Relocating can have a serious effect on your finances so, if you’re considering making a big move, you need to think very carefully about whether it’s going to be worth it. Matt Stevens is a Director at The Mortgage Genie. Here, he outlines what you need to consider, and offers his top tips for keeping costs down.
There are a whole host of reasons why you might be looking to move to a different town or city: perhaps it’s for a job, love, or to be closer to family. But whatever your motivation might be, it’s important that you don’t take the decision lightly. Moving to a new house is one of the most expensive and stressful things you can do, but the stakes are even higher when you’re looking to move to a completely new area. And, more often than not, there’ll be additional costs you need to consider.
To help ensure the process of relocating goes as smoothly as possible and assist you in making the best possible financial decisions throughout, I’m going to talk you through some of the most important things to consider. I’ll also offer advice that will hopefully help you to avoid some of the most common pitfalls people fall into when relocating.
Work out what you can afford ahead of time
Before you make any big life decision, it’s important that you do the maths to ensure it’s going to make financial sense. This will also help you to determine what you can and can’t afford if you decide to go ahead with your move.
So, before you lock yourself in to relocating, it’s vital that you go through this process of working out how much you’ll definitely be able to borrow and whether you’ll be able to make the monthly repayments. You’ll also need to consider some of the addition charges that come with taking out a mortgage. At The Mortgage Genie, we have a guide to mortgage fees and charges, which explains exactly what you’ll have to pay for along the way.
Once you’ve considered all of the financial implications of getting a mortgage once you’ve relocated and are comfortable that you can afford all of the necessary payments, you can move on to seriously thinking about your move.
Location is everything
If you’ve done the maths and are sure you can afford to relocate, the next step is to choose where you’re going to live. Of course, you’ll have an idea of the general region you’re aiming for, but certain areas of most towns and cities can differ when it comes to the likes of property prices, the quality of life, and the cost of living. So, if you’re going to be moving to somewhere that’s currently quite unfamiliar to you, it’s important that you do plenty of research and, if possible, speak to people who already live there to get a good idea of what area is going to be best for you (and your budget).
It’s not just the cost of buying a property that you need to consider, either. For example, you’ll want to think about how much your commute is going to set you back, as well as whether you’re going to want to visit your hometown frequently and how much this is going to cost.
Even the cost of your home and content insurance can be affected by the area you live in, so don’t get caught out by not having an extensive knowledge of the area. Look into the crime figures of any area you’re thinking about moving to, and also look into the history of any property to make sure there are no serious threats of damage from the likes of flooding. All of this will help you to save money in the long run.
Don’t forget about the additional costs of relocating
So, you know you can afford the mortgage on a new home in your chosen town or city, and you’ve done plenty of research to make sure you can afford all of the extras like insurance and the cost of living. But, have you considered how much you’ll have to pay to actually move your life from A to B? Even if you’re used to moving between properties in your home town, there are typically more things to pay for when you’re relocating further afield, and it’s vital that you aren’t caught out by this. Otherwise, you could get into some difficulties.
The average house move cost £10,210 in 2018, according to My Big Move, and their research wasn’t even focusing on relocating further afield. House removal companies typically charge a lot more when you aren’t moving locally, and you’ll also have to consider the costs of visiting your new home town or city numerous times before you actually move. All of this can add up, so you’ll certainly need to have more than just a house deposit save when you’re looking to make a particularly big move.
If you don’t plan properly, relocating can take a serious toll on your finances. But, if you take all of these points on board, do plenty of research, and ensure you can afford to make the move you’re planning, everything will go much more smoothly.
HOW FINANCIAL SERVICES CAN GET TO GRIPS WITH RISING SUPPLY CHAIN RISK
By Alex Saric, smart procurement expert, Ivalua
UK businesses have never been more dependent on their suppliers to help them deliver goods and services to their customers. Be it retail, manufacturing or financial services, suppliers have a vital role to play when it comes to innovation and meeting customer expectations. However, as supply chains become increasingly global, businesses are potentially exposing themselves to more risk than ever before.
This is especially true in financial services. Whether it’s the impact of geopolitical events like Brexit or global tariff wars, supply shortages, security or the businesses impact on the environment, an organisation’s failure to identify and mitigate risk could see millions wiped off its share price, and its corporate reputation left in tatters. Risk can present itself anywhere and at any time, so financial services firms must be ready to address it. However, many simply don’t have the ability to evaluate suppliers for risk factors, leaving them wide open to business operations being hindered, or being slapped with financial penalties.
More suppliers, increasing risk
One reason why financial services firms aren’t able to evaluate suppliers is the breadth and scale of today’s supply chains. For example, French oil company Total said in in a recent human rights briefing paper that they work with over 150,000 direct suppliers worldwide. This is just one example of how large and varied the roster of partners has become. Research from Ivalua has found that financial services businesses on average are working with around 3,600 suppliers annually, which is evenly split between UK-based and international partners. That number is expected to rise, with 60% expecting the number of suppliers they work with to rise.
The expanding nature of suppliers is only going to expose financial services firms to more potential risk than ever before, yet 78% say they face challenges gaining complete visibility into suppliers and their activities.
A lack of supplier visibility leaves businesses unable to identify and mitigate against supply chain risk. In fact, almost three-quarters (73%) of financial services firms have experienced some type of risk during the last 12 months. These include; supplier failure (43%), environmental impact, such as pollution or waste (35%) and supply shortages (45%). Supply shortages can be among the most damaging to a business, as seen by both the KFC chicken shortage which closed stores, and the summer 2018 CO2 shortage which caused companies such as Heineken and Coca-Cola to pause production, impacting supply across Europe during the World Cup.
Businesses unprepared for the worst
One way financial services firms can better prepare for risk is to ensure they know what to plan for to reduce the impact. However, whilst some say they have a contingency plan in place to deal with risk, many of them are unprepared. Financial services firms admitted to not having comprehensive and deployed contingency plans in place to prepare the supply chain for risk such as; natural disasters (68%), supply shortages (67%), geopolitical changes (65%), environmental impact (63%), supplier failure (62%) and modern slavery (50%).
In order to effectively prepare for these types of risks, it’s vital that financial services businesses fully understand their suppliers, their business environment, global variations in regulations, geopolitics, and a host of other factors. But for many, there are multiple challenges when it comes to gaining this understanding. A prevailing factor is an inability to gain visibility into all suppliers and activity because supplier management data is stored in multiple locations and formats, making insights difficult to access. This leaves teams unable to review supplier activity and assess compliance.
Making supplier management smarter
It’s imperative that financial services businesses are able to respond or prepare for supply chain risk. Clearly, much more needs to be done to ensure they have complete visibility of suppliers, especially in an era where regulators can levy heavy fines for GDPR breaches and scandals spread in minutes over social media. These types of risks can be reduced in the future if procurement teams have a 360-degree view of suppliers which will help with contingency planning and risk management.
For example, in the instance of supply shortages, plans could be put in place that identify alternative suppliers to ensure any shortages do not impact end users. This type of supplier collaboration is paramount when it comes to managing and mitigating against supplier shortages. When it comes to regulations, financial services firms can’t allow a lack of visibility to limit their ability to ensure all suppliers are compliant.
To do this, teams must take a smarter approach to procurement that gives complete visibility into suppliers throughout the supply chain. This will allow financial services firms to identify and plan for risk, reducing the potential damage, and ensuring they are working with and awarding business to low-risk suppliers. Supply chain risk is rapidly becoming an overarching concern for financial services firms, but by providing the ability to assess suppliers, they will have all the insights they need to mitigate the impact on business operations.
ISO 20022 – THE BEDROCK FOR PAYMENTS TRANSFORMATION
Lauren Jones, Global Payments Ambassador, Icon Solutions
The financial services industry has seen ISO 20022 grow firmly over the last 15 years. What was then a small pocket of countries tackling migration has now become widespread adoption for domestic and international payments.
And with momentum building, it is clear that IS0 20022 is playing a foundational role for banks in the transformation of their infrastructures, with the rich messaging format delivering business benefits and enabling enhanced customer propositions.
The time is now for ISO 20022
European initiatives, such as SEPA, were the first to drive usage, but have since catalysed a network effect in other countries. Recent examples driving adoption include the New Payments Platform in Australia and the Bank of England’s Real-Time Gross Settlement (RTGS) service doing the same in the UK.
Despite the timeline delay, the SWIFT migration to ISO 20022 for cross-border payments will drive further adoption and it is clear to see why. As the world becomes more connected, having a globally interoperable standard is attractive. ISO 20022 allows banks to have a consistent experience across geographies and provides a low-risk approach to modernisation.
In the US things are moving as well. With the country’s most important payments market infrastructures, the Fedwire and The Clearing House Interbank RTP system, migrating their High Value Payment (HVP) systems almost concurrently, widespread ISO 20022 has reached a tipping point.
For US banks this means it is important to understand that ISO 2022 is no longer happening “somewhere else”. Banks dealing with the modernisation of infrastructure need to decide what will become the bedrock of their transformation efforts. ISO 20022 seems to be the only sensible choice.
ISO 20022 in practice
While banks in the US and across the world grapple with ISO 20022, it is crucial that they engage internal and external stakeholders early on in their journey to define their strategy. Resources should also be pulled from all areas of a bank, including technology, operations, AML, product and sales.
Implementation is not just a technical issue. Governance, sequencing and coordinating activities are all vital for success. Banks need to lay a foundation where legacy systems are ringfenced, but it is equally important for them to understand how to move rich data through or around legacy infrastructure as early as possible.
Deciding what to do with legacy systems is a challenge for many financial institutions. Therefore it can be useful to deploy mapping or translation services in the early stages of adoption. In fact, many market infrastructure ISO 20022 programs include a phased approach where there is a like-for-like phase (where no new functionality is used), allowing adopters to become familiar with the new standard.
This is often followed by multi-year adoption of new functionality and gradual decommissioning of legacy formats. However, mapping should not be viewed as a longer-term solution. To harness the full value of ISO 20022, supporting the standardisation natively allows banks to build from the ground up. This creates a modern data model where both internal efficiency and external value can be realised.
ISO 20022 is the way to deliver added value
One of the major drivers for ISO 20022 adoption is to remain competitive. By implementing a common standard banks can have a platform to innovate at pace and with lower costs.
Many banks now see ISO 20022 as a critical foundational element to deliver value to their corporate clients. But the benefits of ISO 20022 are not solely external. Increasingly, APIs are being used to support both deep integration within the bank and with a broad spectrum of fintech partners. ISO 20022 allows the capability of having a single data model across various computer languages and therefore across multiple use cases.
With a shift towards data-driven architecture, ISO 20022 allows banks to generate greater amounts of standardised data to provide targeted insight. The move to ISO 20022 will therefore be of paramount importance for banks to take advantage of richer, standardised data sets. With more payment volumes set to adopt ISO 20022 by 2025, the discussion is moving on from the standard simply serving transactional needs to the data that can be extracted from these transactions.
Prioritising payments transformation
In other words, over the next few years we will see payments being refocused from a commoditised proposition to a strategic, value-adding one. Yet being “data-aware” is not good enough. Banks need to be powered by that data. As cutting costs is no longer enough to sustain banks, they must use payments data to deliver more appealing propositions and revenue-boosting, value-added services.
As the adoption of ISO 20022 remains fragmented in the US for the time being, many banks will continue to question how best to take advantage of the standard. However, it should be evident that ISO 20022 is coming and the time to prepare is now.
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