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TIME FOR THE FINANCIAL SERVICES SECTOR TO BANK ON CONSUMERISATION

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By Mark Flexman, DXC Fruition Practice Lead, DXC Technology

 

 

Today we can use our phones to control our lives. Want to check your bank balance, go to your bank’s app. A new loan or savings account? Again, check your app or head online and you can take out new financial products at the swipe of a finger. Just aa decade ago the idea that we’d be able to access financial products as easily as we can order a cab through Uber or our grocery shopping from Amazon, would have been unimaginable. The problem is that this experience is one that simply hasn’t been replicated in many workplaces.

 

Employees working for a bank that might offer everything through an app – or indeed be totally accessed through the internet – don’t get the same experience when they sit in front of their computers. Need a new desk chair? You better be ready to spend a long time on the phone or send multiple e-mails. Equally just requesting holiday or a meeting room is complex and takes huge amounts of time. Internal services in the banking and financial sector just haven’t kept up with the consumerisation of technology.

 

Mark Flexman

With research finding the average organisation is only 40% of the way to providing fully mature internal services (known as ‘everything as a service’ – EaaS), there is a major opportunity for financial services organisations to improve service delivery while ensuring higher productivity, lower costs, and greater employee satisfaction. According to research by ServiceNow, managers rate consumer service platforms 103% higher than workplace services. This dissatisfaction is driven by outdated technology in the workplace; only 22% of workplace services can be ordered and tracked via mobile devices, compared with 65% of consumer services on offer to banking customers. There is a huge gap between employee expectation and the services offered by financial organisations.

 

‘Consumerising’ employee services 
At best, only in 21% of organisations can all services from departments such as HR, IT, Finance, Facilities, and Legal be consumed in a self-service manner – a key element of ‘consumerising’ the employee service experience. In addition, only 23% have a consistent way for users to interact with internal services providers. This is in stark contrast with consumer offerings – especially in the financial services sector – where services are constantly being expanded to include self-service management. The knock-on effect of this lack of service maturity means failing to offer unified services through the cloud is costing financial services organisations huge amounts of money as they rely on using different tools to offer similar services across the business.

 

Delivering EaaS within a bank or financial institution is about far more than keeping employees happy with the latest tech. There is also the potential to drive significant return on investment (ROI) through delivering services in a joined-up, automated, online way – not unlike the offerings that consumers get from banks. These include improved efficiency of operations, as well as better productivity from staff due to time saved when making and tracking service requests. Most importantly, businesses will find that their service availability is much improved by limiting downtime because of having a single consolidated service automation platform.

 

Four easy steps to make EaaS a reality for the financial services sector
For those CIOs in banks and financial services organisations keen to take advantage of these benefits, the following four steps give a good outline of how to successfully implement EaaS:

  1. The lay of the land: Before embarking on a journey to EaaS, financial services institutions must assess their current level of maturity. This means focussing on how services are delivered today, what the delivery structure, what processes are used, and which technology is in place.
  2. What’s missing and what’s easy to update: The next step is to put in place systems and processes that make big changes, fast. For instance:
    a. How many manual and email-based processes are in place, costing money and time that could be eliminated?
    b. Are there process areas that can be combined to provide economy of scale in automation?
    c. Eliminating standalone applications that can be consolidated onto a single platform.
    d. Pinpointing where IT service management platforms can be most easily extended to other functions.
  3. Don’t overcomplicate: Technology and organisation are relatively easy to get right, but to truly benefit from EaaS, CIOs must lead the way in delivering organisation-wide integrated, consumer-friendly services and processes, based on a common platform.
  4. Continuous improvement: CIOs should measure the effects of delivering the service revolution (e.g. cost savings and increased user satisfaction) and communicate the benefits across the organisation to demonstrate the value, and bring other service functions on board.

 

Updating outdated workplace services in any business won’t happen overnight, but there are many elements that can be put in place by those in the financial sector relatively quickly to make a huge difference. Banks and other financial institutions should be acting now to see which elements they might already have in place and can be expanded, as well as setting out a roadmap for further change. What’s more they should be considering what technology they might be offering banking customers that they can also offer internally. The results will be more satisfied employees and also cost and time savings alongside much improved service availability.

 

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Finance

HOW TO TELL IF YOU’RE OVERPAYING TAXES

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HOW TO TELL IF YOU’RE OVERPAYING TAXES

Paying taxes is a necessary act in our world, and with good reason. Our governments use taxes to build the infrastructure we use, improve our children’s education, and fund the societal safety nets we all end up needing at least once in our lives, like Social Security, unemployment insurance, and welfare.

There’s a difference between paying your fair share and paying too much because that money could be used to better your situation instead of sitting in a government account. But how do you know whether you’re paying too much and what can you do about it? We’ve got a few tips below.

 

The easiest way to tell if you’re overpaying: Do you get a refund every year?

Does your yearly tax filing fill you with a sense of excitement because of the refund you’ll receive? Unfortunately, that excitement is a clear sign you’re paying too much in taxes.

Try to see your taxes like a loan you give to the IRS. If you pay too much, then you’ve given them above and beyond your fair share, interest-free. Yes, you get it back by April (if you file on time and there’s not an extension for a global pandemic) of the following year, but you’ve lost the opportunity to make that money work for you by either accruing interest, getting rid of debt, or improving your lifestyle. This is known as “opportunity cost” and removing as much of it as possible is a critical part of having a solid financial plan.

Balancing how much you pay in taxes works both ways. Underpaying taxes amounts to an interest-free loan from the IRS to you that will need to be paid in full by Tax Day on April 15. If you can land into a sweet spot where you owe $0 and are refunded a trivial amount, then you’ve adjusted your withholdings correctly. It’s a tricky situation to get just right, though, so let’s cover a few adjustments you can make.

 

How to adjust the amount of taxes withheld from your paycheck

Taxes in the U.S. are complicated, so don’t feel bad if you’re just now realizing you’ve been overpaying.

If you have an employer, the first step is to figure out which department handles your payroll and taxes. Typically this will be HR, though it can fall on the accounting department, too. You can update your withholdings at any time, though it’s better to adjust it when new life circumstances come up. These include:

  • Getting married or divorced
  • Having a child, either from birth or adoption
  • Changes in income

To adjust withholdings, you’ll submit a new W-4 that includes your updated tax situation. You shouldn’t need to send any additional verification, but check with the payroll department to see what the latest requirements from the IRS look like.

 

What to do after you’ve adjusted your withholdings

If you’re able to adjust your withholdings, you should see a bigger paycheck after your next pay period. While it can be exciting to have more money coming in, it’s important you use this opportunity to get into a better financial situation. Consider putting that “extra” money toward paying down your debt or putting it into a retirement account. Using that new infusion of cash responsibly will not only help your financial situation now but ensure you have a stable source of income in retirement, too.

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Finance

WHY THE EXPLOSION IN LOCAL RETAIL DEMANDS NEW PAYMENT METHODS

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Kasper Enggaard Krog, CEO at mobile payment and business technology firm, Vibrant, explains why micro businesses are being badly let down by contactless payment providers while local retail has boomed.

 

Before the pandemic, between 40[i] and 47[ii] per cent of micro businesses didn’t accept card payments, depending which statistics you prefer. This includes everything from corner shops to cafes and builders to barbers. They relied on cash, cheque, or where suitable, perhaps the laborious process of an invoice and bank transfer.

This is despite there being 6 billion contactless cards in the world and 47 per cent of people preferring to pay with one when at a physical point of sale[iii]. At first glance, it might seem that these small traders were cutting their noses off to spite their faces. Customers wanted to pay them with cards, why wouldn’t they just allow them to do so?

 

What was stopping merchants?

The answer is simple. Because for the smallest of merchants, accepting a card payment has always led to expensive ongoing fees, results in slow settlements, requires admin and calls for an up-front investment in cumbersome and basic technology.

It won’t be news to anyone in the industry that the recurring costs all add up. Transaction fees are typically between 1 per cent and 3 per cent, not to mention authorisation fees and merchant service charges[iv]. A credit card reader might be about £20 and the same for a receipt printer. This all eats into profit, not to mention time.

 

Kasper Enggaard Krog

The pandemic changed it all

Yet the pandemic has forced micro businesses to reassess their reticence to take card payments. Two reasons are behind this. Firstly, there has been an explosion in people shopping where they live. When lockdowns swept across Europe, it became hard to get to larger retailers. Local merchants of all sorts became a lifeline[v].

Not only that, but many people were forced to reconnect to their communities and realised they enjoyed shopping on their street and wanted to support independent businesses. The data proves this. According to research, the convenience store sector grew by 6 per cent in 2020[vi].

This led to the second factor, contactless payments were considered safer than handling cards or cash. The overall impact of more shoppers and the threat of infection led to a boom in contactless payments. In fact, the number of purchases made in May 2021 via contactless technology doubled compared with the same month a year earlier and was up 50 per cent on May 2019[vii].

 

Woefully underserved

This shift to accepting card payments among the smallest of businesses should be applauded. There are currently £2.25 trillion in cash and cheque payments made in Europe[viii]. They’re now opening themselves up to this huge market.

This is undoubtedly good for consumers and merchants alike. But it does beg the question, why did it take a pandemic to cause the change? Why did they have to face the prospect of potential infection or financial ruin to make the move?

Simple, the existing model is broken. The barriers to accepting card payments remain – high cost, poor tech and slow settlements – but they’ve been overcome through necessity rather than benefit. These businesses remain woefully underserved yet have been forced to accept what is on offer. There must be another way.

And there is. For the first time, the technology now exists for market traders, stall holders, car washes – any number of micro businesses – to take contactless payments using only their phone. No additional tech. No annoying dongles or readers that take up space and will ultimately add to the vast rubbish bin of obsolete, single-function peripheries. These will soon join calculators, MP3 players and digital cameras.

Furthermore, this tech not only takes payments, but within months is expected to allow merchants to run their whole business on their phone. They will be able to add product lists, inventory details, accounting tools and much more. It’s like a mini enterprise resource management system for the tiniest of firms. And the fees are transparent, predictable, lower than the market rate and don’t have binding contracts. Importantly, it also has the backing of Visa – and Vibrant is leading the roll-out.

The business is proud to do so and sees a huge opportunity. Micro businesses are now worth £1.85 trillion to the European economy[ix]. Their importance will grow, and they need the payments sector to take note of their needs and do better. It’s no longer acceptable to foist poor products and services upon them and allow the pandemic to drive change rather than innovation.

The explosion in local retail demands new payment methods – and they must be made available. In many ways, it’s a scandal that it took a pandemic to force change.

 

[i] 40% of the UK’s micro businesses do not accept card payments
[ii] Visa data
[iii] 40% of the UK’s micro businesses do not accept card payments
[iv] Credit card processing fees
[v] Local heroes: The retailers benefiting from the rise of localism
[vi] Lumina Intelligence UK Grocery Data Index for 2020
[vii] Contactless payments dominated as lockdowns eased
[viii] Visa data
[ix] Visa data

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