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PROTECTING YOURSELF AGAINST LOSS OF FUTURE INCOME IN A RECESSION

Loss

By Gerard Visser, Financial Planning Consultant at Alexander Forbes Financial Planning Consultants.

 

With low GDP growth, credit ratings downgrades and the COVID-19 pandemic, our economy has taken a knock, leaving many investors’ reluctant to save and invest.

This hesitance is understandable, especially when one sees the daily drop in your actual investment values, and many investors might be looking at changing their current strategy by switching portfolios out of markets. However, success takes time, and a good investor must not base long-term decisions and strategies on short-term concerns.

Investors need to know what value they are getting for their investments and whether it is competitive or not. Short term market fluctuations and low economic growth environments can be ridden out where your investment period is over a long term.

If you find yourself in a low economic growth environment, it is a good time to assess your current financial habits and make the necessary adjustments.  It is important to understand the different types of investments you hold and determine the risks associated with them.

 

A low economic growth environment highlights the importance of keeping to good financial habits, like spending within your means to help get you through the tougher times. There are certain investment strategies you can follow to assist your investments during these times to be correctly set up for future growth.

 

Gerard Visser

It is important not to panic and switch your portfolios from your investments, especially if they are standing at an all-time low. You could erode significant future value should you choose to sell an investment at a loss. Quite simply if you sell at a loss, you will realise the loss and lose money in the long term. Your best bet is to keep your money where it is and wait for markets to recover.

 

Asset allocation involves deciding on the different mix of asset classes you hold in your portfolio, for example local and offshore exposure of shares, property, bonds, and cash. All asset class returns behave differently and offer different returns for different periods. Having a mixture of these asset classes will help grow and protect your investment though uncertain times. A portfolio with exposure to the different asset classes will offer protection and diversification in low economic growth.

 

Investors should not have all their money in one company or industry. If that industry or company takes a hit, so will your portfolio. This highlights the importance of diversification.

It is important to set up an investment strategy for the specific investment you are taking out as the allocation to the different asset classes will vary and in turn either increase or decrease the volatility and chance to make returns.

The stock market is cyclical and while it is useful to check your portfolio occasionally, to give you a general idea of how it is performing. It will not be helpful to check the value every day. When you invest in the stock market, you have to ride out tough times in order to come out on top.

 

Talk to your financial adviser to help with your investment strategy, they will be able to recommend investments that match your risk appetite, investment period and financial goals.

 

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CUSTOMER CARE TODAY WILL BUILD RESILIENCE FOR FUTURE CRISES

Cathal McGloin, CEO of ServisBOT writes, “The COVID-19 pandemic has created major spikes in calls to financial sector helplines dealing with customers who are concerned about temporary business closures, or seeking information on mortgage holidays and insurance cover.

 

Easing the pressure

With call volumes surging at many contact centres, moving customers from a voice to a text-based channel and encouraging some of them to self-serve via your website or mobile app helps to reduce pressure on contact centre agents. A call-deflection solution doesn’t have to be complex, costly or time-intensive, but it can be extremely effective in managing additional call volumes more cost-effectively, while still providing your customers the information that they need to allay their concerns.

If customers are able to interact with a chatbot initially and this resolves their immediate queries, this can significantly reduce call volumes and the business can still enable the bot to handover to a customer service agent for customers that require further assistance.

 

Setting up a Chatbot in 48 hours

Whether your interactive voice response (IVR) is based on legacy technology or is a modern cloud-based solution, it’s possible to deflect customers from an inbound voice channel to a messaging channel. We know, because we have done this for a client who considered this impossible with their legacy on-premise IVR system. Spinning up a solution took just 2 days and allowed them to successfully deflect calls, automate the response, and still offer customers a path to live chat.

 

Employing a Chatbot as a Call Deflection Solution

Financial services businesses can launch a very simple bot. The bot can be as simple as just pointing a customer to the COVID-19 FAQ page or it can be an extension of an existing customer service bot that offers multiple capabilities. On day one it may just be used to quickly assess queries and handover to a live agent. However, by gathering the training phrases from customer chats, the bot can be made progressively smarter and add capabilities, so that it can be trained over the course of  a week to start automating your customer service

After a week the bot can start automating to become more self-sufficient and take more of the burden from your customer service agents, allowing them to handle more complex customer issues.

Using a chatbot opens up a whole new path to automation.  Once customers start to engage with your intelligent virtual agent, the bot can handle simple requests, direct them to the relevant information on your website, or help them transact in a self-service manner. All of this can happen without the need for them to engage with an agent unless they specifically request this, or the bot escalates the request to an agent. It can even be integrated with your live chat systems so that the bot works in parallel with live agents when needed.

 

Future proofing

During crisis periods, when interactions with concerned customers need to be handled well, call deflection using a chatbot or virtual agent takes the pressure off contact centre agents. It also introduces an automation path that can help customers around the clock.

Once your chatbot has been trained to respond to common customer queries round the clock and reduce the pressure on your contact centre staff, your employees can focus on providing the best care for your customers who urgently need to speak to them. Introducing virtual assistants sends a clear message to your customers that they are your priority and increases the resilience of your business against future emergencies.

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NEW IVALUA STUDY SHOWS TECHNOLOGY CHALLENGES ARE HINDERING PROCUREMENT TEAMS FROM ACHIEVING BUSINESS OBJECTIVES

Lack of system integrations and actionable insights are stopping organisations from accurately measuring performance

 

Ivalua, a leading provider of global spend management cloud solutions, has announced the latest findings of a worldwide study of supply chain, procurement and finance business leaders on Effective Procurement Performance Measurement. The study revealed the challenges procurement teams face when it comes to achieving business objectives and the wide and growing gap in performance between advanced and less mature teams.

 

The research, conducted by Forrester Consulting and commissioned by Ivalua, found that procurement teams are increasingly being measured by non-cost KPIs such as revenue opportunities being created, payment performance (e.g. on time payments) and spend visibility. However, a lack of data integration between systems (44%), lack of relevant insights (40%) and insights not being made available at the right point in the process (39%) are preventing organisations from accurately measuring progress against business objectives. This is because organisations continue to face challenges when it comes to harnessing technology in procurement, with existing systems not being fit for purpose (36%), poor data quality reducing trust in information (36%) and staff having inaccurate expectations of what technology can do (34%).

 

The research went on to reveal that more digitally “advanced” procurement departments are far exceeding “beginner” procurement departments that are less digitally mature in the range of KPIs they track, how frequently they measure success and the levels of planned technology investments. Key findings include:

  • 97% of advanced procurement departments say procurement strategy is well aligned with overall business strategy versus only 14% of beginners.
  • 51% of advanced procurement departments measure performance weekly or biweekly, versus only 26% of beginners.
  • Only 16% of beginners proactively monitor suppliers’ contracts for expiration and risk, versus 94% of advanced – this is critical for helping organisations manage today’s global supply chain challenges, such as the Coranavirus outbreak.

 

“In order for procurement teams to achieve their growing list of objectives and become strategic enablers for their organisations it’s clear they need to overcome a number of technology challenges” said David Khuat-Duy, Corporate CEO of Ivalua. “As we can see from more digitally advanced procurement departments, technology adoption has helped them to align with business objectives, actively measure performance and add value in areas such as risk management. Their investments and approach to leveraging technology is building a competitive advantage.”

 

According to the study, the amount organisations are spending on procurement technology has been rising and expected to accelerate. In the past 12 months, 46% of organisations increased spending by 5-10%. In the next 12 months, 39% plan to increase spending by 5-10%, while a further 43% plan to increasing spending by 10% or more. Procurement leaders are also looking to fully digitise procurement processes (40%), becoming the preferred customers of strategic suppliers (40%), implementing new software for sourcing/procurement (38%) and improving reporting and insights (38%) to help achieve objectives.

 

“It’s encouraging to see organisations investing more in technology, which will help procurement become a key strategic enabler that goes beyond cost reduction to build a competitive advantage,” added Khuat-Duy. “Increasing adoption of technology will allow procurement teams to gain complete visibility into all suppliers and spend. This will open up further opportunities for procurement to help identify revenue opportunities, track risk and improve sustainability, helping to contribute towards wider procurement and business objectives.”

 

Download the full study here.

 

*The February 2020 study was conducted by Forrester Consulting on behalf of Ivalua and is based on a survey of 409 finance, procurement and supply chains decision makers throughout North America and Europe, as well as several in depth interviews.

 

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