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SaaScada Top Five Predictions for 2023

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From BNPL for business, to sustainability and financial inclusion, 2023 is going to be a year of change as the UK’s fintech darling status comes under challenge  

SaaScada, a cloud-native core banking engine, today released its predictions for 2023, offering insights for the financial services industry.

Nelson Wootton, CEO and Co-Founder:

We will see a surge of interest in ‘BNPL for business’ or Merchant Cash Advance

Much as we’ve seen an explosion of Buy Now Pay Later for consumers, as merchants tighten their belts and the economic outlook becomes even more challenging, we foresee great demand for BNPL style models of finance for B2B in 2023 – in particular, retail. For example, Merchant Cash Advances will enable merchants to receive stock and pay it off over a period of time – as that stock is sold to customers. This helps them to avoid big upfront capital investment, while the lender is repaid as each product is sold.

This model is extremely low risk for the lender, especially for wholesalers of non-perishable products, where the lending agreement can even include the flexibility to move unsold stock to another merchant. Lenders can also check in on the velocity of sales and track daily (or even hourly) against sales projections to help them understand their risk on the loan. For wholesalers or franchise style models, offering merchant cash advances will help to build new revenue streams, while strengthening the relationships with their key retailers by essentially providing them with stock for ‘free’.

Of course, for this model to work, the lender must be able to access real-time data insights into purchases from their customers. This means using a cloud-native core banking engine to connect modern and legacy infrastructure, create real-time event streams, and generate bespoke data sets.

The UK’s fintech darling status will be put to the test in 2023

It’s been a rocky geopolitical year with the global economic slowdown, the war in Ukraine – not to mention Brexit, the pound crash, and having three prime ministers in as many months. Big fintech valuations have shrunk globally, and funding rounds have been few and far between, as UK fintech investment plummeted from $27.8 to just $9.6 billion in the first half of 2022. So, when we look to next year, many will ask if the UK can hold onto its “fintech darling” status.

But to me, any doomsday hypothesising feels like a knee-jerk reaction. Investment naturally goes in cycles, and investors are always watching closely to see which areas are getting the best returns and recalibrating before they invest more. The UK fintech scene is bursting with a wonderful blend of finance and tech innovators who are up for the challenge, so I do not think that position in the industry will be lost.

In particular, fintechs who can harness data effectively are the ones to watch. The future is all about data – being able to predict and track changing customer needs, identify areas of trapped value, and gain a single customer view; it is these things that will enable them to gain a greater share of wallet, even during recession.

UK fintechs should also keep in mind that while they will continue to see investment, they will need to be more cautious with their spending as funding rounds may be slower, valuations lower, and investments more frugal than before. So being cost-conscious will be an asset.

FS firms will miss the Consumer Duty deadline if they can’t leverage customer data

July 2023 will see the FCA implement a new Consumer Duty, which will require the financial services industry to deliver products and services to meet real customer needs at a fair price. Under the new regulation, FS firms must give people the support and information they need to make informed financial decisions, which is particularly important in the current economic climate. But, many FS firms will likely miss the July deadline because they don’t have a complete picture of their customers and how to serve them best.

To meet the diverse needs of customers, including those in vulnerable circumstances and financial distress, banks must have a comprehensive customer view. But today, many banks and wealth managers may struggle to achieve that level of customer insight because they still operate under a cumbersome product-centric data model, in which relevant information is siloed.

With a cloud-native banking platform, FS firms are armed with granular real time insights into customer spending so that they can understand customer needs, assess their financial health, and make recommendations effectively. Without this level of visibility, firms will not stand up to scrutiny from the FCA, and could even face fines in cases of serious misconduct.

Next year, cloud-native core banking providers will become the holy grail for FS firms needing to comply with Consumer Duty, by helping to re-architect how core banking services are delivered. The granular level data can be used to drive hyper-personalisation, unearth opportunities to grow accounts, accelerate the design of innovative new products, and improve the customer experience.

Steve Round, Co-Founder, expects the following core trends will shape the financial industry in 2023:

FS firms will be forced to improve transparency around sustainability commitments

The UK led the way on green finance at COP26 by committing to create the world’s first Net Zero Financial Centre. Now, a year later, the FCA has proposed a UK sustainability disclosure regime. With the rules under review until January 2023 and expected to apply from 2024, FS firms must lay the foundations for sustainability reporting now to comply with future regulations.

Going forward, any organisation delivering banking services must be able to examine the environmental impacts of business operations, as well as the impact of partners. Therefore, FS firms will feel the pressure in 2023 to become more transparent about their commitment to Net Zero targets and sustainability initiatives.

Consumers have also become increasingly focused on sustainability, and want to know how their purchase decisions affect the environment. By collecting customer payments data and tracking environmental impact, FS firms have the potential to launch greener services and help reduce environmental impact for eco-conscious consumers. For example, using transactional data from customers to analyse the carbon footprint of their purchasing decisions – allowing them to make choices about where they spend their money or even choose to carbon offset against purchases. If FS firms fail to launch sustainable products and services next year, there is a serious risk that market share and customers will be lost to more eco aware competitors.

The rising cost of living will drive a new era of financial inclusivity

As the chancellor admitted in the Autumn budget, we are now in recession. More consumers – even those on middle incomes – may find themselves falling into the financially ‘vulnerable’ category, struggling to keep up with soaring mortgage rates, energy bills, and inflation. In 2023, banks will be under pressure to provide more targeted help and support to those that need it to ensure that people don’t fall through the gaps.  Customer insight, driven by comprehensive real time data, will be essential to allowing banks to identify those who are at risk of becoming vulnerable before it happens and help put plans in place to help the customer and avoid bad debt.

There will also be a renewed focus on financial inclusivity – and it’s critical that banks look at credit with fresh eyes. Expect to see banks focusing on designing practical products and services to help those who are struggling financially. Offering advice is one thing, but banks will also be looking to offer personalised and flexible offerings, such as having multiple wallets to help manage different bills and savings. To support their customers, banks will need to leverage their customer insights and technology to deliver more flexible banking solutions that make it easier for their customers to manage their finances. Or, they risk losing customers to competitors offering more feature rich products.

Business

Accounting Automation in the Future

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Accounting automation is the process of streamlining repetitive tasks in financial processes. For example, some processes like invoicing are time-consuming and repetitive. Automation can reduce manual labor and save businesses both time and money. Also, it helps improve accuracy, reduces errors, and provides more accurate financial reporting.

Accounting automation in the future will be increasingly important for businesses to stay competitive. But every new change comes with both advantages and challenges. Let’s dive in to get ready for this future trend.

 

Potential Future Benefits of Accounting Automation

Increased Efficiency and Cost Savings

Accounting automation is a great way to increase efficiency and cost savings. For example, AI bookkeeping uses advanced algorithms to automate many accounting tasks. So, companies can track expenses, prepare financial reports, and more using AI.

It reduces the time needed for manual entry. So, businesses can spend fewer labor hours on tedious processes. They can increase efficiency by freeing up resources for more strategic work. It also helps reduce errors and inconsistencies associated with manual processes. So, the cost of compliance is lower because of greater accuracy.

 

Improved Accuracy and Reliability

Accounting automation can improve accuracy and reliability in accounting processes. For example, Automating bank reconciliation is less prone to errors from human mistakes or miscalculations. You can automate the process to identify discrepancies between the bank statement and accounting records. It helps to ensure that financial reports remain accurate and reliable. So businesses can take corrective action faster than processing data manually.

 

Streamlined Business Processes

Streamlined business processes involve eliminating unnecessary steps, reducing paperwork, and automating repetitive tasks. This allows businesses to focus on higher-value activities, such as developing new products, improving customer service, and developing strategic plans for the future.

 

Making a Better Decision

Accounting automation can enhance decision-making in 3 ways.

1. It enables businesses to access real-time information from multiple systems. So they can identify trends for better decision-making.
2. Automated accounting also helps with forecasting, budgeting, and auditing tasks. It enables businesses to be more proactive in their decision-making processes.
3. Also, automated accounting tools can integrate with enterprise resource planning (ERP) systems. They can manage data across the enterprise and make concise decisions that are favorable to the company as a whole.

 

Increase Customer Satisfaction

Accounting automation can help businesses increase customer satisfaction by streamlining their processes and providing a more efficient customer experience. For example:
4. Automated accounting systems can automate tedious manual tasks such as invoicing, data entry, and payroll processing. This allows businesses to focus on other aspects of their operations that are more important for customer service.
5. Automated accounting systems can also provide customers with more accurate and timely financial information. The information can help them make better decisions about their finances.
6. Also, accounting automation enables businesses to respond quickly to customer inquiries. It helps reduce wait times and improve the overall customer experience. So, you can build better relationships with their customers.

 

Improved Accessibility

Accounting automation takes place online or comes with cloud-based solutions. So, you can access your information and do your job from anywhere instead of being confined to one spot.

 

Challenges to Implementing Accounting Automation in the Future

Cost of Technology Infrastructure Upgrades

Automating an accounting system often requires businesses to invest in new hardware and software, such as servers and other associated equipment. These upgrades come with a hefty price tag that may be difficult for small businesses to afford.

There are also extra costs, such as installation fees, setup charges, software licensing fees, cloud storage costs, and maintenance fees.

 

Training Requirements for Staff Members

Accounting automation involves using advanced technology to automate certain processes. So, it creates a need for trained staff members who can handle the new technology. Training requirements vary depending on the type of software used.

Some common training includes record-keeping procedures, software applications, and troubleshooting skills.

 

Regulatory Compliance Issues

Accounting automation can be a time-saver, but it also requires firms to be aware of the applicable rules and regulations. Companies must ensure that their automated systems are compliant with relevant laws and regulations such as Generally Accepted Accounting Principles (GAAP), International Financial Reporting Standards (IFRS), and other applicable accounting standards.

Besides, they must also comply with legal requirements related to taxes, financial statements, and other reporting obligations.

So, businesses must consider the complexities of regulatory compliance when automating accounting.

 

Security and Data Protection Concerns

As businesses move their accounting processes to the cloud, they are exposed to a wide range of potential security risks. Data breaches can cause significant damage to the business’s financial and reputational integrity. Besides, the complexity of automated accounting systems can make it difficult to identify and detect suspicious activities or errors in the system.

To ensure data is kept secure, businesses must have strong measures in place to protect against unauthorized access, encryption, and regular backups of data.

Furthermore, companies must train their staff on the proper use of the system. It helps staff to know how to protect confidential information from being accessed or misused by unauthorized personnel.

Businesses may also need an experienced IT team to monitor and maintain the system to keep up with any changes or updates for optimal performance.

 

Final thoughts

Accounting automation has come a long way in the past few decades. It is likely to continue to advance in the future. As technology continues to evolve, more businesses will likely begin taking advantage of automation in their accounting processes. So, businesses should be aware of the potential challenges and prepare to stay competitive.

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Weathering the economic storm in 2023

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Nikki Dawson, Head of EMEA Marketing at Highspot

 

New year, new business challenges. When it comes to creating and converting leads into sales for a business, both the marketing and sales teams are critical. Both functions think differently but are equally important in driving growth and revenue. Now more than ever in the current economic climate alignment between the two to achieve business goals is vital to survival.

Entering 2023 it’s important we look back and pinpoint where there’s room for improvement within our business and between our teams. With this, I predict the majority of businesses will realise it’s now critical to get their teams to communicate, collaborate and align more effectively.

What we learned in 2022

Findings from a recent survey of sales and marketing professionals found that over half (52%) of sales and marketing leaders in the UK agree they don’t understand which marketing assets are driving results with potential prospects. For marketers, this lack of visibility over assets limited the amount of valuable oversight which would allow them to improve content and increase adoption.

As a result, we’re now left with over a quarter (29%) of marketers not feeling confident in their ability to demonstrate the ROI achieved by marketing initiatives. Due to this, 30% of those surveyed this year feel a lack of confidence in creating marketing assets that have demonstrable success at meeting specific business objectives and driving sales growth.

Equipping teams with the right tools and technology they need to achieve business objectives seems obvious, but the latest research reveals that over a third (34%) of marketers aren’t confident they have the tools they need to manage and maximise digital marketing initiatives. Furthermore, 30% of UK marketers believe that a lack of efficient technology and tools and inconsistent use of CRM (31%) are barriers to their company’s sales and marketing collaboration.

These are all crucial learnings for what marketers have identified as key barriers in their role, it’s now down to business leaders to listen and take action.

How was revenue impacted?

The lack of alignment between marketing and sales, and the limited visibility over how digital marketing initiatives performed in 2022 had a negative impact on businesses’ ROI. This, as well as not having a single source of truth for marketers and salespeople led to content chaos and became a pain point for both parties wanting to do their jobs effectively.

For business leaders, during a time when demonstrating and justifying marketing and sales spending is needed now more than ever, the gap between marketing content, salespeople and ROI is of great concern.

The year ahead

Misalignment between sales and marketing means, at best, energy and resources are being wasted. At worst, it leads to strategies directly contradicting each other and not being delivered, while team members get frustrated and potentially leave.

Sales enablement has proven that it can dramatically resolve these pain points and be the foundation for alignment. With 72% of both teams equally agreeing that implementing sales enablement to support sales and marketing is something they believe their company should consider in the near future. It’s safe to say that in 2023 may well be the year we see it come into the mainstream.

By design, sales enablement software bridges the gap to provide a platform for alignment, offering one source of truth for linking sales and marketing activity to revenue. This year, the research found that the vast majority, (71%) of sales and marketing professionals agree that a lack of alignment between their teams has had a negative impact on revenue, and 52% of sales and marketing leaders in the UK agree they don’t understand which assets are driving results with potential prospects.

It’s clear that the need for aligned business functions has never been greater and soon, marketers and salespeople will call for AI-powered sales enablement as an essential tool to do their job effectively.

Now is the time…

If businesses want to optimise their work and maximise profits in the turbulent economic climate, they need to focus on driving change from the front by aligning their sales and marketing teams. Smart investment decisions that adapt processes based on buyer engagement with marketing content, and seller activities will be crucial in the coming months.

Having a sales enablement process in place can provide the necessary framework to begin coherently organising, finding, sharing, customising, and analysing content. Sales enablement platforms can be a one-stop shop for sales processes and marketing insights and it’s no longer something that can be overlooked by businesses.

Final thoughts

The need for optimisation has never been greater. In order to maximise profits sales and marketing functions need to work together seamlessly. This year we can expect to see more businesses utilising sales enablement technology to achieve key milestones. With this, marketers and salespeople alike will recognise sales enablement as a crucial day to day tool that is just as essential as the CRM they’re using today.

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