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TOP 6 FINTECH PREDICTIONS THAT WILL SHAPE THE FINANCE INDUSTRY

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Introduction

Fintech is derived from a combination of two words “finance” and “technology.” A Fintech company is thus an industry that uses technology to carry out all manner of financial services. Technology keeps on evolving so we can expect certain Fintech trends to emerge and others to disappear. Though there are many Fintech trends, we shall briefly discuss banking and cryptocurrency.

A bank is one example of a Fintech institution. Before the Automated Teller Machine (ATM) was invented, many people were employed in banks. It is estimated that there were nearly hundreds working in the bank. Banks thus had a big burden of paying many of their workers. After the ATM was invented, many people lost their jobs since their duties in the bank were deemed redundant. An ATM can do the jobs of 500 people within a short time.

Cryptocurrency is another form of payment for goods and services. Think of it as a digital currency, rather than paper money. Bitcoin and Dogecoin are common cryptocurrencies that are used, but there are many others you can choose from. To be able to possess any cryptocurrency, you would need to form an account. In the account, there is a wallet where your digital currency can be stored. To possess any cryptocurrency, you could purchase them, mine them or play games which reward you with them. Businesses are yet to adopt this form of payment.

Fintech companies such as AllFront have helped companies that are fully stacked with back-end developers but have neglected the front-end side of their applications and use their capabilities to finish their projects through constant progress and professional workflow optimization.

There have been predictions put forth by Fintech firms that may shape the future of finance industries. Let’s explore the six predictions below.

 

Fintech institutions will continue to grow rapidly

The COVID-19 pandemic slowed down most industries worldwide. Cessation of movements put in place by the government reduced the rate at which clients sought goods or services. People expected Fintech institutions to collapse following the disease. Experts however think otherwise. They have pointed out that these organizations made use of digital platforms to continue serving their clients. The use of the internet or company applications means people can still pay for services remotely.

 

More people will trust Bitcoin

Bitcoin wasn’t always positively received. Still to this day, there are people sceptical about Bitcoin because they do not think it is genuine. Its price has been rising and falling in the trade market hence people have begun to question its value. People put their trust in stocks yet they also rise and fall. Experts theorize that people will trust it more due to it being decentralized. When the coin is decentralized, no bank or government is in charge of it. Furthermore, it is scarce like gold, and this makes people and Fintech institutions put faith in it.

 

Online payment systems will not fully catch on

Even with the popularity of digitizing every sector, you can think of, people are yet to embrace online payment systems. People who pay using online systems such as credit cards incur an extra cost. Poor people are more likely to stick to paying in cash than pay via credit cards as they will be charged more. In many countries, the poor population has increased; which means online payment systems may take a while to catch on.

 

Increased digitization

Experts have pointed out that more employees will work from home as opposed to going to work in their offices. Workers like managers and supervisors, however, will still need to go to their offices. You can enjoy banking services just by using your cell phone. Bank workers can receive their salaries on their phones so most Fintech organizations are adopting this method of paying them.

 

Adoption of cloud computing by banks

Most banks will increasingly adopt cloud computing as a way of serving their clients. The pandemic forced most banks to devise ways of serving their customers remotely. For instance, if a client wants data about themselves; the banks could simply log onto the cloud system and retrieve their data. They do not have to meet. Experts predict banks will also adopt clouding so that they are not rendered irrelevant once other banks adopt clouding.

 

Rise of open banking systems

Nearly every Fintech organization has apps you could download to access their services. Open banking services provide financial services to users through third-party users and this is where the apps come in. Building apps is a combined effort hence third-parties get involved. Third-parties need the client’s consent to use their data e.g. comparing data. There are however concerns of privacy even with the prediction open banking will be embraced.

 

Conclusion

Some of the expert predictions mainly stem from the emergence of the pandemic. However, it is difficult to predict the direction of a country’s economy. The predictions may either age well or poorly.

 

Finance

THREE STEPS TO ENSURE RECOVERY OF COVID LOANS GOES SMOOTHLY

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In the wake of the pandemic, the government acted quickly to provide financial Covid support packages to help struggling businesses. With the economy now recovering, Mike Hampson, CEO at Bishopsgate Financial explores the range of options available for banks to ensure that those loans are repaid.

 

Since the start of the pandemic, businesses have raised over £75bn[1] from banks and financial markets, through interest-free emergency support schemes. But the harsh reality is that not all loans will be honoured as the economy recuperates.

As a result, banking professionals with client relationship management experience and skills in supporting clients to repay loans in a challenging business environment, will be in high demand.

 

Mike Hampson

Setting up training capabilities for client support post-pandemic

Commercial bankers estimate 60% of new coronavirus scheme loans[4] will default or suffer other repayment issues that will drive previously unseen levels of non-performing loans. It’s a tough balancing act and one that demands careful management of the lending transaction lifecycle, from origination through to collection, recovery, and handling bad debts. Banks no doubt already have frameworks in place to manage these elements, but it’s highly important to make customer interactions as easy as possible and ensure their genuine concern for their customers is clear.

Subsequently, hundreds of workers at major banks including HSBC, NatWest and Metro Bank[5] are understood to be receiving training in how to deal with vulnerable customers and “demonstrate empathy” as the first wave of repayments for coronavirus loans fall due. Staff ‘sensitivity[6] training builds on client-support and workout capabilities, such as improving sensitivity to early-warning systems, developing short-term forbearance solutions and loan modifications, and providing guidance on alternative products.

This approach may further avoid the additional pressure on the UK’s mental health crisis as financial institutions prepare to call in loans issued during the pandemic.

HSBC, which now has 400 staff in its debt collection team,[7] said the aim was to ensure staff had a “consistent understanding of vulnerability” and are “aware of the factors that could make an individual vulnerable” when having repayment conversations with customers.

An executive at another bank said its expanded debt collection team was being trained in “empathy, vulnerability and listening skills”. The individual told The Telegraph: “Ultimately, we don’t want to damage the economy by being overly aggressive.”

A peculiarity of a crisis situation is that customers don’t always know what they will need until that need is pressing. Finding that their bank is prepared to help in unexpected ways will go a long way toward reassuring them.

[2] https://www.law360.com/articles/1355897/

[3] https://www.bishopsgate-financial.com/insights/the-change-perspective/the-change-perspective-2021

[4] https://www.grantthornton.co.uk/insights/how-to-manage-upcoming-non-performing-loans/

[5] https://industryslice.com/NewsLetter/8_33

[6] https://www.telegraph.co.uk/global-health/climate-and-people/covid-19-has-amplified-parallel-pandemic-poor-mental-health/

[7] https://www.msn.com/en-gb/money/other/bank-staff-get-sensitivity-training-before-calling-in-covid-debts/ar-BB1fNMte

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FOUR STEPS TO INTEGRATING INTELLIGENT AUTOMATION IN THE FINANCE DEPARTMENT

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Marieke Saeij, CEO of Visma | Onguard

 

It’s clear that Intelligent Automation (IA) is still very much an emerging technology, with one indication being that is has only been mentioned a handful of times on Twitter since the beginning of 2021. Results from our latest annual FinTech Barometer reveal a mixed picture in terms of awareness, with half of finance professionals having never heard the term before. Whilst this is unsurprising for a technology concept very much in the ‘early adopters’ stage, organisations can stand to gain real benefits from embracing Intelligent Automation now, particular within the finance department. With this in mind, we explore some of these benefits and share a step-by-step best practice to implementing it into business operations.

 

Intelligent Automation ensures a predictable order-to-cash process

Such is the speed of introduction of new technologies that it’s a challenge for businesses to keep pace. As the newest innovation in finance, Intelligent Automation is one that organisations can’t afford to let pass by. It truly takes financial process automation to the next level. In addition to helping maintain a high-quality customer service, it also complements the existing skillset of finance professionals in the industry.

Marieke Saeij

While Robotic Process Automation (RPA) and Big Data are key innovations for the sector, IA can be likened to an additional layer that enhances existing technologies. By combining applications, this layer is capable of independently assessing situations and determining the appropriate process sequence. It can, for example, fully determine the risk of a specific customer, and can also predict at an early stage which invoices will be paid late, or even not at all, ensuring that finance professionals can then plan accordingly. The result is a reliable and predictable order-to-cash process.

 

The four steps to an IA-proof organisation

While the benefits of IA are numerous, implementing the technology can prove complex, although some are already treading the IA path without knowing it. In this instance it’s crucial to become aware and begin the purposeful process to full integration. Below are the four key steps to becoming fully IA-proof.

  1. Exploring the potential: Brainstorm where automation can be applied

Step one is to examine the extent to which automation can help your organisation. Blue sky thinking is the key here. What is the ideal relationship with the customer? What does the ideal order-to-cash process look like? In this phase, involving multiple departments from within the organisation is key, from management to operations. The finance professionals who have the most contact with customers are likely to have the strongest knowledge of which processes they would like to see automated. With no limits to ideas, it’s best to explore all the opportunities in the entire order-to-cash process and describe broadly the potential value to the organisation.

 

  1. Decipher which data and technology is needed

The second step is to map out which data and technology is required. Working with a specialist, either external or from the internal IT department, is beneficial at this stage to see where the opportunities lie. In many cases, off-the-shelf solutions are already readily available to help make the difference, so it pays to do the research and gain advice where possible.

 

  1. Firm up the strategy

With the plan mapped out, it’s time to fit the pieces of the puzzle together. Which technology and accompanying software is proving most valuable? It’s vital at this stage to analyse the results the organisation is achieving from deploying the right technology and software. It’s also important to outline any limitations and emphasising the potential risk of failure. This is the business case and the basis for the elevator pitch that will be presented to internal stakeholders.

 

  1. Draw up the roadmap and start benefitting from agility

The fourth and final step is prioritisation. The roadmap will describe step-by-step how to move from the undesired current situation to the desired end goal. In the first step, choosing a subproject that is relatively easy to achieve will help gain support from other departments within the business, and provide invaluable experience that can be applied to the more complex components that follow later. This agile approach facilitates a learn-by-doing mindset and allows the following steps to be tackled in a smarter and simpler way.

 

Effective preparation is half the battle

Exploring the potential of automation, mapping the required data and technology, establishing the strategy and laying out the roadmap are the four crucial steps to ensure the foundation for Intelligent Automation. Effective preparation and estimating which technology and accompanying software is needed will help to create a streamlined and error-free order-to-cash process. To ultimately save time and costs, empower finance professionals and maintain customer loyalty, the time for Intelligent Automation is now.

 

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