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Finance Monthly. Ed i t or ’ s No t e Hello and welcome to the November 2022 issue of Finance Monthly Magazine! After a month of political instability in the UK and the continuous headwinds the global economy is facing, we present you Finance Monthly’s November selection of articles and interviews covering some of the most talked-about topics in the world of finance. Here are some of our favourite stories from this month’s edition: All of this and so much more - I hope you enjoy the content in Finance Monthly’s November 2022 issue! For more financial news and commentary, please visit our website to stay up-to-date on industry news as it happens, join the conversation on our Twitter (@Finance_Monthly), like our Facebook page and follow us on LinkedIn and Instagram (@FinanceMonthly). Best wishes, Katina Male Editor editor@finance-monthly.com Copyright 2022 Published by Universal Media Ltd The views expressed in the articles within Finance Monthly are the contributors’ own, nothing within the announcements or articles should be construed as a profit forecast. All rights reserved. Material contained within this publication is not to be reproduced in whole or part without the prior permission of Finance Monthly. Circulation details can be found at www.finance-monthly.com Universal Media Ltd PO Box 17858, Tamworth, B77 9QG United Kingdom 0044 (0) 1543 255 537 8. Follow us on Instagram Financemonthly Find us on Facebook Finance Monthly Stay Connected www.linkedin.com/finance-monthly Tweet us @Finance_Monthly Monthly Finance 3 Out of the Frying Pan & into the Fire Swapping Stupidity for Austerity 50. 14. Economic Downturns and the Impact on Mental Health 32. Crypto Influencers Curse or Blessing? Everything You Need to Know Before Investing in a Start-Up
Finance Monthly. Con t en t s 4 CONTENTS THE MONTHLY ROUND-UP News You Can’t Afford to Miss 6. 8. OUT OF THE FRYING PAN & INTO THE FIRE Swapping Stupidity for Austerity FRONT COVER FEATURE BUSINESS & ECONOMY Economic Downturns and the Impact on Mental Health 10 Common Financial Problems that Businesses Struggle with and How to Solve Them 14. 18. BANKING & FINANCIAL SERVICES The Emerging Role of Risk Orchestration Technology in Combatting the Threat of Fraud Do I Need to Outsource Accounting in Business? 22. 26.
Finance Monthly. 5 Con t en t s 46. 36. Why are Blockchain Technology and DeFi Apps so Important? Crypto Influencers Curse or Blessing? Why are Blockchain Technology and DeFi Apps so Important? 32. FINANCIAL INNOVATION & FINTECH 36. INVESTMENT The Rise in Global Retail Investing Apps Explained Beginner’s Guide to Real Estate Investing Everything You Need to Know Before Investing in a Start-Up 42. 46. 50. Vickers-Lee Holdings’ Reorganisation of Shares Orcha, Peak Technology Solutions and MCS Move to Sci-Tech Darebury’s £17.8 Million Violet Development Beretta Holdings Acquisition of Ruag Ammotec Urban Fun Acquires Fun Box 56. TRANSACTION REPORTS 58. Do I Need to Outsource Accounting in Business? 26. Beginner’s Guide to Real Estate Investing 60. 61.
Finance Monthly. 6 THE MONTHLY ROUND-UP News You Can’ t Af ford to Mi ss The Mon t h l y Round -Up Google &Microsoft Struggle Due to Slow Economy The slowing economy has taken a toll on 2 of the Big 4 Tech Giants, their July-to-September earnings have shown. Alphabet, Google’s holding company and Microsoft have seen a sharp drop in profits over the three-month period. Alphabet announced a sale increase of just 6%, to $69bn – marking the company’s weakest quarterly growth in nearly 10 years apart from the start of the pandemic. Meanwhile, Microsoft said demand for its computers and other technology had weakened. Its sales saw an increase of 11% to $50.1bn – the tech giant’s slowest revenue growth in five years.
Finance Monthly. 7 The Mon t h l y Round -Up Australian Gambling company Star Entertainment Group has been fined A$100 million over falling to prevent money laundering at its casino in Sydney. In addition to the fine, the group’s licence to operate the casino has also been suspended. The Star has commented that it will “do everything in [its] power” to regain the licence and its clients’ trust. As a response to reports of increased widespread criminal activity, AustralAustralian Casino Gets Record Fine Over Money Laundering Energy Bills in the UKMight Rise Above £4,000 in April Analysts have estimated that the typical household energy bills in the UK could reach up to £4,347 a year from April next year. The forecast from Cornwall Insight comes after Chancellor Jeremy Hunt said the energy bill help, which was originally expected to last for two years, would be cut in April. The UK Government said the most vulnerable families would continue to be protected from increasing energy prices. Hunt announced the change to the energy price support as part of measures put in place to help families save money following the big hole in the public finances the Government’s mini-budget left. The Chancellor said that “it would not be responsible to continue exposing public finances to unlimited volatility in international gas prices”. ian casinos have been under recent pressure to reform their operations. The Star’s record penalties come following a damning inquiry about The Star’s money laundering organised crime practices in Sydney a few months ago. The casino was said to be taking a “cavalier” approach to governance and at times taking deliberate actions to cover its tracks. At the time, Philip Crawford, regulatory chief, said: “The institutional arrogance of this company has been breathtaking.” The fine is the maximum allowed, but the NSW Independent Casino Commission refrained from removing The Star’s licence altogether in an attempt to protect thousands of jobs. The casino will still operate under a manager appointed by the regulator following the suspension. The Star will not be allowed to run the casino on its own until it can “earn” its licence back, Mr Crawford commented. A spokesman for The Star said the casino is committed “to charting a path back to suitability”. A number of executives have resigned already, including former CEO Matt Bekier.
Trying to write a concise article about UK Fiscal Policy in the middle of October 2022 is a bit like reporting the final score of an aggressively close Rugby Match at halftime. I delayed writing as long as I could, giving Chancellor (n+1) Jeremy Hunt time to lay out his “emergency statement” unravelling absolutely everything Liz Truss has put in motion since her elevation to the premiership. But, in the wake of increasing political instability, I fear how many statements might yet follow... 8 Finance Monthly. Fron t Cove r Fea t ur e
Bill Blain - Strategist at Shard Capital Out of the & into the FRYING PAN SWAPPING STUPIDITY FOR AUSTERITY FIRE Finance Monthly. Fron t Cove r Fea t ur e 9
The question we want answered is – what does it all mean for the UK economy? How are we going to drive growth and restore financial credibility? The current economic debacle facing the UK is much more than just a polycrises of domestic leadership misjudgements, failing services, anaemic growth, tumbling productivity, sub-optimal investment, surging mortgage rates and consumer price misery. There is also the global angle whereby high-interest rates, high debt levels, and persistent inflation may be a feature for a decade. We don’t yet know just how destructive and destabilising the consequences may yet be. (Clue – horrible!) It’s not worth repeating the cataclysm of failure and policy mistakes since Truss was appointed Prime Minister by a small number of rich, aged, white conservative men in her party. But, give Truss and Kwasi Kwarteng some credit: their objectives were good – recognising the UK needed new, disruptive approaches and policies to drive growth and improve productivity. Their goal was to smash the orthodoxy and transform the UK’s lethargic low-growth, low-wage and low-productivity economy into a hi-energy hi-growth economic powerhouse. (Conveniently they skipped over how Conservative Party has been in power for the last 12 years, during which time the value of the UK economy has fallen from 90% of Germany’s to 70%. Brexit? Let’s not even go there!) Then it got messy. Recognising the UK is a lethargic stifled economy was hardly a Sherlock Holmes moment for anyone remotely familiar with economic reality. But Truss and Kwarteng thought they’d uniquely stumbled on some great economic insight – and naively decided only they were qualified to propose solutions. It was dangerously destructive arrogance. What they did next may have condemned the UK to penury for a generation. Their strategy and policy announcements were beyond shambolic – untested, regressive, ill-advised and downright pig-ignorant of any economic or market reality. There was no strategy, no grand plan, just desperate hopes expressed as irrefutable facts. The UK’s financial reputation took millennia to establish. It took Kwasi Kwarteng less than 30 minutes to demolish it. The really upsetting thing is – prior to 23 September 2022 (the date of Kwarteng mass-suiciding the UK economy) it would have been entirely possible to have presented a cogent, credible and workable plan to bail out the UK energy crisis and promote growth via a series of specific taxes, borrowing and policies. The morning before Hunt presented his plan, Tesco Chairman John Allan, a highly respected British business leader, told the BBC’s Laura Kuenssberg the Conservatives have no growth plan, but: “We have seen the beginnings, I think, of a quite plausible growth plan from Labour. At the moment their ideas are on the table, and many are actionable and attractive.” His views are generally shared across the City of London – where previously support for Labour was considered a capital offence. We all know how it played out for Truss and Kwarteng. They have left the UK as a global financial laughing stock. By focusing the eyes of the world on our financial crisis, umpteen doors and policy options that could have offered effective ways for the UK to navigate its way through the multiple crises now upon us are now closed. They have made finding a solution so much more difficult. “The UK’s financial reputation took millennia to establish. It took Kwasi Kwarteng less than 3 minutes to demolish it.” Fron t Cove r Fea t ur e 10 Finance Monthly.
Jeremy Hunt “courageously” stepped into the breach, playing his new chancellor “can’t be sacked” card to unwind the illiteracy of Trussonomics, but he can’t wipe away the indelible stain it’s left on the economic outlook for the nation. He clearly upset Truss - No 10 started actively briefing against him almost from the start. The only Truss “policy” to survive was the removal of the banker bonus cap… Why? Did his scriptwriter miss it? Hunt, and many traditional, orthodox Tories, believe Truss and Kwarteng failed because they didn’t balance the budget, thus upsetting the markets. That’s a massive mistake. Take your pick of the many reasons markets lost confidence in them: • Markets sold off because the mini-budget was chaotic and dangerously ill-informed. • Markets sold off because it was patently unfair and regressive. • Markets sold off not just because there were unfunded spending plans, but because the proposed tax cuts blithely assumed “trickle-down” economics would up UK growth by 2% per annum. • Markets sold off because there was no clarity or vision of the policies to drive growth. The new problem is Hunt has ditched Truss’s growth plans and presented a new mini-statement committing the UK to financial conservatism – effectively switching policy from Growth to Austerity. Hunt and the rest of his party have hunkered down, convinced the only way to restore the financial stability of the UK is to address the £70 bn hole in the accounts (they created) is tax hikes and spending cuts. Austerity is never a route to growth. One of my chums is fellow Scotsman Professor Mark Blyth, Rhodes Professor of International Economics at Brown University. His 2013 book, Austerity: The History of a Dangerous Idea, picks apart the notion of austerity will boost growth by slashing debt. “In general, the deployment of austerity as an economic policy has been as effective in bringing us peace, prosperity, and crucially, a sustained reduction of debt, as the Mongol Golden Horde was in furthering the development of Olympic dressage.” Blyth goes on to show how Austerity doesn’t work, it increases inequality, and it can’t work in a competitive global economy where prices and currencies are volatile. He asks: “Is everybody supposed to run current account surpluses? If so, with whom—Martians? And if everybody does indeed try to run a savings surplus, what else can be the outcome but a permanent global depression?” I spoke to Mark following Hunt’s statement and his disbelief was palatable: “The UK’s growth model, such as it was, was built around asset protection for the south and nationalism for the north. When you can’t even do the asset protection right anymore, what’s the point? And if you think further cuts to a welfare state that is already one of the worst in the OECD will bring back growth I would ask you to look at what happened the last time you tried this with Osborne for a bit of a reality check. Benefit Street and ’strivers vs skivers’ makes for good tabloid headlines but does nothing for GVA (Gross Value Added).” Yet cutting debt and services provided by Big Government is default libertarian conservatism and will appeal to all 81326 party members who voted for Truss as Prime Minister of the UK. They may be happy. The rest of us are not. 12 years is a long, long time in politics. Time for a change. Finance Monthly. Fron t Cove r Fea t ur e 11
Business Economy. 14. Economic Downturns and the Impact on Mental Health 10 Common Financial Problems that Businesses Struggle with and How to Solve Them 18.
People across the UK are continuing to grapple with the cost-ofliving crisis, and mental health conditions, likely exacerbated by the pandemic, are continuing to rise. Employees are facing increasingly high costs, piling financial pressures and as a result, increased stress, and lower well-being. The economic climate has already triggered hundreds of job cuts across certain industries, which will only heighten anxiety for employees. ECONOMIC DOWNTURNS MENTAL HEALTH and the Impact on Paula Allen Global Leader and Senior Vice-President of Research and Total Well-being at LifeWorks Bus i ne s s & Economy Finance Monthly. 14
Finance Monthly. Bus i ne s s & Economy 15
Any uncertainty in an area of importance is very stressful. The human mind experiences stress whenever there is change (even if change that is positive). It does not mean that all change is bad, but uncertainty from a change that feels fully out of our own control is particularly stressful and more likely to have a more significant negative impact on our mental health and well-being. Economic uncertainty can fit into the category of something that feels outside of our personal control. Our Lifeworks’ Mental Health Index revealed that a negative but certain outcome such as job loss is stressful but is actually less stressful than the uncertainty from a fear of job loss or reduced hours or wages. Those who are more vulnerable, to begin with, are more impacted. If one has a cushion of savings and financial knowledge and options, there is a sense of control even in uncertain times. This sense of control and the feeling that although you may be impacted in the short term, you can manage generally in the long term, is a big factor in mitigating stress. Research from Lifeworks’ Mental Health Index also found that a lack of emergency savings is a driver of lower mental health regardless of income. We found individuals without personal savings are 50% more likely than those with emergency savings to have difficulties sleeping because of stress. “We found individuals without personal savings are more likely than those with emergency savings to have difficulties sleeping because of stress.” 50% Bus i ne s s & Economy Finance Monthly. 16
The lack of financial cushion creates anxiety and higher vulnerability, which is stressful. Lower financial well-being also correlates with lower work productivity and higher turnover risk. With the clear work impact, employers are looking for ways to help. It is important to remember that a salary increase alone does not mitigate the problems workers are facing as such contribute to more inflation and may not even be sufficient to make a meaningful difference. Programs that make it easier to save for emergencies, financial management information and coaching, company-sponsored discount programs and even hardship funds have had more of a focus. Additionally, the stress of economic uncertainty or any disruption, means that mental health support and services are needed by more people. It is important to ensure that such services are easy to access and well-communicated. For workplaces, it also means training managers on mental health in the workplace and their role in supporting it and providing the education that addresses the stigma around it. Managers should not be mental health counsellors for their employees, but they do have a role in a psychologically safe workplace and in stepping in when their employees need support. While all of this is most helpful when in place prior to a downturn, it is never too late. Implementing support during a downturn or even ramping up communication of programs such as EAP and savings schemes that address these issues and also already in place, is also extremely helpful on a practical level and also shows that the employer is concerned about the well-being of their people. “It is important to remember that a salary increase alone does not mitigate the problems workers are facing as such contribute to more inflation and may not even be sufficient to make a meaningful difference.” Finance Monthly. Bus i ne s s & Economy 17
Bus i ne s s & Economy Finance Monthly. 18 The cost of living in the UK exceeded 10% in August, and it’s likely going to get higher from there. This crisis has made it difficult for everyone to manage their finances, but there’s hope on the horizon for businesses that can solve some of their common financial problems quickly. that Businesses Struggle with and How to Solve Them COMMON FINANCIAL PROBLEMS
Finance Monthly. Bus i ne s s & Economy 19 PROBLEM 1: Lack of Sufficient Cash Flow A lack of cash flow is one of the top 4 reasons businesses fail. Fortnightly, there are many ways to boost cash flow, such as better account management, limiting discounts, and changing your credit turns. You can also manage your inventory better and avoid overpacking your warehouse. PROBLEM 2: Not Applying for COVID-19 Credits While some small businesses earnedmoreduring thepandemic, most of them lost money. To help companies manage their costs, the government implemented small business credits, and many of them are still available. For example, you can still file for employee retention credit. PROBLEM 3: Inefficient Marketing and Advertising All businesses, whether online or offline, need to market their products and services to stay competitive. Inefficient or general marketing tactics will bleed you dry, but a targeted strategy will work wonders. Conduct a customer audit to help you find and target your specific audience. PROBLEM 4: Not Using a Business Budget Don’t make the mistake of not referring to a budget. All great business plans start with a budget that helps them determine if their finances are on (or off) track. Keep inmind that a realistic budgetmust be flexible, as some economic factors (i.e., the pandemic) are beyond your control. PROBLEM 5: Too Few Capital Investments Businesses that receive significant capital before going public are more likely to succeed. If you weren’t lucky enough to attract angel investors, you would need to rely on bank loans and credit cards. You may need to budget for a personal loan if you can’t lock in a low-interest rate. PROBLEM 6: Unexpected Business Expenses Even the best budgets can’t account for unexpected expenses. Vandalism, storm damage, or a DOS attack could cost your company thousands, but you can prepare for these situations by padding your budget. Try to keep $50,000 to $100,000 on hand in case something happens. PROBLEM 7: Tax and Legal Compliance Small businesses are responsible for different taxes and burdens depending on their structure. To stay legally compliant, companies should review their tax liability and laws surrounding their structure in their state. Otherwise, you could be subjected to fees, fines, and possible jail time. PROBLEM 8: Too Much to Do, Too Little Time Business owners wear many hats, but there comes a point where you need to hire employees to pick up the slack. If you don’t, you won’t be able to focus on the business operations that make you money. Alternatively, you could use software that automates part of the process. PROBLEM 9: Hiring and Retaining Employees The hiring process is incredibly expensive. It’s costly to replace employees, but working on retaining them will keep your business competitive. While you can’t always prevent an employee from leaving, offering a higher salary, better benefits, and flexibility will go a long way. PROBLEM 10: Keeping the Passion Alive You likely started your business because you were passionate about the products and services you were offering. However, when your passion drops, so does your revenue. Addressing burnout early and focusing on why you became a business owner can keep the passion alive. How Small Businesses Can Solve Common Financial Problems Running a business isn’t easy, even when you have a great idea and plenty of customers. A sudden economic downturn could severely impact your bottom line, but it doesn’t have to!
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Banking Financial Services 22. The Emerging Role of Risk Orchestration Technology in Combatting the Threat of Fraud Do I Need to Outsource Accounting in Business? 26.
Eddie Vaughan, Banking Expert for the LexisNexis® RiskNarrative™ platform, highlights through new research how financial organisations are evolving from risk management to risk orchestration, as they strive to better connect the systems and data sources used to combat fraudulent and criminal activities. Eddie Vaughan Banking Expert for LexisNexis® The Emerging Role of RISK ORCHESTRATION TECHNOLOGY in Combatting the THREAT of FRAUD Bank i ng & F i nanc i a l Se r v i ce s 22 Finance Monthly.
The ongoing challenge Despite the best efforts of financial organisations, they are still losing millions per year because of fraud and financial crime. Figures released last month by UK Finance1 show that criminals in the first half of this year stole a total of £609.8 million through authorised and unauthorised fraud and scams. And while this figure is down from the record highs seen during the pandemic, the number is still significant. Cost-of-living crisis set to cause further headaches New research by global data and analytics company, LexisNexis® Risk Solutions, shows that 43% of financial services organisations expect the cost-of-living crisis to increase the risk of financial crime and fraud over the next 12 months, as scammers target vulnerable consumers struggling with rising bills. The research also highlighted a concern that criminals are outpacing efforts to protect banks and their customers. A third (30%) of financial services organisations believe anti-fraud and financial crime systems are not developing fast enough to keep up with criminal techniques, whilst a similar number (32%) think fraudsters are spending more time targeting victims. So, with criminals continuing to look for new ways to exploit potential Finance Monthly. Bank i ng & F i nanc i a l Se r v i ce s 23
victims as fraud continues to evolve, it’s more important than ever for financial organisations to advance their risk management solutions. Helping to prevent fraud The good news is that the advanced security systems now widely being used by banks prevented just under £584 million from being stolen in the first six months of 20221. And financial organisations continue toplay their role inhelping to reduce fraud. In fact, the new study revealed that, on average, financial services providers rely on five external vendors for data sources or solutions to prevent fraud and financial crime across their customer onboarding and lifecycle – with half of these firms (49%) highlighting that having multiple solutions in place helps to increase protection. In addition, UK Finance’s Information and Intelligence Unit2 helped protect over 2.1 million compromised card numbers in 2020. The industry is also working closely with the government on measures to strengthen the fight against fraud and economic crime, including through the Economic Crime Strategic Board jointly chaired by the home secretary and chancellor. However, while financial organisations can only do so much, with social engineering for example an increasingly utilised tactic to trick consumers out of their savings, many banks and the wider finance sector are starting to see risk orchestration as the latest weapon in their armoury to tackle the fraudsters. The move to risk orchestration To address rising levels of risk, the independent research indicated that seven out of ten (69%) finance organisations say they will invest more in technology over the next 12 months, with six in ten (59%) prioritising the emerging concept of financial crime and fraud risk orchestration. Orchestration provides an endto-end solution for customer onboarding and ongoing monitoring, incorporating antimoney laundering screening, transaction monitoring and case management, all within a single platform. It overcomes silos and manual processes to deliver more informed insights that enable quicker and increasingly accurate assessments of risk. Orchestration can help give businesses the flexibility and choice to deploy as many vendors and data sources as needed in their screening and monitoring, without the usual logistical headaches. The research also indicated that the move to risk orchestration is well underway. The majority of respondents (74%) surveyed were already aware of risk orchestration platforms, identifying the main benefits as being: the ability to automatically track customer transactional behaviour over time and flag anomalies (48%); being able to bring all customer £609.8 MILLION was stolen by criminals in the first half of this year through authorised and unauthorised fraud and scams. 43% of financial services organisations expect the cost-of-living crisis to increase the risk of financial crime and fraud over the next 12 months. 30% of financial services organisations believe anti-fraud and financial crime systems are not developing fast enough to keep up with criminal techniques, whilst 32% think fraudsters are spending more time targeting victims. Bank i ng & F i nanc i a l Se r v i ce s 24 Finance Monthly.
checks into a single, unified, digital platform (46%); and creating riskbased financial crime and fraud screening bespoke to varying risk appetites (41%). Risk orchestration in practice – Ikano Bank Ikano Bank was founded in 1995 by Ingvar Kamprad – part of the family behind global retailer IKEA. The bank offers direct-toconsumer products including loans and store cards. In the UK, the bank opens hundreds of new interest-free loan accounts per day. The bank considered the biggest risk it was facing was in ID fraud and document verification. With a view of providing efficient, first-class digital onboarding and fraud risk management, they needed a supplier that would give instantaneous decisions. LexisNexis® Risk Solutions was able to supply Ikano Bank with the orchestration platform, RiskNarrative, that integrated with their existing data to grant them the ability to run ID and document verification, address checks and internal and external fraud rules. Along with this, the platform provided increased Cifas screening – before, Ikano Bank would only check an applicant address, whereas now they can match additional information such as email addresses, mobile telephone numbers, and sort codes, reducing their false positive rate. A year on from going live with the RiskNarrative platform delivering their digital transformation, Ikano Bank have onboarded over 70,000 customers. The financial crime manager at Ikano Bank commented that the automated decisioning has removed many referrals and freed up time for staff. The solution has made a significant difference to what the bank used to see. RiskNarrative has enabled the bank to be in charge of the fraud rules the organisation sets, so it only sees the referrals it wants to see, with the ones the bank does not want to see, or the ones it declines, taken care of. This has enabled them to have greater control. Whilst the RiskNarrative platform is currently only used in the UK, Ikano Bank is also looking to introduce the platform across their Sweden branches and beyond. The future role of risk orchestration With banks and the wider financial sector leaving no stone unturned in the ongoing battle to beat the fraudsters and reduce crime, risk orchestration is set to play a significant role in tackling fraud while supporting financial organisations with ongoing compliance requirements and customer acquisition targets. Ingvar Kamprad For further information, visit RiskNarrative™ Platform | LexisNexis Risk Solutions. References Half-year fraud update 2022.pdf (ukfinance.org.uk) Fraud The Facts 2021- FINAL.pdf (ukfinance.org.uk) Finance Monthly. Bank i ng & F i nanc i a l Se r v i ce s 25
OUTSOURCE ACCOUNTING Do I Need to in Business? Bank i ng & F i nanc i a l Se r v i ce s 26 Finance Monthly.
Most business owners know that accounting is a vital part of their business. But what they may not realise is that accounting can be time-consuming and complex, especially for small businesses. This is why many business owners choose to outsource their accounting needs. In this blog post, we will discuss the benefits of outsourcing your accounting, and we will also provide some tips on how to find the right accountant for your business. What is outsourcing? Outsourcing is the practice of hiring a third-party company or individual to handle certain tasks or responsibilities for your business. This allows you to focus on other areas of your business, while still getting the job done effectively and efficiently. Namely, outsourcing your accounting can free up your time, allow for more accurate financial recordkeeping, and provide expert advice on financial decisions. There is no wonder why many businesses choose to outsource Finance Monthly. Bank i ng & F i nanc i a l Se r v i ce s 27
28 Finance Monthly. Bank i ng & F i nanc i a l Se r v i ce s their accounting needs and why outsourcing has become a popular business trend. What are the roles you should outsource? When it comes to outsourcing your accounting, there are a few roles that you may want to consider handing over. The most important accounting outsourcing roles include bookkeeping, tax preparation and filing, financial statement creation, budgeting and forecasting, and payroll management. These tasks can all be time-consuming for small business owners to handle on their own. By outsourcing these roles to a qualified accountant or firm, you can save yourself the stress and focus on running your business. Why accounting matters in business Having accurate financial records is crucial in running a successful business. It helps with budgeting, and decision-making, and can also prevent any costly legal issues. Outsourcing your accounting means that you have access to professionals who are experts in the field and can handle all of your financial recordkeeping accurately and efficiently. This allows you to focus on other aspects of running your business. Also, having a professional accountant can provide valuable insights and advice on financial decisions for your business. They can help with budgeting, tax planning, and providing financial forecasts for the future of your business. Tips for finding the right accountant When outsourcing your accounting, it is important to find an accountant or accounting firm that fits the needs and goals of your business. Here are some tips on how to find the right fit: • Research potential accountants or firms and read reviews from past clients • Consider their specialisation and experience in the industry • Make sure they have a good understanding of your specific business needs • Meet with them to discuss your goals and how they can help you achieve them Once you have found the right accountant, establish clear communication and set expectations for their responsibilities. Accounting basics that your company should practice Even if you choose to outsource your accounting, it is important for business owners and managers to have a basic understanding of financial recordkeeping. This includes regularly keeping track of income and expenses, setting budgets, forecasting future financial needs, and filing taxes correctly and on time.
29 Finance Monthly. Bank i ng & F i nanc i a l Se r v i ce s Once you are more confident in your accounting skills, you can consider taking on certain tasks yourself or delegating them to other team members. However, outsourcing your accounting needs can provide peace of mind and allow for more accurate financial recordkeeping in the long run. Account reconciliation, tax planning, and cash flow management Outsourcing your accounting can provide many benefits and leave you free to focus on other aspects of running your successful business. Consider the roles that you may want to outsource and find a qualified accountant or firm that fits the needs of your business. Remember to practice basic financial recordkeeping, while also utilising the expert advice and insights that a professional accountant can offer. This can lead to improved cash flow management, tax planning, and overall financial success for your business. How to make the most out of outsourcing your accounting Once you have chosen to outsource your accounting, there are a few steps you can take to make the most out of this decision. • Communicate and set expectations with your accountant or firm • Utilise their expertise and advice on financial decisions for your business • Regularly review and analyse your financial records • Stay involved in the financial aspect of your business, while also allowing yourself to focus on other aspects. While outsourcing your accounting may require an initial investment, it can ultimately save you time and stress while leading to improved financial success for your business. Gain expertise and save on costs When you opt to outsource your accounting, you gain access to professionals who have the expertise and skills necessary for accurate and efficient financial recordkeeping. This can save time and stress for both you and your business, while also potentially saving on costs in the long run. Consider outsourcing as a valuable investment toward the success of your business. Not to forget, the experienced advice and insights that a professional accountant can provide can be valuable for financial decision-making and the overall success of your business. So take the time to find the right fit for your needs, and make the most out of outsourcing your accounting. What to consider when choosing to outsource While outsourcing your accounting can provide many benefits, it is important to carefully consider the specific needs and goals of your business. Research potential accountants or firms and make sure they have a specialisation and understanding of your industry. Meet with them to discuss how they can help you achieve your financial goals. Establish clear communication and expectations for their responsibilities, and regularly review and analyse your financial records. Outsourcing your accounting can lead to improved cash flow management, tax planning, and overall success for your business. Do not hesitate to reinvest in the expertise of a professional accountant – it may just be the key to future growth and success for your company. Now that you are aware of the potential benefits and considerations, it is up to you to weigh the options and decide if outsourcing your accounting needs is right for your business. Remember that gaining the expertise and insights of a professional accountant can lead to improved financial decisionmaking and success in the long run. So take some time to research your options, communicate expectations clearly, and make the most out of outsourcing your accounting needs.
Innovation 32. 36. Financial FinTech Crypto Influencers Curse or Blessing? Why are Blockchain Technology and DeFi Apps so Important?
F i nanc i a l Innov a t i on & F i nTech 32 Finance Monthly. CRYPTO INFLUENCERS CURSE OR BLESSING? Lissele Pratt - Co-Founder at Capitalixe As Co-Founder at Capitalixe, Lissele Pratt helps international companies access the latest financial technology, payments and banking services globally. With 7+ years of experience in the financial services industry and her global perspective, the entrepreneurial-minded Lissele is a recognised expert in financial technology, cryptocurrency and international payments. Lissele’s hard work and determination landed her a spot on the Forbes 30 Under 30 Finance list in 2021. She has also been shortlisted for this year’s Great British Businesswoman Awards, European Women in Finance awards and the Women in Finance UK awards.
Finance Monthly. F i nanc i a l Innov a t i on & F i nTech 33 It is essential to be realistic about the fact that most influencers are not financial experts and may not fully understand the risks involved in investing in crypto. his month, social media mogul Kim Kardashian was charged $1.26 million by the Securities and Exchange Commission (SEC) for failing to disclose that she was paid £250,0000 to promote Ethereum Max on her Instagram page. The rise of social media influencers has been a boon for many industries, but the crypto world is still divided on whether or not they are helpful to the space. Some believe that influencers are a necessary evil, helping to bring awareness to a still largely unknown industry. Others think they’re nothing more than shills looking to make a quick buck off unsuspecting investors. So, what’s the truth? Are crypto influencers a curse or blessing for the FinTech industry? The Rise of Crypto Influencers If you’ve ever scrolled through your Twitter or Instagram feed, you’ve likely seen an influencer in action. Influencers have become a mainstay in our social mediadriven world, from promoting a new product to simply sharing their daily life with followers. The crypto industry is no different. In recent years, we’ve seen
F i nanc i a l Innov a t i on & F i nTech 34 Finance Monthly. the rise of crypto influencers – individuals who use their social media platforms to promote cryptocurrencies, initial coin offerings (ICOs), and blockchainbased projects. Crypto influencers come in all shapes and sizes. Some, like Kim Kardashian, have millions of followers and can command a handsome fee for a single post. Others, like aspiring YouTubers and Twitter personalities, are just starting to build their followings but are no less enthusiastic about the industry. According to Influencer Marketing Hub, crypto influencers make around $500 to $1500 per thousand views. If you look at an influencer’s average views for a video for a month, and the video views are around 10,000 views, you will make approximately $5,000 to $15,000. The Benefits of Crypto Influencers There’s no doubt that crypto influencers have the potential to reach a large audience and bring much-needed attention to the industry. After all, the more people are aware of cryptocurrencies and blockchain technology, the more likely they will invest in them. In addition, some crypto influencers are true believers in the technology and can help to promote its use cases andpotential benefits to the mainstream world. Pump and Dump Schemes However, not all crypto influencers are created equal. Unfortunately, many promote dubious ICOs and pump-and-dump schemes. A pump-and-dump involves artificially inflating the price of an asset through false and misleading positive statements to sell the asset at a higher price. Once the price has been pumped up, the perpetrators will then dump their shares. This results in the price crashing, and investors left with worthless assets. SEC Response to Kim Kardashian As mentioned earlier, Kim Kardashian has recently been involved in what the class action case deemed a pump-and-dump scheme. In response to the case, SEC Chairman Gary Gensler said it was a “reminder” that celebrity endorsement did not necessarily make a product worth investing in. Later, in a Youtube video about crypto investment, he added: “Celebrity endorsements don’t mean that an investment product is right for you or even, frankly, that it’s legitimate. Even if a celebrity endorsement is genuine, each investment has its risks.” FaZe Clan and Save the Kids Another famous example of a Kim Kardashian was charged $1.26 million by the Securities and Exchange Commission (SEC) for failing to disclose that she was paid £250,0000 to promote Ethereum Max on her Instagram page.
Finance Monthly. F i nanc i a l Innov a t i on & F i nTech 35 pump-and-dump scheme is the FaZe Clan and Save the Kids crypto fiasco. Several members of the organisation promoted a new altcoin: Save the Kids. They generated interest in the cryptocurrency through a series of Tweets, videos and even announced themselves as brand ambassadors on their websites. The idea was that a percentage of the proceeds would go to a Children’s charity. People bought into the coin, and shortly after, it plummeted by a whopping 60%. The members of FaZe Clan that were involved in the scheme pumped interest into Save the Kids and then pulled the rug from investors, causing the price to crash. $SQUID Game Coin Another notable example is the $SQUID Game coin, named after the popular Netflix show. Although the coin had nothing to do with the show, it still managed to create a lot of buzz due to the popularity of the show. Influencers were quick to jump on the bandwagon and started promoting the coin. The coin soared from just over a cent to $2,800 in a short period. However, after reaching this peak, it fell back to only a few cents a few minutes later. Final Thoughts It is essential to be realistic about the fact that most influencers are not financial experts and may not fully understand the risks involved in investing in crypto. In addition, influencers are paid to promote particular projects, which means that they may not be impartial. Working with reputable brands that are transparent about their fees and have a good track record can help to mitigate some of the risks associated with crypto investment. For businesses looking to use influencer marketing to promote their project, it is essential to vet the influencers carefully and make sure they are a good fit for your project. Celebrity endorsements don’t mean that an investment product is right for you or even, frankly, that it’s legitimate. Even if a celebrity endorsement is genuine, each investment has its risks. In response to the Kim Kardashian case, SEC Chairman Gary Gensler said it was a “reminder” that celebrity endorsement did not necessarily make a product worth investing in. Gary Gensler SEC Chairman
F i nanc i a l Innov a t i on & F i nTech 36 Finance Monthly.
Money is transferred, payments are made daily, and technology is changing our lives. The ability of blockchain technology to settle payments and money transfers in a speedy, safe, and efficient manner is being recognised by banks and FinTech businesses. Why are BLOCKCHAIN TECHNOLOGY DeFi APPS and so Important? Finance Monthly. F i nanc i a l Innov a t i on & F i nTech 37
danger of depending on a single corporation, central computer, or server to maintain the source of truth is reduced by blockchain, which uses networks of computers to store data and authenticate transactions securely. Data and transactions are forever kept, and history cannot be altered because of how blockchain securely validates the data. Information is the lifeblood of a business. The more accurate and quickly it is received, the better. Because it stores information on an immutable ledger that network users with permission can only view, blockchain is excellent for conveying that information because it is instantaneous, shareable, and entirely transparent. A blockchain network can track transactions such as payments, orders, accounts, etc. You can see all transaction facts from beginning to end since members share a single view of the truth, providing you with more confidence and additional efficiencies and possibilities. As time passes, newer and more advanced trading apps like Bitcoin 360 AI join the digital world to allow people to invest in blockchain technology. What Is the First-ever Blockchain-based Decentralised Crypto? The first decentralised, blockchain-based cryptocurrency is Bitcoin. Bitcoins were created in 2009 by Satoshi Nakamoto, a pseudonymous inventor, and are not backed by banks or governments. Bitcoin is popular, and it is accepted as a means of exchange in many venues, including cafés, bars, retail shops, and health services, even though it is not legal money in most jurisdictions. In recent years, the price of Bitcoin has been extremely volatile, resulting in a lack of trust in Bitcoin as a means of exchange or a store of value, as well as worries among central banks about the viability of cryptocurrencies. Cryptocurrencies like Ethereum (ETH), Litecoin (LTC), Dash (DASH), and Monero (MONEY) are all built on their blockchain systems. Begin investing in the crypto market! Although cryptocurrencies are envisioned as a means of payment, just a few firms accept themas a formof payment today. Crypto proponents believe it can be used for a wide range of economic purposes, but it may take some time for the digital currency to gain traction. When investing in digital currencies, it’s vital to grasp what makes them different from other currencies. To begin with, this is an extremely volatile market. A stock that may fluctuate rapidly is also prone to a dramatic drop. What’s the Primary Use of Blockchain Technology in DeFi Apps? New forms of financial assets, trade, and business models are being created due to decentralised finance (DeFi) applications. Blockchain technology disrupts established financial services and institutions by making financial transactions, procedures, and systems simpler, quicker, and more efficient is also included in crypto finance. Blockchain is a novel method of storing and transacting information. The usage of blockchain in DeFi is unique because it goes beyond basic value transfer to more complex financial applications. Moreover, DeFi is based on blockchain technology, the backbone of the digital currency bitcoin, and allows several organisations to share a copy of a transaction history without being controlled by a single source. This is because centralised systems and human gatekeepers may slow down and complicate transactions while allowing consumers to have less direct control over their money. How Important Is Blockchain Technology in Storing Data? Data may be anything from bank account information to GPS tracking locations, digital art, and x-ray pictures as the world becomes more digitised. Payments, delivery confirmations, and health record updates are all examples of transactions. The F i nanc i a l Innov a t i on & F i nTech 38 Finance Monthly.
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Investment The Rise in Global Retail Investing Apps Explained Beginner’s Guide to Real Estate Investing Everything You Need to Know Before Investing in a Start-Up 42. 46. 50.
In 2022, apps have taken over the world. No matter what it is you need to do, there’s an app for it. This rule applies to everything from dating to business, and the investment sector is no exception. Investing apps have become increasingly popular over the past couple of years. Their appeal is easy to understand, in that they’re consumer friendly and have opened the markets up to ordinary people. We look at the factors behind their emergence and whether or not they’re here to stay. The Rise in GLOBAL RETAIL INVESTING APPS Explained Inve s tmen t 42 Finance Monthly.
An app for everyone In our modern world, those looking for the best investment apps will find themselves spoilt for choice. There are so many out there that entire web pages exist to help consumers sort the wheat from the chaff. These review sites rank and rate options based on various factors, including platform fees and commission amounts. There’s an option for everyone, and it’s a good job because according to the Financial Times, retail investors accounted for one-third of stock market trading in 2021. Those taking advantage of investment apps made up a sizeable portion. The growth in retail trading undoubtedly goes hand in hand with the rise in investment apps. It, in turn, is explained by the pandemic. With more people at home in 2020, and most of Finance Monthly. Inve s tmen t 43
44 Finance Monthly. Inve s tmen t them having additional time on their hands, many explored new pastimes. Investing, and the chance to create a secondary income stream appealed to many. This new breed of inexperienced investors naturally required certain things from the platforms they used – first and foremost, easily accessible advice and the ability to learn on the go. Many also had less capital behind them than traditional traders, meaning they wanted to be able to trade at low volumes and with minimal fees involved. Enter mobile apps, which did away with the need for brokers, banks, and the high costs that have traditionally come with the two. A burgeoning market If there’s one thing we can take away, it’s that the burgeoning popularity of retail investing apps is down to a perfect storm of factors. This has seen app usage increase from 35.6 million in 2017 to more than 150 million in 2021. So, what have user-friendly apps and lower trading costs meant for the retail investor? Access to global markets for the first time. With the cost and complexity of traditional investing removed, it’s easier than ever for traders to invest in stocks and assets without the need for a middleman. This means even lower-income individuals can profit from trading in a way that simply wasn’t possible before. According to Deloitte, this new breed of trader has a notably smaller bank account than previously – but that doesn’t stop them from being active on the markets. They’re also less reliant on professionals for financial advice. While some remain uncertain of the long-term effects of this shift, our personal opinion is this: anything that improves access to the markets for the ordinary man or woman and puts us all on an equal footing can only be a force for good. “The burgeoning popularity of retail investing apps is down to a perfect storm of factors. This has seen app usage increase from in 2017 to more than 35.6 MILLION 150 MILLION in 2021” “Retail investors accounted for 1/3 of stock market trading in 2021.”
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