In 2018 RAK ICC made two key appointments to its team. The appointment of Alan Bougourd as Registrar in February was followed in April by the appointment of Dr Sameer Al Ansari as CEO. These appointments were made as part of the firm’s journey towards achieving global brand recognition as a premium jurisdiction for company formation.
Dr Sameer, a UK qualified Chartered Accountant brings over 30 years of expertise and deep industry knowledge in private equity and investment banking, having managed private equity (PE) funds, investment banks (Shuaa Capital) and investment companies (Dubai International Capital). Dr Sameer was also a Board Member of Dubai International Financial Centre (DIFC) for 12 years.
Commenting on Dr Sameer’s appointment at the time, RAK ICC Chairman, His Highness Sheikh Ahmed bin Saqr Al Qasimi, said: “We are extremely pleased to welcome Dr Sameer as the CEO of RAK ICC. As a much-respected senior figure, his time as a Board Member at the DIFC and Hawkamah as well as his extensive knowledge of the private equity and institutional investment markets reflects his tremendous know-how and it is clear that he will lend substantial credibility to RAK ICC.”
Alan joined as Registrar after having worked in the Guernsey financial services industry for over 25 years, including six years as the Head of the Registry on the island and brings the experience needed to ensure world-class standards of compliance and service at RAK ICC. To hear more about their appointments and the company, Finance Monthly speaks with Dr Sameer and Alan.
RAK ICC is responsible for the registration and incorporation of international companies in Ras Al Khaimah - what are the most important legal considerations that should be taken into account by your clients? How can non-residents avoid difficulties when attempting a company formation in Ras Al Khaimah?
Alan Bougourd: The most important legal considerations to be taken into account, once establishing a sound rationale for operating an International Business, are the stability of the jurisdiction and the legal certainty it provides. As the leading business jurisdiction in the region, the UAE provides a business-friendly environment in a strategically important location. RAK ICC operates under Common Law legislation and companies have access to the Common Law Courts of the Abu Dhabi Global Markets (ADGM) and the Dubai International Finance Centre (DIFC), as well as the local courts in Ras Al Khaimah.
What would you say are the typical issues that RAK ICC faces when advising during the first stages of company registration and incorporation?
Sameer Al Ansari: I am pleased to say that the formation of a RAK ICC company is a relatively straightforward process. We work in close partnership with a large number of agents. Some of them are global firms and others are local businesses, so there is an agent suited to meet the requirements of every potential shareholder. Some of the global firms will have representation in the location of the shareholders and others deal directly with their clients from the UAE - whatever the scenario, the agents are well placed to explain the benefits of, and the requirements for, a RAK ICC company in meeting the international requirements for compliance.
How are these resolved?
Sameer Al Ansari: Choosing the right agent for the individual circumstances of the client is key to a successful on-going relationship. We are updating our Register of Agents to make this process easier. The agent will of course need to meet its own compliance requirements and many of the these are around identifying the client, the underlying beneficial owner, the activities of the company and the source of funds, so being able to provide this information comprehensively is key to getting the relationship off to a good start.
Alan Bougourd: We know that in addition to the RAK ICC company, clients will be looking to open bank accounts, either in the UAE or in other financial centres or indeed in their locality. RAK ICC and its agents work closely with many banks to ensure that their requirements are understood and can be clearly conveyed to clients. As banks increase their due diligence, the key requirement is an understanding not only of the company but also its counterparties in the jurisdictions in which it operates.
You were both appointed as CEO and Registrar respectively earlier this year – what are the responsibilities that you were tasked with and what are the changes/achievements that are expected from you?
Sameer Al Ansari: As CEO, I am tasked with the transformation of RAK ICC into a leading premium jurisdiction whilst also maximising the growth of value-added, knowledge-based, technically advanced and innovative business practices in Ras Al Khaimah – a task I have enormous confidence in meeting, despite global challenges. Reputational risk is a serious matter for our government, however, we are well positioned to become a high-quality jurisdiction and I am delighted to now be a part of RAK’s journey as it plays an increasing role in this sector.
HH Sheikh Ahmed said at the time of Alan’s appointment that: “Evolving client priorities are driving a shift from traditional offshore centres to high quality jurisdictions. Mr Bougourd’s appointment is a clear signal of RAK ICC’s goal of achieving global recognition as a premium jurisdiction for the provision of company formation services with a focus on high-level compliance in line with global standards. We trust that, together, they will work to further align the strategy of RAK ICC to the government of RAK in its overall drive towards building a diversified economy.”
The appointment of Alan and myself, marks the beginning of a journey and will be followed by key appointments to further develop the reach of RAK ICC in the global marketplace. We will be making key appointments to support development in key markets as we look to develop strong long-term relationships and I would encourage anyone that is interested in developing a relationship with the UAE to contact us. We have seen an increased demand from companies looking to move to a quality jurisdiction that is strategically located and is able to meet their requirements is an efficient, sustainable and cost-effective manner. More and more companies are investing time and effort in our systems, processes and product offering, so we ensure that we continue to develop these strengths.
How have the first few months of your appointments been thus far?
Alan Bougourd: Both of us have very much enjoyed meeting with Agents to understand their requirements and to ensure we build long-term relationships with them, in support of their own business objectives, to our mutual benefit. For Dr Sameer, it has been fascinating to adapt his extensive business knowledge to this key market for economic growth and for me, to adapt living and working in the UAE. However, I am enjoying working in a multi-cultural environment and aligning working practices to the highest international standards.
We both have travelled internationally to understand the requirements of international clients and to ensure that RAK ICC’s practices are aligned to the global market and international registry environment.
Dr Sameer, as the organisation’s CEO, what are your short and long-term objectives and goals for the development of RAK ICC?
Sameer Al Ansari: My short-term objectives are to ensure that RAK ICC is meeting the needs of the market it serves and longer term, we want to ensure that we have the appropriate strategy to take full advantage of the changes to the market for International Business Companies. We recognise that the market will be adapting to changing requirements for transparency and substance and are committed to ensuring that RAK ICC will develop its Regulations and Products to align with the future requirements of this market place. We are at the final stages of developing a five-year strategy which we look forward to rolling out in 2019.
The merger and acquisition market is on track to hit record levels in 2018. According to Mergermarket, the first half of the year saw 8,560 deals recorded globally at a value of $1.94tn, with 26 deals falling into the megadeals category of over $10bn per deal.
While M&As present incredible value for businesses, many organisations don’t put much thought into what happens after the documents are signed, says Neerav Shah, General Manager EMEA at SnapLogic. As a result, he continues, many past M&A deals have failed to live up to their promise, with organisations struggling to manage the cultural and technological challenges associated with these deals.
The landscape is littered with unsuccessful mergers and acquisitions, companies that did not heed obvious risks that, in retrospect, were avoidable. Instead, dealmakers focused on the benefits of the transaction, such as prospects for a larger market share, competitive advantages, reduced costs, increased efficiencies, and more diversified products and services.
While the opportunities need to be at the forefront of any deal, organisations need to also address the potential risks and challenges if they want to realise these opportunities. This means integrating newly merged companies effectively, and quickly, should be of paramount importance once a deal is agreed in order to keep critical functions operating at full speed during the post-transaction integration period, realise operational synergies in the ongoing merged entity and to align all employees around a single, merged corporate identity.
As consulting firm McKinsey put it: “Integrating merging companies requires a daunting degree of effort and coordination from across the newly combined organisation… Those that do integration well, in our experience, deliver as much as 6 to 12 percentage points higher total returns to shareholders (TRS) than those that don’t.”
The considerations for integrating the companies typically fall into two main areas: cultural and technological. While the first is an obvious challenge, merging two completely different company cultures, consolidating technology and data often proves to be a more complex task, not least because of the increased level of vulnerability to cyber security incidents both organisations will have during this process.
The sheer number of IT systems and cloud applications in use by companies today, also makes the process of integration more complicated. These days it’s not uncommon for a company to have inked partnerships with more than a hundred different cloud providers. When two organisations combine, integrating all the applications, systems and other sources of data consumes an inordinate amount of time.
Obviously, there is a need for data integrations to occur quickly and seamlessly, minimising the time in which the oceans of data flow from one system to another, from one application to another. Many companies are still struggling to integrate the data they hold within various systems in one company, so when two are involved they need to take a very process-driven approach to not only ensure that security isn’t compromised but also that the most can be made from the data.
Best practices include identifying all the data assets that need to be transferred first, and then determining the specific data standards, policies and processes that will be used to conduct the transfer. Rather than transferring all the data at once, consider a piecemeal approach in which different data sets are prioritised for transfer at different times. Both the finance and HR departments are good areas to start due to the importance of the data they hold in relation to not only business performance but the deal itself. Data that is not destined for transfer should be immediately destroyed.
Lastly, invest in integration tools that make it fast and easy to connect applications and different sources of data. Legacy technology requiring teams of developers to handcraft integration software on an as-needed basis is no way to address today’s rapidly expanding universe of cloud applications.
Companies undergoing a merger or acquisition need to find a fast and easy way to integrate data and applications. They need a single platform that users can rapidly connect diverse systems and applications at their vulnerable intersection points, narrowing the window of opportunity for hackers to attack.
By ensuring data transfers are closely managed so they can flow at enterprise speed, the pace of post-transaction integrations is accelerated. In turn, this assists dealmakers to realise the perceived value of the merger or acquisition at a much quicker rate—adding up into a rare win, win, win.
There’s no doubt that maintaining a continuous cash flow when running a SME is incredibly hard. Here, Catherine Rickett, debt recovery manager at Roythornes Solicitors, shares with Finance Monthly her top tips to keep the cash flowing as an SME business owner.
Between recruitment and staff retention, financial outgoings and ensuring the bills are paid on time, chasing unpaid invoices can often seem like a job that can wait for tomorrow.
Whilst many suppliers and clients will pay without a quibble, some are more difficult to enforce, and it is these conversations that are frequently fraught with confrontation. Often it can be difficult to have ‘that discussion’ with a client whilst attempting to maintain a good relationship and retain them.
Building solid relationships are invaluable in business, especially when you're just starting out, and the prospect of bringing legal action against a long-standing or important client can often be rather daunting. I would argue that this is a major misconception, as 85% of our solicitor’s demand letters result in payment in full and in the vast majority of cases without any adverse impact on the business relation in question.
Having a firm but fair approach to payment collection is key to ensuring invoices are paid on time and in full. With that in mind, here are our top tips to keep business cash flow consistent:
1. Be proactive about collecting payments from clients. Have solid, late-payment penalties and collections policies in place, and stick to them. If your client doesn’t hear from you as soon as the payment is overdue, you can be sure that you won’t be the first to get paid; he who shouts the loudest, gets paid first!
2. Make it easy for your clients to pay. The easier you make it, the more likely they will pay you. Consider having card payment facilities, BACS, direct debit, online payments or even PayPal.
3. Know your client! Consider undertaking a credit check on new or even existing customers if you are having difficulty in obtaining payment. It may be that your customer is unable to make payment due to their own financial problems.
4. Consider applying an incentive for early payment. Money is better in your pocket than theirs and whilst you may feel uncomfortable lowering your prices for early payment, sometimes it can cost more to recover debt than any discount applied.
5. Have clear procedures. You need effective systems in place, with standard letters going out on the day after an invoice is due, seven days after etc. It’s not an ad hoc ‘admin chore’; you need to be strict with yourself and your customers.
6. Keep a ‘cash cushion’. Ideally, this should be three months' operating expenses to protect you from unexpected cash flow issues. Bad payers are a business reality and if your company is working from an account balance of nil, one slow sales month could mean instant disaster.
We understand the need to preserve relationships so that commercial agreements can continue and our team of experts are able to have these difficult conversations on your behalf, starting with our solicitor’s demand letter for as little as £5 + VAT. Even if the problem is not resolved at that point, there is no obligation to commence proceedings and we will then advise our clients on the appropriate action to take.
A decade after the global recession, the world’s economy is vulnerable again. Ryan Avent, our economics columnist, considers how the next recession might happen—and what governments can do about it.
The Apprentice recently returned for a 14th series, as 16 entrepreneurs and impresarios battle it out to win a significant investment in their respective business ventures from Lord Alan Sugar.
Creditsafe analysed the key financial data of each contestant to identify which hopeful is the real winner when it comes to business success, with former ‘Young Entrepreneur of the Year’ and ‘Media Disrupter of the Year’ Jackie Fast coming out on top.
To rank the business acumen of this year’s Apprentice candidates, Creditsafe devised a scoring model that considered the profitability of companies they've worked at, their history as directors, a current ratio of their total business assets and current liabilities, their credit score, County Court Judgments against candidates and finally, their net worth.
Jackie started her first business, Slingshot Sponsorship, in her bedroom in 2010, with only a laptop and a budget of £2,000. Six years later the business had expanded into a number of international markets and boasted a client list that included Shell, Red Bull, Richard Branson and the Rolling Stones. She later sold the business in 2016 to the Marketing Group plc for millions, having grown the company’s net worth from £23,153 in 2013 to £243,239 in 2016.
Jackie also serves as a Non-Exec Board Director of the European Sponsorship Association, one of the youngest in the association’s 30-year history. Her latest business venture is REBEL Pi, a rare Canadian ice wine brand focused on the UK market. Now a public speaker and author, her first book ‘Pinpoint’ was published in 2017, exploring the effectiveness of sponsorship in driving business growth.
Creditsafe’s data also indicates that this year’s runner-up is Kayode Damali, a 26-year-old motivational speaker and former director of the National Union of Students (NUS), making him the only contestant to have worked in a business outside of the SME space. During his time at the NUS, Kayode was appointed as a director, with the organisation producing revenues in excess of £19 million.
David Walters, group data director at Creditsafe, said: “When compared to last year, it’s clear that the slate of contestants this time around have had significantly less board level experience prior to coming onto the show. It will be interesting to see whether experience really does pays off when the contestants battle it out to be crowned the winner of this year’s Apprentice.
“From our experience, the background and past success of business leaders is an important indicator of future success. Before entering into any partnership with a new company, it’s important to do due diligence on who you’ll be doing business with and how they have performed in the past. There’s no doubt Lord Sugar will be grilling the contestants and doing his own research to ensure he picks the right apprentice.”
(Source: Creditsafe)
Research from Dun & Bradstreet reveals that UK businesses prompt payments deteriorated in in the three months to June (Q2). On average, less than a third (31.5%) of payments were made on time compared to 31.3% in the previous quarter. The average payment delay in the UK is around 15 days, two days higher than the European average.
Dun & Bradstreet’s UK Quarterly Industry Report shows a clear split by sector, with ‘Health/Education/Social’ and ‘Finance/Industry/Property’ recording the sharpest deterioration in payment performance (down by 1.7% and by 1.4% respectively quarter-to-quarter). However, more positive results were recorded for the Consumer Manufacturing sector which demonstrated the largest improvement, followed by the ‘Eating and Drinking’ (0.8%) and ‘Materials Processing/Mining’ (0.6%) sectors.
Late payments remain a significant problem for UK-based small- and medium-sized enterprises (SMEs). On average, larger companies of 251 employees or more only paid 8.1% of their payments promptly, compared with smaller companies of 250 employees or less, which averaged at 25.7% for paying their suppliers on time.
Commenting on the results, Markus Kuger, Senior Economist at Dun and Bradstreet said: “What is perhaps most worrying from the data is the sheer volume of late payments UK-based companies are having to contend with, not least as a result of weaker retail sales and the uncertainty of the impact of Brexit on businesses. Although there is legislation in place to assist small businesses with their struggle against late payments, the majority of the time they take no action for fear of alienating their larger customers. Late payments affect businesses across the sectors and of all sizes and give rise to tighter financial conditions and higher administrative, transaction and financial. With continued uncertainty for the foreseeable future, it is likely that we will see further deterioration in prompt payments due to rising headwinds triggered by the Brexit vote.”
(Source: Dun & Bradstreet)
Zac Cohen, General Manager at Trulioo, discusses the key considerations for businesses before engaging in commerce in high-risk countries.
Doing business internationally is a complicated undertaking. Aside from the standard logistical challenges associated with doing business globally, organisations have to factor in considerations specific to different regions and countries. These considerations may include factors such as legislative, political, currency and transparency challenges.
Nevertheless, globalisation is storming ahead and businesses must be prepared to look beyond their domestic surroundings if they are to remain competitive in our global marketplace. International trade secretary Liam Fox has endorsed a move for UK-based businesses to adopt a more international focus, highlighting the importance of global competitiveness. Consequently, UK businesses are feeling the pressure to ramp up their efforts to target a more international consumer base. As if this wasn’t enough for international businesses and investors to grapple with, further complications and difficulties are liable to arise when doing business with “high risk” countries.
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Fraud and Corruption
A recent study by the World Bank estimated that an extra 10 per cent is added to the cost of doing business internationally as a direct result of bribery and corruption.1 Considering the immense amount of international trade, this figure is significant. The danger of doing business with countries considered to be “high risk” – defined by the Financial Action Task Force (FATF) as any country with weak measures to combat money laundering and terrorist financing – is the heightened potential of inviting transactions that are either fraudulent or otherwise corrupt.1 The following considerations should be carefully observed before entering into any commercial dealings with a country considered to be high-risk.
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Enhanced Due Diligence
As a result of the 4th Anti Money Laundering (AMLD4) directive, developed by the European Union, businesses have to adopt a risk-based outlook. The AMLD4 specifies that EU-based businesses must collect relevant official documents directly from official sources like government registers and public documents, rather than from the organisation in question. If a potential trading partner is located in a high-risk country, or serves an industry that has a higher than normal risk of money laundering, then that partner must conduct Enhanced Due Diligence (EDD) on the business entity. This Enhanced Due Diligence process involves additional searches that must be carried out by any firm seeking to do business with this kind of organisation. These searches may include parameters such as the location of the organisation, the purpose of the transaction, the payment method and the expected origin of the payment.
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Ultimate Beneficial Owners
AMLD4 also outlines the need to discover the ultimate beneficial owner of a business, whether they are customers, partners, suppliers or connected to you in another business relationship.
According to the Financial Action Task Force (FATF),
Beneficial owner refers to the natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted. It also includes those persons who exercise ultimate effective control over a legal person or arrangement.
This is important as businesses need to understand who they are dealing with when physical verification is not a practical option. Difficulties could arise when verifying UBOs in high-risk countries as some national jurisdictions impose secrecy policies which block access to verification documentation. This problem is compounded when checking UBOs against international sanction and watch lists as there are more than 200 lists, which vary in scale and uniformity.
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Virtual Identification
However, verification can still be successful. Many are now turning to software that helps businesses to perform the necessary diligence checks. We gave a lot of consideration to the specific complexities of working with high-risk countries when developing our Global Gateway platform. Programmes such as these are designed to allow companies to perform the Enhanced Due Diligence, Know Your Business and Know your Customer checks that are required when doing business internationally, particularly with high-risk countries. Compliance with the various pieces of legislation on this topic should be at the forefront when implementing the necessary verification checks.
Across the world, markets are becoming increasingly more open, paving the way to a truly global economy. If companies can get to grips with the key due diligence requirements, this is a move that will ultimately benefit the global consumer and customers alike.
Chief Financial Officers (CFO) are playing a critical role in driving digital disruption across the organization, according to new research from Accenture. Today’s CFOs oversee more than just the finance function and are now integral players in directing enterprise-wide digital investments and managing their economic outcomes and impacts.
The research report, The CFO Reimagined: From Driving Value to Building the Digital Enterprise, finds that CFOs have expanded beyond their traditional finance roles into areas that have broader consequences for the whole organization. In the UK, eight in 10 CFOs see identifying and targeting areas of new value across the business as one of their main responsibilities. More than three quarters (78%) believe it is within their purview to drive business-wide operational transformation.
"CFOs are increasingly stepping out from the confines of their role to act as strategic advisors as well as innovators across the entire enterprise," said David Axson, Senior Strategy Executive Principal at Accenture. "In an era of unprecedented disruption, this repositioning of the role will continue as CFOs take the role of digital stewards, using data to drive value and improve efficiency while mapping out the digital investments required for their organisations to remain competitive."
CFO as the Digital Investment Sherpa
UK CFOs are emerging as drivers of the digital agenda, with 80 percent heading up efforts to improve performance through adoption of digital technology, and 73 percent also exploring how disruptive technologies could benefit the entire organization and the business eco-system. Not only are CFOs carrying out their own tasks faster and better through automation, they’re also increasingly ushering in the “digitalization” of other functions and finding new ways to use technology to change business models and open new revenue streams.
CFOs: Get Your Data House in Order
The standard CFO to-do list is shifting towards strategic planning, advisory and analytics roles as CFOs continue to automate routine accounting, control and compliance tasks. Automation of these finance duties is enabling the finance function to focus on newer and more challenging tasks and bring the C-suite together to act on insights gleaned from data analysis. Today, 34% of finance tasks are carried out by technology; by 2021, almost half (44%) of these duties will be taken over by automation.
“CFOs’ use of data is expanding to other parts of the business. As a result, they will need to be more entrenched in transformational technologies such as AI and analytics to usher in digitization of the broader organization, create new business models and unlock new revenue streams,” said Dr. Christian Campagna, senior managing director, Accenture Strategy, CFO & Enterprise Value. “The CFOs who step up to manage these opportunities will be the true guardians of the enterprise.”
As the role of the CFO continues to evolve, so do the skillsets required to become a finance executive. Today’s finance function must include employees with a wide range of capabilities, from data visualization to flexible thinking. Most CFOs recognize that finance skills will continue to move away from core finance to advanced digital, statistics, operational and collaborative skills (79 percent). And more than three-quarters (76%) say the change must be rapid and drastic, as traditional finance roles may soon become obsolete.
Future Finance Talent Is Calling
The biggest challenge for CFOs will be recruiting or training the talent to understand how to collect data and gain insight from data. Almost 9 in ten (87%) UK CFOs agree that data storytelling is an essential skill for today’s finance professional. They must be more open-minded and collaborative to work effectively with and serve as strategic advisors to leaders in other business functions.
“It feels like there are two camps for what people look for in a CFO: the control or accounting background versus a more strategic finance role who partners with the CEO,” explains Chris Weber, CFO and executive vice president, Halliburton Company. “Over time, I think the shift has been towards this second role, even if that means the candidate isn't an accountant by training.”
(Source: Accenture)
One of the hottest and most contentious issues facing banks today is how and when to utilise Artificial Intelligence (AI) within a business. AI has transformed many industries and consumers everywhere are becoming increasingly used to the idea of driverless cars, conversational chatbots and suggestive recommendation services.
While AI is relatively new in the financial industry, there are significant concerns and limitations that banks must get their heads around. For example, there is much fear surrounding the integration of AI in workplaces as people believe it will result in job losses and ‘robots’ ruling the world. Even the Bank of England has expressed concern, with their Chief Economist predicting a disruptive fallout from the rise of AI that could make many jobs obsolete.
But when applied in the right way, AI can bring endless opportunities, taking away tedious tasks and amplifying what we do as humans. Tanmaya Varma tells us more.
Where does AI fit?
Discerning how best to use AI, without alienating customers or employees, is a complex issue. Within the finance sector, AI is already being implemented to support with tasks such as fraud detection and management, and credit card and loan risk assessments. JPMorgan Chase, for example, uses image recognition software to analyse legal banking documents. It is efficient and accurate, extracting information and clauses in seconds compared to the 360,000 hours it takes to manually review 12,000 annual commercial credit agreements. This sort of capability could transform the lives of many banking employees as they will no longer be consumed by administrative tasks but can focus on value-added roles instead.
AI is perfectly suited to many straight-forward roles within customer experience. As much as 98% of all customer interactions are simple queries and bots can be used to monitor and streamline these engagements. For example, RBS’s chatbot ‘Luvo’ has the ability to respond to basic customer queries; and can therefore reduce the need for as many customer service employees.
Over the last couple of years, Goldman Sachs, JP Morgan Chase and Charles Schwab have introduced robo-advisers that are able to manage investments, collect financial data and use predictive analytics to anticipate changes in the stock market. While some employees are concerned about competing with this technology, we’re already seeing the use of bionic advisers in the finance sector. These combine machine calculations and human insight to provide a more efficient and comprehensive analysis, whilst also still maintaining the superior customer service clients have come to expect from their financial adviser.
The robots’ limitations
AI has such great potential but there is still one key thing missing – emotional intelligence (or EI) and when customers are involved, this really matters. Where a bank might pay less for a fully automated interaction, the justification for paying more for the human touchpoint is the real value of emotional intelligence, something that computers can’t really provide… yet.
Responding to the emotional cues that your customer displays is an extremely important part of a business relationship, and the ability to read and comprehend these signals plays a huge part in tailoring the customer experience. The big challenge for banks now that chatbots are so readily available is to consider when and where this key human trait is required.
Chatbots can’t easily detect a shift in tone or tension in a conversation and aren’t able to quickly appease a customer. For example, while a robo-adviser is great for an inexpensive and basic service, the issue comes when you have a more unique or sensitive financial situation such as debt or divorce. In this sort of more complex circumstance, a human adviser is perfectly positioned to respond to the nuances of the conversation.
Collaboration is key
There is a great opportunity for AI to go hand-in-hand with human employees - chatbots can be used to streamline the experience, deal with straightforward customers and put more complex enquiries through to the most suitable team member. In this way, banks can bring humans and technology together to provide a superior customer service.
Another example of AI working in tandem with human employees is Relationship Intelligence technology. With thousands of contacts on a database, no adviser can possibly be expected to remember what stage each customer interaction is at and build strong relationships with all of them. Instead, AI can provide insights into who your prospects are, which ones are most beneficial to pursue and when the right time to get in touch is. It can instantly make available information and data from all over the internet about any potential prospect from just a name and email address.
As technology advances, banks are having to walk a fine line between looking for cost-saving efficiencies and smarter ways of working, while ensuring their customers continue to receive excellent and personal service. They also do not want to alienate their workforce and create panic that long-standing staff are slowly being replaced by robots. AI can offer a lot but it doesn’t have the human’s ability to build and maintain vital relationships and collaboration between technology and humans is key here. The successful adoption of AI in the workplace is the issue and opportunity of the moment and one that banks will be contemplating for years to come.
To hear about valuations and middle market M&A, Finance Monthly reached out to the experts at IBG Business.
IBG Business exists to bring merger and acquisitions skills, resources and knowledge to middle market business owners selling (or buying) businesses. “The firm is defined by its expertise, character and commitment to delivering exceptional results”, says IBG Oklahoma Managing Partner and Principal John Johnson. “Our team brings extensive background, robust training and deep resources to each deal. Time and again, the precise execution of our refined professional process has yielded maximum value under optimal terms and timing for our clients.”
Owners should seek professional help prior to selling a business or planning an eventual exit. IBG Denver Managing Partner and Principal, John Zayac, explains the complexities sellers face: “Price is often a starting point in the discussion, a common marker for value. However, it is only the tip of the iceberg. Price is predicated on a complex foundation of components including shifting responsibilities for risk, tax treatment and intangible values, all of which may move dramatically as a sale is negotiated”. Regarding the question “What is my business really worth?” Gary Papay, IBG Pennsylvania Managing Partner, also asks “And why? Knowing the reasons underlying the value of a business can reveal value-enhancing improvements or set up better initial positioning of deal terms.”
Casual opinions of what a business is worth are as abundant as sparrows. Those opining rarely have knowledge of the particulars of the business, the deal terms, an understanding of the sector or any transaction expertise. All are imperative to formulating a competent view on value. Sellers often reach out to valuation specialists for a fair market value opinion, but these regimented, theoretical valuations - while an improvement on sparrows - are better suited to litigation, divorce, or estate planning.
The most useful guidance for prospective sellers will combine sophisticated appraisal techniques with recent ‘boots on the ground’ experience on actual transactions. A market-informed opinion of the value of a business will gauge how potential buyers might respond to its sale. The opinion should provide a range of values, articulate what factors underlie the opinion, and comment on possible impacts of different deal structures. Strategies to minimise obstacles and enhance value may be offered.
Seasoned mergers & acquisitions advisers can also expertly evaluate and manage the nuances and practicalities that arise in the ‘real world’. In any transaction, the buyer and seller have opposing goals: each seeks to best serve their own interests but must ultimately acquiesce in some part to the other while retaining sufficient benefit for themselves. The odds of success in this process dramatically improve when it is proactively managed by a seasoned professional who can keep polarising realities within a cooperative framework. The parties will also be more likely to work well together post-close.
Pre-sale valuation work and pro-active management of transactions are key, but subtle dynamics and market factors unique to a deal can also be vital determinants of value. IBG Arizona’s Principal and Managing Partner Jim Afinowich and Managing Director Bruce Black recently worked on a deal that perfectly illustrates such market dynamics. The client’s firm, a niche food manufacturer, initially might have had a competent fair market value of around $20M. IBG perceived growing demand in the industry vertical, and thought an opportunity existed with the evolving market dynamics. They advised the client to decline early offers and to continue to build value in the business. Improve it did, but IBG’s “read” on the market and recommendation on timing made a tremendous impact for the client: a buyer seeking market control and expansion in the vertical ultimately out-bid several competitors to buy the company for the cash price of $120M. While such extreme opportunities are uncommon, the “savvy” of a seasoned dealmaker can radically impact what is already one of the biggest financial events in the lifetime of a business owner.
Business owners must understand optimal timing and valuation complexities prior to any sale. Today, demand remains robust for quality middle market businesses and valuations are still excellent, but a cooling in the market is anticipated. Active mergers and acquisition broker and advisory firms prepared to assess opportunities with a ‘real-time’ read on transaction market remain the most vital resource for owners seeking to sell for top value.
Contact details:
Email: jim@ibgfoxfin.com
Web: www.ibgbusiness.com; www.ibgfoxfin.com
Direct: 480 327-6610
Main: 480 421-9789
Fax: 602-792-3811
Marketing is of great importance to any sector, but each industry has its own pitfalls and problems it needs to avoid when it comes to developing its marketing campaign. If you’re already running a FinTech business, or are planning on starting one, there’s a few obstacles you need to be aware of in order to market your brand effectively.
Below Where the Trade Buys provides the following guide to help you navigate effectively through the world of marketing.
Social media avoidance
Social media can seem like a difficult arena to step into — it’s huge, the competition is astounding, and your customers can speak to you directly, in front of a massive audience. In fact, many sectors have fallen foul to ignoring and avoiding social media. According to Incisive Edge, banks were a prime example of this, citing a report from Carlisle and Gallagher Consulting Group that revealed 87% of consumers perceived social media usage by banks as being dull, irritating, or unhelpful.
But social media is where your audience is, and it’s where many spend a large amount of time. Securion Pay noted that an effective marketing campaign needs to consider Millennials, of who 84% have smartphones and 78% are on them for more than two hours every day. Embrace this and establish a strong presence on social media! Just make sure you have an effective plan for each channel — content for Twitter might not work as well on say, LinkedIn.
Also, social media is a great way to build a rapport with your customer base. Even in the event you get negative feedback, the way you deal with it will be seen just as much as the original comment. You can turn a negative into a positive: show ownership of the feedback and resolve it quickly. If you ignore it, the chances are the unhappy consumer will feel stung that you have ignored their attempt to reach out to your directly and give you a chance to respond. They will turn to other websites to tell other people of this experience. As social media and customer services expert, Jay Baers says: “A lack of response is a response. It’s a response that says, ‘We don’t care about you very much’.”
Saying too much, too soon
Do you have big news? Great! But before you rush off to tell the world, take a moment to pause. Would the news be better used slowly? Incisive Edge advises FinTech companies to consider an embargo if you’re heading to a trade show soon.
Basically, you can still create a press release about your exciting news or innovation plans, but don’t release it immediately. Place an embargo on it, so that your press sources can’t publish the news until a certain date, such as the trade show or another effective date for your company. This not only stirs up a sense of excitement, but it also lets the journalists and content writers have more time to write an engaging and detailed piece.
Ignoring offline
You may feel that as a primarily online company, your marketing strategy needs to have an online focus too. But the world of offline marketing is still going strong, and it’s a great way to build your brand and get it noticed.
For example, Delineo reported on some highly effective FinTech marketing campaigns, including offline print marketing. In the report, a robo-advisory firm was shown to have created a brilliant offline campaign that saw printed adverts placed through the underground tube network. People don’t have great signal on their phones at underground stations, so tend to notice and read printed adverts more!
As a start up, you might not have enough in your marketing budget to pull off such a wide-spread campaign but consider the use of printed media elsewhere. Are you headed to a trade show or exhibition soon? Seek out a provider of PVC banners and get your brand and goals printed up for your stand! Banners are a great tool at exhibitions and tend to be more effective than digital ads at these events, with customers recalling the brand from a banner long after the show has ended.
Ads with poor language use
You should be making use of both online and offline media in your marketing strategy, but you’ll need to make it as powerful as possible. There’s no use having a well-placed digital advert or a beautifully designed banner if the language used is dull and uninspiring.
Often overlooked, the use of language is a complex skill that can make or break your intended message. There’s a reason why so many people study language at high academic levels!
Consider the intended outcome of your marketing. What are you trying to tell the customer? At a basic level, new technology is designed to solve a problem, so tell your audience this. Words like “innovative”, “cutting-edge”, “rapid”, and “simple” can help address technology woes such as slow loading apps or complicated processes. After all, FinTech is a disruptive innovation — tell the world how it’s shaking up the banking and financial sector.
It’s important for your business to stand out for the right reasons. FinTech is a fast-growing sector, so it’s vital that you keep ahead of the game. Keep your marketing strategy strong and wide-reaching with these campaign tips.
Sources: https://www.callboxinc.com/b2b-marketing-and-strategy/fintech-marketing-strategy-tips/ https://blog.incisive-edge.com/blog/6-fintech-marketing-strategy-tips https://www.delineo.com/culture/4-fantastic-fintech-marketing-campaigns/ https://securionpay.com/blog/6-marketing-trends-fintech-industry/ http://www.brightnorth.co.uk/whitepapers/Image_Quality_and_eCommerce.pdf https://skift.com/2016/05/13/why-the-tourist-brochure-is-still-surviving-in-the-hotel-lobby/ https://www.forbes.com/sites/rogerdooley/2015/09/16/paper-vs-digital/#7de095dc33c3 https://www.pinterest.co.uk/pin/307300374549933402/ https://www.ama.org/partners/content/Pages/6-dos-and-donts-of-promotional-product-marketing.aspx https://expandedramblings.com/index.php/tripadvisor-statistics/ https://www.prnewswire.com/news-releases/print-ads-in-newspapers-and-magazines-are-the-most-trusted-advertising-channel-when-consumers-are-making-a-purchase-decision-300424912.html https://www.forbes.com/sites/matthunckler/2017/02/01/jay-baers-top-3-tips-for-acing-customer-service-in-the-age-of-social-media/#1cbbd1764a08 https://www.forbes.com/sites/rogerdooley/2015/09/16/paper-vs-digital/#31d49c533c34 https://blog.techdept.co.uk/2014/12/marketing-technology-words-marketers-need-to-know/
A bout of World Cup fever may have swept the nation last month but with normality restored, it is business as usual for the Premier League. Except that according to Will Tingle at Moore Stephens, the next season of the UK’s top football league is up for a little more than business as usual.
Premier League clubs are already reported to have spent close to £1bn on over 200 deals so far with a number of high profile transfers such as Riyad Mahrez moving to Manchester City and Alisson’s arrival at Liverpool setting a new transfer record for a goalkeeper. With steady investment already, we explore the reasons why it could be another record breaking summer for the Premier League.
Primarily, there is money to burn. Last year, for the first time, every Premier League club reported an operating profit, with 18 of the 20 clubs also reporting a pre-tax profit. Financial fair play appears to have ushered in a new era of sustainability. There are many reasons why clubs can expect a continuation of strong financial performance and revenue growth. This will in turn be used to fund their transfer war chests.
The domestic TV rights for the year is said to be just shy of the record-breaking £5.14bn existing deal, for three seasons from 2016-2019, with Amazon joining the Premier League market for the first time. The cost of the Amazon package to show 20 games a season from 2019 is still unknown. However, any dip in the domestic TV rights income is likely to be offset by an increase in overseas broadcast income as well as club’s own commercial deals.
The Premier League is reported to have made £3.2bn from international TV rights in the same three season period (2016-2019). Beyond this, five out of 80 contracts are said to have been confirmed to continue through to 2022: the Premier League will be optimistic they can continue growth in this area given that some of the new contracts are said to be as much as 14 times the value of current deals.
In terms of other commercial transactions, last season the Premier League introduced sleeve sponsorships, which allowed clubs to have a second brand on their kit in addition to the main shirt sponsors for the first time. Recently, Arsenal are said to have completed the biggest deal yet in this area for a reported £10million per season over three seasons with Visit Rwanda, the club’s official Tourism Partner. Notably Manchester United and Tottenham Hotspur are yet to agree sleeve sponsors which reflects the fact there is significant scope amongst several clubs to increase revenues through commercial partnerships of this nature.
What does all this money mean? As we have seen in the past, increasing revenue normally translates to growth in transfers and player wages. Although clubs are spending within their means, transfer spending has continued to rise over the years as clubs show little sign of tightening their purse strings with increased revenue making transfers more affordable for clubs and used as justification for record-breaking fees.
Premier League teams have now set a precedent for spending and there is great expectation amongst fans to do so. This has contributed to records being established at an alarming rate. Within the last 12 months, 15 of the Premier League sides for the 2018/19 season have broken their transfer record. Last summer, the total spend for the Premier League during the transfer window was beaten for a sixth consecutive year, coming in at £1.4bn. During the final day of the January transfer window alone, clubs made a record spend of £150m, marking a total spend of over £400m for the month.
There are two additional factors which will serve to add fuel to the Premier League money bonfire. Firstly, the transfer window will close earlier than normal as Premier League clubs voted in favour of closing the transfer window before the start of domestic fixtures. This means that clubs will be under increased time pressure and now have little over 2 weeks to conclude their business. This could possibly trigger a rise in the panic buys associated with the final few days of the window. A lack of time provides leverage to selling clubs in negotiations allowing them to attract higher fees for their players as buyers use money to solve problems when time becomes pressured.
The World Cup only adds to the haste given that many players, many of whom are still on holiday as part of their recovery programmes, wait until after the tournament to resolve their futures. Historically, the competition has led to irrational buying behaviour and overinflated fees as clubs have signed players off the back of a handful of good games. Kleberson, El Hadji Diouf, Guivarc'h… do the names sound familiar?
The precedent for all sides having a reason to spend is well established. Newly promoted sides and those fighting relegation are desperate to establish a foothold in the league given the rewards associated with survival. The riches of the Champions League provides sufficient justification for those competing towards the top to invest heavily.
Others are keen to scale up and compete with the so called top 6 or solely avoid a season of mid-table obscurity. With over £1.4bn spent last summer, Premier League clubs are well on track to break this record again. It promises to be a hectic finish before the transfer window closes on 9th August.
