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How long does on-premise accounting software have before it becomes ‘unusable’?



Paul Sparkes, commercial director for cloud native accounting solution, iplicit


As hybrid working becomes the ‘new normal’ for thousands of organisations, the reliance on numerous cloud-native technologies has grown in importance.

Today, not only do these tools need to support flexible working practices, but it is vital that they ensure workforces remain productive and help them to enjoy a work-life balance – all without compromising secure access and the functionality they would be used to when working in the office.

That’s led to a surge in the use of software that facilitates an identical working environment no matter where someone is based or what device they are using. And that’s only possible with the adoption of cloud-native technologies – whether for CRM, HR, finance, LMS and so on.

There is now a requirement for virtually every organisation to adopt systems that address the hybrid working needs of the average employee. Even if they are only working from home one day a week, these systems still need to accommodate secure, remote access as if they were sat at their office desk.

It is therefore no surprise that the rise in the adoption of cloud-native tools has soared over the past two years. They have provided a lifeline to many organisations that required a greater level of functionality and sophistication during the pandemic, with the added benefit of only needing a Wi-Fi connection. For the businesses that provide hybrid working options to their staff, cloud technology is now considered a must-have in their software stack rather than a ‘nice-to-have’.

So, with this is mind, what does that mean for the future of on-premise technology? Is its end-of-life imminent?

The truth is, while cloud adoption has grown in popularity, on-premise tools are still much-utilised for thousands of organisations. They will continue to remain the preserve of many businesses too – in particular for those who might be reluctant to change and view a cloud migration project as more of a hinderance than a help.

So, while on-premise isn’t exactly ‘dead’, the way in which cloud tech has been utilised throughout the pandemic has underlined that there is a much more efficient way of working – with greater flexibility and functionality as a standard. And what that will mean for on-premise soon is that it will become a ‘dead end’ for growing firms that no longer want to cope with clunky, existing systems and instead want more superior technology.

Even for the businesses who continue with a ‘better the devil you know’ approach, they will come under increasing pressure when seeking to integrate finance with other departments across their organisation. That’s because while on-premise finance will work in isolation, it’s very nature of being architected for a local network – with local servers – prevents any effective integration with any cloud-native solutions being used in other departments.

Even if migrating to hosted, on-premise (also known as ‘fake cloud’), the problems of integration persist to the point of being unusable as an integrated system.


The cloud choice

Today, cloud-native software is the number one choice for most small organisations. Taking Xero as a prime example, it currently has over a third of a million UK users, and has provided a wake-up call for other vendors to either ‘shape up or ship out’.

Additionally, QuickBooks found a comparable offering with a true cloud service. Most accountants in practice will advise either solution because they represent a safe and simple choice for those that require cost-effective, entry-level cloud accounting software. Similarly, at the other end of the scale, it’s common knowledge that Microsoft Dynamics GP, NetSuite and Sage Intacct represent cloud offerings for larger enterprises, but for a princely annual sum.

While these options appear to present vast choice on the surface, there is a huge gap that’s consistently been overlooked – the mid-market.

Typically, organisations with 30-300 employees have requirements that are too complex for entry-level software, but insufficient budgets for the £50,000-plus implementation and training costs needed, not to mention the annual licence fees that typically start at around £30,000… and rise quickly.

So, for the organisations that need to move to a true cloud system but don’t have an obvious, affordable next step with their existing provider, where do they turn? That alone is a huge reason as to why many accountants in practice are reluctant to advise medium-sized businesses.


Mind the gap

There is a shortage of knowledge within the sector when it comes to addressing mid-market requirements and providing the appropriate advice around system upgrades. As an example, organisations with multiple legal entities – and which require approval workflows, enhanced reporting, levels of automation and unlimited analysis of real-time data much like larger companies – have been severely underserviced by the few options on offer.

As a result, they have become adept at compensating for system shortfalls. Battling for too long with multiple Excel spreadsheets and manual intervention, users have tried to manage several copies of software to cope with numerous legal entities. Unfortunately for many, that has led to inefficiency, a multitude of frustrations, increased human error and the inability to see organisational-wide, real-time data to make business-critical decisions.

For years the lack of choice has posed a huge problem for many accountants who haven’t been able to offer the appropriate guidance towards a particular system either – because it simply didn’t exist. Most options for larger companies, for example, were either on-premise, overly complex and unaffordable, or posing as a fake cloud alternative that ultimately failed to deliver on what was required, and when.


Emerging solutions for the mid-market

But there is light at the end of the tunnel for a multitude of these fast-growing businesses and organisations that feel they’re being held hostage to their legacy software. Over the course of the last few years, new technologies have emerged specifically to fill this vital market gap. Affordable choices are now on offer, supporting thousands of medium-sized organisations to move their finance departments to the cloud seamlessly.

With no legacy customer base to placate or on-premise income streams to protect cloud-native developers have the luxury of starting from scratch, and no customers to lose. In response, they’ve created comprehensive finance platforms that can be accessed from any device, from anywhere – as long as the user has a browser. And these tools come complete with additional business process functionality such as approval workflows, project costing, time-sheet submission and expense management, to name a few.

The birth of entry-level ERP – where systems can be implemented in days rather than months – presents a new era of accounting software, one with serious capability and minus the hefty price tag, punitive implementation fees or unnecessary complexity.


Turning challenges into opportunities

However, even with more ‘go to’ recommendations now available, accountancy practices have understandably been reluctant to get too involved when it comes to specifying more complex systems for their customers. They simply don’t want to get it wrong.

In addition, the industry continues to face its own issues – automatic returns, Making Tax Digital and the increasing functionality in entry-level applications all result in the historic transactional part of the business being eroded. Accountants are therefore finding themselves having to move ‘upstream’ to advisory-based offerings and more complicated challenges.

However, where there are obstacles, there are also opportunities. Increasingly, clients are turning to their accountants and want to be educated on the right choice for their organisations. After all, they were happy to recommend Xero or QuickBooks before, so what happens next when the organisation outgrows these systems? They need reassurance when upgrading.

So, while prescribing a next-step solution might still be a step too far for many, accountants who are able to understand the options and guide clients towards an appropriate tool that works for them – as well as in their own practice – should result in a far better outcome rather than letting them fend for themselves and ultimately waiting to hear what they chose.



CBDCs: the key to transform cross-border payments




Dr. Ruth Wandhöfer, Board Director at


If you work in finance, you’ll have been hearing a lot about central bank digital currencies (CBDCs) and the moves different markets are making towards using, regulating and evaluating the viability of moving to an economy based on digital currency.

We are already seeing progress in the research, piloting and introduction of CBDCs into the financial system. The Banque de France for example, recently launched its second phase of CBDC experiments in line with the “triple digital revolution” unfolding in the financial sector. The infrastructures of financial markets and fintechs, however, are not prepared to accommodate their security, stability, and viability.

This could be an issue in the not too distant future. Each year, global corporates move nearly $23.5 trillion between countries, equivalent to about 25% of global GDP. This requires them to use wholesale cross-border payment processes, which remain suboptimal from a cost, speed, and transparency perspective. In fact, the G20 cross-border payments programme considers improving access to domestic payment systems that settle in central bank money, as one of the key components in facilitating increased speed and reducing the costs of cross-border payments.

The current state of cross-border payments

International transactions based on fiat are currently slow, expensive, and highly risky due to today’s disconnected financial infrastructure, messaging, and liquidity. Wholesale cross-border payment settlement can take 48 hours or longer, which is not practical in today’s digital world. Even if not every market moves to CBDCs, in an increasingly digital era, cross-border settlements between central banks will unavoidably involve dealing with CBDCs. So, not only will we have different currencies, we’ll have different technical forms of currency being exchanged – digital and fiat – as markets adopt CBDCs at different rates, adding another layer of complexity to cross-border settlements.

While there is much anticipation about the opportunities CBDCs can bring, the adoption of this technology will only be widespread if payment and settlement capabilities are overhauled to allow for new innovations in currencies.  This need for transformation represents an opportunity to redesign existing infrastructure to support cross-border CBDC transactions.

The current cross-border payments system involves correspondent banks in different jurisdictions using commercial bank money. Uncommitted credit lines used in cross-border transactions are a potential risk for any bank that relies on credit provided by a foreign correspondent bank. Interestingly, there is no single global payment and settlement system, only a complicated network of interbank relationships operating on mutual trust. While trust has allowed financial systems to function smoothly, when it begins to fail, as it did during the 2008 financial crisis, the result can be catastrophic.

Following the crisis, the Bank for International Settlements (BIS) implemented the Basel III agreement, which required banks to maintain additional capital against correspondent banking account exposures. These risk-weighted assets impose a costly capital charge on positions held by banks at other banks under correspondent arrangements. While this framework helps combat risk, it neglects to address the inherent problems in traditional correspondent banking that contribute to these risks.

Making the case for CBDCs

CBDCs can offer an improvement in settlement risks and are certainly thought to have potential benefits by the BIS. If implemented correctly, wholesale CBDCs can indeed accelerate interbank transactions while eliminating settlement risk. They can also encourage a more efficient and straightforward method of executing cross-border payments by reducing the number of intermediaries.

It is likely the evolution towards CBDCs will initially see the financial market supplement rather than replace existing payment instruments with new types of digital currency. CBDCs will coexist with current forms of money in a wholesale context, and their payment rails will also work alongside the existing payment systems. In simple terms, CBDCs will need to be linked to the broader capital markets ecosystem and applications such as securities settlement, funding, and liquidity.

If built with an innovation-first mindset, the future of banking infrastructure should provide full interoperability and convertibility between fiat, CBDCs, and any other type of digital money used in wholesale payments.

The future of CBDCs

To unlock the full potential of CBDCs, a ‘corridor network’ will need to be formed. This involves combining multiple wholesale CDBCs into a single, interoperable network under common governance agreed upon by all central banks involved. The legal framework of this platform would then allow for payment versus payment (PvP) or, where applicable, delivery versus payment settlement.

Practical wholesale CBDCs appear to be on the horizon, either as a supplement to existing financial systems or as part of a transition to a digital, cashless world. Looking ahead, central banks would benefit from collaborating with fintechs that provide innovative cloud native technology to enable seamless wholesale cross-border payments without interfering with the flow of funds. If wholesale CBDCs are to become a reality, fintechs must be prepared to accommodate them.


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Green growth: The unstoppable rise of climate technology investment




With the investment community focusing more and more on renewable technologies, investor interest is at an all-time high. Ian Thomas, managing director, Turquoise, reviews the current investment landscape and highlights the opportunities for investors keen to capitalise on this growing trend.

Green, or climate, finance is a label for providers of finance who are supporting investments seeking positive environmental impact. The label covers investments in green infrastructure, venture capital investment in clean technologies and renewable energy. Green finance has grown by leaps and bounds in recent years, supporting public wellbeing and social equity while reducing environmental risks and improving ecological integrity.

Worldwide, energy investment is forecast to increase by 8% in 2022 to $2.4 trillion, according to a new report by the International Energy Agency, with the expected rise coming mostly from clean energy – $1.4 trillion in total. To put this rocketing figure into some perspective, clean energy investment only rose by 2% annually in the five years following the signing of the Paris Agreement in 2015. Energy transition investment has some way to go, however – between 2022 and 2025, to get on track for global net zero, it must rise by three times the current amount to average $2,063 billion. [1]

Turquoise has been active for almost 20 years as a venture capital investor and adviser to companies in the climate technology space that are raising capital and/or selling their business to a strategic acquirer. Reviewing current industry investment news, as well as drawing on examples from the portfolio of Low Carbon Innovation Fund 2 (LCIF2), managed by Turquoise, I have commented below the latest on the renewable energy trends most piquing investor interest.


Solar PV

Renewable power is leading the charge when it comes to investment, with wind energy and solar PV emerging as the cheapest option for new power generation across many countries, and now accounting for more than 80% of total power sector investment. Solar power is responsible for half of new investment in renewable power, with spending divided roughly equally between utility scale projects and distributed solar PV systems.

This huge increase in solar spending, which continues in spite of supply chain issues affecting raw material delivery, has been driven by Asia, largely China (BloombergNEF, 2022). Meanwhile, Europe is re-doubling its efforts to achieve an energy transition away from Russian gas and other fossil fuels, building on investment that was already rising steadily prior to the outbreak of war in Ukraine. Germany, the UK, France and Spain all exceeded $10 billion on low-carbon spending in 2021.[2]



Last year was a record year for offshore wind deployment with more than 20GW commissioned, accounting for approximately $40 billion in investment. The first half of 2022 saw $32 billion invested in offshore wind, 52% more than in the same period in 2021 (BloombergNEF, 2022). Taking into account also onshore wind, in 2021 investment was spearheaded by China, followed by the US and Brazil.[3]

In the UK, suggested targets include plans to host 50GW of offshore wind capacity, as well as 10GW of green and blue hydrogen production, by 2030. Investors will naturally be encouraged by proposals to simplify the planning process across the board for renewable projects.[4] France and Germany have also increased their offshore wind targets, signalling further support for investment.


Decarbonising housing: the business opportunity

The need to decarbonise residential housing, made all the more urgent by current energy prices, also offers substantial scope for investment. The gas price spike is naturally increasing interest in technology such as electric heat pumps, which had already enjoyed 15% growth in 2021 albeit from a very low base.

Recently, Turquoise announced an investment by Low Carbon Innovation Fund 2 (LCIF2) in Switchd, which operates MakeMyHouseGreen, a data-driven platform that allows homeowners to source and install domestic renewable energy generation, including solar panels and battery storage with other energy saving products in the pipeline. The investment will enable Switchd to roll out the MakeMyHouseGreen platform to a much larger number of customers. The latest episode of the Talks with Turquoise podcast series saw us interview Switchd co-founder Llewellyn Kinch about the UK energy market and national transition to decarbonisation, covering the rise of residential renewable energy and energy efficiency.


Adapting to the low-carbon economy

Meanwhile, investors should not forget opportunities on the other side of the energy market. Renewables are undoubtedly exciting investors, but there are also opportunities for fossil fuel companies to adapt their business models to the low-carbon economy. Turquoise advised GT Energy, a portfolio company from our first fund that develops deep geothermal heat projects, on its sale to IGas Energy, a leading UK onshore oil & gas producer. Under IGas ownership, GT Energy will progress its flagship 14MW project to supply zero-carbon heat to the city of Stoke-on-Trent through a council-owned district heating network.


A broad investment landscape

Forecasts show that renewables will increase to 60% of power generation in Europe by 2030, and 40% in the US and China by the same date.[5] As demand rises for climate technology, the investment opportunities in green finance are far broader than they ever have been. Undoubtedly, as the energy crisis continues, investor interest will continue to soar to even greater heights.


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