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COULD DIGITAL EXCLUSION IN PAYMENTS BE A BARRIER TO A COVID-FREE SOCIETY?

By Vince Graziani, CEO of IDEX Biometrics ASA

 

Cash is in decline in every country around the world. That has only intensified since the emergence of the COVID-19 pandemic, swiftly leading us towards a cashless society. Many retailers have stopped accepting cash altogether, instead encouraging customers to use contactless card payments or mobile apps to pay in a touch-free, and more hygienic way. Given concerns around the virus staying on bank notes for around 48 hours, and ATMs potentially being touched by hundreds of hands without a deep clean in between, many of us have instead embraced touch-free payments.

Touch-free authentication allows consumers to make a transaction without having to touch a shared PoS to tap in a PIN number, sign for their purchase, or hand over cash. It is common when tapping a contactless card or using a mobile payment app and is an increasingly vital step in the process of making the payments industry safe in the world of coronavirus. Yet, there is a significant segment of society that still rely on cash who are unable to embrace touch-free payment authentication.

As we move more towards a more digital-focused society, Government bodies are increasingly worried about the effects on vulnerable members of society. In particular, the elderly, those who remain un-banked, or those without a smartphone are still reliant on cash and could be left excluded in a digital-first payment ecosystem. In a post-COVID world, these same groups are those who could be most exposed to further viruses from cash circulation.

So, with touch-free payments important to improving hygiene, there is an important question to consider for those unable to access contactless payments: could digital exclusion be a barrier to a COVID-free society?

 

Bridging the digital exclusion gap

Those who are digitally-excluded have limited or no access to digital tech that can make life more convenient, such as a smartphone or payment apps. According to the ONS 9% of UK adults, or almost 5 million people, don’t have access to the internet, while in the USA, FCC data suggests around 42 million Americans lack broadband internet. As a result online banking would be inaccessible to many. In the UK, the Government-commissioned Access to Cash review found that 17% of the population – over 8 million adults – would struggle to cope in a cashless society.

Exclusion from the digital world can lead to lower skills and confidence, but it can also lead to social exclusion and a wider impact on economic problems. As payment technology continues to advance, the use of basic IT devices could become essential to access goods and services. While touch-free digital payments offer many benefits, not everyone is ready to embrace a fully digital society just yet. But in our new normal, we must also consider the need to remove the concerns around transmission of the virus on cash.

Therefore it is important to be more innovative in our approach to payments and ensure that Governments and banks work together to develop new digital payment technology in a more inclusive way, to bridge the digital exclusion gap.

Failure to do so will see those without access to digital services and payment options locked out from everyday services that so many of us take for granted and forced to continue using cash. Meanwhile more digitally-included members of society are able to avoid touching paper notes and coins or ATMs amid the threat of the virus. With more and more banking services moving online the need for simple and secure access to these digital services is more important than ever before.

 

How biometric technology can support digital inclusion

In The Access to Cash review, the commission highlights biometrics in digital payments as an innovative technology that will make payments even easier in the future, which will support the pace of change towards a cashless society.

Biometrics are likely to be key to revolutionising digital inclusion in the coming years. As people get used to using fingerprints and faces to identify themselves, biometrics will become a more familiar and accepted touch-free way to validate transactions. Now, fingerprint biometric sensors can be incorporated into smart payment cards providing a speedier, personal and more secure means for consumers to authenticate payments.

During a transaction, a consumer only needs to touch their finger to the sensor on their own payment card, and then hold it over the contactless card sensor. This will allow them to authenticate a payment of any amount, without a payment limit. By extending biometrics to payment cards, authentication will no longer rely on what you know, or what you can remember, but who you are. This is valuable for those who struggle with PINs as well as in countries with lower literacy levels or less reliable identification systems.

The use of fingerprint biometrics in smart cards are also an affordable way to ensure touch-free authentication in the payment process while effectively banishing the concerns people currently have about the implications of devices being lost or stolen. For those that don’t have access to a smartphone, they will still be able to bank and pay for goods securely and in a touch-free way without a large upfront cost.

 

We have a duty to provide cost-effective touch-free payment methods

While tackling digitally exclusion remains complicated, advancements in biometric fingerprint technology are leading the way to a more inclusive payment method. By placing an emphasis on usability, the benefits of touch-free authentication can be made available to all.

As we move towards a cashless society, Government bodies have a responsibility to work with payment method providers and banks to ensure those who remain unbanked have access to cost-effective touch-free payment methods, such as biometric payment cards. This will limit a potential second wave and protect vulnerable citizens from the spread of future viruses during the payment process.

 

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Finance

HOW TO ENSURE YOUR CHILD’S ASSETS ARE PROTECTED

TAX HAVENS

Making money is one thing, but protecting it is another – this is particularly true if you want to pass your assets onto your children. Any reputable bank, solicitor or lawyer will tell you that individuals who have amassed some form of wealth need to protect their assets, especially those with a high net worth. In the event of your death, there are many loopholes that could stop your children from benefiting from your assets, often causing further distress for your loved ones. It is therefore important to shield your assets from any possible risk by having a secure, legally binding plan in place.

As divorce rates in the UK rise, marrying more than once has become much more common. Research shows that one-third of all marriages in England and Wales are between couples where at least one of the spouses has been married in the past. This set-up often brings children from previous relationships, resulting in a UK-wide rise in blended- and step- families. As such, many people find themselves trying to manage the financial needs of their current spouse while ensuring that children from a previous relationship inherit their fair share of your estate. That’s why making a Will is an essential part of protecting your assets for those you leave behind.

 

MAKING A WILL

Making a Will is a necessity that many people ignore. Without a current and valid Will, the law decides who gets what and how much. The majority of your assets will likely be given to your spouse, who can then leave it to whoever he or she chooses. Even if you are separated, but not yet divorced, your children from your previous relationship may be disinherited if your new spouse decides to keep your inheritance for themselves. As such, it is crucial that you update your Will after any life-changing event to ensure the right people benefit from your estate.

For individuals who have remarried, the best thing to do is to write up a will that includes a trust. Not only will this protect your children’s assets, but it will also allow you to look after any future spouses in the event of your death. Your future spouse can access your assets during their lifetime, but once they die, your children will inherit the remainder of your estate.

A trust is particularly important if you don’t have a prenuptial agreement as it will ensure that specific assets are preserved for designated children. However, in the event of a second marriage breakdown, a prenuptial agreement will ensure that the assets owned solely by you (or any assets acquired before the marriage) go only to your own children if you so wish. So, having both a Prenuptial Agreement and a Will in place should account for every eventuality. It’s about exploring the options available to you as to how you can leave your assets.

Thankfully, Turner Little’s Will writing specialists work closely with you to explore every avenue, giving you complete peace of mind. We protect your children’s assets at all costs to ensure fairness and financial security for the whole family. We advise on succession planning, skipping a generation, protecting the vulnerable, preparing for care fees, as well as tax reduction. So if you’re looking for a legally binding document that ensures your wishes are carried out in the most tax-efficient way, get in touch with us today.

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Finance

THE IMPORTANCE OF THOUGHT LEADERSHIP CONTENT IN THE FINANCIAL SERVICES SECTOR

The collapse of Lehman Brothers in 2008 marked a turning point in the financial services industry. Not only did the collapse have disastrous financial and regulatory consequences, but it also caused reputational damage on a mass scale, leaving the entire industry to rebuild trust. Indeed, as little as two years ago, AXA Group CEO, Thomas Buberl, commented that while trust may have returned to the financial markets, “it has still not found its way to society and citizens yet.”

Perhaps hauntingly, Mr Buberl also warns of the need to “better understand new risks to avert the next crisis”, which he says “could well have a non-financial cause.”

If the issue of trust remained fragile two years ago, then the challenges that COVID-19 has added only compound matters. KPMG recently reported that out of six principal matters financial services organisations face as a consequence of the pandemic, communications and transparency is right up there. For Executive teams and CMOs, in particular, this highlights the need to communicate effectively, not just with customers but with employees, suppliers and third-party dependents too.

But what does effective communication entail? As Yogesh Shah, CEO, iResearch, argues, now more than ever there is a huge opportunity for financial services organisations to leverage the benefits of thought leadership content within their communications strategies to re-build brand authority and trust at a time when it’s needed most.

 

Banking on industry expertise

Within every financial services organisation, a CMO will be able to find spokespeople with a wealth of expertise and experience in a range of industry matters. From data security to financial liquidity, business stability and risk mitigation, it is these experts that must form the backbone of an effective communication strategy. Effective communication, after all, relies on the ability of the reader to relate to their content; this in turn, relies on the ability of the author to convey their thought leadership position.

Thinking back to rebuilding trust post-Lehmans and beyond, there are many related and relevant topics to be addressed. What impact will particular regulations have on not just demonstrating compliance, but on providing customer insight as well as safeguarding customers and investors in the event of economic uncertainty? How will these regulations enable the market to continue to grow, whilst protecting data and removing unethical sales and promotions from the industry? Furthermore, how can customers be reassured about the use of automation, AI and data security in the midst of seemingly consistent reports of cyber security breaches? Every CMO should have a solid content strategy built around addressing these topical issues – and planning for other eventualities.

There are numerous examples of financial services companies that have used thought leadership effectively within their content strategies. In addition to the excellent example from Mr. Buberl, in response to the discussions around topics such as Brexit and the coronavirus, J.P. Morgan regularly produces thought leadership articles, reports and insights on the consequences of new developments and practical advice for not just its customers, but for the industry as a whole.

 

Demonstrating data depth

Using data within thought leadership content is also extremely important. Backing up key arguments with industry research or surveys to show why the issue or challenge is so pertinent, and how the rest of the industry might be responding to these issues, will also see engagement soar, especially if the research is relevant, timely and issues-driven. BlackRock Investment Institute has used data intelligently within its thought leadership strategy by creating focused investment information that aims to improve the way its portfolio managers control their funds and, importantly, helps its clients to maximise their own investment results.

 

Community and continued communication

Thought leadership content should be used to create a community; after all, every CMO will be aware that the financial services sector has been through the same challenges together for years. Capital Dynamics has been a prime example of this, regularly producing a 200-page guide of professional advice, guides, statistics and case studies in order to encourage other institutional investors to invest in its clean energy strategy. It is by creating this community that financial services companies can truly establish trust and authority with their target audience, and in turn, that the industry’s reputation can continue to be rebuilt. HSBC is demonstrating both data depth and continued community communication effectively in this space through their annual sustainable financing and investing survey.

 

Opportunities to engage in uncertain times 

KPMG highlighted how important both communication and transparency are for financial services organisations, and with so much change and turbulence currently across many sectors, customers in both the B2B and B2C worlds need to be assured that they can have confidence in financial services organisations once again; that they are one step ahead of industry issues and that their investment, in any capacity, is safe. And, with no doubt that more disruption and uncertainty is on the horizon, CMOs need to plan how they can use thought leadership content to support future contingency plans and be prepared with comments on possible scenarios.

By discussing issues directly relating to the sector and subtly showing the reader a solution to their challenge, thought leadership content will demonstrate invaluable industry expertise. Every CMO knows that content is king, but data-driven, issues-led thought leadership content is a proven way to appeal to target audiences and show how they can trust financial services industry once more.

 

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