Derick Fiebiger from 0chain explains its key benefits for your business.

Irrespective of what your opinion is, business executives have a duty to their organisations to assess relevant new technologies. Blockchain is an exciting new technology and companies the world over are evaluating whether blockchain offers a dependable, effective and valuable solution to their current challenges.

Seeing leading tech giants like IBM, AWS , Oracle and Accenture already on board and heavily invested in this new technology helps validate that blockchain is indeed more than hype and will transform many industries and systems in the years to come.

So what does this mean for me and my enterprise you may ask?

What are blockchain’s benefits for my business now and how will it help me innovate and stay ahead of the competition?

Blockchain’s advantages are many and as the underlying technology, applications and protocols evolve, more and more use cases emerge. At this stage though, the most important business benefits focus on increasing efficiency, agility, ROI, security, privacy and transparency.

The ability to easily access historical transactional data is particularly important for companies that have complex supply chains

1. Transparency and Traceability 

Lack of transparency leads to delayed transactions, financial losses and situations that could compromise important commercial relationships.

Blockchain plays a critical role in tracing transactions and operations. The ability to easily access historical transactional data is particularly important for companies that have complex supply chains. It also helps with confirming transaction authenticity and preventing fraud.

As each transaction is recorded sequentially and indefinitely, you can easily provide an indelible audit trail for each transaction, operation or asset.

This accelerates reporting dramatically and enables you to access data regarding any potential issues in real time so you can fix problems as soon as they arise.

Furthermore, the audit process becomes much more efficient, faster and non-disruptive for the business.

2. Security and Privacy

Security has become a massive issue for all enterprises and senior tech leaders are investing significant resources to prevent malicious attacks, stop data leakage and increase auditability and accountability.

Despite this investment, many companies only install low level security measures and pray solutions hold against malicious attacks. But, considering how many reputable global corporations have been victims of malicious parties recently, it’s becoming very clear that IT security not only has to protect confidential, sensitive data but there needs to be immutable records showing who did what, when and where in case something does go wrong.

Independently verified complex cryptography, definitive unchangeable records and decentralisation unite to make it far more difficult for hackers to compromise data. All these factors could revolutionise how critical information is shared, preventing fraud and loss of data.

With blockchain you can reduce data storage costs, store data in a more cost effective way and also eliminate many third parties that are now used for various transactions and trading processes.

3. Efficiency and Agility

In order to navigate an increasingly complex business environment and fully leverage blockchain’s benefits, businesses need services with ample transaction capacity, near-instant finality and the ability to scale, all without sacrificing blockchain’s core benefits.

Think how much data your company generates and what’s managed on a daily basis. Countless transactions and operations happen every day inside and outside the company. Data flows to and from different parties.

With blockchain and tokenisation, you can reduce costs by storing and verifying all this data in a more efficient, secure way but also - transactions and data queries can be validated and completed far faster than traditional methods.

Furthermore, many companies still use paper heavy processes which are time-consuming, prone to human errors and offer little transparency. Blockchain streamlines and automates all these processes, enabling organisations to become more efficient and agile.

4. Lower Costs

Reducing costs is a critical priority for many enterprises. With blockchain you can reduce data storage costs, store data in a more cost effective way and also eliminate many third parties that are now used for various transactions and trading processes.

This is increasingly important for companies with large IoT networks or business functions generating huge volumes of data every day.

Taking Control of Your Destiny 

Security, agility and efficiency are powerful blockchain benefits that businesses should be exploring. At the same time, there is an infinite number of tools, applications, and ideas that can be delivered through blockchains and it’s up to each enterprise to investigate how they can use the technology.

One thing to keep in mind if you’re considering implementing blockchain in your business is that this is not just an IT or R&D project. Blockchain, in many cases, is a fundamental business transformation operation which, if deployed and used properly, will significantly improve revenue and cost management. It will also cut across organisational silos and provide unique abilities for increased competitiveness and overall performance.

Regardless of whether you’re still on the fence regarding blockchain adoption or a passionate ambassador, one thing is clear - blockchain is here to stay and only the sky is the limit for the companies that are ready to take on board this new technology and leverage its full potential.

Derick’s Specialisms

• Deep knowledge of cryptocurrencies, digital assets, intersection of business and DLT
• Extensive expertise of the technical aspects of blockchain
• Plugged into blockchain and crypto’s ecosystems
• Moderates 0chain’s Telegram groups including 40,000+ strong main channel
• Manages 0chain Medium content (here)
• Highly responsive, available for fast comment with extremely short deadlines

LinkedIn: https://www.linkedin.com/in/derick-fiebiger-4605a040/

Website: https://0chain.net/

This week Finance Monthly hears from Mohit Manchanda, Head of F&A and Consulting EXL Service UK/Europe at EXL, on the ever-evolving DNA of a CFO.

Business leaders have to stay relevant and ahead of the curve and adapt to the constantly evolving world of finance. This development has become ever apparent for the Chief Financial Officer (CFO) whose role now includes, strategies, operations, communication, and leadership as well as building knowledge surrounding the impact of emerging technologies within the finance sector.

Business outcomes

Advances in data software and automation are opening up avenues for businesses to generate valuable insights that can lead to major productivity improvements. Within the finance and accounting areas, technology is becoming a catalyst for change, driving innovation and providing operational efficiency in business-critical functions.[1] It is essential for CFOs to rethink how to utilise this opportunity to streamline their processes for efficiency, compliance and risk management.

CFOs have many objectives to commit to and by using cutting-edge solutions to enhance the transparency and accuracy of financial data, they can better manage the financial management process. Using automation within finance helps to free up high-value tasks and alleviates the pressure on the CFO to perform traditional activities such as, transaction processing, auditing and compliance.

Human X Machine

It is becoming more and more evident that the CFO will be looked up to, to drive the utilisation of new technologies, however they should try not to get ahead of themselves and forget about the day to day business. Becoming too attached to the hype surrounding Automation and Analytics can put other business objectives on the back burner. For example, managing costs and coming up with new ways to generate profit are tasks that require the CFO to use their own industry knowledge rather than relying on data or analytics.

New technologies can speed up processes and lessen tasks for CFOs; it is important for them to make choices and identify processes where AI, Automation and machine Learning adds value. An investment in one area of a business can create savings in another. In most companies, a high percentage of staff still perform tasks that can be automated through Machine Learning, and these tasks can be performed exponentially faster if self-learning algorithms are applied.

Given the pace of technological change, CFOs should carefully evaluate their point of entry and roll out multiple pilots or proofs of concept (PoC) to test and secure validation before deploying these new technologies.

New technologies can speed up processes and lessen tasks for CFOs; it is important for them to make choices and identify processes where AI, Automation and machine Learning adds value.

Introducing innovative technologies within the finance sector does aid in mitigating lesser tasks for the CFO, however it is not only the technology alone that enables a more streamlined work process. By combining talent, skill set and technology together creates a unified approach, resulting in major improvements throughout the business. For CFOs it means that they can move away from everyday traditional accounting tasks, therefore freeing up time to use their industry knowledge to focus on new business opportunities and provide strategic guidance.

Data & Domain

Organisations regardless of their size will collect large masses of data of which most will never be utilised. It is important for CFOs to understand which data sets are of value and which ones aren’t. Some may be needed for regulatory purposes and others for commercial predictions and products, however by disregarding the sets that are not of value helps to create a more streamlined result.

Starting to experiment with data will help identify potential risks before they are put into production. Machine Learning is all about data experimentation, hypothesis testing, fine tuning data models and Automation. Bringing data, technology and talent together in the form of ideation forums, innovation labs and skunk work projects allows discrete data to be tested for the first time. By bringing in Machine Learning, it can identify hidden patterns that could potentially harm the production process.

In order to drive the business forward, CFOs can translate data and combine it with industry knowledge. The data helps to provide insight within the industry which then contextualises their business decisions. Using data driven decisions CFOs can be confident in their choices within the organisation and use it to back up or prove their conclusions.

Putting data under the business lens enables a CFO to understand the repercussions that can occur through the improper use of big data. A business’ reputation is on the line if data violations occur. Not only will this result in legal sanctions, it will limit business operations, which will have a domino effect on resources and a company’s position compared to its competitors.

Therefore, CFOs should review all of the potential consequences before putting their experimented data findings into practice, including any legal, financial, and brand implications. This is where industry knowledge comes into play, using an expert committee on business data to inspect algorithms for unintentional consequences, results in less risk than normally associated with Machine Learning.

For CFOs to thrive in the digital age, it is essential for them to have a unified approach combining industry knowledge, data, technology and talent.

For CFOs to thrive in the digital age, it is essential for them to have a unified approach combining industry knowledge, data, technology and talent. By employing new technologies, data, talent and knowledge as one package, CFOs can add continuous learning opportunities for critical talent pools, and assist in the overall improvement of productivity within the business.

[1] https://www.business2community.com/big-data/17-statistics-showcasing-role-data-digital-transformation-01970571

Below, Finance Monthly hears from Kim Hau, Senior Proposition Manager for ONESOURCE Indirect Tax, Thomson Reuters, on preparing your business for MTD.

HMRC’s move is in-line with the global trend towards a more digital relationship between tax authorities and businesses, as well as increased regulatory guidance from the Organisation for Economic Co-operation and Development (OECD) for greater transparency in tax data.

Digital Records and Submission

The first stage of MTD for VAT mandates digital record keeping and filing for all VAT registered businesses with a turnover of £85,000 or more, providing a “soft landing” period for businesses before mandating the requirement to have digital links between their data. The ultimate aim is to improve the quality of record keeping, while reducing the mistakes often caused by manual processes and reducing the perceived tax gap – of which £12.6 billion relates to VAT.

A recent Thomson Reuters survey on MTD found that 79% of respondents keyed in submissions directly into the government gateway, something that will not be acceptable come April 2019, or, October 2019 for more complex businesses.

Instead, businesses will have to store and maintain all Accounts Payable and Accounts Receivable data in electronic form using functional compatible software. In other words, using technology that can store and maintain records, perform the required calculations, and submit the information to HMRC directly via their Application Program Interface (API). Those wedded to the use of spreadsheets will find that whilst they can continue to be used, they will require additional software to handle the digital submission piece and certain conditions must be met to ensure a digital trail.

Digital Links

The second stage mandates digital links, the requirement that any transfer or exchange of information in the VAT return process is made electronically between software programs, products or applications. This is a move to limit mistakes from manually inputting figures and comes into effect for all VAT registered businesses in April 2020.

The second stage mandates digital links, the requirement that any transfer or exchange of information in the VAT return process is made electronically between software programs, products or applications.

By far, this is anticipated to be the most complex and difficult requirement of MTD for VAT, forcing businesses to assess every single step of the UK VAT return process for each of their entities.

While there will be some flexibility in the first year of MTD going live there will be no bending of the rules. Connecting all digital records will not only help to ensure the business is compliant but will also future proof organisational systems and processes before penalties are enforced.

The Road to Digital Transformation

An obvious first step is for businesses to understand to what extent they are already compliant, focusing on where relevant data is collated, what kind of data is available via digital means and understanding the processes used for producing VAT returns.

At this stage, companies will be able to decide on what level of change is required. However, with further reforms expected after 2020 it is highly recommended that companies do not settle for a “sticking plaster” solution.

With further reforms expected after 2020 it is highly recommended that companies do not settle for a “sticking plaster” solution.

There are many solutions available to meet each gap of MTD for VAT compliance, however piecemeal solutions should be put in context of the general trend towards a digital tax agenda, and their long-term suitability.

Reviewing the options with internal and external stakeholders such as IT, software providers and external consultants will ensure that the most appropriate solution to meet operational needs is selected. This could include considering data security policies, compatibility with existing systems (e.g. ERP) and developing a tax technology strategy. After all, while MTD for VAT is a UK initiative, it is also worth considering the growing impact on tax teams of similar reporting requirements in other jurisdictions.

What are the benefits of having a third-party portfolio manager to manage one’s accounts?

Ron Medley: Whether using a third party or an in-house portfolio manager, a key benefit is having a relationship with the portfolio manager in order to have a communication channel that can provide feedback beyond just the price and the news headlines of the day. The ability to get a view into the investment decision-making process can help provide the necessary feedback to inoculate you from the emotion that only looking at price and headlines can generate. Once you have that feedback, you can achieve certainty of process and peace of mind, given the variety of possible outcomes from the market. As an example of our practice, we use volatility as a factor for investment selection. Our research has shown that the risk/reward of owning lower volatility portfolios has generated a couple percent more return for about the same risk as the market over the last couple decades. We construct portfolios that are dynamic in their ability to adapt when unexpected things happen in the market and we can also build custom variations of this approach, which are unique to each client. Generally, once clients learn about how we implement the investment process and experience owning a portfolio constructed and managed this way, emotional energy can be channeled toward much more productive areas.

Our research has shown that the risk/reward of owning lower volatility portfolios has generated a couple percent more return for about the same risk as the market over the last couple decades.

What mechanisms do you use when identifying risks and opportunities for MSAM’s clients?

Ron Medley: What’s most important here is the ‘What, Why and How’ for the client: What are your beliefs and your mission? ; Why are we doing this? ; How do we tap into the positive emotion that is driving you and help you step toward making your vision reality? We listen first. And then we work to understand how we can help provide clarity to help turn those emotions, concerns and goals into positive actions.

What sets your firm apart from other asset management companies?

Chris Pelley: There are almost one million investment advisers around the world. We all look about the same and most people aren’t entirely sure what we’re talking about or how to differentiate us. But we all have three deliverables as follows:

• Comprehensive financial planning – We pull together strategies and views tying life goals and expectations. We are also aligned with both tax and legal advice.
• Portfolio design – Working to develop custom asset allocation profile and investing the portfolio accordingly.
• Education – We encourage our clients to ‘invest their time before they invest their money’.

At MSAM, we add a special fourth dimension that is often the primary focus on enhancing our client relationships. We are very mindful about making useful ‘connections’ that can help our friends’ companies, careers, children and charities. We believe that the way people invest their time is even more important than the way they invest their money. We open doors that enhance the quality of their lives. They reciprocate for us too.

What are some of the challenges that investment advisers in the US have been facing over the past year in relation to changes in what customers expect in terms of products and services?

Ron Medley: We have an overabundance of investment products - there are as many funds as there are stocks they invest in, and this is not only because of the proliferation of funds and ETFs. There are also less companies going public. Although the value of the market as a whole has grown, the US market had almost twice as many public companies 20 years ago. More and more, it seems investment capital is chasing companies long before they are accessible in the public markets. Historically, over the last century, small companies offered a 3%+ return premium over large companies. But with less small companies being public, we have to find more ways to access quality small companies. Alternatives, as an asset class, have attracted a lot of investable assets and are projected to become 15% of the investable universe by 2025, a recent PwC study has shown. We’ve invested a lot of energy in developing ways to allocate to alternative asset classes, such as private equity for example, in order to continue to broaden our access to the investable universe for clients.

Alternatives, as an asset class, have attracted a lot of investable assets and are projected to become 15% of the investable universe by 2025,

What strategies do you implement to ensure that your clients’ goals and objectives are achieved?

Ron Medley: We’ve got a full toolbox to work with, but it’s all about the journey, not the destination. We follow a structured process that has certainty in its steps, use a variety of solutions, enabling and advocating client significance in purpose and making useful connections, and we work to focus client conversations in areas that will help them have the greatest impact. Through a culture of continual discovery, we make adjustments as necessary, given whatever changes life or markets bring.

Additionally, investing is not just about risk/return – it’s also about innovation, impact and purpose. When we have built a trusted relationship with a client, worked together to position a portfolio overall to take care of a client’s financial planning needs and move conversations toward fulfilling the client’s greatest purpose, I know we are on the right track. We are happy to play whatever small part we can in helping our clients change the world for the better, one trusted relationship at a time. And it all begins with a conversation.

What two or three things would you look for in an adviser if you were seeking one?

Ron Medley: Trust and a willingness to invest in the relationship to create it. I’d also want to know that they weren’t going to waste my time with a bunch of product features and benefits without a depth of expertise in the approach and the process. I’d also like to be in the hands of professionals who experience both the up and down sides of the market, and who prepare themselves for the uncertainties, instead of just reacting to whatever crosses their path.

Finally, I’d like to know that we could learn from one another and make each other better. We’re only as good as the quality of the team we surround ourselves with.

Ron Medley has a passion for building custom investment portfolios - he works with advisers and clients to build, manage, protect and transfer wealth. As the President of Moloney Securities Asset Management (MSAM), Ron leads a team of over 50 independent advisers who provide wealth management services to clients primarily in the US, with some international exposure. Ron joined the Moloney Securities family of companies in 1999, after working for a mutual fund company and an insurance company in the 1990s

MSAM is a registered investment adviser, affiliated with Moloney Securities Company, Inc., a broker/dealer. Headquartered in St. Louis, MO, MSAM has a correspondent relationship with the Royal Bank of Canada (RBC) and has advisers across the US operating as MSAM or affiliated entities.

Chris Pelley, Managing Director of the Pelley Group, has been in the financial services industry for over 30 years and has a passion for helping investors make better decisions. He’s spent over 11 years working abroad for world-class financial institutions including Shearson Lehman Hutton where he specialised in retirement planning for corporate executives in NYC. In 1994, Chris founded Capital Investment Management Company (CIMCO), with the goal of offering clients independent investment advice. In 2014, he joined RBC Wealth Management and chose to affiliate with MSAM as an independent adviser in 2016.

For more information, please visit: https://www.msam.net/ and https://pelleygroup.com/

Does this mean Santa’s business model is driven in its brand? If that is the case, and on the commonly agreed assumption that Christmas is a business in its entirety, what are the brand values that make Christmas so financially successful?

The truth is Santa and his gang can offer business leaders a great deal of know-how in the business world. Christmas is a tradition and a business that goes back at least 200 years, one which according to Forbes, accounts for over $1 trillion, or 25% of US annual retail income. As a corollary, Christmas also monopolises on retail data, as just like in Santa’s Grotto, we tell markets exactly what we like and want the most.

Starting with the business’ marketing, Father Christmas’ branding model is built on worldwide collaboration, in that everyone believes and trusts the brand, the promise of reward, in the form of gifts and celebration, and the use of emotive marketing, via songs, colours, smells, clichés and scenarios, all of which come together to stimulate feelings of family, community, togetherness, joy and nostalgia, among many.

The brand itself is the strongest driving part of Santa’s business model, and if anything could imitate the above formula as successfully, they would likely be the richest and most reputable company in the world. Brands that have tried and come close are the likes of McDonald’s, Coca Cola and Disney, yet these come with shortcomings, mistakes and elements that carry negative connotations, like sustainability, sourcing, sales and taxes. Not to mention their ability to stay as relevant and innovative as Christmas. With the Christmas brand as a whole however, being a collaboration of all businesses and consumers involved worldwide, these negative undertones are looked over and left mostly associated with what Christmas is about. When you think about Christmas you simply think about the good stuff.

The brand itself is the strongest driving part of Santa’s business model, and if anything could imitate the above formula as successfully, they would likely be the richest and most reputable company in the world.

In terms of the business operations, small to large firms around the world can learn several important pointers from Father Christmas. He treats his employees fairly, he has a diverse and equal workforce, each with an important role suited to their talents or features. Donner helps Santa navigate his delivery route, while Rudolph, lights the way with his ‘very shiny nose’. Santa himself, as the Director of his company, has a job that was tailor made for his likeness and character.

Assistant Professor Fang Ruolian of Management & Organisation at NUS Business School, said: “Santa’s enthusiasm is infectious and the reason why he has built such a loyal following over the years and across generations. He spends time getting to know his customers in his grotto, learning what they want for Christmas, and then goes the extra mile to see that their wishes are met; all the time accompanied by a jolly “ho, ho, ho!”

In doing this, Santa learns about his customer base, collects data on a regular basis, and actions operations and gifts based on said data. And as far as we can tell, Santa doesn’t share any customer personal data with third parties. In addition, every year Christmas happens is a new year, with new data, which in turn means growth and evolution, as Santa and his elves have to keep up with a changing market, adapting and innovating each Christmas. They work together and collaborate, each department preparing all year round to deliver an excellent service with impeccable timing and precision; his wishlist staff work closely with the customer service department to get the right gifts to the right people.

Every year Christmas happens is a new year, with new data, which in turn means growth and evolution, as Santa and his elves have to keep up with a changing market, adapting and innovating each Christmas.

On the topic of customer service, Christmas is built on several promises. That kids will get presents, that family will come together, that people can be good, that it will happen again next year, and the year after, and so on. Businesses around the globe have to keep these promises, accommodate logistics and operations to meet demand, and in doing so contribute to the overall success of the Christmas brand. Christmas breeds a likely 95%+ customer satisfaction rate and a customer retention rate that is just as successful. Can your business say the same?

All in all, Christmas is one of the most successful business models to have ever been conceived and all businesses should strive to imitate its values and methods. In terms of actually delivering gifts all in one night, there is a questionable logistics issue, but with everything else on the table, Santa’s workshop and staff make a winning business model possible. With the real-life Christmas period ahead of us, and as markets are set to action the Christmas spirit, we wish you good business and a happy new yield this quarter.

Sources:

https://www.forbes.com/sites/bryanpearson/2016/12/22/holiday-spending-to-exceed-1-trillion-and-11-other-surprising-data-points-of-christmas/#609c6dbb247f

https://www.intheblack.com/articles/2015/10/01/disney-cocacola-and-mcdonalds-fight-to-remain-relevant-in-a-digital-world

http://thinkbusiness.nus.edu/article/santa-claus-the-business-model/

https://designabetterbusiness.com/2017/12/21/why-the-business-model-of-santa-claus-is-so-successful/

https://www.omaha.com/money/retail/amazon-expands-free-shipping-ahead-of-christmas-to-compete-with/article_033de127-80b6-5c34-9085-c41042c19c46.html

The comments from Ian McLeod of Thomas Crown Art, follow growing concerns that the global economy is likely to experience a significant slowdown before the end of 2019.

Leading economic indicators tracked by the OECD have weakened since the start of the year and suggest slower expansion over the next six to nine months.

Similarly, the wider global expansion that began roughly two years ago has plateaued and become less balanced, according to the International Monetary Fund.

Mr McLeod observes: “There’s a growing list of investment tailwinds to consider for 2019. These include significant trade tensions, rising interest rates, political uncertainties, including Brexit, and complacent financial markets.

“The US, the world’s largest economy, has, of course, considerable influence on Asian and European economies. As such, should ther US stock market plunge – as it did recently scrapping all of its 2018 gains during a major sell-off - global markets are vulnerable too.”

He continues: “Against this backdrop, we can expect cryptocurrencies will increasingly be seen as investors’ ‘safe havens’ in 2019 and beyond.

“When the downside of the economy hits, digital assets cryptocurrencies like Bitcoin and Ethereum are likely to be viewed by investors as a robust means of storing wealth, in the same way they do with gold.”

Mr McLeod adds: “There are several keys reasons why the likes of Bitcoin and Ethereum will be safe havens. These include scarcity, because there’s a limited supply; permanence, they don’t face any decay or deterioration that erode their value; and future demand certainty as mass adoption of cryptocurrencies and blockchain, the technology that underpins them, takes hold globally.”

Of this latter point, he comments: “As mainstream adoption is going to dramatically gain momentum in 2019 as the world, especially business, realise ever-more uses for and value of crypto and blockchain.

“Ethereum’s blockchain, for instance, is used in our art business. It has allowed us to create a system to use artworks as a literal store of value; it becomes a cryptocurrency wallet.

“It also solves authenticity and provenance issues – essential in the world of art. All our works of art are logged on the Ethereum’s blockchain with a unique ‘smART’ contract.”

The tech expert concludes: “We are some way off from cryptocurrencies replacing the Swiss Franc, the Japanese Yen or gold as the preferred safe haven assets.

“However, as the world moves from fiat money to digital, and as adoption of crypto picks up, there can be no doubt that cryptocurrencies will be firmly in the pantheon of safe haven assets within in the next decade.”

(Source: Thomas Crown Art)

Finance Monthly speaks to the Director of the Financial Planning Program at Stephen F. Austin State University - Banker Phares, who has been licensed to practice law in the State of Texas since 1964. He was founding member of the Estate Planning and Probate Specialty for the State Bar of Texas in 1977 and still holds that specialty certification which is renewed every five years. Representing individuals, businesses, and foundations interested in charitable giving, he provides advice concerning the amount, structure, use, and deductibility of charitable gifts.

What do you think prompts charitable giving in the US?

In 2017, I wrote an article on Charitable Giving in the United States. Using a report published by Giving USA Foundation, I found that charitable gifts in the United States totaled $410.2 billion in 2017. The percentage breakdown is as follows: 70% was given by individuals, 16% by foundations, 9% by bequests at death, and 5% by corporations.

A study by The Comparative Nonprofit Sector Project sponsored by Johns Hopkins Center for Civil Society Studies made a study of the level of giving by different countries. According to that study, the level of giving is determined by comparing the giving to the Gross Domestic Product (GDP) of a country. Using that test, individuals in the United States gave 1.85% of the GDP, Israel gave 1.34%, and Canada gave 1.17%. When volunteerism is the sole criteria, the study concludes that the Netherlands is first, followed by Sweden and then the United States.

Using a report published by Giving USA Foundation, I found that charitable gifts in the United States totaled $410.2 billion in 2017.

It is difficult to determine why a business makes a charitable contribution. From my 54 years of experience, I know that some do it for public relations purposes and some do it out of social conscience. I have listened to discussions where leadership groups “cherry pick” charitable organisations – not for altruistic purposes - but for the favorable publicity. Regardless of motive, the charities benefit.

What should businesses be mindful of when supporting charities?

Businesses should be very selective, and should examine the annual filings of the charity to determine the reputation of a charity and the amount a charity uses for charitable purposes. A large business has the opportunity to make a substantial contribution thereby allowing a charity to carry out charitable purposes it otherwise would be unable to undertake.

Businesses should be very selective, and should examine the annual filings of the charity to determine the reputation of a charity and the amount a charity uses for charitable purposes.

About Banker Phares

Banker Phares graduated from the Southern Methodist School of Law with Juris Doctor Degree in 1964, and, while there, served on Board of Editors of Southwestern Law Journal, and as a member of the Barristers. He became Board Certified in Estate Planning and Probate Law in 1977 by the State Bar of Texas. He is the Director of the Financial Planning Program at Stephen F. Austin University, and teaches in the Department of Economics and Finance. He is the John and Karen Mast Professor. He is also the Director of the Marleta Chadwick Student Financial Advisors, organised to the purpose of informing students and the public with the need for financial planning.
Banker Phares is engaged in Solo practice of law in his area of specialty with law offices in Beaumont and Nacogdoches, Texas. He has designed charitable estate plans which include gifts to universities as well as public and private foundations. He has also created public and private foundations as a component of estate plans. The gifting methods utilised include direct gifts of cash and other property to charitable lead and charitable remainder trusts, and the design of conservation easements.

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 14^th 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)