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Finance leaders must also transform digitally to help mitigate rising costs

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Gavin Fallon, General Manager for Board International in the UK, Northern Europe, Middle East, India and Africa, explains how intelligent planning can help combat uncertainty

Uncertainty is here to stay. Rising costs and inflation, an ongoing pandemic and continued supply chain pressures all mean that survival is tougher for businesses. As a result, leaders across the globe are looking for unique approaches to manage the impact of change to remain competitive. For many, this means planning for new unknown scenarios to navigate these challenges successfully.

 

Digital transformation has changed the role of finance

At the same time, many businesses have undergone digital transformation, spurred on by the pandemic, yet as digital transformation permeates throughout organisations, the role of the finance function is changing. Until relatively recently, finance leaders were focused on reducing operating costs, while that dynamic still remains, continued transformation is now a first priority for finance leaders. According to our research ,  more than one third (36%) of global financial decision-makers believe that a fundamental transformation of the finance function is needed to survive.

After the last few years, finance leaders know that they now need the ability to adapt at a moment’s notice and make quick decisions to stay ahead of the market. Companies want to move faster, make more accurate decisions, and see quicker returns to compete with agile competitors for ever more discerning customers. But most finance leaders also know that this is an impossible task when planning and decision-making is disconnected across the organisation. A siloed approach can only take you so far.

 

The hidden cost of inaccurate planning

The cost of living crisis has brought this challenge again into the spotlight for many CFOs, and this dynamic of change is here to stay. From rising energy costs, the impact of Brexit to the post-pandemic reset, organisations will always face challenges when it comes to planning and successfully navigating macro-economic change.

However, many organisations still rely on disparate data and point solutions for planning and analytics. This can lead to miscommunication between departments, significant manual efforts from teams and a high risk of human error. This slow, outdated approach makes it challenging to deliver the quick and accurate insights needed to make strategic decisions to respond to uncertainty.

 

Data: the most strategic asset in the digital age

When change happens, businesses need financial planning and analytics capabilities more than ever to capture the insights needed to drive more accurate business decisions to maintain or even increase profitability. In these circumstances, CFOs need complete transparency of the business so that performance can be reviewed quickly, plans adjusted and the impact of different decisions analysed and simulated.

For finance, that demands a shift from its traditional scorekeeper role to being a performance driver. Our research reveals that 91% of finance leaders see monetising data as holding the highest transformative value, specifically by generating measurable economic benefits using enhanced data analytics.

They believe that CFOs will have technology-driven insights delivered over the cloud, enabling them to see opportunities and work on these with the business side-by-side. This requires in-depth but accessible reporting that can project performance and accurately adapt forecasts to reflect changing market conditions

 

Unlocking the true potential of finance

Many businesses overlook the potential of the office of finance. Less than half (44%) of finance leaders have total confidence in their organisation to harness the finance function as a key business asset, rather than simply back-office support. This means that the organisation’s leadership needs to support finance to become more strategic and accelerate the digital enterprise by making the function the hub of strategic data.

The true impact can only be understood through a smart finance function that has access to data instantly and a good understanding of the expected outcome of any strategy or change. That means aligning finance with operations, not just to cut costs, but to identify new strategic opportunities. Those who embrace digital transformation will continue to benefit from a faster, more integrated way of working across finance, strategy and operations.

 

The role of financial planning and analytics

Finance leaders have seen the benefits technology can drive over the past few years and now many want it for themselves. Unsurprisingly, in a world of continued uncertainty, they want to be able to plan effectively with scenarios that cover a range of events and challenges and adapt to whatever comes their way.

There is a clear appetite for real-time scenario planning tools. The vast majority (94%) of finance leaders see those applications as important to navigating uncertainty and moving away from a single view of the future. This stems from the fact that two-thirds (67%) believe their role would largely benefit from being able to model key business and operational drivers into financial plans. Uniting strategic, financial and operational planning can ensure that the business can respond quickly as a whole to change and help to unify the team towards working together to the same goal.

As many finance leaders feel they are emerging from navigating the challenges that came with a global pandemic, they are now facing a shift in purchasing habits due to the rising cost of living. Many will be asking themselves what the worst-case scenario could be, how they can cut costs or how to shift stock, for example. These are questions that are always on their mind at the best of times but in crisis mode they are exacerbated.

There are decisions that need to be made quickly based on an accurate picture of the business’ operations and finances. Organisations with a resurgent finance leader focused on more intelligent approach to financial planning will be better equipped to tackle the vagaries and unpredictability of the today’s evolving marketplace to plan for what comes next.

Finance

Why You Should Work on Your Financial Literacy

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A lack of financial understanding plagues our society. Most people have very little understanding of finances, which means they struggle when making crucial financial decisions.

Making correct financial decisions is more critical than ever. The UK is currently in a cost of living crisis, and inflation has risen to around 9%. This means many people are seeing their disposable income fall quite rapidly.

Buying essentials such as energy and fuel is becoming increasingly difficult for many households as you will have noticed, fuel and energy prices with the energy inflation rate at an incredible 28%!

This means working on finances and ensuring you can sustain your lifestyle is something we currently need to focus on. Falling into debt is something that you should definitely avoid!

Read on to find out more about financial literacy and how it can help you manage your living costs.

What is Financial Literacy?

Financial literacy is the ability to use and understand various financial skills. For example, if your financial literacy is strong, you should be able to use skills such as budgeting and investing to make correct financial decisions.

This includes decisions such as mortgages and opening bank accounts. Mortgages are some of the most important financial decisions people will ever make. Mortgage payments will take a large chunk of your monthly income, and it’s a big commitment.

Financial literacy isn’t only about lifelong decisions such as mortgages. Improving your financial literacy will help more minor priorities such as your daily spending and subscriptions.

How Can Improving Your Financial Literacy Benefit You?

Ideally, everyone should have a good understanding of financial literacy. Borrowing money is a large part of modern life, with most people using loans regularly. Loans are not a bad thing and are, in fact, very helpful, but unmanaged borrowing can be very dangerous.

Strengthening your financial literacy can help you properly acknowledge the risks of borrowing money. This means you’ll be able to conduct a cost-benefit analysis to see if taking out a loan will benefit you in the long run.

This will prevent you from getting into some sticky situations where you overestimate your repayment abilities. Deferring on a loan will have many repercussions that will last most of your life.

Improved financial literacy can also help you manage day-to-day spending. One skill in the package of financial literacy is budgeting. Budgeting effectively will help you decrease unnecessary spending and increase savings.

A more significant savings account will help you apply for a mortgage. Furthermore, you’ll be able to react to any unexpected expenses that come your way. This will also help you increase your financial stability.

Increasing your financial literacy also means improving skills such as investing. Investing can help you increase the size of your savings and also your monthly income if done correctly. This will again help you fight against rising costs due to inflation.

Methods to improve your financial literacy

Start Budgeting

Budgeting is beneficial and pretty simple to start. A budget is a financial plan for a period of time and will help you track what you’re spending and increase your savings.

Budgets are pretty simple to outline nowadays. Many budget apps can help you track your spending and monitor your spending vs your saving. Make sure your budget is realistic, and you can actually stick to it.

Keep tabs on your Credit Score

Your credit score is fundamental when taking out any loans. A good credit score will give you access to the lowest interest rates, which will make the loan a lot cheaper.

Moreover, if your credit score is very poor, some lenders will be unwilling to lend you money, making finding loans much more complicated. A healthy credit score will make it easier and cheaper to take out loans. This will help boost your financial literacy in the long run.

Give Yourself a Savings Goal

Many people struggle to save because they don’t stick to their saving goals. One trick is to set out some money as soon as you get paid. By effectively paying into your savings account first, it makes sure you focus on boosting your savings account.

Most people wait until the end of the month and put any spare change in their savings account. Although this can work if you’re consistent, it’s very tempting to blow the extra cash on some new shoes or other luxuries. If you set out money for savings first, you won’t have to deal with this temptation.

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A new beginning for financial services B2B marketing

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Financial services B2B marketing is dead. A bold statement with B2B ad spend set to pass $30bn next year in the US alone. But it is dead, or at least, it’s dead boring.

B2B marketing has long carried a reputation for being dull, lacking emotion, heart or guts. Indeed, the same could be said for financial services, with its technical jargon, long-winded T&Cs and an array of complex services and products to promote. Put the two together and you have a considerable marketing challenge on your hands.

Michael Richards

But there are green shoots of change springing up on the beige horizon, as financial services businesses begin to recognise that they deserve better and start to see the lessons to be learned from their B2C peers. For example, many financial services B2B brands moved to digital to refine client experiences and grow relationships during the pandemic, meaning they could connect with businesses in a more accessible way through tailored and creative solutions. But it’s not enough to just convince a business to buy a product or service with a smattering of data and a selection of charts. There needs to be a focus on provoking the truth about these progressive brands; giving them what they deserve: intelligence, imagination and emotion to provoke their truths and tell their stories in ways that just can’t be ignored.

There are so many financial services B2B brands that are missing the mark on creating provocative work and telling their stirring stories. The industry is full of inspiring stories but needs to adopt the techniques of B2C (and fast) to avoid being left behind.

Below, I’ve outlined three approaches B2B financial services marketing should take from B2C:

 

Be 100% brand and 0% product

Let’s look at the lessons we can learn from one of the biggest brands in the world. Coca Cola used to advertise on a single poster with simple descriptive messaging that didn’t make a lot of sense … but that was in the early decades of the 20th century. Coke is now one of the most instantly recognisable brands in the world. It has evolved so much from that early uninspiring product messaging that some Coke ads today feature nothing more than a red background, a white glass bottle silhouette and the message ‘Open Happiness’. 0% product, 100% brand.

Financial services business brands can learn a lot from this. Very few are tapping into the vocabulary of emotional marketing. They sell their product in line with industry jargon, expecting their ever-changing audience to understand what they mean. When really their product or service should be learning to speak a new language. One that showcases the brand over the product, communicating to their audience with a personality and values of their own.

No company can rely solely on their product features because no product is unique anymore. The power of a brand can generate that differentiating value that will set it apart from the competition.

 

Use data to personalise your offer

Data is the beating heart to personalisation. It gives businesses the foundation to build a product that is bigger and better than its competitor. One that entices new audiences while maintaining loyalty.

Consumer brands are obsessed with collecting data to better their product and reach audiences far and wide. In fact, nearly 90% of UK shoppers will hand over their personal information for improved online customer experiences.

B2B businesses also use data, but on a much narrower scale. In a survey of B2B companies, only 25% of B2B businesses use data weekly to understand customer needs, while 9% admitted they never use data at all. This is evident given that 47% of B2B buyers who need a new financial service go straight to their existing bank, and 75% of those who claim to shop around also end up with their current bank. Most buyers don’t even consider more than two brands. Meaning lots get left behind.

This is where B2B marketing shouldn’t just rest on its laurels of tedious white papers and limited data. It should inject its own personal touch and emotion by undertaking its own research and data collection to produce insightful pieces of research and showcase its unique findings. This can include specific consumer trends and behaviours in the financial services space, so they can really understand their audience and further improve their product.

 

Be audience aware

Audience Blindness is a condition that hinders B2B brands from seeing that business decision-makers have changed. They have become younger; they’re millennials. The content they consume is worlds apart from what their predecessors consumed and is constantly evolving – particularly as we enter Web 3.0 and the metaverse.

Even in the finance sector, B2B marketing is still about appealing to ‘people’ and their needs. B2B isn’t a machine and shouldn’t just cater for a computer. It needs to connect to real life audiences – those with feelings, thoughts and emotions. Because behind every business partnership is a room full of people interacting, debating and sparking ideas.

The B2C financial services sector has progressed significantly, understanding changes in audiences and catering to new needs and desires. The rise in neo-banking, investment made easy and services specifically for young adults and children looking to save is testament to this. They’ve introduced digital-first approaches, influencer techniques and new ways of improving the shopping experience through buy now, pay later (BNPL).

We’ve seen glimpses of B2B’s new beginning, but its future is to live in the present, and inject it with the power of B2C. Only then can B2B see the new audience, hear the new market and feel the new world.

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