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WHY YOUR FINANCIAL ADVISER RECOMMENDS YOU AVOID BLACK FRIDAY

By Rita Cool, Certified Financial Planner at Alexander Forbes

 

November’s arrival ushers in holiday shopping and with Black Friday specials already displayed, overspending to get the ‘picture perfect’ family life we see in advertising can be the cause of unnecessary financial and emotional stress.  There are a number of ways to avoid falling into a debt trap by being mindful of sale scams, doing comparisons and thinking about investing rather than spending this holiday season.

One pitfall to avoid is the ‘closing down sale’ sign which we automatically assume means the products will sell for next to nothing however, be aware that this may just be a marketing gimmick and often times after a few weeks when you return to the store the sign might still be up and the shop still there. Evaluate whether the deal you are getting is really a discount as prices could previously have been inflated and then deflated to reflect a discounted product, similarly a different colour sticker might be added to create the illusion of a discounted price. Make comparisons between different makes and models as retailers might sell older models at a discounted price when a new version is about to be launched – however if you buy a better quality product which may cost more it might last longer.

Rita Cool

Looking at the unit price could also save you, as buying in bulk may not always mean a product is cheaper, also be mindful that when a price ends in a 9 it makes the item seem less expensive however a price of R5 999 is actually only R1 away from being R6000 – this is another tactic commonly used to persuade us into buying unnecessarily. Things such as membership schemes are also rife at this time of year and you need to think of the long term costs and whether signing up would benefit you or not. Looking up and down the shelves is also another great trick in ensuring you get the most bang for your buck as items that are less expensive are normally placed either higher or lower than your eye-level and shopping with a list is another great way to cut your expenses dramatically.

 

As an alternative to spending money this Black Friday, rather take the money you were going to use on buying items that you don’t need and investing it or pay off your existing debt instead of creating more. A budget is a great way to see how much extra money you can give to paying off your debt quicker and if you were planning on buying something big on credit this Black Friday, your budget will show you if you have some extra money to pay it back faster.

If your debt is under control, use any extra money to save for an emergency fund or save any extras in your access bond so you can take money out of the bond in case you really need something – the great thing about this is that while in the bond it reduces your outstanding debt. A great investment can really pay off in the long run and by investing R10 000 at 10% annual interest you could receive much more back for example:

 

YearInvestment ValueTotal Interest
1   R 11 000    R   1 000
5   R 16 015    R   6 105
10   R 25 937    R 15 937
15R 41 772   R 31 772
20R 67 275 R 57 275
40   R452 592    R442 592

Shopping events like Black Friday make you feel like you want to be part of the group. It makes use of the fear of missing out on a bargain that your friend manages to get. So before you know it you are in the shops on one of the busiest days of the shopping year just to be able to brag about the deal that you got. You might have landed a great deal, but if you didn’t need it to start off with then it’s not really a deal and you have spent money you didn’t need to spend.

 

So this year don’t follow the group on Black Friday and spend unnecessarily but rather invest in yourself and your financial future.

 

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NEW TECHNOLOGY PLATFORM REDUCES CLAIMS PROCESS FROM WEEKS TO MINUTES

CLAIMS

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

CORONAVIRUS

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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