By Mark Vivian, CEO, Claremont
The COVID-19 pandemic and resulting economic hardship has left some businesses and their CFOs in dire need of streamlining their internal processes whilst also cutting costs. Finance departments in particular have not only been challenged to make their own processes more efficient, but also more agile.
Take the HMRC’s furlough scheme for example; finance departments were faced with the need to ensure that their organisation’s employees were paid correctly and on time, while also having to make sure they adhered to the Government’s specific regulatory requirements. At the same time, cash needs to be collected, invoices still need to be paid and the day-to-day needs to be kept up.
To add to the finance department’s woes, research from Gartner has found that finance processes are on average a business’s third slowest operating function, leading 73% of finance workers to claim they are under pressure to deliver faster results from their superiors when it comes to processes such as reporting and tax returns.
So, what can finance departments do about it? The answer may lie in IT. By choosing the right finance system and optimising it with a managed service provider, organisations can go a long way toward increasing both their finance department’s agility and efficiency.
Choosing the right finance system
When choosing the right finance system, there are number of important considerations businesses should take into account when it comes to boosting agility and efficiency, which will be largely centred around functionality.
For instance, when it comes to efficiency, businesses should consider whether there is a finance system available that provides them with a wide ranging set of integrated business applications, such as HR, Payroll, and CRM. Oracle’s E-Business Suite is a great example of this.
As part of their functionality consideration, businesses will also need to consider their specific use cases. For example, is the requirement to have a finance system capable of supporting global organisations working in multiple territories, with multi-currencies and multi-languages, and also local country legislation?
In terms of boosting agility, businesses will also need to consider whether they are happy to adopt largely standard “best practice” business processes, which usually necessitates business change, or whether to use customisation to the standard product so that it reflects the way your business works. In order to find the finance system that best suits their specific needs, businesses should look to consult a managed service provider (MSP).
Partnering with a Managed Service Provider
Partnering with an MSP will help enable organisations to get the most out of their IT environment, including their finance system. Software deployments are complex and will require a team of engineers, each with specific skill sets, to optimise. Finance directors have enough on their plate without having to worry about their finance systems under performing.
Managed service providers will work closely with both your finance and IT teams in four main areas:
- Incident Management: MSPs will provide “fix on fail” support when issues with financial applications occur, which will typically be against a Service Level Agreement for both responding to and resolving the Incidents.
- Problem Management: Here MSPs will get to the root of the problem that caused the Incident and resolve it so that the same Incidents don’t reoccur.
- Change Management: MSPs will also make sure that your finance applications are up to date and will make any necessary modifications that businesses may require as their needs change overtime, or new legislation is introduced.
- Optimisation: A good MSP will be proactive and make recommendations on how businesses can optimise their financial applications, highlighting were efficiencies can be made and costs reduced.
At Claremont, we were able to help the National Trust respond to the unprecedented changes that have taken place since March 2020 and develop a fully functional furlough solution within their Oracle financial applications. The National Trust naturally wanted to take advantage of the government furlough initiative to support their staff and protect their organisations as their sites began to close.
The solution was deployed rapidly and automatically calculated the rebate amount for each employee, gave each employee a professional standard of notification, and required minimal payroll intervention. The first payroll runs of the month began on the 16th April and by the 25th April the National Trust had successfully processed over 14,000 employees through their payrolls.
Obtaining peace of mind
The COVID-19 pandemic has put increased pressure on finance departments to boost operational efficiencies, cut costs and adhere to new legislative requirements. The last thing they need to be worrying about is insufficient IT systems. By partnering with a managed service provider, organisations, their finance departments and their IT departments can gain peace of mind that their finance systems will be optimised to suit their needs – leaving them to focus on their day jobs.
THE LOYALTY-TRUST PARADOX AT THE HEART OF FINANCIAL SERVICES AND HOW TO OVERCOME IT
By Andrew Warren, Head of Banking & Financial Services, UK&I at Cognizant
There has long been a paradox at the heart of the financial sector – customer loyalty remains high despite overall trust in the banking system being very low. In any other sector, low trust would lead customers looking for services elsewhere. Generally, however, the major banks have been able to retain their clients despite, rather than because of, trust.
This customer loyalty does not always pay, with research suggesting consumers could be overpaying by £2.9bn in areas such as mobile, broadband, home insurance, as well as, notably, mortgages and savings. Whether the result of customer lethargy, lack of awareness of the possible cost savings or low expectations of the service banks provide, this has encouraged complacency in the banking sector.
This could, however, change as our post-pandemic reality begins to bite. People may have used the extra time from the lack of a commute to do some research and shop around for better alternatives, as well as harbouring frustrations over a perceived lack of support in recent months. Coupled with the possibility of a period of negative interest rates, we could soon be heading towards a perfect storm, where both retail giants and small local businesses start to question the value their banks actually provide.
Digital native challengers are shifting the landscape
One viable reason for the supposed loyalty consumers have towards the major banks has been the lack of real alternatives. With all of the traditional high street institutions offering services that were largely interchangeable, switching services seemed more effort than was really worth it when perceived benefits were so minimal. However, this changed with the arrival in recent years of challenger banks such as Monzo, Starling and Revolut, which continue to grow in popularity due to ease of use and better customer experience from sign-up through to their intuitive apps.
The primary advantage of the big banks is their liquidity, historical reputations and longstanding customer base. However, the agility and user-friendliness of the challengers is shifting the landscape, and the continued reliance on legacy systems leaves the traditional players struggling to surpass, or in most cases match, the innovative services and products fintechs are able to bring to the market.
Customer expectations setting a new standard
As personalisation and smooth technological integration in other sectors, such as retail, raises expectations of similar offerings across all service industries, this could soon become a key battleground for banks.
With the challengers currently looking better equipped to respond to these consumer needs, here are some of the steps banks can take to modernise their offerings and retain customers’ loyalty:
- Embracing human science – the financial sector has long favoured data science in its behavioural analysis. Almost anyone can understand basic data; it is how semiotic algorithms can be used alongside this that will reveal real insights that can be used simply to help understand people better, their fears, their hopes and their aspirations.
- Adapting to modern trends – the lockdown has, by necessity, modified and in some cases accelerated, many of the established habits of both individuals and businesses. These range from an increased adoption of cashless payments, to remote working, the propensity for saving vs investing, attitudes towards fraud and risk appetite, and loyalty. As a result, some customer journeys, which had become the cornerstone of banks’ or lenders’ strategies, will now need to be adapted. For example, products, pricing and customer treatment strategies will need to be updated, and the entire value-chain of customer touchpoints should be digitally enabled. Financial institutions will now need to ensure speed and quality of their response to this change.
- Using innovation to level the playing field – the systemic advantage the big banks have over more agile challengers is in liquidity access. It is an advantage that potentially will be scrutinised in the COVID-19 enquiries we can expect to see in the near future, particularly around the provision of the various governmental support schemes and loans for which these big banks initially had responsibility. As that advantage then reduces, the need for real innovation grows. This means building business models and deploying technology that can deliver value and differentiation. For example, the major banks have more channels than their digital-only counterparts and, therefore, more data to draw on. The result is a better focus on customer journeys, with modern cloud-based data management platforms central to this. The quantity and detail of data can play in banks’ favour, allowing constant ongoing improvements to customer communications and simplifying self-service options in an increasingly remote world. It is important that banks continue to ensure they are thinking outside the box and keeping pace with other industries that are innovating in their response to the pandemic.
- Personalising the process – technology is already helping to speed up processes and improve self-service banking operations, particularly with predictive and smart decision-making through AI and ML. The advanced use of chatbots is an example, along with increasing tailored content and interfaces in apps and on digital platforms. However, the end goal is personalisation across the whole customer journey, not only through technology but also call centre operatives who still form a critical role in trouble shooting and need an up to date view of the customer in order to be able to do their job. Technology can also help analyse how these human interactions can then become more personalised.
The major banks retain a crucial position in UK society for the support and confidence they offer their customers. However, as in so many other sectors, the coronavirus pandemic could come to be seen as a watershed moment in their evolution. With the challengers continuing to gain momentum, banks certainly cannot afford to stand still. It is the ability to have a data- and technology-driven approach, as outlined here, that can help them retain their dominance and justify customer loyalty now lockdown is beginning to lift. Should they fail to do so, we may find ourselves in a very different landscape than we do today. By focusing on the steps above, banks will start to level out the playing field.
WE NEED MORE CRYPTO COMPANIES TO IPO TO INCREASE DIGITAL ASSET SCRUTINY AND ADOPTION
Stephen Ehrlich, Co-Founder and CEO at Voyager Digital
As a publicly listed digital asset trading business, the recent announcement of Coinbase’s IPO has naturally put a spotlight on us at Voyager Digital and we welcome their move as it will improve trust, transparency and above all, adoption of digital assets. It is imperative that the crypto asset space ups its game as there’s still a great deal of scepticism and concern in respect to their legitimacy or even purpose. This scepticism comes even at a time when several well-known household institutional names have entered the space in 2020.
But there are more than just signs that the mood is changing, with even some of the die-hard naysayers starting to accept that Bitcoin and crypto assets are here to stay.
The regulators are slowly coming to the table with the introduction of new rules, for example the US’s SEC is looking to impose greater KYC (Know Your Customer) on crypto wallet providers and France, a vocal advocate of the emerging blockchain technology and digital asset space, is looking to implement anonymity measures to fight money laundering activity.
Being a publicly listed company naturally provides an extra level of transparency and today there are quite a few digital asset focused public companies ranging from Bitcoin miners, crypto investment companies and in Voyager Digital’s case, crypto brokerage firms that allow investors to buy and sell crypto.
Over the Christmas and holiday period Bitcoin has continued its stratospheric rise showing further evidence that investors are hungry for alternative assets. With traditional markets being closed for public holidays, people have had time to read, research and because crypto-assets trade 24/7 they can take action. So while many around the world will have been trying to forget the trials and tribulations of a torrid 2020 by gorging on turkey or goose and opening presents, many investors will have been buying Bitcoin.
This is a trend we expect to continue well into 2021 and beyond. As people become more accepting of the digital asset space and adoption increases, more crypto based businesses will pursue the IPO route and become public companies. This process should become a self-fulfilling prophecy, bringing a greater proportion of the space under the regulatory regimes of stock exchanges and allowing anyone to dig deep into the business, providing greater scrutiny.
But this expansion will present regulators across the globe with multiple challenges. As Bitcoin and other crypto-assets are borderless, it allows brokers such as Voyager the ability to expand quickly, providing secure trading platforms to meet the demand of wider adoption. Regulatory hurdles will be overcome though as we are already seeing forward-thinking Central Banks and established regulators embracing this new asset class and the technology underpinning them. By working with regulators, established crypto businesses and in particular publicly listed ones, can help forge the way for the industry.
The future for crypto assets, Bitcoin in particular, looks bright and we look forward to playing a major role.
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