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UK START-UPS MUST MAKE THE MOST OF A SMALL WINDOW TO CAPITALISE ON INVESTMENT OPPORTUNITIES, FOX WILLIAMS WARNS

INVESTMENT

Despite rising investment, Brexit and growing interest from tech giants could cut off start-ups’ opportunities in 2020

 

While a burgeoning tech industry, education and the value of the pound have made UK tech start-ups an attractive target for investors outside the UK – with investment in UK tech start-ups growing 44 percent to £10.1bn in 2019 – businesses need to be aware that they may only have a short window to attract investors, city law firm Fox Williams LLP has warned. With a large proportion of investment dependent on the talent in place at start-ups, an inability to attract and keep the best and brightest talent post-Brexit could turn away investors. At the same time, as markets such as FinTech grow, they become more attractive areas for technology giants such as Apple or Facebook to invest in – meaning start-ups may only have a limited time to grow before their market is taken over.

“London’s position as the number one destination for tech investment in Europe isn’t guaranteed for ever,” said Jonathan Segal, Partner at Fox Williams. “While the value of the pound and the fact that businesses, talent, regulators and investors are all clustered in a single city help make London start-ups attractive for investment, it is quite possible that this will change. At present, UK start-ups are seen as a low-risk investment. Yet changes to the sterling exchange rate, or to immigration and employment laws that make it harder to attract and keep talent, could change this. Start-ups and growth companies will need to ensure they are doing all they can to attract investment; understand where their funding is coming from; and have both a clear final goal and a route mapped out.”

As it becomes harder to differentiate and attract investment by creating a never-before-seen product or service, so start-ups need to demonstrate their value through their talent, their professionalism, and by showing a clear path to profitability. This means not only having skilled personnel in place and being able to point to an experienced management team, but making certain that they will not be negatively affected by any changes in immigration law.

Fintechs will want to help EU citizens already present in the UK and arriving in 2020 to stay long term by ensuring they apply for settled status, providing advice on obtaining endorsement by Tech Nation under the Global Talent visa route and ensuring that UK based companies apply for a sponsor licence if they plan to recruit from overseas from 2021.

At the same time, start-ups need to demonstrate that they are taking the right advice. For example, most law firms will have a tech practice that can advise start-ups. However, for those in specialised sectors such as FinTech it is essential to employ advisers that also have financial services expertise.

As well as demonstrating their value and professionalism, start-ups need to know who is funding them, and ensure they have done relevant due diligence. The right advice will again be critical here, to ensure that regulators do not veto any investment in, or takeover of, any regulated business in the financial services sector, in particular FinTechs. Yet even if everything is clear from a regulatory perspective, start-ups need to be confident that they are completely happy to be funded by an investor, and have not missed any factors that might damage their reputation.

“This is no time for complacency,” continued Jonathan Segal. “While investment is increasing, it is not infinite. FinTechs and other start-ups that cannot show that they have prepared themselves to succeed with the talent, the professionalism, and the right attitude to advice will soon find themselves losing out to better prepared competitors. At the same time, organisations need to lobby for the support they need – such as ensuring clear and favourable post-Brexit immigration and employment laws are in place so they can plan as appropriate.”

“Businesses should consider seeking strategic immigration advice at an early stage, to help ensure they  can recruit the talent they need into the UK,” added Segal. “It’s vital that employers in the tech space are aware of and adhere to the correct processes and systems to ensure that the business is able to manage flow of talent in a seamless and orderly way. The UK Government is keen to  attract highly skilled tech talent to the UK and in light of Brexit and the new immigration system being introduced in the UK, it is critical that companies seek advice to ensure that talent mobility is not an issue.”

 

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NEW TECHNOLOGY PLATFORM REDUCES CLAIMS PROCESS FROM WEEKS TO MINUTES

New platform has potential to cut fraudulent claims by almost half Decrease claims costs by as much as two thirds

 

Pact Global, an insurtech business, has launched an Artificially Intelligent (AI) Claims as a Service (CaaS) platform to help the General Insurance market significantly reduce fraud exposure, accelerate the claims process, enhance customer insight and significantly reduce the overall cost of handling a claim by up to 66%.

 

Mark Seddon, Founder and CEO of Pact, says what currently takes days or weeks to complete, can now be managed in minutes: “Our platform is better for the customer, as it makes the claims process much faster and easier, and also much better for the insurer, as it automates the whole process and minimises the time spent on claims management, a significant cost to the business.”

 

Focussing currently on travel, motor and property insurance, all Pact’s offerings use more than 50 separate data points during the claim validation process to verify the customer’s contact details and investigate their claims history.

 

Verification is supported by the use of AI, behavioural analytics, assisted intelligence and a purpose-built, face and voice recognition program. Employed at the First Notification of Loss (via a white labelled customer mobile and web app), it confirms the customer’s identity and detects whether expressions/behaviours or variations in speech might give cause for concern.

 

Pact enables the collation of all policies and schedule information for easy customer access, importantly allowing the platform to verify the claim against the policy for the insurer.  Relevant limits and schedule information are then known to be correct before the claim progresses.

 

For travel insurance claims specifically, the platform cross-references claims like cancellations and delay, to transport information (e.g. Flights).  Across all insurance types, checking weather patterns increases the likelihood of detecting fraud and helps insurers predict possible surges in claims:

 

“The platform is so intelligent that it can detect whether any images or videos, invoices, warranties and receipts uploaded have been used anywhere else in the world,” Mark continues, “and it’s all done within a matter of minutes.”

 

Alongside this, Pact has automated and simplified the process of dealing with third parties to obtain quotes, instruct workers, update claims status and verify job progress prior to invoicing, all accessible to both customer and claims handler through the app.

 

The platform can integrate into existing networks or be used to find local tradespeople or garages, supporting local communities. The open communication between worker, claim handler and customer reduces complications and allows the customer and/or claims handler to easily flag and resolve potential issues.

 

To further improve customer service, the mobile app features a Machine Learning Chat Bot called Ollie, which is designed to advise, assist and simplify the user experience. It delivers real time notifications, keeping claimants informed of their claim’s status improving customer service by 65%. It stores all policy information and T&Cs and can identify policy cover and limits. This increases customer awareness and creates upsell opportunities for insurers, buying or renewing with a single click.

 

Mark says that Pact has been built to deliver customer transparency and improve the experience with their insurer, ultimately building and cementing trust: “It is designed to significantly reduce the time and cost of handling claims for insurers, delivering real savings to the bottom line.  It’s win-win for company and customer.”

 

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CORONAVIRUS PANDEMIC, STORE CLOSURES, SHIFT CONSUMER BUYING BEHAVIOUR LEADING TO ACCELERATED DIGITAL TRANSFORMATION FOR MERCHANTS

Forter Issues First In A Monthly Series of Coronavirus Special Reports 


Forter, the leader in e-commerce fraud prevention, today announced the release of the Forter Special Report on the Impact of Coronavirus on Consumer and Fraudster Behaviour. The report provides merchants across industries with insight into trends seen within the $150B in transactions that Forter processes annually.

As the Coronavirus pandemic sweeps across the globe, government responses have included enforced social distancing and financial support to beleaguered economies. Merchants who sell non-essential goods have responded by closing physical stores, and in some regions also their online operations. Consumers have begun to shift their purchases, even those of essential items such as groceries, online.

The Forter Special Report tracks trends and spikes in consumer behaviour as well as innovative methods that opportunistic fraudsters take to prey on consumers during this unprecedented and unpredictable time.

“Merchants are scrambling to cut costs, reduce the impact of fraud, scale efficiently, and deliver a consistent customer experience to meet rising consumer online buying behaviour,” said Michael Reitblat, CEO and co-Founder of Forter. “The aftermath of the pandemic will accelerate digital transformation among merchants as consumer shopping habits adapt.”

Covering industries including travel, fashion and beauty, food and beverage, marketplaces, and more, The Forter Special Report uncovers consumer buying trends such as:

  • The travel industry has been extremely hard hit. Regional variations are appearing, in particular an increase in purchases of inbound international travel to China in the weeks before the country closed down inbound travel on 26 March. Data in the last month points to “optimistic travel” in which the travel date is 120 or more days following booking. Such bookings now account for 65% of travel purchases.
  • The food and beverage industry has seen a dramatic increase in online purchases. New accounts now represent 15-25% of all customer volume, compared to 5-7% prior to the pandemic. As merchants struggle to manage the increased volume and meet expectations of new customers, we are seeing an increase in service chargebacks.

Fraudsters are exploiting confusion and uncertainty caused by government and corporate policies:

  • As people adjust to working from home, Forter sees a marked increase in social engineering fraud, associated with fake emails purporting to be from HR and corporate addresses. Here fraudsters invite people to click for more information, instead taking victims to malicious sites.
  • With a shift to online shopping in Apparel and Accessories, we see an increase in gift card purchases. While a higher number of legitimate buyers usually means that fraud rates drop, gift card fraud rates have not. Fraudsters have noticed an increased demand of the completely virtual merchandise that is easy to monetise.

In its recent report, “Mitigate Coronavirus (COVID-19) Business Impacts With Digital Commerce (March 2020),” Gartner asserts that “the COVID-19 outbreak will negatively impact business performance in the short term as offline activities are cancelled and online orders overwhelm delivery capacities. Application leaders can mitigate the impact and ensure continuity of operations by accelerating digital commerce initiatives.”

 

“With more consumers experiencing buying online, we expect merchants who hadn’t considered e-Commerce as a viable platform to now try it,” continued Reitblat. “Merchants that had already adopted e-Commerce struggle to meet this increase in demand. Working collaboratively from home and hiring to meet the volume create obstacles for those who manually review transactions for fraud.”

Forter’s integrated fraud prevention platform delivers real-time decisions at every point of the customer journey from account sign up and login, to purchase, and to returns. The system is tailored for each merchant based on its unique business requirements, pairing merchant feedback with Forter’s expertise.

Forter’s growing Global Merchant Network includes over 620 million consumers globally and 97% of online US consumers. Links among known consumers and those new to the network allow the platform to infer trust, resulting in higher accuracy without the need to manually review transactions and interactions.

With the Forter platform merchants can expect an up to 90% reduction in false declines, recapturing otherwise lost revenue and delivering the best possible buying experience to their consumers, with an up to 90% decrease in chargebacks due to fraudulent activity. Forter allows merchants to scale and accelerate their digital transformation strategies even in an uncertain time.

“Rules based systems by their nature look at the past and adapt to it,” said Reitblat. “New consumer behaviours, which we’re seeing across industries, as well as new fraud behaviours, are missed by these systems until they can adapt. Forter’s identity-based system authenticates the buyer, not just the behaviour.”

Together with the Special Report, Forter has also issued its Eighth Fraud Attack Index, highlighting industry trends and innovative fraud vectors, showing the evolution of fraud, comparing H2 2019 to H2 2018. The report features the continued evolution of fraud attack vectors across all customer touchpoints, demonstrating the need to protect merchants’ digital offerings at all interactions in the customer journey, from account abuse to payment abuse to policy abuse.

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