By Michael Feldwick, Head of UK and Ireland at Tinubu Square
Nothing could be more certain at the moment than that we face uncertainty. The outcomes of the UK’s exit from the EU will affect every one of us and for businesses, frustratingly, there is a limit to what can be done in the short term. Alarm bells are ringing across the insurance industry as the outlook for trade credit risk becomes more and more difficult to predict, and the Association of British Insurers has said that ‘a no deal Brexit is an unforgivable act of economic and social self-harm’.
Uncertainty reduces pockets of resilience
At the end of January, trade credit insurer Euler Hermes published its latest annual insolvencies report, which indicated that the UK would ‘remain highly vulnerable to a disorderly Brexit’. The company believes there will be a sharp rise in the number of UK business failures in 2019, regardless of whether a Brexit deal is agreed before the March 29 deadline and in an article in GTR, Ana Boata, the company’s European economist said: “Overall, the prolonged high Brexit uncertainty has significantly reduced the pockets of resilience in the economy.”
Other insurers agree, with Coface saying the magnitude of the slowdown in growth in 2019 will depend on the final outcomes of Brexit and Atradius, in its January economic update saying: “GDP growth is forecast to rise to 1.7% in 2019, from a historically low growth of 1.3% in 2018. However, this outlook is subject to uncertainty as it is based on the assumption of a smooth Brexit, including a transition agreement.”
UK businesses, however, still have to trade, and unless they take the plunge, up-sticks and move overseas, which in itself is a risk, consideration needs to be given to how they can protect themselves amidst the uncertainty.
Caution is the best approach. Against the backdrop of expected increased failures and the growing demand for domestic and export credit insurance, it’s reasonable to expect that rates will increase, so companies need to factor this into their calculations. This goes for receivables finance too, where the demand for non-recourse factoring is likely to increase as an outcome of Brexit uncertainty. It makes sense for companies to seek the comfort and protection of insurance when they could be faced with the possibility of non-payment of invoices in established markets and new markets at any time but especially now, when future trading conditions are so unclear. After all, the supply chain is only as good as its weakest link and this may not be visible to the seller.
It is important to remember that whilst UK traders are at the mercy of the sterling exchange rate, those that export and import have been embracing globalisation with increasing success for years. Many already have processes in place to manage sharp increases in costs and duty and changes to trading regulations. Because exporting is not like turning on a tap, they are prepared to continually assess their positions as they invest in developing markets or consolidate existing ones.
Getting power from intelligence
The key to keeping these assessments rooted in reality is intelligence. Insurers and receivables financiers cannot expect to make informed decisions about their level of exposure if they don’t have good aggregation management systems in place that deliver a complete picture, and the same goes for businesses. Insight into the complete financial ecosystem of a market or a geography can be a hugely powerful tool when it comes to making important decisions about the levels of credit that should be offered.
Turning to software solutions that can deliver the level of in-depth intelligence needed to calculate risk in relation to every division, company, sector and country where an organisation has exposure is a good counter-measure for the uncertainties of Brexit.
In addition, having a full financial picture delivered in real-time mitigates against the risk of different stakeholders using different systems that don’t talk to each other. In many industries buyers, banks, receivables finance companies, credit insurers and suppliers use widely disparate financial solutions that cannot communicate. This increases exposure to risk because the entire portfolio can so easily be miscalculated or misunderstood.
Of course, whilst leveraging dedicated intelligence platforms will transform processes, they should not be viewed as just a quick Brexit-busting approach. Trade credit management solutions will impact not just the finance department, but all operational areas, and these changes need to be part of a strategy to protect the broader business. The net result is that projects planned now, when we are unsure of the Brexit-effect, and later when the dust has settled, will be based on accurate intelligence and this will ensure that risk is managed within the particular parameters that suit the organisation, regardless of the external economic situation.
AI: CUSTOMER FACING EMPLOYEES’ BEST FRIEND IN THE FINANCIAL SERVICES INDUSTRY
By Ryan Lester, Senior Director, Customer Experience Technologies at LogMeIn
We’ve all heard the old saying “money talks.” Well when it comes to customer loyalty and retention, good customer experience talks much louder, with 30% of customers leaving a brand and never returning due to a bad experience.
The truth is, there are a lot of companies with similar products and services, but that doesn’t mean that differentiation is impossible. So, what’s the solution? For financial services, large and small, customer experience is becoming the key competitive differentiator and the best way to deliver an impactful experience is to empower customer-facing employees to do their best work. Artificial intelligence (AI) is enabling these employees to create remarkably better customer experiences, resulting in customer loyalty, advocacy, and overall growth.
For financial institutions that have been considering new strategies for improving the quality and efficiency of their customer experience, here are a few ways AI can enable them to deliver the “human factor” that good customer experience demands whilst ensuring customer facing employees can provide a more positive experience for customers.
Increase employee productivity
How much of employees’ time is spent searching for answers to questions? Do they ever have to put customers on hold or even step away to get additional help? AI helps provide front-line employees real-time guidance so they can spend less time looking for information and more time solving problems. An AI-powered chatbot, for example, can be listening in the background of a conversation helping point employees to the right data, solutions, and processes to resolve customer issues faster than ever before.
Deliver a consistent customer experience
When banking customers engage with their financial institutions, they measure the speed and accuracy of the service through two criteria. First, how quickly can the system access their account and deliver the correct information? Is it faster than a human could type it in and share it? And second, if they eventually do need to be connected to a live customer support agent, is their information captured and passed along accurately? AI technology takes those general queries off the customer support team’s plate, providing a quick, accurate, and effective response. If a query needs a more in-depth response, AI can hand it off to support staff to address.
Not only this but leveraging a centralised, AI-powered knowledge solution ensures every employee has access to the same, updated information, so no matter who the customer speaks to, they can be assured that employee responses are both consistent and accurate across the board.
Accelerating employee training and onboarding
Like any industry, employee turnover is inevitable and can be costly. But, not training new employees correctly or in a timely manner could be much more costly. When it comes to financial services there is a lot to learn, whether it is something simple like the process for checking an account balance to all the nuances associated with mortgage loans. AI can support on-the-job training by helping new employees answer questions confidently, correctly, and much quicker than they could before.
Improving employee satisfaction
Today’s banking customer has all kinds of new ideas about their banking experience. “The Amazon Effect” has successfully raised consumer expectations to the extent that a consistent, personal, and relevant experience is the new normal. As a customer, how many times have you been told “I’m sorry, I don’t know the answer?” Customers want solutions to their problems and employees want to be able to deliver those solutions as efficiently and effectively as possible. AI assisting in the background helps minimise those negative moments – making employees job easier, less stressful, and overall more enjoyable.
Identify knowledge gaps
Do you know all the questions employees are getting asked? Do you know what’s easily answered and what’s not? Real-time insights allow knowledge managers to keep up to date on frequently asked questions and gaps in current resources. This allows them to strategically improve or add content where needed.
Augmenting customer service
Whether talking with an AI chatbot or a personable customer service team member, the modern banking customer has high expectations for convenience, speed, and security. Which means that the technology you choose to deploy and how you deploy it is now just as important as who you hire and how you train them.
Today’s AI solutions won’t replace customer service agents or get in the way of the human factors that drive the customer experience. On the contrary, they augment it, allowing the business to do more without adding human resources. The higher the quality of a AI chatbot solution, the better it will be at taking the routine requests off the plate of customer service agents—giving them more time to provide a personalized and positive experience for customers.
TIPS TO PROTECT YOUR CASHFLOW DURING THE COVID-19 PANDEMIC
By Rita Cool, Certified Financial Planner at Alexander Forbes Financial Planning Consultants
The full impact of the COVID-19 pandemic is as yet unknown, but individuals have already begun to have their lives disrupted by the country’s economic shutdown, with retrenchments, salary cuts and forced unpaid leave making them take stock of their financial position.
The basic principles of financial planning are especially relevant at this time, but in the short term, cash flow is more important to many people.
To help safeguard you and your family’s financial security, here are some tips to follow to make sure you’re making your money work hard for you:
- Draw up a budget – this is especially relevant if you’re worried about possible retrenchment of yourself or your partner. This will help you know how much you need to cover your basic living expenses and where you can save money. Don’t only look at what you need to spend money on, but also when you think you will need that money. Perhaps you paid school fees upfront at the beginning of the year, or your car registration is only due again next year.
- Check your bank fees. Are you in the best structure for your needs? Are you paying for services that you never use? Consider moving banks to get a better deal.
- Banks have waived the Saswitch fee payable for withdrawing cash at another ATM other than your own bank, but if you’re doing this, be aware of when this switches back as you can end up paying almost double the bank fees.
- Did you know that you start paying interest immediately if you draw cash from a credit card and that you do not get three or six months’ interest free?
- Go through your house while you have extra time and identify potential items which you could sell, as this will free up cash.
- Where possible, pay cash for items as the interest rate on hire purchase items is very high and you pay around 20% more for those items than the sticker price. If you cannot afford the item and you don’t need it right now, wait.
- Look around for bargains online rather than driving around. There are some good sales on, and you can support businesses that need your help.
- At the same time, be aware of spending extra cash you could be saving towards your financial safety net. There are lots of deals available, so balance the need for the 70% off bikini or new laptop with being cautious about the future.
- Use store coupons and discount vouchers. The main food retailers have loyalty programme structures that can be tailored to your specific spending patterns. Make sure you claim point or vouchers but look out for monthly costs to belong to a rewards program. Ask yourself if your monthly savings validate the cost. Optimally a reward scheme shouldn’t cost you money.
- Check with your insurance company if your premium can be reduced because you’re driving less during lockdown.
- Check your current insurances. Do an insurance rebroke. Make sure you are covered for what you need and take things off the list that you do not have any more and add what you have bought since the last update. Make sure you are not under or over insured and that your premium is market related. The cheapest premium isn’t always the best so be aware of exclusions and excesses and make sure you can afford the excess if you need to claim.
- In most cases you can reduce your monthly insurance premiums by not having a cash pay-out in the future. If you want a pay-out, save the extra premium in an investment product, not a risk product.
- Be wary of consolidating debt. You might pay a lower interest rate but it might well be over a longer period so the total interest paid will be higher. If you have debt issues, set up a debt plan with dates and goals to reduce the debt little by little. Do not give up.
- Be aware that payment holidays are not a free loan, you still owe the money and you’re paying interest on it. Check with your service provider.
Remember that the pandemic will pass. Try not to panic as this may lead to rash financial decisions, which could have an impact on your finances later down the line.
AI: CUSTOMER FACING EMPLOYEES’ BEST FRIEND IN THE FINANCIAL SERVICES INDUSTRY
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