By Morgan Terigi is Co-Founder and CEO of Incomlend
The past few years have presented a series of hurdles for companies whose operations rely heavily on international trade.
Brexit brought with it a storm of bureaucratic complexities that upended long-standing trade routes and routines, impacting not only those in the United Kingdom and Europe but also businesses across the globe. This on its own would be enough to cause logistical headaches for even the most senior of operators, but the emergence of the COVID-19 crisis, the subsequent worldwide lockdowns, and now the Russian invasion of Ukraine has created an environment where running a business smoothly becomes an altogether more difficult task.
According to information from Eurostat, between January 2020 and December 2021, EU imports coming from the United Kingdom fell by 16.4 percent and at the same time, EU exports to the United Kingdom decreased by 2.1 percent. Taking a sector such as the fishing industry, which exports much of its goods to the EU (113 thousand metric tons in 2019), trade has been impacted by both additional costs and delays due to red tape which can be a nightmare.
Analysis by the National Federation of Fishermen’s Organisations the bulk of the UK fishing fleet is set to lose £64 million or more per year, with a total loss in excess of £300 million by 2026, due to Brexit. This is just an example of one of the many industries which have suffered post-Brexit, and for many, it has only gotten worse.
The spread of COVID-19 quickly added another monumental hurdle to international trade. According to statistics on UK-EU trade from the House of Commons Library, the first lockdowns in the UK and EU, which occurred in March 2020 saw the value of UK exports to the EU drop by 17 percent from the first quarter to the 2nd quarter of 2020. Imports from the EU to the UK fell by 26 percent over this same period and there was an 18 percent drop in UK exports between Q4 2020 and Q1 2021 and imports from the EU fell by 25 percent over the same period.
Moving past COVID-19, the Russian invasion of Ukraine and the subsequent economic sanctions on trade and imports of goods from Russia would stand as the next major hurdle to the UK, the EU and the wider world.
According to an analysis of the impact of economic sanctions of UK trade in goods with Russia, the imports of goods from Russia dropped to £33 million in June 2022 – the lowest level since records began. There have also been no imports of fuels from Russia in June 2022, another first, while exports to Russia dropped by £168 million (66.9percent ) compared with the monthly average for the 12 months to February 2022.
The combination of Brexit, COVID-19 and the war has caused significant logistic supply-chain related issues not just for companies in the UK and Europe, but across the entire world.
So what can exporters do in order to minimise risks to their business operations?
It is important for exporters to diversify in order to survive. While imports from the EU to the UK took a massive hit due to Brexit, imports from other non-EU countries increased by 30.1 percent. At the same time, EU exports to other non-EU countries increased by 6.1 percent.
When the flow of raw materials from one country or region becomes problematic or non-cost-effective, it is in a business’s best interest to source these raw materials elsewhere. Having this variety of sources means the production of products or services can continue despite whatever problems may arise.
This allows a business to operate more efficiently and securely. However, once a business starts venturing into new supply lines, a certain element of risk comes into play.
Long-standing relationships provide a comfortable routine and while diversifying these routes can provide a security blanket, new issues with new suppliers may arise.
To survive in such uncertain times, exporters must explore new markets, and SMEs must be nimble in regards to where they get their products, all of which increase risks for those trading.
These new risks can be costly to SMEs, particularly those whose cash flow may not be enough to survive a major hurdle or hiccup. And with SMEs making up around 90 percent of businesses and over 50 percent of employment worldwide, their role in the economy can not be overstated.
This is where invoice financing firms step in. They are able to provide funding to these companies in order to cover the trade-finance gap from which they are currently suffering.
These businesses can provide SMEs extend credit lines in a more flexible manner than banks and traditional lenders can achieve.
This means an SME which is under pressure can rely on this credit to cover overheads such as paying wages and suppliers, allowing them to keep operating smoothly, even if unexpected problems arise.
An example of this would be a factory in one region, which provides car parts for a company in another region. On the first of the month, this firm ships out the completed order of car parts for an agreed fee of €150,000. However, the payment for this may not come in for a number of weeks – leaving the factory owner in a tough situation until that payment comes in. The invoice trading firm steps in there, as a middleman. He pays the factory owner, meaning said owner can pay his workers wages, and pay for the next load of raw materials. Once the money comes through from the buyer, the invoice trading firm then receives their money back, plus interest and the whole supply chain continues to operate smoothly.
As the geopolitical climate continues to shift and change, new challenges and hurdles are sure to arise. Fintech, in particular, invoice financing firms will play a decisive role in the future of trade. The flexible nature in which they can provide financing see that wages are paid, materials are sourced, shelves are stocked and businesses stay open.
How FS organisations can utilise data to boost customer experience
Charles Southwood, Regional VP and GM – Northern Europe and Africa at Denodo
We’ve all heard the age-old adage “the customer is always right”. It insinuates that, in any sector, the needs and desires of those buying a brand’s product or services should be paramount. However, today’s customer has new standards and it is becoming harder than ever for businesses to meet and exceed them.
This is certainly the case in the financial services (FS) sector where getting customer experience right used to be relatively simple. The human touch was traditionally delivered as a bi-product of in-store, transactional interactions. Perhaps, as a result of this, few people ever considered changing their provider and the traditional, established banks ruled the space.
However, with the dawn of online banking and the introduction of new, exciting challenger banks as well as the UK’s unique Current Account Switching Service, the balance of power between the consumer and the bank is changing. Consumers no longer feel locked in. If their needs aren’t being met, they aren’t afraid to look elsewhere and switch their allegiance to other companies. In other words, loyalty is far from guaranteed and customer acquisition is only half the battle.
Retention relies upon delivering strong, unique customer experiences that beat down the competition. In order to achieve this, FS organisations will need to be able to leverage data. Its insights could be the differentiator that enables them to stand out. The positive news is that, in our online world, there is a constant stream of data being produced. However, having access to all this data doesn’t necessarily mean that a brand knows how to effectively analyse and utilise it.
Ensuring data provides insight
The rapid growth in digital technologies and services across the sector has left many FS organisations juggling an unimaginable amount of data. This data is both complex and much of it is lacking in quality. Structured, semi-structured and unstructured, it is stored in many different places – whether that’s in data lakes, on premise or in multi-cloud environments. Before FS organisations can even think about using it to inform customer experience strategies, they need to be able to find it and understand it.
This is where modern technologies – such as data virtualization – can help. Through a single, logical view data virtualization boosts visibility and real-time availability of all data across an organisation. Unlike traditional extract, transform and load (ETL) solutions, it does not move and copy data. Instead it leaves it in the source systems. In other words, instead of just replicating data, data virtualization reveals an integrated view to those trying to find it.
For FS organisations this provides several important benefits. For example, it helps when data sovereignty issues arise and the movement and replication of data outside certain countries is illegal. Data virtualization solutions can also assist in terms of financial reporting by fetching data in real time from underlying source systems – applying the necessary security and obfuscation whilst delivering the performance, the agility and the accuracy needed through the seamless connection of data.
FS organisations that adopt data virtualization, are likely to see an improvement in the overall performance and efficiencies of their business operations. Overheads will be reduced, as will the length of project times. Above all, data virtualization will rapidly strengthen the customer experience by supporting business leaders to think strategically and make decisions based on real-time insights. But don’t just take my word for it.
The proof is in the pudding: How Landsbankinn is delivering on the CX promise
Landsbankinn is just one of the many financial services institutions that has already successfully embraced data virtualization and its benefits. Despite being the largest financial institution in Iceland – with around 40% of the retail and 33% of the corporate banking market share – Landsbankinn used to face several issues when it came to data sharing and analytics.
Over 45 siloed data sources – including Oracle databases, data warehouses and APIs from internal and external sources – made finding and accessing the right data at the right time extremely difficult. Without real-time data to fuel informed decision making, customer experience and operational efficiency were suffering. As a result, Landsbankinn was in need of a data overhaul to streamline and integrate its infrastructure.
To bring together its complex data landscape and collect data in real-time, Landsbankinn implemented the Denodo Platform – a data integration and data management solution built on data virtualization – to build a logical data warehouse. As a result, the team can now aggregate data from multiple data sources, transform that data based on the applied business rules, and then make it available to consuming applications. Ultimately, this means that, throughout the organisation, the data can be utilised by a wealth of employees, even those who are not particularly IT savvy. It also means that the business leaders can use data insights to make well-versed decisions and provide a plethora of services to Landsbankinn customers both quickly and efficiently.
In recent years, customer retention has become the key to successfully growing a business. This cannot happen without an effective customer experience strategy. The ability to convert data into insight is priceless in an economic landscape where the line between a business thriving, surviving and failing is so thin. Those operating in financial services must harness modern technologies – like data virtualization – to stay at the top of their game and ahead of the competition.
The Evolution of SoftPoS in 2023
By Brad Hyett, CEO of phos
Contactless payments and digital wallets have surged in popularity in recent years. Part of this stems from the digital boom that occurred during COVID-19 but it’s also thanks to the ease of use that contactless offers customers. This has helped accelerate Software Point of Sale or ‘SoftPoS’ adoption amongst SMEs and enterprise retailers, with a total of 6 million merchants taking advantage of the technology in 2022 according to Juniper Research.
SoftPoS or ‘Tap to Pay’ technology – is a software solution that allows vendors to turn their phones or mobile devices into contactless payment points. This has made life for small businesses easier, as they no longer have to fork out large sums of money for traditional Point of Sale (POS) terminals, i.e. card readers, or ‘make do’ with outdated payment software.
In light of Apple’s announcement to allow third-party SoftPoS providers to deploy their technology on iPhone last year, adoption is expected to increase further. By 2027, it’s forecast that there will be up to 34.5 million merchants by 2027 – nearly a 500% increase from today. With more payment giants like Paypal and Venmo announcing they will support contactless transactions through their iOS apps in the months ahead, what else is in store for SoftPoS in 2023?
Apple’s role in market consolidation within SoftPoS
Apple’s move to integrate the technology with iOS devices will expand SoftPoS’ usability across mobile operating systems – significantly boosting the size of the addressable market for vendors. For the first time, Apple users will be able to offer Tap-to-Pay solutions which have traditionally been limited to Android devices only.
This will ultimately bring greater awareness and adoption of SoftPoS as we see increased familiarity with Tap-to-Pay solutions among businesses and consumers alike – as they’re no longer bound by the constraints of the type of phone they use.
While the SoftPoS on iPhone rollout currently only applies to the US market, it’s fair to assume this will expand internationally at some point – aiding the normalisation of ‘Tap to Pay’ solutions en masse in the months and years ahead.
The next wave of solopreneurs
The events of the last year will also continue to have a ripple effect over the next 12 months. For example, we’ve seen the tech industry undergo mass layoffs due to a challenging economic environment and rising global inflation.
With large numbers of highly skilled talent out of work, the phenomenon of solo entrepreneurship is likely to see an uplift – as it did during the pandemic – over the next 12 months. Born in a digital-native environment, individuals from this released workforce can now set up their own businesses and run them on mobile devices, as opposed to legacy infrastructures.
This could prove another sizable opportunity for SoftPoS vendors in the coming year, as we predict to see more small businesses sprout as a result of ongoing redundancies.
The growing importance of SoftPoS orchestration
As the market rapidly develops, so too does the choice and ease of onboarding. Financial institutions and retail technology providers can now use a SoftPoS orchestrator to help them deploy Tap-to-Pay solutions quickly and easily for their merchant customers, instead of having to create their own mobile solutions. This saves them time and money – both crucial resources for any business and especially in a challenging economy.
Partnering with a SoftPoS orchestrator is a cost-effective way of providing mobile payment solutions without having to worry about waiting on new software and security updates. With an orchestrator, this is done automatically – making this a much lighter lift with no requirement for technological know-how.
As SoftPos orchestrators are acquirer agnostic, this means they can help businesses provide a SoftPos solution to their own retail customers, regardless of the existing acquirer that they’re already using.
An additional benefit here is that a wider pool of merchants are able to benefit from the technology – growing the overall size of the SoftPoS market. Orchestrators, then, have the ability to drive wider adoption of the technology globally, reaching a bigger audience of end users and advancing the mobile payments industry in emerging markets across the world.
The increased popularity of digital and contactless payment options has driven exponential growth in the SoftPoS market in recent years. The next 12 months will see the technology enter the mainstream, as Apple starts to allow more third-party SoftPoS providers to deploy their solutions on iPhones.
The timing coincides with several emerging opportunities for the technology, including a potential uptick in the number of solopreneurs and mobile-first businesses. This combination of factors will see more financial institutions and legacy technology players work with SoftPoS orchestrators to bring Tap-to-Pay solutions to market in 2023 if they want to stay ahead of the competition and keep up with ever evolving customer demands.
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