Don’t be confused with these terms as they only have one common idea, and that is to earn a profit! However, some investors almost always end up committing mistakes in the beginning. Since investments belong to a larger scale, you may focus first in trading so that you could easily understand it.
When we say traders, they are the ones who are into buying and selling goods, currencies or even stocks. They may be transacting using their own capital or using others’, whether a single proprietorship, partnership or a company. You can check the link and reviews about nextmarkets, stock exchange experts, money market and the likes for more information about trading to get more idea about this.
Traders can be vulnerable, most especially those who are just on their initial stage. Therefore, it is a must that a beginner trader should consider all the necessary factors in order to avoid committing the same common mistakes. And what are those general trading mistakes or flaws? You may try considering and understanding the following:
As a beginner trader, you owe yourself everything. Whether you succeed or fail, there is no other person to be blamed for or to be proud of but you. It is your decision that can make or break your business because you’ve certainly relied on what you have studied, researched, and gathered about the business trading that you are handling.
As a start-up trader, you need to do a post-trading analysis to be able to determine your next move. Otherwise, you’d be left hanging, losing and crying over your lost capital. Do not dare to follow the advice from random people around you as some may be giving you the right advice because they are really concerned about your business, while some may be there to mess it up with how you manage your business. So if you will not primarily consider this aspect, you know what will happen to all your trading transactions.
This component is sometimes being ignored by most beginners in the trading venture. You may be willing to take the risks, but you may also not be prepared to do so. Why? The business know-how may be present, but the guts do not exist. You must be mentally and emotionally prepared as a trader. You should be firm and certain of all your decisions. Emotional trading must be avoided at all times and be aware of its consequences in the business.
When you are initiating a new business journey, you should be taking note of all the details, whether you are earning and so on. In that way, you would know what to change, remove, replace or retain on the methods that you are using or applying for future reference. Don’t rely on just remembering things when needed, but a good reminder is the one that you have absolute knowledge and experience. When there is something to decide now, you can go back and check what you’ve done in the past in any similar situation. It may look like a diary, but it is really helpful.
On the other hand, you can only refine gold by putting it on fire. You may fail several times, but take the chance of redefining and remolding your trading strategy instead of always looking and applying a new one. You may come up with the right trading strategy which is applicable to what you need by doing the trial and error experiment. Practice makes things perfect after all.
In business, you may also hear of the terms such as old school, traditional, obsolete, outdated, outworn, and stodgy. These words may be referred to the business techniques, strategies, and methods that are being used and applied. Unfortunately, the business deals of today’s world are far beyond what these traders have done before. For this reason, beginner traders must be open to new and advanced business marketing procedures and all. This will save the entire business from losing its target clients, affiliates and even investors. Thus, you will rest assured that your business is secured and stable.
A beginner trader should bear in mind that in the trading world, all things might occur or happen. Of course, you are expecting for continuous profits, more clients and even business expansions. However, as a trader, you should be realistic and expect worse case scenarios so that you can prepare and plan for the right move to take in case these business mishaps happen. Your venture in the business world will not always be rainbows and butterflies, so you must have an alternative action for every scenario that may happen. Also, in business, it is advisable to have more sources, investments or other methods for unexpected events or losses. This will help you in making the business to recover or rise again after every fall.
Beginner traders should be aware of the differences between the long-term and short-term perspective so that you would know how to deal with things in every situation. There are some factors that are beyond your control such as fortuitous events that can affect your business. Therefore, you need to make stable and suitable back-up plans for that just in case anything happens.
In business, it is not advantageous to analyze the performance of your business on a daily basis since each day is different from other days. As a beginner trader, you should focus on doing your best method each day and gather all the necessary data in a long-term range before you compare its performance to become more competitive, stable, feasible and profitable.
A trader must be aware not only of how he runs the trading business, how it goes, or how it gets more clients or affiliates but also of how his trading competitors manage their own businesses. Your competitors play a vital role in your business, and knowing how to deal with your competitors will give you an advantage. That is why we have this saying that goes like this, “If you cannot beat them, join them.” Instead of getting more enemies, it would be wiser to turn them into your allies. Get involved with a fair play in a healthy kind of competition.
There are still lots of quotations, sayings, and words of wisdom that you can best relate with as far as successes and failures are concerned. Still, you should not rely on words to make your business succeed. Do the legwork and use the right strategies to manage your business.
Following recent incidents such as TSB's systems failure and Visa's service outage, operational resilience is increasingly vital. Bank of England and FCA recently published a report stressing the importance of business continuity during a disaster. Below Finance Monthly hears from Peter Groucutt, Managing Director at Databarracks, who discusses what businesses need/can to do to strengthen their operational resilience during a disaster to absorb any shock a business may experience.
In July 2018, the Bank of England, Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) published a joint discussion paper aimed at engaging with the financial services industry to improve the operational resilience of firms and financial market infrastructures (FMIs).
At the time it was issued, banks and FMI’s were capturing media attention, following several high-profile incidents.
TSB’s failed IT migration has been well publicised, costing the firm £176.4m in various fees and leading to the departure of its chief executive, Paul Pester. In June 2018, shortly before the release of this paper, millions of people and businesses were unable to pay for shopping due to a sudden failure of Visa’s card payment system.
Financial services lead in business continuity
The financial services industry is a leader in business continuity and operational resilience. It has a requirement of a high level of systems-uptime and is well-regulated. The best practices it introduces are often taken and more widely adopted by other industries. Our own research supports this. Our annual Data Health Check survey provides a snapshot of the IT industry from the perspective of over 400 IT decision-makers. The findings from this year’s survey provided some revealing insights.
64% of financial institutions had a business continuity plan in place, compared to an industry average of 53%. Of the financial sector firms with a specific IT disaster recovery process within their business continuity plan, 64% had tested this in the past 12 months – compared to 47% across other industries. Finally, 81% of financial firms had tested their IT disaster recovery plans against cyber threats, versus 68% of firms in other sectors.
While these findings reinforce the strength of the industry’s operational resilience, incidents like TSB and Visa prove it is not immune to failures.
The regulators want to “commence a dialogue that achieves a step-change in the operational resilience of firms and FMIs”. The report takes a mature view to the kind of incidents firms may face and accepts that some disruptions are inevitable. It provides useful advice that can be taken and applied not only to the financial services community, but other industries too.
Leveraging advice to improve operational resilience
So, what can be learned from this report? Firstly, setting board-approved impact tolerances is an excellent suggestion. This describes the amount of disruption a firm can tolerate and helps senior management prioritise their investment decisions in preparation for incidents. This is fundamental to all good continuity planning; particularly as new technologies emerge, and customer demand for instant access to information intensifies. These tolerances are essential for defining how a business builds its operational practices.
Additionally, focusing on business services rather than systems is another important recommendation. Designing your systems and processes on the assumption there will be disruptions – but ensuring you can continue to deliver business services is key.
It’s also pleasing to see the report highlight the increased concentration of risk due to a limited number of technology providers. This is particularly prevalent in the financial sector for payment systems, but again there are parallels with other industries and technologies. Cloud computing, for example, it’s reaching a state of oligopoly, with the market dominated by a small number of key players. For customers of those cloud services, it can lead to a heavy reliance on a single company. This poses a significant supplier risk.
Next steps
Looking ahead, the BoE, PRA and FCA have set a deadline of Friday 5th October for interested parties and stakeholders to share their observations. The supervisory authorities will use these responses to inform current supervisory activity, helping to dictate future policy-making. The supervisory authorities will then share relevant information with the Financial Policy Committee (FPC), supporting its efforts to build resilience in the financial system.
Firms looking to improve their operational resilience should take advantage of this excellent resource – whether in financial services or not.
If the recent software failures in the financial industry are anything to go by, then disruption to payment systems are becoming the ‘new normal’. This week David O Riordan, Principal Technical Engineer, SQS Group, delves into the benefits of blockchain, in particular in the aftermath of a software disaster.
The VISA card payment outages, Faster Payments issues and disruption to card payments at BP petrol garages, all within the first half of 2018, have caused many to question the regulatory environment around financial institutions. And with the Bank of England and FCA requesting banks to report on how prepared they are for IT meltdowns, stating that any outages should be limited to just 48 hours, the finance industry is under real scrutiny when it comes to technology.
Corporations are now expected to have a Disaster Recovery (DR) and business continuity plan put into place to avoid falling victim to software failures. Nevertheless, what business leaders need to understand is that while no IT solution is completely foolproof, and will likely go down from time to time, the key is knowing how a potential internal failure can be mitigated without affecting the overall performance. This can only be achieved with a well-practiced DR plan that is second nature to the responsible parties and can be executed in the desired timeline. However, this can be both costly and time-consuming to set up. How can such incidents be minimised, or potentially eliminated, in the future? Blockchain is an alternative technology solution business leaders should consider, as it has fraud protection already built-in and is highly resistant to all type of attacks and failures.
Blockchain for Business Continuity
Built-in Fraud Protection:
Blockchain is a de-centralised platform, where every node in the network works in concert to administer the network and no single node can be compromised to bring down the entire system. It is a form of distributed ledger where each participant maintains, calculates and updates new entries into the database. All nodes work together to ensure they are all coming to the same conclusions, providing in-built security for the network.
Most centralised databases keep information that is up-to-date at a particular moment. Whereas blockchain databases can keep information that is relevant now, but also all the historical information that has come before. But it is the expense required to compromise or change these databases that have led people to call a blockchain database undisputable. It is also where one can start to see the evolution of the database into a system of record. In the case of VISA and other payment systems, this can be used as an audit trail to track the state of transactions at all stages.
Ingrained Resiliency:
Additionally, blockchain removes the need for a centralised infrastructure as the distributed ledger automatically synchronises and runs across all nodes in the network by design. As a result, Disaster Recovery (DR) is essentially built in, eliminating the need for a synchronised DR plan. The inability to alter entries in the ledger also contributes to the overall security of the blockchain, improving resilience against malicious attacks.
This is unlike traditional large centralised systems where resilience is provided by failover within a cluster, as well as site-to-site Disaster Recovery at a higher level. Disaster Recovery plans and procedures can be costly due to a large amount of hardware and data replication required. Furthermore, most businesses often do not execute it, so when disaster strikes, corporations are not prepared to deal with the aftermath; as seen with VISAs outage problems.
The Downside of Decentralised Blockchain Technology
Performance:
While blockchain can be used as a system of record, and are ideal as transaction platforms, they are slow compared to traditional database systems. The distributed networks employed in blockchain technology means they do not share and compound processing power like traditional centralised systems. Alternatively, they each independently service the network; then compare the results of their work with the rest of the network until there is an agreement that an event has happened.
Confidentiality:
In its default, blockchain is an open database. Anyone can write a new block into the chain and anyone can read it. Private blockchains, hybrid limited-access blockchains, or ‘consortium’ blockchains, can all be created, so that only those with the appropriate access can write or read them. If confidentiality is the only goal then blockchain databases offer no benefit over traditional centralised databases. Securing information on a blockchain network requires a lot of cryptography and a related computational liability for all the nodes in the network. A traditional database avoids such overhead and can be implemented ‘offline’ to make it even more secure.
Blockchain for Disaster-Relief?
As an emerging digital disruptor technology, no one can say for sure where blockchain technology will ultimately lead. While many have disregarded this technology, the potential is certainly there to attempt to solve some of the most common problems in the digital space.
However, with high customer demands on the increase within financial services and with the combination of a widespread network and substantial cost pressures, IT outages will continue to impact consumer experience. Businesses can minimise potential damage by managing communication effectively and dealing with the technical nature of the outage quickly. With a comprehensive and well-rehearsed data recovery plan, it can not only mitigate outages but maintain standards of service too. This will encourage customer retention, loyalty and growth. Therefore, blockchain should be considered, as it has a built-in check and balance to ensure a set of colluding computers can’t ‘game’ the system; as the network is virtually impossible to crack. As blockchain processing efficiency improves, it will increasingly become a more viable proposition, potentially making traditional disaster recovery unnecessary in the future.
An independent study commissioned by Dun & Bradstreet reveals a UK business community that believes it has already lost out due to the EU referendum. When asked how the Brexit process has affected business finances, 43% of business leaders say they have felt a negative financial impact since the Brexit vote. More than a third (37%) say they have lost out on potential revenue and, on average, businesses say 19% of their revenue will be put at risk by Brexit.
Two years on from the vote, almost a third of business leaders (32%) reveal that their organisation has or is planning to reduce UK investment, and almost a quarter (23%) have already halted or slowed their plans for expansion in the UK. This suggests businesses could be considering moving activities elsewhere in the EU or beyond, or simply downsizing the scale of activities in the UK.
When asked about their initial reaction to the 2016 EU referendum in a previous survey, business leaders’ views mirrored those of the general population, with 42% saying it was positive and 41% negative. Despite this fairly even split of opinion initially, it appears that optimism has waned significantly since then. The recent study found only 23% of leaders feel that the impact of Brexit has been positive, with 42% citing that Brexit has had a negative influence on their business.
Political instability, including Brexit, has been the biggest challenge that the majority (51%) of businesses have faced over the past two years. Many are still unsure of how the negotiations and outcomes will affect their business and views remain split. Almost a quarter (24%) say leaving the single market will impact them most, followed by the regulatory landscape (18%), the length of the potential transition period (15%) and the settlement on migration (13%).
However, the research also highlighted that not all businesses believe Brexit will have an impact on their business, positively or negatively, and in fact, a fifth (21%) of businesses believe that Brexit will have no impact at all. Moreover, over half (51%) of business leaders feel the impact of Brexit has not been as negative as they first anticipated. Perhaps most critically, over half of businesses are confident that they will survive and thrive after Brexit.
Commenting on the results, Edward Thorne, Managing Director UK of Dun and Bradstreet said: “As we move closer to the Brexit deadline, it’s evident that there is still a high level of uncertainty amongst UK businesses about their future in a post-Brexit era. Our research suggests that businesses have already been affected financially and are still unclear about further impacts once the UK does leave the EU. How businesses get ahead and plan for Brexit will be crucial to their future success.”
(Source: Dun & Bradstreet)
Recent news reports regarding Marks & Spencer’s shop closures have left other high street retailers feeling fearful about profits.
With plans to close 100 stores by 2022, in what M&S bosses are calling a re-organization of the entire retail chain, the aim is to turn a third of its in-store sales into online sales.
This of course is another blight in the midst of a global retail infection, predominantly caused by the propagation of online buying. Below Finance Monthly hears Your Thoughts on M&S’ shop cuts and the potential consequences across the UK.
Joe Rabah, Managing Director for EMEA, RMG Networks:
With the recent announcements that M&S is said to close 100 stores and that House of Fraser could close up to half its stores, it’s no secret that the UK high-street is under pressure as a result of changing shopper behaviour and a drastically altered customer journey.
For retailers to survive and adapt they must embrace technology to create meaningful, immersive retail experiences. However, it’s not enough for retailers to invest in technology without doing so in a purposeful manner and knowing the solutions that they invest in are going to be specifically relevant to their business and their customers. It’s essential that retailers use platforms that create frictionless purchasing experiences for their customers, enabling them to increase customer engagement that is tailored to individual customer needs and habits. In doing so they will drive customer loyalty and provide consistent cross-channel experiences. Today’s solution is not tomorrow’s in retail, and technology can either allow a brand to pivot so that it can adapt quickly to changing customer expectations, or it can lock a brand into delivering stale customer experiences.
While we don’t know what the future holds, retailers must understand whether the technology they are investing in suits a clearly defined purpose and is adaptable enough to suit their future needs and their customers’ evolving customer expectations, and consider this before making any technological investment.
Julian Fisher, CEO, Jisp:
With retailers, such as Marks & Spencer, facing large declines in high street spending as consumers turn to online shopping, bricks and mortar stores must evaluate how they are interacting with customers. We are a nation of shoppers and shopkeepers, but convenience is a key factor in driving potential instore customers online where they have access to a wealth of information, deals and personalised offers. To keep customers in stores, the high street shopping experience must provide this instantaneous access to information and personalisation through handheld devices. It is essential that retailers increase investment in areas such as mobile technology to bring the shop floor into the 21st century.
The restructuring decisions that Steve Rowe is making will have the desired effect with these future-thinking closures a controlled choice with M&S in charge of its own destiny. Customer service and quality of merchandise has been a hallmark of M&S for years.
Looking ahead, it will be innovation and the ability for stores and their staff to connect and personalise their brand with new customers who are armed with devices and a world of information and content. If they don’t they may succumb to the fate of others who have been unwilling to embrace changing consumer behaviours.
Iain Wells, Investment Manager, Kames Capital:
Will M&S shares be up or down tomorrow when they announce their results? I don’t know. Expectations are certainly low with earnings forecast to be down nearly 10%. The bad weather in the first quarter, that kept shoppers at home, has been so widely discussed that it can surely provide no negative surprises. With a dividend yield of 6.3%, and a price earnings ratio 9.8x, results that are in-line with expectations could see the shares rise.
While the share may rise on the day, more important is what evidence there is that the structural pressures that have impacted M&S over many years are easing. On this I am less confident. It is not that M&S is a “bad” retailer, just that the retailing world is changing around it faster than it can adapt, and the process of adaptation is painful for shareholders.
The key issues that M&S are trying to address include:
Everyone has a view about M&S, what they are doing well, and what they are doing badly. As a national institution management have the misfortune of having to carry out their plans on a very public stage.
Terry Hunter, UK Managing Director, Astound Commerce:
The news of the M&S store closures is yet another dagger in the heart of the British high-street. The retailer plans to move a third of its sales online, and intends to instead have fewer, larger clothing and homeware stores in better locations. If the company is going to recover from its recent sales slump, it is imperative that it has an exceptional online offering. It will now be competing more directly than ever with the likes of Amazon and Asos.
Online retailers like Asos take advantage of efficient and nimble business models by avoiding the costly overheads associated with running bricks-and-mortar stores and as a result, they can afford to invest a great deal in offering websites which give the best possible user experience. Although M&S is cutting back on some of these overheads, it is not as experienced or effective in the ecommerce arena as the pureplay online retailers. M&S needs to make sure its in-store offering works in harmony with its online strategy. The retailer struggled over the Christmas period last year – basic logistical errors caused a real headache as next day delivery targets were missed – a type of error you don’t see the likes of Amazon making. A truly omnichannel approach is the only way that this British retailer is going to recover, let alone flourish.
One factor that is working against M&S is that its customer base has an ageing demographic. The company has been making efforts for some time to attract a younger shopper and an improved online offering could potentially aid this. A younger tech-savvy shopper is more likely to make purchases online rather than instore. One of the key battles for M&S will be ensuring that its predominantly over-50 female shopper continues to visit the new stores, whilst also becoming more active in buying products from its website. It is a difficult road ahead.
Paul Fennemore, Customer Experience Consultant, Sitecore:
M&S faces a similar challenge to many other retailers – in trying to find out exactly who its target market is, and what they want, ahead of them wanting it. Evolving a customer experience strategy on the basis of anticipating needs in this way will require a very sophisticated, multi-channel, cross platform customer experience strategy in place, each of which must feed the other to create a total experience that is worth more than the sum of its parts.
One way it could go about reinventing itself online is to go beyond personalisation – which all brands claim to be able to do – and move to individualisation. This will deliver content to its customers based on specific data points. This will help set it apart from the other online retailers, and help it provide its customers with an unexpected, satisfying experience which will keep them coming back.
By creating a robust individualisation strategy, focusing on customers as individuals, rather than using the more traditional broad personas, M&S will be able to attract a younger, mobile-first demographic, who value individual interactions with brands. The challenge here will be to ensure that experience is consistent across all channels, including mobile, online, social media, and in-store. Integration of its systems will be key for M&S going forward, otherwise customer data will be siloed, meaning they won’t be able to track a customer’s journey efficiently. This will ultimately lead to a worse customer experience, as it won’t be consistent.
Ben Holmes, Head of Display, Samsung UK:
Yet again, we’re seeing more boarded up shop fronts on the British High Street with M&S recently announcing a series of store closures. We understand the predicament M&S is in as it sets about ‘modernising’ its business to ‘meet the changing needs of customers;’ but at the same time, we do believe that bricks and mortar establishments can be part of the modernisation effort rather than being the sacrificial lamb to more investment in online. When every retailer is battling for the same pound spent, businesses definitely need to be more innovative in how they sell to their shoppers. The old rules no longer apply when it comes to in-store retailing in an age where shoppers expect personalisation, digital connectivity and high impact experiences. We’d encourage retailers to experiment with digital technologies like video walls and touchscreen kiosks because these technologies have been proven to drive engagement and sales. Physical stores are definitely not secondary to online retail estate because there is a real opportunity for companies to transform their stores into experiential destinations – think brandship not just flagship. Until retailers start delivering genuine, digital experiences, we can unfortunately expect more casualties.
Adam Powers, Chief Experience Officer, Tribal Worldwide London:
This latest announcement is yet another indicator of a malaise that’s been hanging over UK retail stalwarts for the past few years. The inexorable growth of online commerce means that a strategic rethink must be undertaken for businesses that want to successfully trade on the UK high street. Actually, this is a global challenge, but the UK is one of the most advanced ecommerce markets in the world and so we are seeing the outcomes here earlier. Like Mothercare, M&S is clearly trapped in the middle of a market where they are being squeezed at both ends. Cheaper or more fleet-of-foot competitors are doing product innovation around food (Aldi/Lidl) that was once an M&S sweet spot. Away from food, key competitors have high performing home delivery infrastructure like Next or ASOS that leave M&S looking lumbering and out of touch with modern customer expectations. Additionally, M&S are getting squeezed from the top as style needs for their target demographics are increasingly met by internet optimised clothing competitors. The wrapper around all of this is really customer experience - online and instore, this is the modern retail battleground. From the outside looking in, it appears that nobody at M&S is looking at customer experience holistically, with a mandate to drive radical, customer-centric transformation and the initiatives underway, such as store closing, look piecemeal. What’s particularly worrying about M&S delivering a turnaround, is that the way things are emerging must be highly unsettling for the workforce, the very people who are at the frontline of delivering customer experience.
John Taylor, Co-CEO, Duologi:
The internet has made it easier than ever before for customers to compare prices and shop around online, without ever having to leave the comfort of their homes. This subsequent decrease in footfall to the high street has led to a number of high-street brands opting to close stores where footfall has dwindled to save on overheads, with M&S being just the latest example of this.
However, this does not mean that the high street is dying – far from it. Rather, we’re seeing a shift in the retail landscape, wherein the retailers set to thrive will be the more flexible, agile brands which can offer customers a choice in how they shop and pay for products.
To accomplish this, savvy smaller retailers are taking the time to optimise their online presence to sit alongside their bricks-and-mortar offering, engaging customers who no longer shop with a brand due to ongoing store closures.
This flexibility also extends to the payment process itself. With consumer confidence currently low, flexible finance options such interest free credit, 0% finance and buy-now-pay-later can support shoppers at the time of purchase – particularly for big-ticket items – which can both engender consumer loyalty and increase average basket values.
Charles Brook, Partner, Poppleton & Appleby:
We should be careful not to jump to conclusions. There is undoubtedly an acceleration of change in the retail market with some large towns experiencing retail depletion more than others. Statistics released this week in Yorkshire put Doncaster, Barnsley and Huddersfield towards the top of those hit hardest by a combined net loss of more than 1,000 retail outlets in the past 12 months.
Marks & Spencer is shifting the focus of its in-store offering away from homewares and clothing to place emphasis on and serve its online offering in a more contemporary manner. This is a sensible response to the evolved way in which even its traditionally conservative-minded customers now shop and, having such a significant leasehold estate, and it needs to plan well ahead. I think it highly unlikely that M&S would try to foist a Company Voluntary Arrangement on its landlords.
Perhaps this is a good time to deliver seemingly bad news. The M&S Board may be gambling on the market and its major shareholders (if not the public at large) recognising that whatever issues have hit other big names, M&S is reading the trading conditions and charting its future trading strategy with typical caution.
Rick Smith, Director, Forbes Burton:
Retail is going through a transition, and a transition that M&S should have seen coming, especially with the likes of Ebay / Amazon etc dominating the way people shop, but unfortunately for all those concerned (towns, cities, the high street, communities, shoppers, staff) they didn’t. High street shopping is now all about the experience.
However, it’s not just the blue-chip retailers fault, it’s a collective from councils, property owners and communities. This should have been recognised and adaptive investment should have been put in place a long time ago. The problem we have now is that it’s all knee jerk and I’m not convinced they are going about it the right way. Closed high street shops is simply demoralising for the community and once the reality of it sets in it’s quite scary when you start thinking more about it.
M&S haven’t kept up with the times and they need to look at online sales especially for the struggling clothes and homeware sections. While they’ve been able to do well compared to their competition by attracting females to their clothing range, they have failed to find their proper place in the market on this side of the business and need to get this totally right. Also, many of the stores need modernising which is difficult when profits are dropping and there’s no money for investment.
Their food range is nice and appeals to a small, specialised section of the population. However, competitors have caught up with their food offerings and often for much less with most now doing a ‘finest’ or similar range. A small percentage do also believe the bad press around packaged meals, and this combined with the offerings from the competitors has had a knock-on effect because there has been no differentiator in terms of quality. M&S food is of very good quality, but it is now evident with these closures that they do not have the resources to convince the public otherwise.
Emma Thompson, Head of Strategy, Visualsoft:
E-retail is booming at the moment, with consumers currently spending a staggering £1.2 billion a week online. As such, high street retailers need to make the most of this opportunity to ensure they have the best chance of success. Those who fail to do so can expect to fall behind more digital-savvy competitors, as we have seen with the likes of Toys ‘R’ Us and Maplin.
While it still remains to be seen whether Marks and Spencer’s store closures will help boost performance, it is heading in the right direction by using this restructure to support the growth of its website. This forward-thinking attitude could see the retailer maximising its growth potential, as the majority of the UK’s top retailers that neglect their online offering risk stunting their growth as a result.
For Marks and Spencer to effectively focus its efforts, it needs to not only improve its website’s user experience, but also utilise a variety of online channels to boost revenue. Social media in particular should be a priority, given that a growing proportion of e-retail sales are driven through the likes of Instagram and Facebook. If the retail giant prioritises these areas, it can expect advantageous results to follow.
Leigh Moody, UK Managing Director at SOTI:
The decision to close 100 stores over the next four years is a bold decision from one of the UK’s leading retailers and highlights the shift in focus from high-street to online in order to keep up with evolving consumer trends.
In response to this change and to support its online growth plans, M&S will need to consider how they integrate their mobility management strategy across their entire on and offline operation to ensure they are streamlined, data is protected and customer demands are met.
As M&S becomes more digitally enabled across all channels including mobile and social, mobility will be key in influencing the shopping experience, touching every part of the value chain which in turn, will lead to further opportunities for cost savings and buying efficiencies.
We would love to hear more of Your Thoughts on this, so feel free to comment below and tell us what you think!
It has emerged that TSB could be facing £16 million in fines for the catastrophic meltdown of its online banking software which prevented customers from accessing their bank accounts and using their debit cards. On the back of our Your Thoughts this week, Yaron Morgenstern, CEO at Glassbox Digital, discusses the important lessons we can learn from this ordeal.
Almost a month after the crisis emerged, mortgage account holders are still unable to access accounts online, while business customers continue to face problems making online payments.
TSB’s response to its customers’ fury is more revealing, with customers unable to get through to customer service teams, even after fraudsters have drained their accounts. Any financial organisation that truly values its customers can learn a number of lessons from this meltdown. Providing a positive and consistent customer experience is vital in today’s digital environment – and this is likely to get even more important as your clients move away from human interactions, such as in bank branches and via call centres.
In the aftermath of TSB’s IT disaster, the question is: how can organisations create digital engagements that are responsive to clients’ needs and at least as successful as human engagements?
Be ethical
A digital footprint is the only way to understand the issues your clients are experiencing, whether they are on a similar scale to the TSB crisis, or as tiny as a minor frustration. However, the Cambridge Analytica scandal has reminded business of the importance of considering ethical data collection when measuring your customer’s experiences.
These recent events, and the distrust that surrounds tech giants and data collection, have showed that financial organisations must inform their online users how their data is collected, stored and used. More importantly, it must be remembered that customer data is on loan to businesses for a given period of time and not owned by the organisation. As such the data collected must be relevant to the individual customer and be able to offer them a distinct advantage in the customer experience.
Be helpful
In light of this mistrust it’s more important than ever that you demonstrate the advantage your processes offer to customers and clients. We are now in a world where there are all kinds of service users, devices and operating systems operating in the financial services environment. This landscape will only become more complicated as the amount of IoT-enabled devices continues to increase. How organisations connect with customers will also evolve in line with these technological advances.
Digital mapping allows businesses to know precisely what browser, device and operating system each online user is operating on, and therefore to know more about the experiences users are having than ever before. The upshot for customers is that these organisations can offer an improved digital journey at every touchpoint in return.
Be responsive
In this digitally-enabled world, organisations should be more capable of staying in touch with their customers. Digital processes need to identify customer pain-points and solve these problems before they begin to mount up like they did at TSB. And instead of operating in complete silos, IT and customer service teams must work together. When considering the TSB disaster, you cannot help but wonder how prepared other parts of the business were for the back office switch.
How can you react immediately to any issues that emerge? Customisable alerts can be set up that go out to IT, customer service, marketing and web development departments that warn about problems on the website and app. With these alerts in place, all teams have full visibility of digital problems and there are no nasty surprises. Similarly, if a user then approaches a customer service representative with a problem, the handler of this complaint should be able to effortlessly tap into the online session data and identify what the issue is and where it lies.
Be pre-emptive
The TSB fire was stoked by Sabadell’s development team, who before the IT crash were publicly toasting what they thought was a successful migration of customers to a new platform. Whilst this is a PR disaster, it also demonstrates how little they understood about the potential pitfalls they were facing. With such a heavy reliance on online experiences, it’s important your teams consistently prepare for failures, in order to best react.
Financial services firms must put in place processes that prevent online glitches (however small these may be). If they do so, businesses will enjoy increased customer loyalty and retention. Rather than simply employing digital mapping when moving legacy systems over or updating a customer portal, it should be engaged day-to-day.
Can you do it?
The finance industry is more reliant on the online experience to retain and win customers than ever before. Despite this, not all banks and insurers are doing it well. Making sure that your IT and business processes are ethical, ongoing and integrated will help guarantee customer loyalty and retention. This approach will insulate businesses from IT disasters like the TSB fiasco – or at least allow them to respond properly in the event of a crisis.
The ongoing TSB IT meltdown has been strong evidence of the risks and challenges financial institutions face daily. It has caused mass uproar from customers and severely tarnished the bank’s overall reputation.
TSB started a long-planned move of 1.3 billion customer records from its former parent company, Lloyds Banking Group, to Proteo4, a platform built by TSB’s Spanish owner, Banco Sabadell. The change-over, which started on Friday 20 April, was supposed to be completed over the weekend by 18:00 on Sunday. But on Monday morning millions of customers were unable to use online or mobile banking or had been given access to other people’s accounts.
Error messages and glitches meant paydays and company salaries were turned upside down across the UK. This has understandably caused a chain of problems across many sectors. TSB’s overall response has not been appreciated by the public and its customer service methods have been hugely questioned.
Below Finance Monthly lists some of Your Thoughts on TSB’s IT failure and its customer service approach.
Mark Hipperson, CTO, Centtrip:
Looking more closely at what happened and how the events evolved, it appears that some key IT best practices might have been omitted, such as:
And last but not least is proof of concepts (PoCs), which would have revealed any tech and planning errors. TSB should have run PoCs on test accounts, or even staff accounts, before the full release.
Alastair Graham, spokesperson, PIF:
Small business customers have reached a nadir in their relationship with traditional banking partners. Branch closures and the move of services online have meant that few now receive any active guidance or support from their bank in helping to grow their business.
At the same time, many feel that even basic banking services aren’t meeting their expectations. Even without issues such as the recent TSB banking crisis, businesses would like improvements to be made.Whether that is quicker account opening processes, simple lending or transparent and fair charges, the demand for alternatives is growing.
Tech innovations, combined with legislative changes such as Open Banking, mean that more products and services are being launched, designed specifically to meet the needs of small business customers. SMEs have already shown they will trust other providers when their banks fail to provide adequate services. This has been particularly evident where prepaid platforms offer more versatility, while still being a safe, secure and flexible method to transfer money.
Yaron Morgenstern, CEO, Glassbox Digital:
In today’s digital age, customer experience is more important than ever. This banking app drama has revealed how important it is to measure your consumer’s experience with complete visibility of any problems. This should really be an ongoing effort, and not just when you plan large scale back office migration. There are three fundamental tenets to an effective customer experience: observation of the customer journey via touchpoints, reshaping customer interactions, and rewiring the company’s services to align with customer expectations.
It is only through advanced digital analytics and AI technology that organisations can understand what is going through their customers’ minds. These are powerful tools for mapping out customers’ digital journeys from the moment they visit a website. This all goes to the heart of improving conversion in the digital customer journey.
Fabian Libeau, EMEA VP. RiskIQ:
The fact that TSB’s IT meltdown dragged on for such a long time, meant that customers were locked out of their accounts for extended periods. It also made them vulnerable to digital fraud in the form of phishing. TSB itself has warned more than five million customers that fraudsters have been attempting to take advantage of its IT breakdown to trick people into handing over information that could enable them to steal their money. Criminals exploiting brands to defraud stakeholders in this way is nothing new, and we know that financial institutions are a much-loved target for hackers, given the highly-sensitive and valuable information they’ve been entrusted with – it is therefore no wonder that cybercriminals are queuing up for an opportunity to impersonate the bank online.
Andy Barratt, UK Managing Director, Coalfire:
In the grand scheme of things, the TSB incident is perhaps not as significant an event as a nation-state hack like last year's WannaCry. But it has still left many, including the ICO, concerned that a major 'data breach' occurred just weeks away from the implementation of the EU’s General Data Protection Regulation.
The power to hand out major fines that GDPR affords the regulator means that the price of poor data protection is about to become far easier to quantify. When the regulation comes into force at the end of the month, a breach like TSB’s would certainly require a Data Protection Impact Assessment and measures put in place to ensure a similar incident doesn’t happen in the future. At the very least, TSB will have put themselves on the ICO’s radar as ‘one to watch’ when GDPR comes into effect.
While the share price of Banco Sabadell, TSB's Spanish parent, wasn’t overly affected by the incident, there could still be a significant financial consequence for the bank. We now know that a large number of customers are affected so the cost of rolling back any mistaken transactions as well as offering support, and potentially refunds, is likely to eat up a lot of operational resource. This event should be a reminder that data protection and the safeguarding of personal information has to be to priority for financial institutions.
Andy Barr, Founder, www.10Yetis.co.uk:
The best thing you can say about the TSB approach to public relations throughout its issues is that it is going to become the modern benchmark for university lecturers on how not to approach crisis communications.
From the very outset, TSB has failed in its approach to handling this ongoing crisis. Its messages have been wrong, even from its highest-level member of staff, the CEO. He has repeatedly issued statements that have been incorrect and that he has had to retract and apologise for.
TSB’s brand reputation is now circling the plughole and its Spanish owners could very well be forced down the route of a re-brand in the mid to longer term in order to try and recover their reputation. I fully expect a classic crisis communications recovery plan 101 to be rolled out, once this all dies down. Step one; apologise (usually full page ads), step two; announce an independent investigation, step three; a member of the C-Suite gets the Spanish Archer (El-bow), and then step four; another apology before trying to move on.
Whatever the final outcome, this has been a public relations disaster for TSB and they are very lucky that at the time that it happened there was so much other “hard news” going on such as Brexit, rail company re-nationalisation and, of course, Big Don, over the pond, constantly feeding the 24-hour news agenda.
Danny Bluestone, Founder & CEO, Cyber-Duck:
The TSB fiasco shows that many organisations vastly underestimate data migrations. Moving data on such a scale from an incumbent system to a different one is an inherently complex task. There are several steps to follow for a successful migration.
First and foremost, it begins with a considered strategy for structural changes that ensures no legacy data is made unusable and new functionality is accounted for. Banks like Monzo test new features within alpha and beta modes, so new pieces of functionality are tried and tested before a mass general public release. TSB would have been wise to utilise test scripts and automated testing to auto-test thousands of permutations from login to usage of the system. Relevant applications that monitor errors could have then detected issues early on.
TSB could have also used a run-book for deployment so all steps of deployment are documented. When an error was detected, TSB could have rolled back without data loss. Problems could also have arisen if TSB failed to use a testing environment that was identical to the production environment. As if there is even a slight difference, the user experience can break.
With regards to the application hosting, TSB should have an active engineering team monitoring performance 24/7. In our experience at Cyber-Duck – from working with numerous institutions including redesigning the Bank of England’s digital website – there really is no excuse for users to suffer. Complex data migrations can be dealt with in a secure and efficient manner if best practice methodology is followed.
Adam Alton, Senior Developer, Potato:
Software is difficult; Microsoft still hasn't finished Windows. Trying to write a new piece of software or create a new system, and then migrate everything over to it in one go is likely to go badly. The chances of it working are incredibly slim. Instead, a migration in several parts would be better. Release small, release often. When Mark Zuckerberg said "move fast and break things", you could interpret that as "you're going to break things, so do frequent and small releases in order that you break as little as possible before you get a chance to fix it". The problems with TSB's migration appear to be multiple and disparate; error messages, slowness and capacity problems, users shown the wrong data. It seems unlikely that these stem from a single cause or single bug, so it would seem that they tried to do too much at once.
Coerced optimism: when under pressure to get something to work, it's easy for a team of developers to wishfully believe that something is finished and working because they can't see any problems, even though their experience tells them that the complexity of the system and the rushed job they've done means that it's extremely unlikely to be free of issues. I wouldn't be surprised if IT workers at TSB fell into this trap, leading to the premature announcements that the problems were resolved.
Denying that you have a problem is always a bad idea. Amazon Web Services (AWS) provide a detailed status dashboard giving a continuous and transparent view of any issues on their systems. They don't deny that they occasionally hit problems but instead have a process in place for actively updating their customers with as much information as possible. This transparency and openness clearly win them a huge amount of customer trust.
Senthil Ravindran, EVP & Global Head, xLabs, Virtusa:
Fortunately for all involved, it seems as if the worst of TSB’s IT debacle is now behind it. But its botched migration led to more than 40,000 customer complaints in what was arguably the most high-profile banking error we’ve seen this year. Worse still, the technology itself isn’t to blame here – both previous owner Lloyd’s and the Proteo4UK system used by new owner Banco Sabadell have a good record in handling data. Instead, the responsibility here rests solely with TSB.
It mostly boils down to a lack of proper preparation on TSB’s part. Banks carry out small data migrations regularly, but a large-scale migration such as this typically calls for months of preparation. Actually moving the data isn’t the tricky bit; drawing the data from the siloes it’s stored in across the business and knowing how it’ll fit within the target system is the real challenge. This is why banks are increasingly looking to ‘sandbox’ the testing process; creating a synthetic environment with the data they hold to gauge how it’s likely to fit within a new system of record. Granted, this approach to testing doesn’t happen overnight, but when applied properly, it reassures banks that the actual migration will run smoothly.
This method would likely have spared TSB the disaster it has faced. Yet in reality, we’ll likely see similar high-profile stories appear over the coming months thanks to the combined pressures of GDPR and open banking. The former is forcing banks to bolster their data handling practices in order to avoid hefty financial penalties, while the latter is forcing banks to expose their data to all manner of third parties. Both initiatives are incredibly difficult for banks reliant on decades-old legacy IT systems to manage (indeed, it’s likely that the GDPR deadline this month may have added pressure on TSB to rush the migration through), and as the reality of this new banking environment begins to set in, expect to see other examples along the same lines as TSB’s.
We would also love to hear more of Your Thoughts on this, so feel free to comment below and tell us what you think!
Here Kevin Wilbur, Senior Vice President of AP Automation at Tungsten discusses with Finance Monthly the practicalities of implementing new technologies in supply chains.
Trust in business is more vital than ever today. At a very basic level, it underpins what is required to agree employment contracts, retain customers and grow a business. However, when it comes to monetary transactions for the exchange of goods and services, trust is even more crucial.
Unfortunately, even when payment terms have been set and assets exchanged, trust can often be undermined. A delayed payment from a buyer is something many suppliers will have experienced, resulting in unnecessary stress and a loss of confidence in the trading relationship. Equally, supplier challenges, where data security is compromised or orders are not fulfilled, can cause headaches for buyers.
Certain sectors face greater supplier risk than others, making it even more important to ensure they have a robust supply chain. Finance businesses in particular hold a vast amount of sensitive data, so the ramifications of poor supplier service can be significant.
Widespread supply chain failures
Worryingly, our research shows that 84% of businesses have suffered from supply chain failures such as these. The biggest supplier risks were found to be security (ensuring data security and privacy standards) and information risk (accuracy, timeliness, and security of information exchanged with suppliers).
These risks or failures can have a huge financial impact, with 30% of firms reporting a loss in revenue or business partners. In addition, 22% of buyers said they faced higher insurance premiums, damaged reputation, a loss of customer trust, and/or significant legal and regulatory fines as a consequence of supply chain failures.
Many of these breakdowns in the supply chain arise from poor supplier management processes. Regrettably suppliers are often managed on an ad hoc basis with no consistency and very little attempt made to track and monitor spend. In many supply chains the sheer volume of suppliers involved means that it can be hard to stay on top of each relationship, and with the added pressures of cyber fraud, siloed customer data, insufficient cash for investment, and legacy technology systems, there are often layers of overlapping bureaucracy and confusion.
Managing and monitoring
To manage suppliers effectively and efficiently, supplier-related processes should be measured. From there buyers are able to optimise processes, which in turn enables automation. However, only 23% of buyers in our study achieved this level of maturity, and just 12% had optimised processes.
Buyers who describe themselves as having good supplier relationships have taken the time to map supplier activity, to establish a clear onboarding process, and to define a strategy that not only makes supplier management a priority, but also establishes responsibility between themselves and the suppliers they work with. Optimised firms ensure compliance with regulations and corporate social responsibility (CSR) standards by constantly monitoring their suppliers.
Low process maturity, revealed in more than a third of businesses (35%), can lead to poor sourcing decisions, because buyers lack high-quality, up-to-date information about suppliers’ past performance when awarding new contracts.
Technology that transforms
The research, which was conducted by Forrester Consulting on behalf of Tungsten Network, concludes that for businesses to thrive, they need to be properly managed using modern tools and processes that establish accountability, reduce uncertainty, and foster trust. This in turn enables the exploration of mutual growth opportunities for both buyers and suppliers.
Increasingly sophisticated technology exists that can genuinely strengthen supply chain relationships. For example, through a secure e-invoicing platform such as Tungsten Network, buyers and suppliers can have clear visibility on whether an invoice has been received and approved, and when payment is due. This means businesses have a single source of truth for invoice status information, which is monitored in real time. It can also help remove manual processes around invoice validation and compliance. This is a good example of where technology is enabling growth across the board, through developing trust in business relationships.
Often networks such as this provide value-added services that can serve as a source of competitive advantage. For example, through analysis of the real-time data generated from end-to-end e-invoicing capabilities, decision makers can more effectively predict demand and manage disruptions. Buyers and suppliers of all sizes can also find each other more easily and can build capabilities that benefit them both. They can also experiment with managing cash in new ways, such as by negotiating more flexible payment options like dynamic discounting and invoice financing.
The winners in the digital age will be the companies that best use technology to win, serve, and retain customers, and to enhance relationships throughout the supply chain. Technology can enable buyers and suppliers to more effectively use their data and manage their interactions, removing friction from the supply chain and strengthening trust, to the mutual benefit of all.
Following a 66% share drop, hundreds of thousands of families that lend off Provident Financial have been placed in limbo, as the firm collapses due to a glitch.
According to reports, a software bug made it impossible for Provident Financial, a blue-chip FTSE 100 company, to collect debts from clients. This resulted in a 66% drop in shares within a day, bleeding £1.7 billion out of the Bradford based company’s gross value.
It’s now considered to be the biggest ever one-day stock price fall for such a firm. The company CEO, Peter crook, immediately resigned. The whole ordeal has also resulted in several investigations and the axing of its dividends.
On top of this, the 137-year-old company’s customers, mostly vulnerable low class families with very little income, will be affected.
The software that created the bug was introduced following a £21.6 million overhaul of the firm’s doorstep collection business, which collects customer debts on loans with up to 535% annual interest. A rehiring of staff fell flat and failed the firm, then an appointment system software that was introduced also failed to improve efficiency, all in all letting the company down when it came to meetings with clients, and therefore slumping profits.
According to the Daily Mail, Chairman Manjit Wolstenholme, who has taken over the daily responsibility of the company after Crook resigned, said: “We’ve got people on the ground, but we have issues with the software being used by them. Agents are turning up at the wrong time when customers aren’t there.
“It’s not behaving because the data that’s in there isn’t good enough for what we need to do. This is something we should be able to do something about.”
Whether it’s in investing, a partnership, a sponsor, or simply a paying client, a sinking ship can cause a deep wound in the business. Here Rachel Mainwaring, Operations Director at Creditsafe talks Finance Monthly through the steps in identifying a failing house.
One of the fears for any business is that it won’t get paid for the work or services it has supplied because their client is in financial difficulty. This fear became more prominent last year when, for the first time in three years, there was an increase in businesses closing their doors through insolvency (up 24% on 2015).
Given the uncertainty within the UK economy after the Brexit vote, an increase in failures was not entirely surprising. But knowing who will be affected is a trickier call. When a company gets into trouble, it can often take the businesses it deals with by surprise. Unfortunately, a sinking business is not always as obvious as the Titanic going down with the band playing.
With 2017 set to be just as unpredictable as 2016, it’s essential that companies are attuned early to the signs of possible distress. Obviously a negative balance sheet and falling profit can indicate that a company might be failing – but results statements in Annual Reports or company filings can be issued many months after year-end and long after problems have begun to take hold.
There are other, less obvious signs that business leaders should be looking out for when doing their due diligence on the companies they are in business with, as well as those they may be about to start working with.
These signs can usually be found in a company credit report, which is why they really are worth investing in obtaining. Things to look out for include:
Changes in directors. It’s natural for directors to change occasionally within a business, but if it becomes a trend, or if a director isn’t replaced within a few months, it could be a sign of deeper issues within the company.
Directors with previous failed ventures. You can check individual directors’ histories – and if they have a record of previous failures, that could be a warning sign. Our data found that if a director has been involved in a company that has failed in the last three years, they are nine times more likely to fail again compared to a director who has never been involved with a business collapse.
Adverse payment information. According to trade body R3, at least one fifth of UK corporate insolvencies in 2016 were caused by late payment or the insolvency of another company. If there is an increase in the number of days a client is taking to pay their bills, that could indicate cash flow difficulties. Check whether their average Days Beyond Terms (DBT) has increased or whether they have any CCJs against them.
Spike in views of a company’s credit report. It’s natural that if other businesses are worried a company is getting into financial difficulties, they will check their credit status and report. So look to see whether there has been a rise in the number of views. It could be due to other issues, but nevertheless it can be a useful indicator.
Links with businesses with low credit scores. Many companies are owned by or have links with other businesses. Their financial position can have a knock-on effect on each other. So another thing to look at in a credit report is the information on linked companies and other businesses in the Group structure. Look at their credit scores and histories – it could be very worth doing.
It’s important to study a credit report carefully and not merely look at the topline statistics. It’s also important to do some of your own research. What’s been written about an organisation in the press, for example? Do you have contacts at other businesses who may have worked with them?
What’s more, it’s important to keep monitoring on an on-going basis: if they seem fine in January, that doesn’t necessarily mean they will be, come July.
It’s also possible to sign up for risk tracker alerts that automate your monitoring process and notify you when there has been a change to a company’s credit report – from a director leaving to the company receiving negative publicity in the press.
Keeping abreast of your clients’ credit status is not difficult to do. The small effort involved could pay for itself many times over if it prevents your business incurring a bad or irrecoverable debt.