The good news is that understanding how to manage your finances effectively is an art that can be learned and perfected. The best part is, it isn’t any difficult.
This practical guide takes you through the landscape of financial management for physicians in 2023, covering everything from crafting an emergency fund to the significance of retirement planning.
The Foundations of Personal Finance
Understanding the foundations of personal finance is one thing all physicians should know in 2023. Often, this starts with building an emergency fund and reducing high-interest debts.
Having an accessible emergency fund helps protect your earnings under unforeseen circumstances that life may throw at you. Additionally, it's critical to minimize debts, particularly credit card payments.
On the other hand, high-interest rates can quickly magnify what you owe, which threatens your overall financial health. So, ensure you prioritize these two fundamentals if you’re looking to set the stage for robust financial stability in 2023 as a physician.
Investing Strategies and Balancing Risk
In 2023, physicians should also aim to comprehend investing strategies and the concept of balancing risk.
Diversification is a crucial consideration when investing your money. It implies spreading out investments across various asset classes (such as equities, bonds, and real estate), which can decrease the impact of poor performance from any particular investment type.
Furthermore, strive to maximize your tax-efficient investment strategies by making wise use of registered retirement savings plans or tax-free saving accounts. These approaches enable you to accrue additional income while evading heavy taxation. Remember, the key here is finding a balance – one that aligns with your specific financial situation and risk tolerance.
Insurance and Risk Management
Discovering the role of insurance and risk management in safeguarding your finances is another significant learning point for physicians in 2023.
Having sufficient income protection coverage could be essential if you encounter situations like accidents or illnesses that prevent you from earning a regular income. Regularly reassess your financial needs as they progress over time, adjusting your insurance coverage to match these changes.
The good thing about managing potential risks through insurance is that you can ensure a level of financial safety amidst life's unpredictability. However, you must note that this part of financial management is all about preparation, so equip yourself today to face the unexpected turns of tomorrow with confidence.
Harness Technology for Streamlined Processes
With physicians often juggling their clinical responsibilities and personal finances, streamlining processes with Foothold Technology software or any other care coordination platform becomes increasingly critical in 2023.
The best thing about integrating such tools into your daily operations is that you can effortlessly consolidate all care-related activities onto one accessible platform. Additionally, such incorporation optimizes workflow, bolsters efficiency and helps save a considerable amount of time that you can spend focusing on other financial management aspects.
Retirement Planning
Equally important in your financial management journey as a physician in 2023 is the concept of retirement planning. While caring for others, it's easy to neglect yourself and miss out on making appropriate provisions for your golden years.
Although you may be passionate about practising medicine now, there will be a day when relaxation might sound more appealing than work. Setting aside significant savings specifically dedicated to your retirement ensures that those days can be lived stress-free without worrying about financial stability.
Start early, invest wisely, and create long-term monetary goals to ensure you're prepared when it's time to bid farewell to the world of active service while leaving no room for regrets or uncertainties.
Professional Financial Advice
Finally, as you aim to master financial management in 2023, remember there’s no harm in seeking professional help. Circumstances may arise confusing enough to warrant advice from a certified financial planner, particularly complex matters like tax planning or estate management.
Professionals can lend expertise to help navigate the intricacies of financial decisions and offer customized strategies catered to your unique situation. They can provide perspective on risk assessment and infuse confidence about your choices, making your journey towards better financial control less daunting.
So, while it's vital to educate yourself about personal finances, don't shy away from expert opinion when necessary. It might just be the springboard you need for financial success.
In June 2023, Richard Liu’s JD.com (known as Jingdong in Europe) celebrated its 20th anniversary. The company also announced plans for the next two decades in the form of its new “35711 Vision.” Here’s an overview of the 35711 Vision and JD.com’s low-cost market strategy.
JD.com’s 35711 Vision: Sustained Growth
JD.com revealed its 35711 Vision in a letter to employees. The vision outlines a path for sustained growth over the next 20 years.
What The Numbers in “35711 Vision” Represent
The numbers in “35711 Vision” each stand for a crucial aspect of JD.com’s future-facing strategy:
● The “3” represents JD.com’s goal of establishing three businesses with more than one trillion RMB in revenue and 70 billion in net profits.
● The “5” represents JD.com’s plans to have five of its businesses included in the Fortune Global 500.
● The “7” represents JD.com’s goal of creating seven publicly listed businesses with a market value of 100 billion RMB.
● The “1s” represents JD.com’s plans to contribute 100 billion RMB globally in taxes and create more than 1 million jobs.
Creating A Clear Path for Growth
JD.com’s 35711 Vision is aimed at creating long-term, sustainable growth. Sandy Xu, CEO, set out the Company’s three main strategies for growth.
- Build the business in developing markets.
- Advancing the company’s technology and services.
- Expand JD.com’s international businesses.
Sustainability And Social Value
JD.com is also committed to having an impact on Sustainability and the Markets in which it is active. Examples include:
● Providing more than three trillion RMB in benefits to the company’s frontline employees.
● Increasing 100 million farmers’ incomes.
● Helping 60 million small- and medium-sized enterprises implement digital transformations.
● Developing a global supply chain infrastructure to support economies that represent 80% of the world’s economic volume.
● Achieving carbon neutrality.
JD.com’s Low-Cost Market Strategy
Throughout 2023, JD.com has introduced several merchants that offer cost-effective products to its platform.
The trusted e-commerce company has long served consumers with a select group of merchants. These merchants’ products often appeal to higher-income shoppers. Now, this expansion of affordable products welcomes a new class of merchants to the platform. These merchants’ cost-effective products attract a broad consumer demographic.
As part of its low-cost market strategy, JD.com has hosted initiatives to help small merchants sell low-price products. For example, the 2023 “Spring Dawn” initiative made it easy for small merchants to launch stores on the JD platform.
These merchants spanned from college students to designers, craftsmen, and farmers, among other entrepreneurs. Thanks to this initiative, the number of new merchants joining JD.com rose by 240% compared to the same period in 2022.
JD.com’s impressive history of supply chain purchasing places the company in an advantageous position to sell high-quality, low-cost products. Its warehouse and trucking network also supports the company’s strong position in this market.
Guided by its 35711 Vision, JD.com will continue to make innovative moves in the next 20 years with a focus on long-term growth.
Learn more about JD.com’s 35711 Vision.
About JD.com (a.k.a. Jingdong)
JD.com, also known as Jingdong, is a technology and service enterprise with a supply chain at its core. Founded by Richard Qiangdong Liu, JD.com is a renowned leader in China's e-commerce industry and the company has expanded across retail, technology, logistics, healthcare, insurance, property development, industrials, private label, and international business. Ranking 46 on the Fortune Global 500, JD.com is China’s largest retailer by revenue.
JD.com serves nearly 600 million customers and has set the standard for e-commerce through its commitment to quality, authenticity, and competitive pricing. The company operates the largest logistics infrastructure of any e-commerce company in China, pioneering a standard experience of same- and next-day delivery. JD.com also promotes productivity and innovation across a range of industries by offering its cutting-edge technology and infrastructure to partners, brands, and diverse sectors.
Technological advancements have made it possible for you to buy stock in the virtual space. Most people are looking to buy shares without considering the various aspects that affect the same. You need know-how in the stock markets to help you make an informed choice regarding the stock you want to buy. Here are some of the top factors that you ought to bear in mind when buying shares.
1. Volume
Some companies have many shares in the market. The stock they put up for sale may be lucrative and draw in a large number of people. However, this is not always the case. Some of the shares available in the market do not attract many investors making their sales very low. The volume for such stocks is on the lower side, meaning that your investment may not have considerable returns. You have to check the shares sold and bought in a day to determine the volume of the same in the market. Additionally, you can gauge whether your investment will have returns with minimal hassle or not. This element is crucial, and you have to be intentional about the stock you are buying and its volume in the exchange market.
2. Management
You buy shares from companies, and this necessitates the need for you to look at the management of the stock you are interested in. Read expert reviews on authoritative sites to know more about the product that you are interested in. Be keen to understand how the company works, and their ethics as this determines the stability of the same. The firm you buy shares from has to be stable for you to cash in through dividends and sell your shares for more than what you invested. Innovativeness, the management culture, and the competence of the managerial team and other employees are some of the elements that you ought to review. Companies riddled with scandals should be avoided at all costs. This is because you may lose your hard-earned money if the company goes down due to incompetence.
2. Dividends
There are various ways to make money once you buy shares. Most people believe that you have to sell your stock to recoup your investment and make a profit. This is not always the case; you earn dividends from the company where you own shares for as long as they belong to you. Dividends are the payments that the company makes to you for holding their stock. However, not all firms pay this. You need to confirm that the company whose stock you are buying has a dividend payment plan for all the shareholders before investing in its stock. Companies that pay dividends should be on the top of your list. This is because the regular payment is a guarantee that the firm is growing and making money from its products and services. Ask customer support for this information if it is not readily available to avoid any surprises in the future.
The three elements we discuss above are crucial but not the only ones that you ought to consider. The cash flow per share and market capitalisation are other vital factors that you need to bear in mind. The cost of the venture should be within your budget to avoid unnecessary expenditure. For this reason, you need to research the different types of stock and pick an ideal one for you.
What pops into your mind when you think about payroll services? Probably making some complicated calculations in the massive number of worksheets. However nowadays, as the technology evolves day by day, like every other business domain, personnel management, workforce planning as well as alignment with the accounting process are being enhanced and re-designed with new generation software as a service (SaaS) platforms.
Payroll is more than a calculation of paycheck. Rather, it is a secure form of the income statement that is both critical for the employer and the employee. It is a simple yet highly technical field of expertise and may have resulted in legal penalties and burdens on the employer if the payroll process is not managed correctly. Because payroll calculation includes income tax, other tax calculations, and withholdings, as well as considering benefits like premiums, expense reimbursement, health insurance, and so on.
If you are a small business owner or an HR or Administration responsible working in a small business, to avoid wasting too much time each month for a specific task, and to find a solution with an affordable budget, the best payroll services may be the software solutions for your case.
Software as Service (SaaS) payroll solutions will benefit you in terms of time and save your money that might otherwise be wasted in outsource payroll companies or hiring personnel dedicated to this, which indeed cost more than a subscription to payroll software.
Automatic Payroll Calculation and Tax Features
For a small business with a limited number of full-time employees, payroll service software may be seen as the best payroll service option to choose from.
Payroll is more than a calculation of paycheck. Rather, it is a secure form of the income statement that is both critical for the employer and the employee.
They offer automated payroll calculation along with the necessary legal tax calculations such as income tax as well as manage financial reflection of benefits like health insurance and overtime payments.
You can calculate the payroll of your employees quickly and do not have to deal with complicated menu bars.
Adjusted to company size
Most of the payroll services online offer you several plans which can be adjusted and customised based on your employee number and needs. When choosing the one among the best payroll services that fit your company, please bear in mind to control their policies, whether they ask fee per person or a certain limit or they demand an extra fee for part-time employee payments which occur irregularly. If they have payroll limits per month and you have too many variables changing at each monthly period, then you should search for the best payroll service that provides more flexible options.
Workforce Management
If your company operates based on shifts, managing schedules and employee working hours is a big deal, especially considering that the best payroll services come with built-in HR tools such as workforce planning, automated shift planning, and platforms for personal agendas which would be a beneficial asset.
Through this feature, if you need it, you can see your daily schedule, which will reduce the rate of errors. Special reports as per company unit, date range, and type of employee, and monthly shift reports for employees may also be produced.
Integration to Company Software
Whether you have a digital service company or a business that has brick and mortar stores, you will have several other pieces of software to execute your business ranging from CRM tools and financial dashboards to procurement and shipping platforms. Particularly, the integration of payroll tools to accounting software or existing workforce management or HR tools such as SAP will be a crucial factor when deciding for the best payroll service for your company.
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Why is SaaS the best payroll service solution?
✔ They are affordable and a smart decision for a small business compared to a full-time expert or outsourcing.
✔ On a single screen, you can do all your calculations.
✔ In real-time, you can monitor the payrolls and share them with the accounting department or legal party.
✔ You will not get lost in complicated menus.
✔ They complete payroll calculations quicker because of these properties.
✔ Simplify with one click the entire shift schedule.
✔ Online recording of all payroll payments, expenditures, promotions, incentives, and bonuses.
✔ An online framework to control leaves and shifts
✔ Each worker can have his or her account, demand leave, and oversee their shifts or overtime hours.
✔ Manage I-9s, part-time W-2 workers, 1099 contractors, and freelancers.
To Sum Up
Payrolls must consist entirely of accurate statistics. The payrolls must be properly maintained and preserved in the case of court proceedings concerning the employee and the employer since they are valuable evidence. For this purpose, efficient and smart payroll software, instead of the effort, money, time, and manual labor spent on complex files, is a very practical solution among the best payroll services on the market, particularly for small companies.
Consolidating and standardising processes delivers benefits such as improved operational efficiencies and reduced administrative costs. But as well as improving efficiency, sharing resources also creates valuable opportunities for revenue growth. Tim Vine, Global European Head of Finance & Risk Solutions at commercial data and analytics firms Dun & Bradstreet, explains how this beneficial coordination can be achieved.
Although finance shared services are often the focus during challenging times to reduce cost or outsource operations, businesses can deliver operational efficiencies and increased productivity by moving to a shared service model.
Historically, “back office” finance functions have not been seen as growth drivers or sources of innovation. However, there is huge potential to transform the management of processes such as invoice-to-cash processes and deliver significant value to the business, rather than just being seen as a function where costs can be cut.
Steps to Implementing Finance Shared Services
To create an effective shared model, there are three recommended steps to help deliver maximum value and tangible results for the business, regardless of company size or industry.
- Define. Before embarking on the implementation of a finance shared services model it’s important to ask some key questions to ensure you have well defined the business goals and desired outcome. Things to consider include asking internal (and external) stakeholders what processes are considered suboptimal or are incurring significant cost to the business. It’s also important to have full visibility of any duplication and type of tasks completed manually vs. automated processes.
- Analyse. Conducting a full analysis of your current processes is also important, as well as benchmarking them against best practices. Assessing the ‘current state’ will allow you to examine where improvements can be delivered by introducing a more centralised and standardised approach. It’s important to validate this analysis both internally and externally and seek the support required for successful implementation.
- Measure. When considering a finance shared service model, it’s important to understand your current costs, structure and processes to help measure your performance against recognised best practice and measure any improvements. If you operate across multiple locations or have siloed teams then processes may be duplicative, too decentralised or too manual. If your infrastructure is fragmented there is unlikely to be much successful information sharing taking place. Establishing a robust governance model will be key to addressing any deficiencies, ensuring a central point of control and creating synergies.
When considering a finance shared service model, it’s important to understand your current costs, structure and processes to help measure your performance against recognised best practice and measure any improvements.
Gap Analysis
Once you have evaluated the current situation and collected feedback from various parties, further analysis is required to inform the implementation strategy. This analysis will identify any gaps between what is actually being completed versus what people believe or perceive is being delivered. Bridging these gaps between actual performance and best practices will help you establish what needs to be done to drive improvement, reduce cost and create opportunity for growth. Gap analysis is a good way to manage expectations and provide evidence to key stakeholders on what a shared services model can deliver.
Scaling Shared Services
Best-practice governance models help finance teams gather the right information for each market a business operates in to understand the legislative landscape and identify similarities (and differences) between countries or region. Where legislation is similar, there is an opportunity for a more centralised and standardised structure.
Global policies can bridge gaps across business segments, units, markets, and regions and drives consistency across finance operations planning. To perform in the most efficient way, you can scale processes so that it doesn’t matter where the teams are based. Processes from credit, collections, billing, dispute management, disbursement, or transactional accounting can be managed consistently around the world.
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Auditing Technology
To support effective implementation, it’s important to have a full view of all the systems used across the business including customer relationship management (CRM) system, general ledger platform, collections management, enterprise data management (EDM) and a business intelligence (BI) or reporting tools. A technology audit can reveal which solutions should be kept, which have global capabilities, and which are potentially no longer required. Crucially, an audit can identify which systems should be integrated or combined across functions.
The End Game: Finance Shared Services
Initiating change and gaining buy-in from decision-makers can be challenging, especially if the change impacts people and resources. The steps outlined are designed to help with the successful implementation of a finance shared services model, to increase efficiency, reduce costs, but perhaps most importantly to add value for the business and its clients.
Did you know that having an excellent credit routine practice is an integral part of securing one's financial future? It's why building a credit score is a high starting point, and one mustn't ignore it. One of the most excellent ways to make credit is by using credit cards to build credit. It can be a challenging process if you aren't up for the task. However, don't beat yourself up as you can implement excellent credit card management practices. In turn, you get to have a brighter financial future by having a stellar credit history. Here's a step by step guideline on how to build credit with a credit card in corporate finance.
1. Pay All Your Credit Card Bills in Full and On Time
Diligent credit management practice involves you making a timely monthly payment. It's a procedure that might pass you by if you aren't too cautious. However, if you want to skip getting a headache, you need to make autopay your close buddy. Thus, you can get to pay all your bills in due time. It ultimately contributes to your credit score improving. The secret to paying timely payment with no much hassle is spending a budget that's within your limit. Therefore, you won’t have to keep carrying a balance into the next month, which might incur a higher interest charge.
2. Your Needs
Before you think of getting a credit card, you need to take time and ask yourself the vital questions. You ought to know why you are signing up for a particular card. Do you want to build credit? Or do you want the fantastic rewards that come with credit cards? Finding the ideal credit card will enable you to make the most out of it. It's a chance you ensure that you meet your needs each time you get to swipe the credit card. As you open these credit cards, you ought to know about the soft and hard inquiries. It’ll enable you to tread lightly to ensure your credit score doesn't hang on the balance.
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3. Regular Purchases
It's quite unfortunate that most individuals have credit cards that have their credit cards lying idle and unused. However, it leads to one having a pause in credit score growth. If you need your credit history to continue improving, you need to continue making purchases using your credit card. As you use your credit card, you get to make timely payments. Thus, your credit card issuer will keep making monthly reports to the credit bureaus.
4. Don’t Get Too Many Credit Cards
With the numerous captivating rewards from several credit cards, it's easy to sign up and get as many credit cards as possible. There's entirely nothing wrong with getting more than one credit card. However, the trouble comes when you have more credit cards than you can handle. You might get tempted to spend more, and that's not good, and it might harm your credit score.
Mindful credit card usage is quite crucial in achieving your financial independence dream. It's a seamless process that enables you to learn how to use credit cards to build credit. It's because one learns to become financially conscious, determined, and precise on each penny that gets spent.
Below Nic Redfern, Finance Director at Know Your Money, discusses the potential for a four-day work week and how that could work in today’s busy working environment, particularly for the finance sector.
Despite the above changes, there are some aspects of work that have remained somewhat constant, and one of those is the 5-day 9 to 5 working week. This makes sense. The 9-5 offers a relatively good balance for allowing workers time to rest, and for employers to reach maximal productivity.
However, technological advancements have changed the way in which employees are able to connect to their offices. Laptops, smartphones, and of course, the internet have transformed workplace connectivity, so employees can connect with their offices at any location, at any time. Thus, people are now beginning to question whether the regimented 9-to-5 working day is fit for purpose.
The rise of flexible working
With this challenge has come the rise of flexible working; an approach which grants employees greater freedom to organise their own working day. It has clearly grown in popularity amongst the UK’s workforce. Indeed, in a recent survey of 2,000 UK adults in fulltime employment, Know Your Money revealed that 71% of people believe that flexible working is highly important to their overall job satisfaction.
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Perhaps unsurprisingly, flexible working can be adjusted to meet the various needs of individual employees. For some it may mean coming into work later in the day to do the school run or working at home to avoid a long commute. For these individuals, flexible working can provide a huge help. Evidence also suggests that flexible working doesn’t just benefit the individual. Indeed, the Chartered Institute for Personnel Development recently released new guidance on flexible working which cited numerous cases where employees experiences boosts in morale, motivation and productivity as a result of the policy. Thus, one could infer that the flexible working revolution is definitely blazing the trail for employee wellbeing.
However, over the last few months, particular attention has been drawn to an alternative working structure: the four-day working week. This concept has gained momentum amongst many employees, the aforementioned research from Know Your Money revealing that three quarters of survey respondents would be in favour working additional hours over four days if it meant having the fifth away from the office.
But will it work in reality?
It is possible to see the attraction of a four-day working week. Firstly, an additional day away from the office provides employees the opportunity to create a healthier work-life balance. What’s more, there is also a business case in favour of the system. Trials in New Zealand and Microsoft Japan have shown that productivity can improve significantly with a reduced working week – as well as improving working morale.
However, it’s not going to be an easy policy to adopt, and various issues could present themselves throughout implementation.
Firstly, it would be wrong to assume that the four-day week is merely an extension of flexible working. Whilst some employees might assume that it will mean they can dictate their own working week – for example, not working at all on Fridays or stretching out their hours over seven days rather than condensing them into four days – the reality will be very different. Managers will find it impossible to implement numerous structures which simultaneously ensure employees work the exact hours they want and maintaining business performance. So, in reality, it is likely that four-day working weeks would create greater regimentation within the workplace, therefore undermining the principle of flexible working.
In reality, it is likely that four-day working weeks would create greater regimentation within the workplace, therefore undermining the principle of flexible working.
Further, the adoption of flexible working would require a massive overhaul of the working structure of a business. This would inevitably require major financial and resource commitments, which some organisations might not be able to provide. So, whilst at face value it may seem easy to assume the policy would simply mean closing the office for an extra day, the reality is far more complex.
So, what are the next steps for companies?
The most important thing to remember is that your workforce is the life and soul of your operation, without which you would not be able to operate. To retain and embolden them, adaptation might be necessary; indeed, more than one in four (28%) of the workforce have left their company over the last 12 months because the role was not flexible enough. So, open and honest discussions between employees and employers are vital. Only then will managers be able to understand the needs of their workforce.
After careful consideration, it is them up to decision makers to consider what kind of flexible working, or week length, is right for them. As with all business decisions, it will not be a case of one size fits all. To assume as much could ultimately harm employee satisfaction, and overall business performance.
Below Simon Wood, CEO at accredited LEI issuer Ubisecure, discusses with Finance Monthly the significance and function of LEIs, what they are and how they work, but more importantly how the financial sector can work to reduce the risks involved in managing LEIs.
Comprising of 20-character alphanumeric reference codes, LEIs are designed to identify distinct legal entities and provide a free, publicly available, verifiable source of ‘who is who’ (organisation identity) and ‘who owns whom’ (organisation group structures). Crucially, by utilising LEIs, companies of all sizes can identify themselves as a true legal identity and trade globally.
LEIs offer many advantages to the banking industry, ranging from significantly reducing costs in customer onboarding to establishing transparency and enabling trust in transactions. Indeed, McKinsey & Company, along with the Global Legal Entity Identifier Foundation, recently found that LEIs could yield annual savings of over U.S. $150 million within the investment banking industry alone.
Despite these benefits, however, if LEIs are not managed correctly the potential risks could result in harmful ramifications, including non-compliance fines and negatively impacted reputations. With that in mind, it is important that the banking sector not only educates itself on these risks, but that it also acts to deploy tools and strategies to manage LEIs safely and effectively.
The role of LEIs in banking
The value LEIs bring to the banking sector can be categorised in two key ways – by enhancing transaction identification processes, and by simplifying the process of tracing information about a transaction.
LEIs are an ideal mechanism in situations where an identification process is required for payments. At the same time, they allow financial institutions to optimise the efficiency of their systems through automating and augmenting verification methods.
LEIs are an ideal mechanism in situations where an identification process is required for payments. At the same time, they allow financial institutions to optimise the efficiency of their systems through automating and augmenting verification methods.
Where payments need to be routed to the correct entity in a large corporate group, LEIs serve an equally essential function, making all members of the transaction aware of who owns whom via LEI level 2 data. They also allow economic crime and identity fraud to be quickly pinpointed and averted.
It’s therefore unsurprising that the SWIFT Payment Market Practice Group is a key advocate of LEIs, and has formally declared the ‘huge potential’ they offer for improving payment processes.
Moreover, the cost of customer onboarding can also be significantly reduced with LEIs as they standardise one comprehensive identifier for KYC/AML processes. In fact, recent research from McKinsey & Company suggested that by using LEIs to support all stages of the ‘customer management lifecycle’, the banking industry as a whole could save around U.S. $2.4 billion a year.
LEI management considerations
With ISO 20022/SWIFT becoming the global standard for financial transactions, there is a strong push for the inclusion of LEIs in payment messages. Consequently, LEIs are set to play an even more fundamental role within banking over the next year – so it is increasingly vital that they are managed in a secure and efficient way.
This involves ensuring that workflows and systems are able to obtain LEIs as required, and also that they don’t lapse. Ultimately, a host of new risks are introduced when LEIs are missing, incorrect or out-of-date. The implications can be severe, resulting in held-up trade and potential non-compliance fines.
Organisations are required to acquire and uphold LEIs in line with specific regulations – such as MiFID/MiFIR in the EU for example. If this doesn’t happen, then trade will be delayed and transactions frozen until the issue is resolved. For this reason, LEIs should be issued at the earliest stage possible to avoid payment workflow delays and disruption down the line.
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Mitigating the risk
The first step around countering LEI risk is to ensure that the relevant staffers are fully aware of the consequences that come with lack of LEI preparation. With this, its essential that strategies are put in place to provide the necessary education.
In practical terms, employing a robust LEI issuance and management solution can help to reveal the existence and status of all current LEIs within an organisation’s internal and external groups. This also helps to provide an overview of all the LEIs in play within a single view, so financial organisations can easily identify and issue LEIs to anyone with missing identifiers.
By automating the LEI issuing and renewal processes, banks can significantly cut down administrative burdens, while simultaneously guarding themselves against the risk of lapses or fines from regulatory breaches.
As LEI use cases are set to explode, there’s no question that they are the future for driving progress within banking. Yet although the benefits are significant, the industry must also be aware that the potential costs of lapsed, missing or incorrect LEIs are also considerable. To fully reap the rewards, then, implementing systems and processes to manage them effectively is vital.
You visit your local bank branch’s ATM to withdraw cash or to print out a mini statement and you are met with a message informing you that the ATM is out of service. That is frustrating at all times but can be especially aggravating when there is no other cash machine available nearby. On the theme of banking resilience, here Alan Stewart-Brown, VP EMEA at Opengear, discusses with Finance Monthly the network issues banks are currently dealing with.
For retail banks, the issues and challenges presented by ATM network downtime are likely to be high on the agenda. Financial institutions are reliant upon a resilient network to ensure unique compliance requirements are met, address customer needs and adapt to evolving industry trends. ATM resilience is an important element of this.
Many banks have extensive ATM networks across the UK and often further afield. They may have an ATM in every town or city across the country, and in some places, they may be running multiple ATMs. They are likely also to have machines in many other more remote sites. If they have network issues or outages, a large number of ATMs could suddenly be out of commission and that presents a huge range of issues and challenges to the bank.
Whenever ATMs go down, it will inevitably result in a loss of revenue and customers for the bank, as they switch to other providers. It is likely to also have a negative impact on a bank’s reputation and brand image. Less well understood, but equally important, it presents a security issue, as the engineer will have to open the ATM up while on site.
In the past, when an ATM went down, an engineer would be scheduled. Depending on availability; how remote the ATM was geographically and the severity of the problem, that could mean at the least hours or even days of downtime.
Even when the engineer arrived on site after a potentially long journey, fixing the problem might not necessarily be straightforward. The ATM may be owned by a third party organisation, not necessarily the bank itself. It may therefore be difficult to access because it is located in a building or facility belonging to another organisation and/or because the engineer’s visit happens out of normal working hours.
Finding a Solution
Banks with ATM networks need something that allows them to get these remote units fixed without having to waste engineering time travelling to the site and dealing with the security issues of opening the box up and the logistical issues that may be involved in gaining access to the ATM itself. They need a solution that can give them remote access when the network is up and running and also when it is down. And they need one that can allow them to power cycle the equipment within the ATM when the router hangs - a common problem in these environments.
These networks also need a solution that is vendor neutral on the equipment it connects to but also on the power equipment it can manage. An out-of-band management unit can be added to each ATM to reduce downtime to just a few minutes and bring them back up very quickly. It also negates the need for someone to physically go to the site, and most importantly removes the necessity for the secure opening up of the ATM.
Keeping Branches Up and Running
ATM failures are of course one key aspect of a broader requirement facing banks to keep their retail branches up and running at all times. At Opengear, we are seeing a growing demand for solutions that deliver network resilience from core to edge in financial networks. One of the top performing banks in the US recently needed an out-of-band solution for its multiple locations across the country. With the challenge it faced highlighted by a recent outage at a remote location, the bank wanted to reduce the burden of travelling to geographically-distributed sites, decrease downtime and ensure compliance requirements were met. It chose to deploy ACM7000 Resilience Gateways from Opengear at each branch location, paired with the Lighthouse Central Management System (CMS), also from Opengear.
Failover to Cellular (F2C) and Smart Out-of-Band (OOB) technology ensure security requirements are met while also providing access to infrastructure during a disruption, with an alternate path to the primary network using 4G LTE. In addition, the bank is able to deploy and provision new sites remotely. It is a great example of the benefits of resilient access to networks in financial services when an outage occurs.
In summary, outages are bad news for banks and other financial institutions. ATM outages are arguably especially bad because they are particularly visible to customers; cause immediate loss of revenue and customer churn; as well as negatively impacting reputation and presenting a security risk. But they are inevitable because of human error, cyberattack, and the ever-increasing complexity of network devices, modern software stacks, and hardware devices. To keep consumers happy and the institution’s reputation intact, financial services must be prepared for outages. Smart OOB with Failover to Cellular can keep services running even when part of the network is down.
After all, hackers are rife on the internet and if you’re not careful then you may find yourself an unsuspecting target. If you want to help yourself then there are a few things that you can do to guarantee your own online security.
Test your Passwords
It doesn’t matter how strong or even clever you think your password is because hackers can use the finest technology to get the edge. One way for you to know for sure if you think your password is strong enough would be for you to use a password analysis site. Sometimes this will give you an estimated time they think it would take for a hacker to guess your password. They even give you hints to improve it too.
Financial Accounts
Hackers tend to target real-money websites more than anything. This can include payment sites or even casinos. If you want to help yourself here then it is so important that you assess the site first, before you go depositing anything. If you want to sign up to an online casino, then check to make sure that the site is reputable, and that it has HTTPS as this will help to protect your data. NetBet casino games are a prime example of this, so you can always rest assured knowing that your data is safe on there. When signing up to a payment provider, check to see how well-used they are, how long they have been in business or even to see if they have any additional security measures that you can implement.
Use a Password Manager
Remembering all of your passwords can be an absolute nightmare. Writing them down is a huge security risk because if you were to be burgled then they would have access to just about anything. Using a password software can be great, as they are super secure and they give you the chance to remember just about anything you need. You will need to set a single master password to get into your account, so it’s suggested that you incorporate letters, numbers and even symbols where possible.
Sensitive Accounts
If you have an online account with any sensitive information, then you may want to double-up with an additional layer of security. This is especially the case if you bank online. Sure, this can make signing in way more frustrating but it’s well worth it if something were to happen. You also need to make sure that the most important accounts have an alternative email address too so that you can gain access to your account should you ever be locked out. This can be a real life-saver and it can also alert you if someone ever does try and hack your account. This can give you an extra level of security and you’d be surprised at how convenient it is for you to do this.
So, keeping your online data safe involves:
- Using a password manager
- Protecting your sensitive accounts
- Changing your passwords regularly
- And always choosing sites with HTTPS over HTTP
The quality and efficiency of financial management services have improved by leaps and bounds after the industry finally decided to embrace the Internet of Things. But as impressive as the changes are, there’s still a lot more to do to meet the expectations of a more demanding client-base. Thus, it doesn’t take much to figure out that future innovations need to focus on more inclusive and interactive models that make the most of available technology.
It’s too early to tell what the future holds for the industry. However, these trends give us a glimpse of how wealth management could look like in the years to come.
A More Digital Industry
Looking back at how “traditional” things used to be for the wealth management industry merely a decade ago, the rapid and strategic digitalization of most firms and companies is nothing short of amazing.
As big and small companies alike prepare for an influx of younger and hipper clients, automation and digital integration become even more essential aspects of their marketing efforts. In fact, industry leaders are already carrying out groundbreaking centralized digital marketing strategies that are pushing the rest to follow their lead.
To thrive, organizations have to rethink and reshape their approaches and decipher how they can use technology to their advantage.
Robo Advisors at Your Service
Witnessing how successful chatbots are at offering 24/7 customer support for many companies around the globe, the financial services industry strives to do the same – if not better – with robo-advisors.
While this can be a huge hit-or-miss situation, it’s a risk worth taking for many asset management firms. Aside from software-based solutions being more cost-effective than traditional investment management, this development has the potential to catch the fancy of millennials who are almost always fascinated with what technology can do.
You can’t deny that digital assistants enhance and empower customer experience. Be that as it may, it's too soon to tell for sure if robo-advisors will ever become competent replacements for human advisors, especially in offering customized and long term investments proposals.
Sustainable Investing Becomes an Even Bigger Hit
The growing interest in sustainable investing is expected to swell in the coming years as more people are encouraged to take socially and environmentally-conscious investments.
Millennials have been leading the awareness campaign towards sustainable investing and its principles; and the overall response has been positive, to say the least.
At the rate things are going, wealth managers will have to pay more attention to impact investments and find a way to incorporate the ESG philosophy into their management approaches, should they wish to attract the millennial market.
The Age of Better-informed Investors
There was very little interest in wealth management pursuits in the past few decades because the majority of the population basically had no idea what it’s all about. Thankfully, things have changed, and they continue to change for the better.
As information and resources on asset management and financial services become easier to access, people from all walks of life are opening up to the concept of investing and becoming more conscious of the state of their financial health.
The future shines bright for the wealth management industry.
For a newbie, the wealth management industry is a lot to take in; but that should not stop you from dabbling in investments and asset management. All you need is a wealth management firm that you can count on to put together a sound financial plan for you!
Take note of these important factors when looking for a wealth management firm:
Expertise and Experience
It’s no secret that the world of investment and financial management is a complicated one. That said, you’ll need a firm with the expertise to handle complexities and deliver the sophistication that unique situations require.
Don't fall too quickly for advisors who claim they've handled plenty of clients like yourself. Keep in mind that people's financial circumstances are rarely alike, and this is probably just a tactic to lure you in. Instead, why don’t you ask the financial advisors about specific clients with financial situations quite similar to yours? How were they able to help them grow and manage their money?
A good and reliable wealth management firm should have advisors who can make you understand their insights and ideas even if you're new to the whole thing.
Continuit
Here, consistency is key. In 10 or 20 years, you'll want to retire and enjoy the fruit of your hard work and investments. However, you definitely do not want your wealth management firm to do the same!
One important thing to consider when selecting asset and investment management firms is longevity. But the number of years in business alone won't suffice -- it is crucial to go for those with a dependable succession plan in place. Think of it as an assurance that they can continue taking care of your wealth management needs well into the foreseeable future.
Access to Resources
For your investment to grow, choose a firm that has access to a wide variety of products, services, and financial management options. While it’s true that most firms offer flexibility in terms of investment opportunities, some may have limited access to certain investment vehicles due to the size of the assets that they manage.
Thus, large scale investment firms may be more capable of leveraging their assets to address certain issues, negotiate fees, and formulate more sophisticated solutions to your investment needs.
Performance and Reputation
In the end, it all boils down to one thing – results. This is, perhaps, the most crucial box you'll have to tick. Before making your final decision, find out as much as you can and assess if the firm you’re about to choose has consistently delivered commendable results over time.
Spare some time and energy for research and get to know the firm a little beyond the surface level. You can ask your friends and colleagues for opinion or consult the internet for reviews and recommendations. Remember: your money and the future of your finances are at stake here.
Lastly, look for wealth managers you can work closely and comfortably with – someone you won’t hesitate to approach for inquiries or when you want things to be handled differently.
More often than not, people choose a wealth management firm on the basis of price. But you know what? Cheaper isn’t always better. What you need to look for is value.
