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PANDEMIC PAYMENTS HAVE TRANSFORMED RETAIL WITH SAFER, SMARTER AND FASTER WAYS OF WORKING

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By Animesh Chowdhury, Founder and CTO of Goodtill by SumUp

 

How customers pay for goods in a retail environment has changed immeasurably in recent times.  The idea of a predominantly cashless society used to be the rhetoric of forward-looking pundits, but now those buying on-line and shopping in-store are encouraged to use, if are not completely limited to, contactless payments. Government backed schemes, such as raising the contactless limit on credit and debit cards from £30, to £45 and now £100 have made this much easier for the consumer. As a result of such incentives, in the first quarter of 2020 alone, Mastercard recorded that cashless payments grew by more than 40 percent globally and YouGov research found that ATM withdrawals in the UK had fallen by around 60 percent over lockdown.

Undoubtedly, the pandemic has accelerated this change in process and behaviour, but retailers are now realising that it is also extremely convenient for themselves and their customers. They’ve been forced to live test new ways of working and have seen consumers adapting equally as fast.  Aside from bringing in new customers and keeping existing loyal customers, businesses have also recognised there are huge efficiencies to be gained. This includes improved processes, interactions with customers, business practices and insights that can make a quantifiable difference to the bottom line.

 

Faster and higher transactional value

On average, contactless transactions take around 2 seconds, 3-5 seconds quicker than Chip & PIN and 12 seconds faster than lengthy cash payments. Over the course of the working day this time adds up, most notably cutting queuing times and increasing customer satisfaction.

Additionally, although responsible retailers do not want to be seen to encourage spending without limit, cashless payments are a simple way to increase revenue. Drazen Prelec, a pioneer in the field of neuro-economics at MIT, discovered that people are more likely to spend without limit with card payments compared with cash.

 

Animesh Chowdhury

Less risk and more convenient 

Cash payments not only mean slower transactions, but also bring with them a host of other tasks such as refilling the register with change, reconciling cash at the end of the day and making bank deposits. All of these take up valuable time and expose businesses to the vulnerabilities that come with human error. Going cashless eliminates these tasks and brings the added benefit of maintaining a more accurate and timely watch over the business financials.

Not only do new payment systems bring with them convenience for both businesses and customers, but for many retailers they have become the core system for managing data and workflows relating to inventory, by helping to ensure businesses source the right products, stock them in the right quantities, price them correctly, and as applicable, ship them on time in the fulfilment methods the customer desires. Synchronising inventory data with POS sales reports will ultimately lead to smarter, better-informed purchasing decisions. Not only will this help a business to decide what to keep or discard from the merchandise list, but it will also assist with decisions about minimum stock-levels and re-stocking schedules.

 

Safety & Security  

Another key benefit to going cashless is the increased security it brings businesses. With less trips to the bank and less cash on the premises, retailers are a less attractive option to thieves. Remote cash handling also eliminates risk of fraud and money laundering, making online financial transactions, when used alongside the appropriate precautions, a much safer option.

 

Keeping your core customers

Moving to cashless payments also provides the ability to gain better access to invaluable data, such as customer buying patterns and preferences. This means that organisations can create tailored offers that better suit customers, which is a vital tool to cultivate loyal and long-term customers in an age where shoppers have more choice than ever before.

The move to cashless payments increases the businesses’ opportunity to offer a personalised experience to the customer including communications, discounts, offers or unique rewards based on their profile or previous purchases. Retailers can use these improved offers or perhaps a points-based loyalty programme to promote more customer loyalty, which in turn increases repeat transactions and supports business growth.

 

Looking ahead

As we peer tentatively into the years ahead, it seems misguided to not picture a future that is heavily reliant on cashless POS systems. Although in 2019, UK Finance published a report that predicted that just 9% of all payments will be cash by 2028, it seems likely that the events of the past 2 years have changed the face of payments far more than anyone could have predicted.

As we navigate our way out of lockdown, it appears we will be entering into an age of revolutionised sales transactions. There’s no doubt that COVID-19 has accelerated the use of contactless payments, but the benefits have proved to exceed the cause of temporary public protection. With faster transactions, added security, easier personalisation for customers and more it seems cashless payments are here to stay.

 

Banking

LEGACY INFRASTRUCTURES MUSTN’T HOLD BACK INNOVATION IN FINANCIAL SERVICES

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By

Ian Perry, Principal Solution Architect at Zscaler

 

We are living in a changed world; one of hybrid home/office work and customers who may never return to bank branches and the services of the high street. According to RFi Group, 73 per cent of UK consumers interact with their main bank via digital banking at least once a week, and only 23 per cent believe nothing can replace what they get in a branch. Meanwhile, institutions including JP Morgan, HSBC and Nationwide have all indicated an intention to retain new higher levels of homeworking.

Now that employees work from a multitude of locations and customers bank and manage their money online the race is on to adapt processes, systems and support structures for safe, secure and productive homeworking and digital access for customers. Inevitably, this calls into question legacy infrastructures in financial services and how they might impact digital progress.

 

New tools, old systems?

The question is, how can banks and other financial institutions securely provide a higher level of remote access to their systems and applications when incumbent infrastructures were developed for an entirely different time?

Of course, the first thing to note is that banks aren’t coming at the problem from a standing start. Oft-cited legacy infrastructures have been added to over time so that many set-ups are now an on-premise/cloud-hosted hybrid. In fact, the finance sector has invested heavily in cloud infrastructures and cloud-based office applications.

The issue is how to harmonise this set-up so that it works for users and organisations as a whole. Here, there is work still to be done. It’s often the case that core banking applications remain in mainframe on-premise networks, whilst other operational tools reside in the cloud. Cloud-based Office 365 is a case in point. It supports digital working, as organisations need it to, but a range of its benefits and functions are at odds with legacy network setups.

Inevitably, when a product or service innovation reaches implementation planning stage, the starting point is the existing network, its systems and processes. The hard part is flipping this approach to assess what the resulting experience will be from the user point of view, but that is exactly what’s needed. It’s an approach that competing market disruptors have been ideally placed to adopt from day one.

However, that needn’t mean that financial institutions must completely overhaul their legacy infrastructure – something that would be expensive and complicated. They can still fully capitalise on the benefits of cloud-based services, among them flexibility, productivity, business continuity and the right customer and user experience.

 

Zero Trust without friction

One way is to take a ‘Zero Trust’ approach. As a result of recognised risks, 72 per cent of companies are prioritising the adoption of such a security model. This resets a data security approach from one that traditionally secured the perimeter to one that protects users, devices and business resources.

It’s a shift in emphasis from securing the network to securing each access and doing so without introducing friction into processes for users. We can think of legacy digital protection methods as a visitor getting a key from reception and being allowed to wander around the building, and compare that to a frictionless cloud experience in which a security guard shows the visitor directly to the room they need.

The Zero Trust model lends itself to high levels of remote access, which is exactly the situation organisations are now in. Employees work from anywhere, from a range of devices, and customers access services previously provided in-person online. Applications are no longer exclusively within the data centre, they are outside the network perimeter meaning that traffic must be enabled to run securely through the internet, rather than through corporate IT. Doing so not only equips organisations for the way things are today, it can also reduce the cost of individual site maintenance and enable the full benefit of cloud-based tools.

The technology now exists to make high levels of security completely invisible and so, with a growing number of security processes now taking place in the cloud, educating customers will be key. The industry must come together to improve user interfaces to signal what’s taking place behind the scenes.

With the right security approach, financial services can deliver on new access priorities to support their workforces and serve customers. Convenience, as well as security, should be the aim along with a strategy that ensures legacy doesn’t hold back innovation. That way, banks and other finance institutions can begin to fully capitalise on the benefits of cloud, adapt to meet customer demands as they evolve and compete in a disrupted market.

 

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Finance

HOW CFOS CAN TAKE A HOLISTIC APPROACH TO ENTERPRISE AGILITY

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By

Frederic Portal, Financials Product Marketing Director, at Workday

 

Whether brought on by a market shift, technological innovation or as we have seen over the last year, a pandemic, change in business is constant. But to survive it, or even thrive in it, organisations must find a way to adapt rapidly, while remaining strong and stable in the long-term. This is where enterprise agility and the CFO come into play. In theory, the concept of enterprise agility — a company’s ability to outperform the competition and drive growth in new, ambiguous situations by learning and adapting — sounds like something every business should inherently do. Yet, many are trying to introduce technology or implement processes before defining and establishing what agility really means to them as an enterprise. In other words, embracing agility should be a holistic approach and crucially must be led by the CFO. The CFO and financial team are instrumental in making sure that a business can lead digital transformation, steer through uncertainty and ultimately, embrace a culture with agility at its core. However, in order to achieve enterprise agility successfully, there are some simple factors that a CFO should consider when guiding their organisations to become truly agile.

 

Enterprise agility starts with the CFO

The last year made it clear that the finance function is leading business recovery. In fact, a Workday survey with C-suite leaders showed that 37 percent of respondents agree that finance is the function most likely to influence digital growth in a business. Overnight, CFOs and their teams had to rethink their processes and leave behind legacy technology in order to keep up with the continuous change that the pandemic now demands. Naturally this prompted a company-wide transformation.

To make sure this transformation towards agility doesn’t stop at technology adoption, CFOs should put practical steps in place, working in collaboration with all senior leadership, from IT to Sales and HR, to build a plan that will guide a wider change within the business. Once a plan is in place, it must be communicated and then reinforced to the rest of the workforce by providing them access to real-time data and cloud-based models. Led by the CFO, this will give crucial insight into payroll, cash flow and planning scenarios. In turn getting the entire organisation on board, creating uniformity and ensuring teams are all working from the same source of truth to move the business forward.

 

Embracing an agile mindset 

When incorporating new agile processes, CFOs must work with all business leaders to define and integrate an agile mindset. Enterprise agility isn’t just a process, it needs to be baked into the heart of the organisation — and its digital transformation agenda — so that teams across the business embrace qualities such as quick thinking, being perceptive and taking action. Adopting this way of thinking and behaving is the foundation for any agile organisation and must begin with the finance department.

Take Aon as an example. The multinational British professional services firm sells a range of financial risk-mitigation products, including insurance, pension administration, and health-insurance plans across 120 countries. By March 2020, COVID-19 resulted in the company’s entire team working from home, which meant Aon’s finance team had to do a fully-remote close. While this had never been attempted before, Aon had baked agility into its financial processes by investing in the right cloud-led, and agility enabling technology. With up to date data, and transparency across the regions, Aon’s finance team was able to close remotely, with one region even being able to close a day early.

 

Empowering agility 

Transparency and accessibility are also key to enterprise agility. So, it’s critical that CFOs empower all departments to work from the same data sources, assumptions and outcomes in their workflows. It is only by prioritising digital transformation and having technology structures up-to-date, that businesses can experience real results, and fast.

Take Netflix, for example. Even in this streaming powerhouse there were improvements to be made to back office processes. Netflix’s back office systems had usability issues due to clunky workflows and limited visibility. Led by the CFO and investing in transforming the back office into one unified system, Netflix was able to introduce an agile mindset across the business that was vital in turning this around. For instance, every time Netflix creates an original show or movie they have to create a legal entity and set up the banking and with Workday it just takes minutes to add it to an existing framework. Implementing the right technology resulted in more efficiency, more agility and fewer silos among the IT, Finance and HR teams.

 

Taking a holistic approach to enterprise agility

The disruption of 2020, and impact COVID-19 has had, is showing no signs of slowing down in 2021. It is simply no longer enough to just deploy new technology or processes with hopes of becoming  agile. In order for an organisation to truly embrace agility, it must take a holistic approach and proactively adopt an agile mindset across the entire organisation and its way of working. This is where the CFO plays a pivotal role.

 

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