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USING ANALYTICS TO CHEAT TO SECURE THE ONE RESOURCE THAT MONEY CAN’T BUY

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By Avtar Dhillon, Director, Business Value Consulting, ThoughtSpot

 

“It’s not that we have little time, but more that we waste a good deal of it” – Seneca.

Time is precious. Time lost cannot be regained. There are a lot of sayings about the fleeting nature of time. Right now, time is flying. In a volatile market where enterprises might need billions in revenue just to stand still there is a pressing need to understand how to compete and build back better as we go into 2021. Take the mortgage market. Lenders lost billions of pounds when lockdown stopped the housing market.

A report conducted by the Economist Intelligence Unit found this year that while AI adoption is widely in use by most financial institutions, 86% of banks and insurance companies plan to increase AI-related investment into technology by 2025. The research was drawn from retail and investment banks and insurance companies across Europe, APAC, and the US.

One of the main reasons for this adoption comes down to time. Analytics and AI can support smarter financial industry planning, and shave time off every activity in order to beat competition and extract maximum value from the market where possible. It’s an important consideration as many financial services firms find themselves in an uncertain position post-Brexit and during the global pandemic. The future is uncertain, markets are volatile, and businesses, consumers, and the government have all been adjusting to changing circumstances. AI is held by financial sector firms as the technology with the potential to help them maintain competitiveness in this uncertainty.

The Economist study found that while there is a strong degree of confidence in the benefits of AI, the reality is that the technology is not yet largely in use: More than half of respondents say AI is not incorporated into their processes and offerings, with only 15% saying the technology is used extensively across the organisation. However, the benefits that have already emerged combined with respondents’ plans to double down on AI investment in the short-term show this technology is slated to drive a massive wave of future growth for financial services.

Avtar Dhillon

Banks and insurance companies perceive AI as critical to unlocking new growth opportunities and reducing costs. Respondents were clear AI will transform businesses in a number of ways over the next five years, including spurring new products and services (27%), opening new markets (25%), and paving the way for innovation (25%). About one-third (29%) expect between 51% and 75% of their workloads to be supported by AI technologies in five years.

In addition to driving growth, AI promises significant savings today and in the future: 37% reported that their organisation has reduced operational costs as a result of AI adoption, and 34% predict that AI will lower their cost base over the next five years. When it comes to other benefits, one-third of respondents each reported a greater use of predictive analytics (34%), increased employee capacity to handle workload volume (33%), and enhanced customer service and satisfaction (32%).

 

Investment and retail banks emerge as AI leaders

Investment banks are deploying a higher volume of new AI applications on average when compared to retail bank and insurance peers. They are also the most advanced in the implementation of training programmes: 54% have already implemented initiatives, compared with 46% in insurance and 48% in retail banks. Additionally, investment banks are most likely to use machine learning (63%) and image analysis (52%), whereas retail banks are more heavily deploying predictive analytics (71%) and virtual assistants (61%).

The report also found that banks and insurers in APAC are trendsetters when it comes to adoption, training and measurement. 61% reported that half or more of their workload is supported by AI, compared with North America and Europe (both 41%). Europe’s low usage is partly a reporting problem: Almost 10% either had no metrics to measure AI-application success, or had not been measured for long enough to report on. By way of contrast, all APAC respondents had functional reporting metrics. Notably, APAC prioritises reskilling and training initiatives, with 75% expecting an increased investment in people over the next five years to learn more AI skills and arm them with resources compared to 59% in North America and 37% in Europe.

 

The path forward: Upskilling frontline knowledge workers

Despite relatively slow adoption rates to date, the promise of AI holds clear with 86% of respondents saying they plan to increase AI-related investments into the technology over the next five years. However, greater AI adoption will ultimately be driven by how much financial services organisations invest into upskilling their workforce. This upskilling is required to get real value from democratising insights.

According to the data, the industry is at a halfway point when it comes to upskilling their employees, with 49% of respondents saying training initiatives for employees to better understand AI are currently in place. Another 42% have plans to implement such training.

With cost reduction plans working (for over a third) or forecast (another third) using AI, as the data shows, the way ahead revolves around driving new growth. AI is seen to be the new growth engine, and the key to unlocking its potential requires investing in talent. Financial services companies must lower the technology barrier for ordinary employees to capitalise on the productivity and innovation gains made possible by AI. This is the end goal for most of the financial services industry, and many others – to be able to react at the speed of thought to changing conditions, markets, and information – bringing us back to the point: Making the best use of time, because getting to understanding has not been a fast process in the history of business intelligence.

 

Business

TOP TIPS FOR BOOSTING YOUR CASH FLOW AND BUSINESS IN 2021

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Ian Gass, CEO at Agitate

 

Many small businesses are still dealing with the disruption caused by the pandemic. Improving financial performance is most likely to be at the top of agenda, and a good place to start is reviewing cash flow. No matter what the product or services a company provides or the size of the business, cash flow still remains king.

Research has shown that 38% of small business owners who have suffered cash flow problems have been left unable to pay debts. With 1 in 7 small business owners having been left unable to pay employees because of cash flow issues, this equates to a huge 2.2 million people in the UK not being paid on time.

 

The importance of positive cash flow

Profit has traditionally been seen as the most important measure of an organisation’s financial performance. However, the focus is increasingly shifting from the income statement to the balance of cash inflows and outflows. Prioritising profit levels reflect long term fiscal health, but it does not necessarily mean that a business can pay its bills on time and survive in the short term.

Ian Gass

Sudden drops in demand prove how keeping an efficient cash flow balance is essential, and can expose shortcomings of currently used solutions. When reviewing your cash flow, you need to look at ways to get more money coming in and better manage the money that is going out. Here are a few ways to improve cash flow management and see positive changes in a short period of time.

 

  1. Efficient forecast

It is important to be able to compare actual income and expenses with those that are in the pipeline, as it helps to determine which area of business is under performing or generating unnecessary costs. Start by looking at your projected income and expenses for the next three months, don’t wait until you receive a bill to realise there are not enough funds to cover it. An easy way to overcome this issue is a free cash flow template available online.

 

  1. Terms and Conditions review

Making sure that T&Cs are clear and comprehensive not only provides your business with a protective layer, but also makes customers understand when and how the payment is expected, and the process and penalties for late payments. That’s why regular checks and reviews of existing agreements prevents businesses from potential loses. It is also good to use reward tactics to encourage customers for prompt or early payment such as discounts or free shipping.

 

  1. Payment terms

Payment terms that are understandable and realistic is clear T&Cs in place. As it creates a contract with suppliers and obliges the organisation to pay on time, it is important to match these terms wider operation processes. For instance, if you have 14 days to pay your suppliers, but your customers get 30 days to pay you, a problem of late payments will be inevitable. To avoid damaging relationships with suppliers, you should consider an extension of the terms or reducing the credit period for your clients. It is worth taking deposits, asking for payment in advance or on receipt.

 

  1. Invoice management

Another method that can quicky improve cash flow is sending invoices promptly and ensuring they are accurate. Any mistakes will simply require queries to be resolved and it will take longer to receive payment. In addition, it is important to remain persistent at following up late payments and moving the money to the bank as soon as possible. Some clients will always need chasing and, without a follow up, they will hold on to the cash as long as possible.

 

  1. Payment options

Making it easy for clients to pay gives businesses the best chances of being paid quicker. While accepting card payments might be common place, there is a high risk of fraud. For example, in 2019 £620.6m was lost in card fraud in the UK. Also, it can be expensive to process and often leaves an organisation to wait days to receive the funds. Using a free bank-to-bank payment app means businesses can send payment requests from mobile phone straight to customers via email or messaging app (such as WhatsApp).

In that case, the consumer will receive a message with all the information they need to make the payment instantly. They click the secure ‘Paylink’, which directs them to their online banking app and all the relevant information is displayed such as your name, the amount to be paid and a reference. The transaction needs then authorising with their bank and the money moves instantly from their account to yours.

 

  1. Cost reduction

If there is too much money going out that a company can’t afford, business owners need to think of ways to reduce those expenses. There are a few questions to help understand where money can easily be dislocated:

Is there software or equipment that you are paying for that you don’t use? Can overhead costs such as utilities and administrative expenses be reduced? Are card transaction fees putting an unnecessary pressure on cash balance? If so, it can be eliminated with a bank-to-bank payment app.

Although profit might be seen as the ultimate goal for companies of all shapes and sizes, sustaining positive cash flow provides vital foundations on which a company can grow. By using the right tools, business owners can not only get paid faster and more securely, but also improve customer experience, reducing the transaction to a quick QR scan. Making a few smart changes to the existing balance sheet can have a big impact and future-proof an organisation in no time.

 

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Business

BRIDGING THE DIGITAL EMPLOYEE EXPERIENCE GAP

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By

Matthew Sturman, senior technical consultant, AppLearn

 

While the financial sector was arguably some way along the digital transformation curve before the pandemic, embracing innovative solutions to enhance customer experience and security, the last 12 months have required a step change like no other for employees.

Overnight, teams were operating remotely, using an array of new business applications from communications tools to support systems. Business critical processes which may have been stagnant for some time due to a risk adverse culture, quickly evolved with a need for greater agility.

In a post-pandemic world, it’s crucial that financial leaders don’t become complacent about the employee experience; KMPG put employees at the top of their list for financial institutions six considerations in dealing with the impact of COVID-19. Organisations have rapidly undergone transformation to facilitate home working while maintaining operations, however the proliferation of technology has also highlighted a critical digital employee experience gap. Addressing this will be key to embedding digital strategies which enable and support employees in the long-term.

 

Matthew Sturman

The overwhelmed employee

Even before the pandemic, research from Okta detailed how the number of worker applications deployed by organisations had increased by 68% over the past four years.

You only need to look at how employees access IT support to realise just how complex this picture has got for employees. Every technology application – from risk and complicance to payroll software– has a different route to access support, with employees having to navigate chatbots, online knowledge bases, resource hubs or the helpdesk. The result? Context-switching. Time spent flitting between different applications or windows to complete tasks, taking employees out of the flow of work. Studies have shown that switching contexts has a dramatic impact on time lost mentally re-focussing between tasks, in addition to time wasted navigating to try and find support.

In fact, research from McKinsey has found that workers spend up to 20% of their working week searching for information or support on tasks. This issue has only been compounded further with employees working from home, and not knowing where to go for timely support.

 

Prioritising the user

Over time, these small interruptions can add up to a significant impact on an organisation’s performance – and lead to user frustration, as well as decreased motivation amongst employees.

Historically, financial services businesses have taken a customer-first approach to investing in user experience – prioritising external customer service and communication over the internal employee experience. However, most employees are also users of this technology, and expect the same smooth transitions and consumer grade experience when using their work devices or software. When their digital experience is seamless, employees can focus on their role without interruption.

In a recent report, KPMG said organisations should create an ecosystem of tools and technologies that work together to enable experiences that help people work better. Any shifts in technologies should consider the combined impact of features and integration. It’s this sentiment financial leaders must embrace to truly empower digital workers.

 

Bridging the employee experience gap

According to a recent report from analyst firm Constellation Research which looked at the impact on the pandemic on the digital workplace, organisations have a historic opportunity to transform the employee experience.

It encourages organisations to adopt an ‘employee experience platform’ (EXP) model that connects disparate digital tools into a more cohesive digital workplace. This model is made up of disruptive technologies that bring together siloed applications and software.

Technologies such as digital adoption platforms (DAPs), machine learning, ‘people analytics’ tools and on-demand talent sourcing have been highlighted by Constellation as key components to the EXP. DAPs, for example, help solve the issue of disparate IT estates by overlaying software applications and providing a consistent support experience across multiple applications. This can take the form of step-by-step guides to navigate the user through new digital tasks and workflows, through to ensuring knowledge articles and chatbots are seamlessly available when required and provided in context of the individual requiring it and the task they are performing. Crucially, this keeps employees in the flow of work and avoids wasted time switching between applications and searching for support.

 

Looking ahead

It’s been an immense year of change for financial leaders, organisations, and importantly employees. As we move out of the pandemic, getting this next phase right will be absolutely key. For many businesses, this will be about moving from survival to thriving in a digital world.

The steps are simple. Identify the experience gaps, explore disruptive tools and technologies that bridge them, but most importantly, create an employee experience that enables and empowers them to do their job better.

 

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