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What is the right strategy for the end of money?

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By John Barber, VP & Head of Europe at Infosys Finacle

More than five thousand years ago, humans replaced barter with money. Physical coins made of precious metal, which guaranteed their value, were stored in strong rooms, accompanied by ledgers to record who-owed-what-to-whom. Those early coins were subsequently joined by promissory notes, which became paper currency and today’s plastic notes.

While the container of value has changed dramatically, from silver dollar to printed bill, the value itself has always relied on a combination of trust and security, supplied in large part by central and commercial banks.

In the wider economy, we continue to speak of ‘cash’ even as the physical currency is rarely seen. In Portugal, for example, non-cash payments have reached around 72%. For governments, economic statistics based on the number of notes and coins in circulation are becoming less relevant as we switch to card payments.

Within the foreseeable future, physical currency may disappear, and the container of value may become purely digital. Many of us rely on banks’ ledgers to use credit cards, debit cards, transferring money, being paid, online purchases and much more without a second thought. Today, numbers on a screen provide the only evidence of a transaction completed or a revised balance, and we trust those numbers absolutely.

On the cusp of change

It could be that we will soon reach a tipping point, where the costs of a physical currency become unsupportable. Will governments continue with the complex and costly manufacture of notes and coins as usage dwindles to zero? Will banks be motivated to fund ATM networks if you can pay and be paid digitally, see your balance, initiate transactions, apply for loans and more on a mobile phone app?

On that topic, the signs are already present: the ATM numbers in Europe peaked in 2016 at 420,200, declining by around 10% to 376,984 in 2021, while the number of point-of-sale terminals increased in 2021 by 9.8%.

The recent pandemic accelerated many of the digital initiatives that were waiting in the wings. In the recent past, opening a new bank account online still required a branch visit with original identity documents. Today’s consumers, immersed in their digital existence, find a branch visit inexplicable. The forced switch to remote working during the pandemic brought forward many changes, and – most importantly – normalised authentication and identification using apps and online solutions.

Some industries have fully grasped the transition, where the day-to-day business of life is conducted digitally, and in-person visits are reserved for special occasions. For example, Apple’s high-street stores are temples to the brand rather than sales-led market stalls. While they enjoy the in-store experience, consumers prefer the speed and efficiency of digital transactions. In the same manner, most clothing retailers actively recommend that shoppers go online for a greater range of sizes and colours. The in-store experience focuses on the brand identity and customer service, such as accepting returns. Notably, sophisticated retailers offer an integrated omnichannel experience, with personal accounts that enable you to buy in-app and return in-store, in contrast to the often siloed operations of banks’ systems.

Showcase for banking

Even as we move to a cashless world, bank branches remain closely tied to the physical currency ecosystem developed over centuries. Will these branches make the transition to become showcases for banking?

There may be very little time remaining for banks to act. The costs of creating and managing physical cash are carried by governments, and their global exchequers would gladly cut the expenses sooner rather than later. There may be regulatory changes that will force this too, particularly around preventing money-laundering and investigating tax fraud, where governments would much prefer transactions were captured digitally to provide an evidential trail.

Consumers and corporations bear the costs of managing physical currency, too. As we can see from our own changing behaviour, we happily say goodbye to the delays and friction of carting physical tokens from buyer to seller. Many of these costs show up in time rather than as direct expenses. Cash lying in the till or trapped in a purse or pocket cannot be used for interest-bearing deposits or to ease cashflow; moving cash into the bank’s ledgers means time waiting in line at the branch or at the safety deposit box.

Friction-free future

In so many other areas, the internet and mobile apps have eliminated all of this transactional friction, and in the process often removed intermediaries. Mobile apps in particular have placed power literally in consumers’ and corporations’ hands. With mobile apps, response is instant and balances are updated in real time; some older bank systems that support branch operations continue to rely on batch processing, with delayed updates that can affect customer service.

For banks, given the accelerating pace of change, it becomes essential to ensure that underlying systems are ready to compete in the digital world. There is a pressing need to deliver an integrated, omnichannel experience, and switching to modern platforms will be part of the solution. This includes strategic decisions about whether banks should invest in on-premises technology and develop their own software, or move to cloud operations and standardised platforms that can be configured rather than coded.

Fintechs, challenger banks and – in many cases – younger banks (particularly in south Asian economies) tend to show the direction of travel. Supported by agile, flexible software platforms, these banks can focus their banking domain expertise to create innovative new products and services. And by selecting cloud-based solutions, capacity can be increased to align exactly with demand – and with expected compound annual growth rates for digital transaction volumes nearing 50%, scalability is a critical issue.

As the pace of change increases, the window is closing fast for banks to make their own transition to a fully digital existence. With proven leading technology and the flexibility of cloud enablement, the moment has arrived for banks to choose their strategy and build their digital future.

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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Finance

Weathering the economic storm in 2023

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By

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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