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How fintech is key to empowering climate action

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The Green Revolution In Investing - Sustainable Investing

Attributed to: Rory Spurway, CEO & Founder of CarbonPay

 

As human activity continues to have a significant impact on the climate in unprecedented ways; particularly through disconcerting levels of CO2 emissions that contribute to global warming, there is an urgent need  for sustainability to be an integral part of the way industries operate. Research has found that 6 in 10 consumers think UK-based businesses need to do more to combat climate change and cut emissions. To meet the target of reducing 100% of emissions by 2050, innovation and accessibility are essential.  This global crisis paves the way for fintech, a major driving source of innovation, to create new ways of decarbonisation and climate action.

Rory Spurway

Because of this positionality, the  growing fintech sector has a significant role to play when it comes to mitigating the worst of climate change. For instance, new technologies such as data analytics, artificial intelligence, and creative innovations within the payments sector have disrupted how businesses can make a positive impact on the environment. One of the most significant ways that the fintech industry can make strides towards reducing emissions comes from partnerships with other businesses. The largest firms, such as Visa and MasterCard, are already known for their environmental sustainability efforts and work with fintech companies to develop the right sustainability aids, such as carbon reduction tools. Fintech can also be used as a catalyst to enforce positive climate action from a B2B standpoint, which is particularly key in a time where many of the biggest companies globally are currently failing to meet their sustainability targets.

 

How can sustainable fintech tackle greenwashing?

A way companies demonstrate commitment to sustainability and climate action is through green pledges and activities, such as tree planting initiatives. While these are  well-meaning, they can’t be the only avenue taken to combat climate change. Relying solely on one-dimensional initiatives runs the risk of losing environmental efficacy and sometimes are unfortunately used for companies to present a sustainable front without following through — more commonly known as greenwashing. The fintech sector has the power to help companies combat greenwashing concerns, through changing the behaviours and mindset of C-suite executives, prioritising decarbonisation and  by providing tools for tracking emissions. Backed by technology led solutions, the fintech sector actually has a lot of power and capabilities when it comes to changing the face of sustainable action.

 

Changing the mindset at the C-Suite

One of the major reasons sustainability is still not properly prioritised is that not enough CEOs think like CSOs. CEOs tend to focus more on business and financial operations rather than on CSR, leaving that to CSOs (if the organisation has one). But what does this mean for climate action and sustainability? By adopting a CSO mindset and thinking about climate issues in the same way that CSOs do, CEOs and other C-Suites can make sustainability a key priority for the company rather than separating the two operations. In the same way that everyone has a part to play in ensuring the  wellbeing of our environment, it’s the joint responsibility of the C-Suites to ensure the company is doing its part as well.

 

Tracking emissions – the first necessary step to decarbonisation

The concept of digital payments is not new, but its development has transformed the way people live, and pay for things daily. Our spending behaviours are largely reliant on technology and have also had a significant impact on the environment, and this is very much tied to carbon emissions. Because of this, it’s essential we adopt tools that enable people to mitigate the negative impacts that their spending habits are having on the environment . One way in which fintech is leading this is by providing the tools to track carbon emissions, and subsequently creating a simple way to offset these emissions. Companies are able to directly and transparently view the impact of their purchases, and with the help of specialised fintech companies, these emissions can be offset. Enabling businesses and their employees to take these easy and small steps to take responsibility for their carbon footprint ensures that sustainability remains accessible and constant , even at a B2B level.

 

 

 

 

 

 

 

Business

How app usage can help brands increase their online revenues and customer retention

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Arunabh Madhur, Regional VP & Head Business EMEA at SHAREit Group

 

Brands are continuing to invest heavily in the e-commerce market despite current market and economic challenges – and they need to. Indeed, the current global e-commerce market is valued at around $5.5 trillion. Further to that, estimates show that online retail sales will reach $6.7 trillion by the end of 2023 – and e-commerce making up 22.3% of those sales.

So despite the economic and market climate, businesses must still plan for success and cater to customer demands to make the most of the global e-commerce opportunity.

 

Mobile apps are key

Mobile apps are now a fundamental component of retail, as they provide customers with a convenient and engaging way to shop from their phones. The past couple of years has been rocket fuel for digital transformation, providing an opportunity for the retail industry to innovate. Whilst global trends continue to point to the user growth of Facebook, TikTok and Instagram, the trends underneath the headlines highlight significant opportunities to drive new customer acquisition, which in turn demands a targeted customer retention strategy from companies.

According to research from Baymard Institute, 69.82% of online shopping carts are abandoned and with demand expected to continue, pressure is growing on retailers to expand current offerings and create personalised experiences to tackle this. One of the big challenges e-commerce companies face, though, is analysing and maximising the behaviour of users, and bringing down the cost of their marketing and engagement against how much is earned through a customer making a purchase.

To meet customer demand, mobile apps offer a variety of features such as push notifications, product recommendations, exclusive discounts and offers, and easy checkout processes, to make the shopping experience easier for customers. By leveraging the power of mobile technology, brands can create an immersive shopping experience tailored specifically to their customer’s needs, and this in turn helps increase customer loyalty, customer return rates, and maximise online revenue.

 

Re-targeting and re-engaging customers

Brands should focus on re-engaging with returning consumers through a personalised strategy as this can help increase the lifetime value of users, which in turn helps brands bring the cost of their marketing down knowing that brand loyalty has been achieved. According to research from Google and Storyline Strategies study, 72% of consumers are more likely to be loyal to a brand if they offer a personalised experience.

Optimising the online shopping experience is crucial in retaining customers. Today, consumers need a more ‘human’ touch, i.e., smart product suggestions based on buying history & behaviour that helps build a one-to-one relationship between brand and buyer. In particular, push notifications haven’t just enhanced personalisation but also increased app engagement by up to 88%. Push notifications have also proven to get disengaged users back, too, with 65% returning to an app within 30 days of the push notification.

Another strategy to consider is the option of adding buy now pay later (BNPL) options at checkouts for customers. Brands that add the option of financing at the checkout allow customers to spread the cost over time, which according to Klarna has resulted in a 30% increase in checkout conversation rates.

Publisher platforms allow brands to leverage their reach and sticky user base. Especially with open platforms such as SHAREit, which can help e-commerce brands create a strong revenue conversion with higher average order value with unique retargeting and user acquisition solutions. Because users are not just sharing product links, but also sharing e-commerce apps and deals among their community. Users of these publisher platforms are also encouraged to share products and apps through platform activities.

 

What the future of e-commerce holds for brands

E-commerce is positioning itself as a key facet in retail, and its future. With Advancements in technology, customers can access various products and services worldwide through their smartphones – making shopping more accessible than ever. Brands must put consumers at the heart of everything they do, like never before. Offering incentives and payment options, personalising customers’ experiences and re-engaging them, as well as targeting new customers, in an effective and un-intrusive way, are all ways in which they can influence purchasing decisions and improve retention figures.

 

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Business

Does the middle market have a financial edge?  

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Ilija Ugrinic, Commercial Solutions Director at Proactis

 

Companies tend to look up the ladder when searching for ways to improve efficiency and business performance. What are larger competitors, or others outside their industry, doing right that they can learn from and implement?

What smart technologies or bright ideas do they have that could create efficiencies for them, too?  

As we enter yet another likely volatile year for business, punctuated by recession, should businesses continue to only look up? And could the approach of a slightly smaller business offer more of a competitive edge? 

Large corporates tend to pioneer innovation in automation by simple virtue of the resources they have. Home to transformation directors and departments, with the ability to implement large overarching software systems, they pave the way for others and are often the first to digitise their source-to-pay cycle at pace. 

Ilija Ugrinic, Commercial Solutions Director at Proactis

While growing businesses understand the merits of full automation, implementing it is often too expensive and it doesn’t bring the rapid realisation of benefits that they need. They need to consider what will bring them the biggest return on investment – and the reality is that those in the middle market don’t necessarily need all the elements of an ‘all-doing’ piece of software. What’s more, without dedicated personnel to project manage a transition, they frequently lack the currency of time to be able to comfortably transform working practices, and take staff with them on the journey, without taking resource from other areas of the business.  

For SMEs, digital transformation has never been quite as seismic a shift. Instead, they tend to take a modular approach, employing digital solutions only for particular areas of their finance department, where they need them. This has never been a particularly strategic move. Rather, for a growing business that values quick results and watches their outgoings with greater scrutiny than their larger counterparts, it’s something that suits them better. A modular approach also comes with very little disruption and can be implemented relatively seamlessly into their existing organisational setups. 

But while growing businesses are opting for a modular approach because it’s the most cost and time effective option for them, the benefits go far beyond that. The beauty of a modular approach is that it is agile. The last three years – with pandemics, an increasingly challenging climate and shifting geopolitical tensions impacting our global economy – have only served to remind us of how suddenly, and drastically, a business landscape can change. The companies that have weathered the storm are those that have reacted and adapted quickly – those that have been capable of changing the way they do things with little impact on day-to-day operations. A modular approach can offer just that.  

Businesses using modular finance technology can integrate small solutions that sync up with the rest of their processes, quickly and seamlessly – and these systems can be integrated into their existing Enterprise Resource Planning (ERP), too. There’s no restriction of a monolithic or aging piece of software either – finance teams can add and update small solutions to their daily operations without the upheaval of having to replace or update large IT infrastructures or wider working practices within the business to accommodate the new software.

Unrestricted by entrenched and hard-to-change systems, the speed with which SMEs are able to react to market changes is miles ahead. A prompt software add-on to manage risk, or create a quick fix in response to a market shift, can be virtually a knee-jerk reaction. SME’s abilities to bend and flex to today’s world efficiently is seeing them reap the benefits of a modular approach. It’s lean, it’s fast and it’s facilitating their growth with a strong competitive edge. And as some of these companies’ growth propels them into the large corporate sphere, they’re choosing to keep a modular approach to finance.  It will certainly be interesting to watch those middle-sized companies which grow to the extent that they find themselves competing in the same space. With no financial remodelling to assume a large ‘all-doing’ piece of software, they’ll be competing against their counterparts with completely different tools in their arsenal.  

With technology, working life and business needs continuing to change day to day, we have another year ahead of us that will see companies running to keep pace with each other – and fast-growing companies’ approach to finance could be the silver bullet that enables them to catch up with, and even take on, big enterprises. It might just give them a competitive edge against large corporates in these turbulent times.

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