In today’s digital world, data is a vital asset that gives organisations the ability to uncover valuable insights about customer behaviour, which ultimately provides businesses with a competitive edge. However, new research commissioned by managed services provider Claranet has revealed that UK financial services organisations are struggling to capitalise on the vast amounts of customer data they collect.
The research, which was conducted by Vanson Bourne and surveyed 750 IT and Digital decision-makers from a range of organisations across Europe, is summarised in Claranet’s Beyond Digital Transformation report. The findings reveal that despite the increasingly large quantities of data that the financial services sector is now collecting, over half of UK companies (54%) struggle to use and understand their customer data to help them make important business decisions.
According to the survey responses, 43% of UK organisations in the financial sector cite centralising customer data as being a key challenge encountered when trying to improve the digital user experience, and 41% reported that they were unable to provide a consistent experience across channels as a result.
For John Hayes-Warren, Head of Vertical Markets at Claranet UK, the findings highlight how the often-siloed and legacy approaches to data management are preventing businesses in the financial sector from exploiting the potential of the information at their fingertips.
Hayes-Warren commented: “Data has quickly become an incredibly valuable asset in the financial sector and the source of important intelligence that can be applied to respond to changing customer demands. Most businesses are sitting on vast amounts of data and those that can harness it effectively can gain a much deeper understanding of their customers, better predict, improve and personalise the customer experience and, ultimately, create stronger brand loyalty and repeat business. It’s therefore troubling that over half of UK financial services organisations are reporting challenges in this area, so addressing data management shortcomings needs to be a priority for any business that is passionate about delivering a positive customer experience.
“To realise the benefits of data you’ve got to be able to combine and mine different repositories of data and make it actionable in real time. However, that’s something that is often frustrated by legacy systems and batch processing. These unconnected and incompatible IT systems create data siloes and prevent data and insights from being discovered and actioned within organisations,” he continued.
“Cloud technologies can help a great deal, providing the tooling and infrastructure needed to collect, process, and analyse vast sets of data from across the organisation and make it actionable in real time. By creating a platform that can capture and analyse data from across an organisation, leaders can discover unique insights, issues and opportunities that will ultimately help them achieve the competitive advantage they seek,” Hayes-Warren concluded.
(Source: Claranet)
For almost three quarters (73%) of financials services leaders, customers are the main driving force behind their company’s digital transformation, however fear of failure is holding back the implementation of digital projects, with almost three quarters of financials services leaders put off by the costs of failed projects. This comes as no surprise, as seven-in-10 admit to cancelled projects in the last two years, according to Fujitsu’s Digital Transformation PACT Report.
“Financial services firms are under pressure from their customers to deliver greater speed, convenience and personalisation, as well as better customer services,” said Ian Bradbury, CTO Financial Services at Fujitsu UK & Ireland. “Digital transformation is certainly a key strategy in helping banks and insurers achieve this, however, despite the sector going from strength to strength, financial sector firms have undertaken unsuccessful projects and lost money. This has made them nervous about deploying new projects. But we feel that success can be born out of previous unsuccessful projects, as previous failures allow organisations to learn. In an ever-changing market, there is no such thing as permanent success. Organisations must continuously improve, learning from their mistakes along the way.”
Even though over four-in-five (87%) have a clearly defined digital strategy, almost three quarters (73%) admit that their digital transformation projects often aren’t linked to the overarching business strategy. But is this the sole reason UK financial services leaders can’t get to grips with their digital projects?
Realising a digital vision is not just about having the right technology. In order to successfully digitally transform, this research highlights four strategic elements businesses must focus on: People, Actions, Collaboration and Technology – the Digital PACT.
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People
While admitting to a problematic skills gap – especially as 80% believe the lack of skills within the business is the biggest hindrance to addressing cybersecurity – it is encouraging to see that over nine-in-10 believe they have a culture of innovation within their organisation. Despite this believe, 87% believe that fear of failure is a hindrance to digital transformation projects. There is therefore a long way to go for financial services companies to truly transform their culture to thrive on innovation. As UK financial services firms are taking measures to increase their access to digital skills and expertise (93%), four-in-five believe attracting ‘digitally native’ staff will be vital to their firms’ success in the next three years, as well as turning towards targeted recruitment (72%) and apprenticeships (50%) to support digital transformation.
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Actions
Although having the right processes, attitudes and behaviours within the organisation to ensure digital projects are successful are seen as the least important of the four key elements of digital transformation, 87% are taking specific measures to support collaboration on digital innovation and over two-in-five (43%) are creating networks for employees to share expertise across the business.
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Collaboration
Over a quarter (28%) of UK financial services leaders believe collaboration is an important element in realising the company’s digital strategy. While almost four-in-five (78%) turn to technology experts for co-creation, 67% go as far as seeking consultancy and training from start ups and organisations outside their industry.
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Technology
Many organisations are already leveraging new technology that will radically change the way they do business. A fifth of financial services leaders believe implementing technology will be the most important factor to realising their digital strategy, with cloud computing and big data and analytics playing a key role in helping drive the financial success of their organisations over the next 10 years.
Bradbury continues: “Historically, financial services firms have been cautious when it comes to innovation. They are working under strict regulations and the very nature of what they do, means that a radical digital transformation project could have a detrimental impact on people’s lives – for example, negatively impacting access to bank accounts or making insurance claims. But this shouldn’t hinder innovation across the sector. Quite the opposite – with the help of external expertise and willingness to implement digital transformation, we can be soon pleasantly surprised at a revamp of the industry. Change doesn’t always come naturally, but the financial sector understands what’s at stake, with 86% admitting that the ability to change will be crucial for the business’ survival in the next five years.”
(Source: Fujitsu)
A traditional industry like finance and accounting doesn’t often go through many changes. However, with the rise of artificial intelligence (AI), machine learning and automation, technology is having – and will continue to have – a huge impact on every business; changing the way people work within an organisation. And, finance departments are not exempt from this change. Below Andy Bottrill, Regional VP at BlackLine, discusses the future of finance and accounting with Finance Monthly.
Whether finance departments like it or not, technology is going to become part of the accounting process. And despite 71% of workers admitting to still using spreadsheets to manually carry out month-end tasks, 80% of businesses are expected to be ready to adopt AI by 2020.
So why should today’s accountants look forward to, and not fear, the future and technology?
Automating Admin
Companies have already reported that 75% of intercompany transactions are automated, and this is only set to increase over the next 10 years; with 45% of individuals predicting invoicing will cease to exist by 2030.
Although the prospect of investing in automation may seem negative to many accountants at face value, they need to consider the long term benefits it can bring.
Workers must realise that technology will actually positively impact them. For example, removing mundane tasks such as admin data entry – automation can do this far quicker than a human, with a much higher accuracy rate. Using this technology, accountants are seeing manual admin tasks disappear, giving them time back to do tasks of greater value, such as financial analysis.
Augmenting the Accountant
A large concern around the future of finance and accounting is that robots will result in redundancies. But many fail to realise technology won’t wipe out jobs, but instead augment existing roles.
In 10 years’ time, the accountant we know today will no longer exist and instead, an accountant with a completely new skillset will have evolved. Technology is transforming employees’ roles, allowing them to transition from accountants who report last month’s numbers to reporters and analysts who deliver real-time data and predictive analytics.
Removing mundane tasks from day-to-day activities frees up time for more rewarding tasks in the finance department and others that require help – augmenting accountancy roles. Having the opportunity to work in other departments or take on other areas of expertise augments the skillset that accountants have.
Augmenting the accountant role in this way not only boosts job prospects within the workplace, but makes employees much more employable in the future. Making it an opportunity accountants should embrace.
Removing bad habits
Many organisations pride themselves on “best practices”, and don’t stray away from what they have always known. Sometimes, however, adhering to outdated traditional processes can do more harm than good and that is seen within the finance department.
Financial departments are known more than any to practice the phrase “if it ain’t broke, don’t fix it”. However, technology is changing this and removing these somewhat bad habits from day-to-day tasks and instead replacing them with new “best practices” through the use of technology.
Efficient Processing
Amid the personal benefits technology can bring to businesses, the practical savings are just as important – especially for C-suite level executives.
Imagine it’s the year 2028. The CEO questions the finance department on the likelihood of being able to acquire a desirable start up. In response, the CFO brings up real-time figures on her iPad and analyses them with her team to evaluate the potential options. She then emails the CEO their forecast: the business can afford to put in a competitive offer.
And while this evaluation is happening, the machine learning programme installed in the finance department has spotted and flagged a suspicious transaction that looks like possible fraud. The team are able to investigate this straight away, instead of waiting for auditors to discover it. Through this continuous accounting, businesses gain better insights and minimise mistakes.
Increased Sector Reputation
Whilst it’s important to look forward to the internal benefits technology will bring, it is equally important to understand the external impact.
When it comes to quarterly reporting, many finance departments have been scrutinised for incorrect data. But the technology available to finance departments today is helping reduce, if not eliminate, this from happening.
By using real-time data analysis, automation and machine learning businesses can reduce the number of reconciliations required and decrease the margin of error. As a result, more accurate financial results and closing data is produced.
This not only increases the reputation for individual businesses, but for the sector as a whole. Instead, accountants can promote their profession in a positive light. As businesses look to be the best in their industry, enhancing reputation is critical – and technology can certainly help do that.
Accounting departments in UK businesses have continued to shift towards digital practices, but more than four in 10 (41%) continue to rely on paper-based processes, according to new independent research.
The 'Changing trends in the purchasing processes of UK businesses' report, commissioned Invu, revealed a slight reduction in the number of businesses relying on paper-based accounting in the last few years.
The 41% in this latest report is a slight fall from the 45% of business finance decision makers who admitted to relying on paper-based accounting in 2016.
But despite the trend towards digital, the report revealed a significant number of finance bosses who admitted that their company was struggling to move fully to a digital based model.
More than half, 56%, said that a paper process was still used at some point within the purchasing process in their business.
Within accounts payable departments in these UK businesses, 16% of finance bosses said their company had not introduced any digital processes at all - relying on totally paper - while nearly a quarter 24% relied on manual scanning and storing of documents.
Ian Smith, General Manager and Finance Director at Invu, said the findings showed a welcome trend of redundancy of paper-based accounting, but said some businesses were still putting themselves at risk by continuing to rely solely on paper.
"Businesses are often dealing with dozens, if not hundreds of invoices and payment enquiries on a daily basis and trying to manage and juggle these requests and demands using paper and filing cabinets can easily lead to finance departments being overwhelmed.
"Delays commonly arising from manual processing of supplier invoices can result in a business being unaware of its future payment commitments - and then it is only a short step further before they end up in severe financial difficulties.
"Given the current focus in the UK on productivity it is frankly staggering that so many companies won't let go of their legacy paper-based systems and free their accounting teams up to add value to the business rather than drown in paper work.
"In a rapidly changing world this report shows a welcome shift towards the use of technology. I’m concerned for the future of the 41% of businesses that appear to be lagging behind”
(Source: Invu)
Banking apps are set to have the biggest impact on commercial banking within the next five years according to more than two thirds (68%) of commercial bankers, a study has revealed.
Banking apps are also predicted to become one of the most disruptive technologies during the same time period. Only cryptocurrencies (56%) and virtual assistants (48%) are expected to be greater disrupters, according to a study by Fraedom that polled 1000 decision-makers in commercial banks including senior managers, middle managers and shareholders.
The research also found that just under half (45%) of respondents listed digital wallets to have a substantial impact on the industry while nearly one third (32%) noted machine learning as having a future influence.
Kyle Ferguson, CEO, Fraedom, said: “The research highlights that the commercial banking world is beginning to shift towards a more consumer focused approach. Business executives are increasingly wanting a real-time view for their payments, just like they can in their personal lives. This trend is also mirrored by commercial banks who are planning to invest in the key technology areas to make consumerisation possible.”
The study revealed that data analytics (55%) and enhanced mobility (41%) are two of the most likely areas of a commercial bank to receive investment within the next five years. Unsurprisingly updating security systems was most likely area to receive an investment boost, as cited by 65% of respondents.
The research also uncovered that almost half (45%) of financial services organisations believe that increased regulation will drive the adoption of new technologies, with 32% predicting it will lead to better customer engagement. In addition to this, nearly two thirds (60%) of commercial bankers believe that a more ‘consumer focused’ approach to engagement is the most important factor when strengthening relationships with SME customers.
“Regulations have transformed the commercial banking sector over the past few years, and while this appears to be restrictive approach, this research proves that banks are seeing regulation as an opportunity to adopt new technologies and improve customer engagement,” said Ferguson.
(Source: Fraedom)
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)
This CNBC original documentary explores the elusive and controversial world of bitcoin, the cryptocurrency that sparked a global frenzy. Is it the future of finance, a bubble or worse? Anchor Melissa Lee follows a cast of captivating characters to find out.
Bitcoin will lose 50% of its cryptocurrency market share to Ethereum within five years, states an influential tech expert and business analyst.
The comments from Ian Mcloed, from Thomas Crown Art, the world’s leading art-tech agency that he established with renowned art dealer, Stephen Howes, comes as Ethereum, the world’s second-largest cryptocurrency by market cap, began a price recovery on Friday after being hit hard with a major sell-off in recent weeks.
Bitcoin – the biggest digital currency – had also been in decline, but it bounced back quicker than its nearest competitor.
Indeed, Ethereum had crashed 85% overall this year.
However, Ethereum is regained ground late last week, jumping almost 14 per cent after its most recent plunge, only find itself trading again 10 per cent lower once more in the past 24 hours.
What is happening? And what does the future hold for Ethereum?
Mr Mcloed observes: “Turbulence is a regular, and sometimes welcome, feature of the crypto sector. Therefore, the Ethereum rebound was, and is, inevitable.
“But not only do we think it will rebound considerably before the end of 2018, I believe that over the longer time it will significantly dent Bitcoin’s dominance.
“In fact, I think we can expect Bitcoin to lose 50 per cent of its cryptocurrency market share to Ethereum, its nearest rival, within five years.”
Why is he so confident?
“Simply, Ethereum offers more uses and solutions than Bitcoin, and it’s backed with superior blockchain technology,” says Mr Mcloed.
“This is why we use Ethereum’s blockchain 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.”
Last month, Stephen Howes explained: “Using this cutting-edge technology, the art world can eradicate one of its biggest and most expensive problems – forgery – and can protect artists, galleries, and private owners and collectors.”
Ian Mcloed concludes: “Whilst there will continue to be peaks and troughs in the wider cryptocurrency market, due to its inherent strong core values, Ethereum will steadily increase in value in the next few years and beyond.
“Unless Bitcoin does more now to tackle scalability issues, and improves the technology it runs on, we cannot see how it can catch up with Ethereum over the next five years or so, when the crypto market will be even more mainstream.
“Ethereum is already light years ahead of Bitcoin in everything but price – and this gap will become increasingly apparent as more and more investors jump into crypto.”
(Source: Thomas Crown Art)
When it comes to trading globally, banking access and reconciliation can be remarkably complex. Not only do businesses interact with a range of financial institutions to track funds across multiple bank accounts, they are also required to reconcile accounts receivable and payable transactions throughout the global supply chain. Funds may get lost in transfer and invoices can be difficult to reconcile – forcing valuable personnel to deal with unnecessary complexity rather than driving progress.
Introduced in January, the UK’s Open Banking initiative changes this. The launch of Open Banking is set to radically change the way consumers, businesses and banks pay and get paid, and how they manage their data. The introduction of a unified Application Programming Interface, or API, across financial institutions creates a foundation in which data can be seamlessly and securely shared in real time.
The beginning of an era
While the UK regulations are only mandatory for the top nine banks in the country, the initiative is gaining wider traction. A growing number of UK financial institutions outside the mandated nine banks are volunteering to open their APIs to Account Information Service Providers (AISPs) and Payment Initiation Service Providers (PISPs), recognising the open approach will enable them to offer new services and become more competitive pre settlement funding.
In the new world of Open Banking, an AISP can consolidate reams of bank account statement data and deliver it to the customer in a single interface, making it perfect for treasurers of multi-banked organisations. Payment service users – whether they are individuals or businesses – are now able to instruct their banks or payment service providers to share their bank balance and transaction information with regulated AISPs. In addition to displaying this information on a user-friendly dashboard, the AISP can convert all this transaction data into the required format and send it to the customer’s ERP or Treasury Management System.
Similarly, before the introduction of Open Banking, businesses and consumers would have to log into each bank separately to initiate payments, using different workflows and security protocols. With the advent of Open Banking, individuals or businesses are now able to mandate their multiple banks or payment service providers to accept payment instructions via their PISP’s app.
Making things easier for suppliers
Through initiatives such as Open Banking, as well as the New Payments Architecture which aims to modernise the UK payments infrastructure, we’re likely to see the development of modern Inheritance Loans payment services. One innovation to look out for is Request to Pay. This will see the introduction of sophisticated electronic invoicing into the payment system, making it easier to pay and get paid, with more flexible payment options in terms of timings and partial payments.
Instead of a Direct Debit, where money is simply taken from a bank account, the Request to Pay mechanism will issue a request to the payee. They will have the option to pay in full immediately, pay later or arrange a payment plan. Designed partially to accommodate the trend towards more flexible work and the rise in the ’gig economy’, it offers greater flexibility to individuals and is likely to reduce the risk of non-payment or default.
Where cash flow once existed in a complex ecosystem of different financial systems, businesses will now be able to enjoy greater simplicity. The potential for a single dashboard that unifies all accounts in real time while securely and effectively reconciling invoices with seamless, integrated incentives will help maximise supply chain value.
Beyond UK borders
The innovation potential of Open Banking does not stop here. In London, unprecedented levels of collaboration between banks and FinTech providers highlight the mutual benefits of combining a bank’s scale, large customer base and economic muscle with the fast-moving and innovative skills of smaller FinTech firms.
Innovations under way include apps to help consumers find the best investment or borrowing offers in the market, and tools for businesses to manage their cash more efficiently or forecast working capital requirements more effectively. And this is just the start. Competition will intensify with new entrants, offering innovative value propositions and new business models.
Other markets are also directing an API-driven open banking agenda. In Europe, the revised Payment Services Directive, PSD2, was also launched in January 2018 and comes into effect from September 2019. Australia will introduce Open Banking in June 2019 for the country’s Big Four banks. The Hong Kong Monetary Authority has announced an Open API Framework which paves the way for banks to share data with third-party providers. Similarly, Canadian authorities are exploring the introduction of Open Banking soon after the launch of its Real Time Rails programme. The Monetary Authority of Singapore is also encouraging banks to adopt a voluntary transition to Open Banking. And in the US, a number of the large banks already voluntarily offer open APIs to third parties, pre-empting the regulators by using APIs as a competitive advantage, rather than mere compliance with a mandatory change.
We are seeing the early stages of a seismic industry migration that will come into full force over the next five years. The emergence of innovations with the potential to drive simplicity and increase flexibility are turning a once complex web of financial institutions into unified tools to maximise value creation. At Bottomline Technologies, we thrive on maximising the benefits of innovation, leveraging the UK’s head start to help our global clients fully realise the immense potential of open banking.
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/
The 05: Do Not Honor card declined response is the most common and general ‘decline’ message for transactions that are blocked by the bank that issued the card. This week Finance Monthly hears from Chris Laumans, Adyen Product Owner, on the complexities of this mysterious and vague transaction response.
05: Do Not Honor may be the largest frustration for any merchant that regularly analyses their transactions. Although it frequently accounts for the majority of refusals, it is also the vaguest reason, leaving merchants and their customers at a loss about how to act in response.
Although unfortunately there isn’t an easy, single answer about what this refusal reason means, there are several suggestions as to what could be the cause behind the non-descript message. So what might the 05: Do Not Honor mean? From our experiences analysing authorisation rates and working with issuers and schemes, here are some plausible explanations.
Insufficient funds in disguise
In probably half of the cases, 05: Do Not Honor is likely just an Insufficient Fund refusal in disguise. Reality is that some issuers (or their processors) do a poor job of returning the appropriate refusal reasons back to the merchants. This is both due to the use of legacy systems at the issuer side as well there being no mandates or monitoring by the schemes on this, letting issuers continue to use it as a blanket term.
By looking at the data from various banks, it is easy to see how “Do Not Honor” and Insufficient Funds can often be used interchangeably. Records that show a disproportionately high level of Do Not Honor and a low level of Insufficient Fund refusals would suggest one masquerading as the other. Given that Insufficient Funds is one of the most common refusal reasons, 2nd maybe only to “Do Not Honor”, it makes sense that “Do Not Honor” by some banks may actually represent Insufficient Funds.
Refusal due to credential mismatches
Although the words “Do Not Honor” aren’t the most revealing, sometimes other data points in the payment response can be clues for the refusal. Obvious things to look at are the CVC response, card expiry date, and, to a lesser extent, the AVS response. For lack of a better reason, issuers will frequently default to using “05: Do Not Honor” as the catch-all bucket for other denials.
Suspicion of fraud
The most appropriate use of “05: Do Not Honor” would be for declining transactions due to suspicious activity on the card. In some cases, although the card is in good standing and has not been reported lost or stolen, an issuer might choose to err on the side of caution due to a combination of characteristics on a given transaction. For example, a high value transaction made at 3am from a foreign based merchant without any extra authentication, likely will trigger a few too many risk checks on the issuer side. These types of refusals will again unfortunately be designated into the “05: Do Not Honor” category, with merchants drawing the short straw. Even though issuers may be able to point to specific reasons why the transaction was refused, issuers have no way to communicate this back to the merchant.
Some astute merchants might point out that issuers should be able to use “59: Suspected fraud” in these cases. Some issuers however remap these 59 refusal reasons to 05 before sending the response to the acquirer to protect store owners in the POS environment and avoid uncomfortable situations with the shopper standing in front of them.
Collateral damage
Finally, the reality is that your likely not the only merchant that a given shopper interacts with. Regardless of how good your business is or how clean your traffic is, a shopper’s recent history with other merchants will influence the issuers decision on your transaction. For lack of a better reason, the catch-all 05: Do Not Honor refusal in some cases be seen as “Collateral damage”. If the shopper coincidentally just made a large purchase on a high-risk website or went on a shopping spree before reaching your store, there is the possibility that the issuer may decline the transaction at that moment in time. In these cases, there is unfortunately very little that can be done, except to ask for another card or to try again later.
Hopefully this helps shed some light on the possible reasons why ‘05: Do Not Honor’ is so dominant in the payment space and that there is no single reason for this response. Adyen’s advice to dealing with these refusals is to look at the data at individual issuer/BIN levels and from there, try to distil patterns particular to those bank’s shoppers.
Online research from Equifax, the consumer and business insights expert, reveals a lack of awareness of banking options among Brits. When presented with a list of digital banks 60% hadn’t heard of any of the brands and only 20% would opt for a challenger bank if opening a new account today.
The survey, conducted with Gorkana, showed 44% of Brits would choose a traditional bank, and when choosing which brand to bank with, they prioritise good customer service (41%), ease of managing money via a good app or online service (34%), and availability of a physical branch (32%). Media influence was least important; only 3% of people factor news stories about a bank into their decision.
Good customer service also topped the list of priorities for people who would choose a challenger bank (31%), followed by incentives such as a joining fee (28%) and a good app or online service (27%). Friends or family using the bank was the least important factor – just 5% of respondents would take this into consideration.
People who would opt for a challenger bank appear to be more value conscious; one fifth (20%) said better rates when using their card or withdrawing cash abroad would appeal to them, compared to 12% of people who would use a traditional bank. Over a quarter (27%) rate more competitive rates, for example on overdraft fees or loans services a contributory factor when choosing a challenger bank, versus 19% for traditional banks.
Jake Ranson, Banking and Financial Institution expert and CMO at Equifax Ltd, says: “Challenger and digital banks have been making their mark in the banking sector bringing attractive, consumer friendly services to market, yet many consumers are still unaware of these brands. The government has taken action to increase competition in the sector but there’s still a lot of work to do to encourage consumers to fully explore the options available to them and make informed decisions on selecting or retaining accounts.
“Open Banking is underway and is a huge advance for consumers. Services are coming to market that will help people get better value from banks, for example identifying sign-up incentives or better rates tailored to their needs. The next step is for the industry to work together to increase consumer awareness of the value Open Banking unlocks.”
(Source: Equifax)
