CES crowd, wait a couple of months and you could see last-gen models fall in price.

February: As well as Valentine’s Day sales, February sees the Mobile World Congress (MWC) and the announcement of new Sony releases. This month is also a great time to buy the Google Pixel and other smartphones – again due to their release cycle – as well as nab yourself a bargain camera, TV or laptop.

March-April: Look out for a ton of new releases in the spring months, with Huawei, Samsung and Sony releasing their new smartphones, and LG, Samsung, Sony and Panasonic announcing their new TV ranges.

July, August, September: The summer months bring back-to-school sales that typically see student essentials at lower prices. You may be able to enjoy a wide range of deals on TVs, laptops, computers and more during this time. Keep in mind that July is also when Intel and AMD announce their new releases. Responsible for many of the processors that make up the backbone of much of our electronic products, Intel and AMD inspire many brands to lower their prices in anticipation of incorporating their new, advanced processors into their product lines.

November-December: Black Friday and Cyber Monday are undoubtedly the biggest sale events in the consumer electronics space, with deals, discounts and flash sales offered across the entire gamut of the tech world. It’s the optimum time to invest in premium brands, including Apple, Samsung and Google.

Embrace the pre-order period for additional bonuses

If you’re an early adopter and only the latest innovations will do, you may not be keen on last-gen products. But keeping up to date with the latest gadgets needn’t mean your bank balance has to take a hefty hit. While costs will naturally be higher for new releases, ordering during the pre-order period could mean you’re able to take advantage of bundle deals or other freebie items provided by the retailer to entice uptake. Sign up to notifications on the products you’re interested in, so you’re forewarned and ready for the pre-order period.

Learn some insider tips to beat retailers at the price game

As a final point, when it comes to saving on tech-related purchases, it can be handy to understand retailer behaviour. For example, if you’re looking to upgrade your TV at a cutthroat price, aim for the 55” models. As it’s the most popular size, retailers tend to drop prices on these first in their holiday sales.

If you’re buying tablets, waiting until a new model has been released is usually the best time to get the best prices; last-gen iPads are often discounted a couple of months after a new release. Similarly, if Android tablets are your preference, all you have to do is wait a few months for the newest release to start seeing price drops. And if Kindles are your go-to tablet, it’s probably no surprise that Amazon is the best place for bargains, and particularly so on Amazon Prime Day.

There’s vast potential in technology – and consumer electronics are seeing more and more innovations every year. But, as long as retailer behaviour stays fairly consistent, the information above can help you comfortably get the most for your money.

Business

LAST DAYS OF LIBOR? WHAT ASSET MANAGERS AND FUND ADMINISTRATORS SHOULD DO NEXT…

By: Sern Tham, Product Director, Temenos Multifonds

The replacement of LIBOR with new reference rates in 2021 is not a simple substitution – existing valuation systems will require an overhaul

LIBOR (the London Interbank Offered Rate) will be replaced with alternative reference rate by the end of 2021. This is a gamechanger for the financial services industry, particularly when you consider an estimated $350 trillion of financial instruments including bonds, loans, deposits and derivatives used LIBOR as the benchmark rate. Asset managers and fund administrators need to act now and start asking the right questions of their teams and their technology providers.

LIBOR is a forward-looking rate produced daily by the Intercontinental Exchange (ICE), and it is the lack of actual transaction data underlying LIBOR and other IBORs that made them so prone to manipulation. To avoid this risk, central banks around the world have established new ‘Risk-Free Rates’ (RFRs) that are backward-looking, based on actual transactional data of rates offered in liquid markets on the previous day.

The new RFRs that will replace LIBOR will change the way valuations are calculated. The result is wide-ranging consequences on operations, risk calculations and the way institutions will conduct business in the future. The new observed rates cannot simply replace LIBOR in a floating rate contract, because RFRs are based on observed overnight rates that are compounded over the period. In addition, different market conventions will be adopted to deal with lookback and lockout periods.

Therefore, to accurately reflect the value of the holdings once LIBOR is replaced by RFRs, asset managers and fund administrators will need to make sure their systems are capable of supporting the new methodology. Otherwise, investors buying and selling into a fund could be short-changed, leading to censure from regulators and clients alike.

Acting on the considerations listed below, will save any operational headaches once LIBOR has had its last dance. Asset managers and fund administrators must be aware of all the securities and contracts that are impacted. LIBOR’s role as the primary benchmark reference rate for trillions of dollars’ worth of financial instruments means it is deeply embedded in the financial industry. Firms must assess the scale of their exposure. This could be derivatives linked to LIBOR, cash instruments which reference it, or money market funds, which invest heavily in LIBOR rates. Mapping out all the affected instruments is an essential first step.

Alternative rates are already being published by the Federal Reserve Bank of New York, the European Central Bank, the Bank of England and Switzerland’s SIX Exchange. Regulators including the Financial Conduct Authority in the UK have emphasized the importance of early preparation for the transition.

Because the shift to the new reference rates will happen on an instrument-by-instrument basis, asset managers and fund administrators also need an overview of when instruments mature. If they have instruments tied to the LIBOR rate that mature after 2021, they need to be clear on when they will migrate to the new rates in order to meet the current deadline for the end of 2021.

Calculating valuations differently will be the biggest change for asset managers and fund administrators. Firms should not assume their systems are going to cope with this change. The bigger the size of assets involved, the more complex the change will likely be. Accounting, collateral management and middle office derivatives programs should all be stress-tested to ensure the fund’s entire ecosystem can cope with the change.

Finally, the clock is ticking fast. Firms will need to have a solution in place by the end of 2021, which means the timeframe for action is shrinking. Starting with assessing their exposure and then upgrading and testing systems, the transition will take time. Upgrades should be completed in early 2021 to allow testing to start by mid-year, ensuring firms are in a place of strength before the deadline. Firms must act now to ensure their systems are ready for the end of 2021.

Business

THE ROLE OF THE CFO IN ILLUSTRATING THE SUCCESS OF DIGITAL TRANSFORMATION

Tim Scammell, Finance, Treasury and Risk Solutions at SAP

It’s no secret that there are changes occurring within the modern corporation. While roles were evolving as a result of the move to digitisation and automation prior to Covid-19, the pandemic has further accelerated this movement as executives face new challenges. The most obvious is of course, the volatile economy we’re facing which has been the primary focus of the CFO within businesses. According to a recent survey, three-quarters of CFOs expect the pandemic to have either a ‘significant’ or ‘severe’ negative effect on their business in the next 12 months. But the same Deloitte report highlights that for CFOs, business transformation is a top priority, with a strong focus on digitisation and automation.

As such, we’re seeing the role of the CFO change most drastically. While the traditional demands of product evolution and revenue generation remain unchanged, they are also now playing a pivotal role in the wide-ranging ramifications of digitisation in terms of evaluating new dimensions like customer experience, channel management, IoT, blockchain and the associated compliance and legal exposures that lurk within the digital economy. CFOs are therefore vital in pushing digital transformation forward for several reasons and business executives would be wise to harness their skills in the journey.

Translating compliance and regulatory concerns

The digital journey is undoubtedly an exciting one, and for many industries, it’s a much-needed overhaul to ensure relevancy and success. However, it’s easy to get caught up in the excitement of implementing new programmes, products and services without thinking about the more mundane aspects. Primarily, the associated necessities that come with any new business operation, like regulation and compliance for example. However, the CFO is uniquely poised to tackle this dichotomy due to their ability to drive digital transformation forward but also deal with the more ‘analogue’ world aspects. The CFO is still dealing with the demands of regulatory reporting, tax, and compliance, which demand significant manual intervention and judgment.

As such, the CFO has the ability to break down the tension between the digital and analogue. The broader C-Suite is often focused on shaping the future and is grappling with the changing landscape of a hyper-competitive digital economy whilst pursuing the resulting revenue opportunities. Aspects like compliance normally don’t fit into this fast-paced thinking. As such, businesses should be harnessing the ability of the CFO to translate the actions of the C-Suite implementing digital transformation initiatives into a different language, one that satisfies stakeholders and legislative requirements. This translation demands the talents of an excellent communicator who understands the digital journey the company is undertaking and can articulate the consequences of these decisions using the analogue languages of compliance and regulatory reporting.

Pulling on past experiences

Not only can this best of breed, digital-savvy CFO make this translation due to their understanding of the digital and analogue worlds of compliance, but their extensive experience in building governance models should be maximised by the business too. CFOs are well versed in feeding the necessary information to decision-makers, particularly when it comes to unpredictability. The successful transition to a digital company is accelerated by observing how operational risk reacts to the unpredictable nature of the digital market. As such, organisations should bring the CFO into the digital transformation journey early in the planning stages as they are able to use their experiences to best plan for potential operational risks. What’s more, they can then plan for the resulting avalanche of data that these digital business models generate and navigate a way of ingesting and processing this information.

Highlighting success

But this dynamic can only be achieved when the CFO is able to integrate data from across the organisation to produce the numbers they require for decision making. Such a platform will only exist when businesses make a dedicated effort to bring the CFO into digital transformation plans early so that they can explicitly coordinate actions and create a harmonised view of all aspects of performance, in the digital market.

Through this harmonisation of information, contemporary CFOs are critical to the great digital transformation as the insights obtained from big data and associated technological challenges are all manifested in the numerical results collected by the finance team. Financial results that track the impact the digital revolution has on the company’s competitive landscape and revenue projections. Financial results that enable a confident executive team to drive decisions that result in positive outcomes.

Clearly, the digital-savvy CFO is under a tremendous load. They occupy a wholly unglamorous position in the executive team and one where the consequences of failure could quickly derail the digital transformation of the company. Yet, if the CFO is given the means to draw together the right information, from a large number of sources, they can aggregate this quickly, and with the correct analysis, will be able to covert this governance to a strong position in the digital economy.