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THE FUTURE OF THE UK’S FINANCE FUNCTION

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By Ryan Demaray EMEA MD for SMBs at SAP Concur

 

With businesses feeling the pressure of both the pandemic and Brexit, UK finance teams must not only re-evaluate their capabilities, but fully prepare their finance function with the right tools, technology, and people. Key to the ongoing success of finance teams in a new world will be delivering analytics and insights to support strategy and decision making. In the past, reporting and focusing on balancing the books was a significant responsibility of finance teams, but today’s landscape will require the sector to transform into a key driver of data-driven decisions within businesses. This article will explore the evolution of the UK’s finance function and what the future holds for it considering the many challenges it faces.

Tackling uncertainty with technology

To manage the economic uncertainty, businesses and their finance teams need a better visibility of their cash flow to understand where their money is being spent. The impact of Brexit will make this particularly important with expected fluctuations in currency this year likely to affect the expense claim process. In the immediate term, this involves businesses knowing exactly what’s coming in and going out at any time, and this means having proper visibility across invoices and expenditure. Paying invoices at the right time and knowing exactly when cash is leaving the business helps to maintain cashflow and prevent any nasty surprises down the line. Finance teams will need to turn to technology to increase visibility of invoices and expenditure and leveraging automated expense systems to make it easier for employees to expense invoices, submit returns and companies to process them.

New technologies promise to save costs, manage risks, and increase insight. To fully reap the benefits of such technologies, financial leaders and managers must embrace a new mindset and get better at processing and extracting actionable insights from large amounts of data.

Financial leaders must keep abreast of new technologies to determine how they can use sophisticated analytics to enhance their organisation’s performance. This will help finance professionals to focus on working on more meaningful tasks such as supporting the overarching strategy and shaping the direction of the business.

 

As the finance function evolves, so will its people

As finance teams become accustomed to using actionable insights from their data, finance professionals with wider knowledge of operational technologies will become crucial to a business. Building a function that has the right people and skills to compliment and get the most out of new technologies will be a crucial part of this. Success will depend on combining smart technologies with the intelligence and interpersonal skills of talented finance professionals.

Using advanced analytics tools to run predictive models and better forecast will become a prerequisite for finance professionals of the future. Financial leaders will need to understand the backend technology and systems — and determine whether they can help teams to respond quicker and gather insights from new cloud-based financial management systems. This will allow finance leaders to move beyond just analysing historical financial data to accessing real-time business performance metrics.

 

With great challenge, comes great opportunity

While the past year has been particularly challenging and transformational for entire industries and businesses – every challenge brings with it an opportunity and finance teams have an opportune moment to impact business recovery. The next evolution for the future of finance will rest upon becoming a data-driven function to drive decision making across the business.

To support this shift, finance leaders need to fully prepare their departments with the right tools, technology and people. Operating models must evolve so they are able to process vast amounts of data and extract actionable insights from it. With the right supporting technology in place including automated expense systems, finance professionals can remove lengthy administrative tasks and focus on upskilling and gaining insights that can shape the strategic direction of the business.

 

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ACCESSPAY AND YAPILY PARTNER TO RE-DEFINE CORPORATE CASH MANAGEMENT

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FinTech scale-up AccessPay is pioneering a new Treasury solution for corporates, using Open Banking.

Enabled by Yapily, a leading Open Banking infrastructure provider, it will provide thousands of UK businesses real-time visibility into their cash position and transaction flows.

The integration enables AccessPay users to connect and aggregate their entire corporate banking estate at the click of a button.

This not only reduces the friction of using multiple systems, but significantly decreases the time-to-value for corporates from months to minutes.

The ability to join together data from multiple connectivity channels, means AccessPay can deliver a global solution, whilst enhancing the user experience within the EEA.

Until now, some corporates relied on outdated and manual processes to reconcile payments and manage cash across several company accounts. This presented costly challenges when monitoring financial performance and cash management.

As the world economy recovers from the impact of Covid-19, treasury teams need one centralised place to access reliable, secure financial data to support their businesses.

Harnessing Yapily’s Open Banking infrastructure, AccessPay has expanded its cash management product to thousands of mid-market and enterprise businesses.

This is the first use-case of Open Banking in corporate cash management to be brought to market and demonstrates how tech innovation is creating better services for businesses.

The collaboration between these two UK-based FinTechs will enable thousands of treasury and finance teams to make more informed financial decisions, as well as establishing reliable, automated processes around reconciliation, payroll and forecasting of company cash.

Yapily’s infrastructure will provide AccessPay’s customers, such as ITV, NSG and Imperial College London, with access to real-time banking data. This removes the need to manually download data using spreadsheets, which is error-prone, time-consuming and costly.

Surfacing the transaction data that treasury operations teams need to successfully support their businesses in making the right financial decisions, within one single view.

 

Winston Pearson, Senior Product Manager at AccessPay said: “We are delighted to be working with Yapily, another fast-growth FinTech, to drive digital transformation in the corporate space.

“Businesses and banks simply aren’t as connected as they should be in today’s global business landscape. Treasury and finance teams, the driving force of today’s corporate operations, need one central place to automate banking operations for complete visibility and control.

“With Yapily’s support and guidance, we’re able to expand our cash management solution to more of the market at this pace and scale. The integration has transformed a cumbersome process into a frictionless data flow for our customers.

“Thanks to Yapily’s industry-leading infrastructure and strong relationships with banks across Europe, we’ve been able to deliver a solution previously reserved for the few, to the masses.”

 

Stefano Vaccino, CEO of Yapily said, “Leveraging our Open Banking infrastructure in this way has enabled AccessPay to move faster and disrupt the corporate business landscape. This is an exciting development for Open Banking and demonstrates the benefits the technology brings to the ecosystem.

“Through partnering with AccessPay, we’re continuing our mission to expand the reach of Open Banking to a wide range of businesses. We look forward to developing our partnership with AccessPay and helping them continue to scale to new heights.”

AccessPay’s cash management service, enhanced by Open Banking, has been launched to the mid-market in the UK, and a broader European roll-out is planned later this year.

 

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VOLATILITY IS CRYPTO’S BEST FRIEND

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Stephen Ehrlich, Co-Founder and CEO at Voyager Digital.

 

Volatility is good for crypto. It serves multiple purposes as the whole crypto ecosystem matures, which we have to remember is an industry and technology that is still only just over a decade old. New and emerging industries are by their nature volatile as they move towards mainstream adoption. But the volatility attracts people, investors and technologists, who drive the pace of adoption forward and as it grows, volatility naturally decreases. In the case of Bitcoin, its volatility has steadily been decreasing over time and even the recent sharp moves have not seen such a big rise in volatility compared to historically (see chart below).

Chart showing Bitcoin Price and Volatility

Source: https://www.buybitcoinworldwide.com/volatility-index/

Volatility continues to attract participants as it is unquestionably in our human nature to be drawn to assets that are subject to rapid price appreciation. Throughout history there have been numerous asset bubbles that have burst, with Dutch tulips of the 1600s being the one that most referenced in relation to crypto-assets. But do tulips really provide any utility apart from looking and smelling good? Many crypto-assets actually provide a purpose, a utility, and serve as the backbone to new technology protocols upon which useful apps are being built. This is why we are seeing greater adoption and as the whole market continues to grow, we are now seeing institutions embrace Bitcoin by diversifying into it as an alternative store of value. This is why volatility is good for crypto. But another harsh reality is that it allows people to learn about the risks, as well as the rewards, of getting involved. Hopefully this is done with the assistance of their chosen broker or through educational webinars, video, and other collateral.

Yes, there will be many that will get their fingers burnt, especially if they employ leverage into their trading without a disciplined approach to managing risk. The same can be said of the internet boom and bust in the late 1990s and early 2000s that saw many a “dotcom” go bust. Leverage was around in those days too, so unfortunately many people learnt the hard way, but it is a necessary evil for the industry to become even more established. For Bitcoin, we have seen multiple bubbles burst, with 2017/18 being the last cycle and soon after the sceptics were suggesting the end for crypto-assets was nigh. But those who see the technology’s potential were keeping their heads down and building amazing platforms and applications. If we take a look at Bitcoin today, it’s clear that the end is nowhere near.

Volatility also attracts the attention of regulatory authorities, another natural evolution of nascent industries. On occasions though, there can be overregulation. Whilst the sentiment behind the UK’s FCA ban on retail investors being able to trade crypto derivatives is right, in respect to trying to provide greater investor protection, it can limit choice and ultimately drive investors to offshore brokers that may afford much less regulatory protections. If an investor really wants to employ leverage in their trading then they’ll find a way to do it, so perhaps rather than an outright ban, perhaps limit the amount of leverage they can use instead.

Bans certainly don’t help liquidity and are actually counterproductive. We’ve seen multiple decisions to “ban” crypto reversed as authorities realise that people simply circumvented it by using a VPN or other means to buy Bitcoin. India is now set to vote on a crypto ban, but at the same time they are due to introduce their own Central Bank Digital Currency, which in itself sends out mixed messages. As governments become more knowledgeable on crypto-assets and understand how they are totally borderless, bans are likely to become less and liquidity will continue to improve further.

Coinbase’s prospectus filing and the fact that the SEC is allowing this anticipated $100b direct listing to come public, with significant consumer involvement, is further acceptance of digital assets by the authorities. The continued evolution of the industry going mainstream and public companies vetted and allowed to move forward by the SEC, foreshadows the long-term outlook by the SEC that this industry is here to stay and regulation and acceptance of digital assets as an asset class is forthcoming. Regulation adds legitimacy to the industry and will attract a broader audience of investors and participants, as oversight gives comfort to a larger group of investors.

Regulation is very important, but it needs to find the balance that protects consumers, yet also fosters adoption of what is a truly ground-breaking technology and asset class. So, for those people that complain about crypto markets being too volatile, we NEED volatility in order for the whole ecosystem to thrive.

 

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