Blockchain technology is being incorporated nearly everywhere. Hospitals are using it to secure and share patient files. Accountants and banks are investing in the blockchain as a means of increasing the speed and security of financial transactions. Even in the real estate markets, the blockchain is transforming the way things are done.
Real estate may not seem like the obvious industry to capitalise on blockchain technology. However, experts believe it can help make a positive difference in the efficiency and security of real estate transactions. Rather than working in person, the blockchain may enable more online transactions to realistically take place.
Taking Real Estate Online
In the modern world of smartphones, the internet, and apps that all work together to put the world at your fingertips, customers have come to expect a certain ease-of-use. This sentiment carries from easy online shopping to scheduling appointments online to buying a house. The rules for customer courtesy are changing and the real estate market is using the blockchain to meet the demand.
One of the primary ways the real estate market has changed is by taking listings online where customers can browse homes and find an agent with an easy click of a button. However, the blockchain stands to create an even larger online opportunity for real estate. With the blockchain behind them, many agents believe they could complete the entire process — outside of physically visiting the home — online.
Some platforms are coming online that do just that. In order to use the blockchain, real estate companies “tokenise” their assets, so the property can be traded on an exchange similar to that of the stock market. The tokens can easily be traded or exchanged for money — i.e. purchasing a home. Doing this could cut out a lot of the middlemen in the home buying process and create a more straightforward and transparent opportunity for consumers.
Increasing Speed And Reducing Fraud
Incorporating blockchain technology into the real estate market can also be a huge boon to consumers in other ways. Because all transactions are verified on a network of computers, transactions can be completed in minutes or even seconds. Rather than relying on people to review transactions and operate within normal business hours, these transactions can happen anywhere at any time. This speeds up the process substantially.
Because all blockchain transactions are completed on a public ledger, all parties can see the transaction at all times. Traditional methods are prone to fraud and human errors, but this increases transparency profoundly and helps reduce the likelihood of fraud taking place. Furthermore, the blockchain is an incredibly tamper-proof means of storing information, which makes it one of the most secure means of doing business.
Part of the reason the blockchain is so secure is that the information is decentralised. It would be incredibly difficult for a fraudster to change a blockchain transaction that is stored on hundreds of different computers across the country without someone noticing. Ultimately, this increases trust in the real estate market system, which doesn’t have too far back in history to look for proof of the dangers of a lack of transparency. The 2008 housing crisis is a prime example of what can happen.
New Opportunities
Real estate companies are interacting with more data than ever before. Some of this data is internal, relating to sales figures and revenue, while some of it is external such as data collected by government or social media entities. All of this adds up to provide real estate agents with a broader picture of the markets they are working in and offers the ability to create innovative opportunities.
For instance, once properties have been “tokenised” it is easy to divide them up in meaningful ways. Fractional ownership becomes a much more straightforward and realistic option. This could be a scenario where investors are given the equivalent number of tokens to represent the per cent of the investment they’ve made. Ultimately, it could lower investment costs and barriers to entry into investment markets.
Conclusion
Blockchain technology is truly transforming the real estate industry. The technology stands to speed up transactions and reduce the number of middlemen involved, all while bolstering security. Additionally, the technology can open up a number of new opportunities such as fractional ownership for investors that could generate a lot more wealth among certain sectors of the population. It could be a win-win advancement.
Today, it’s almost taken for granted. According to a recent report by Leading Edge, 61% of business professionals identified hybrid working as critical to business success. And even in the financial sector, which is known for legacy systems and being slow to change, the idea of returning to pre-pandemic ways of working seems almost impossible, despite calls to return to desks.
A BBC survey found that 70% of people predict that workers would “never return to offices at the same rate”, with the majority stating that they’d prefer to work from home either all or some of the time. And for financial companies, the evidence that a ‘one size fits all’ approach is not equipped to deal with this growing need, is mounting. But while the workforce may have changed, many offices are still designed for their old ways of working, so it is up to businesses to keep up with changing employee expectations.
The move to mobility
Laptops have unsurprisingly been the main device to work and collaborate for most employees in the move to mobility. Indeed, in the UK alone, laptop penetration rose from 47% in 2009 to 76% in 2021. In the world of hybrid working, with meetings being controlled via these portable devices, businesses will need to invest in solutions that allow for seamless connectivity between office and home, while simultaneously mitigating the security risks that come with it. The finance industry will need to ensure offices are well equipped for hybrid meetings implementing new software alongside updated Audio-Visual equipment to make collaboration easy and smooth.
Indeed, in the UK alone, laptop penetration rose from 47% in 2009 to 76% in 2021.
But what about security?
The other headache facing IT leaders are the security risks of a hybrid approach. While these risks are true for any sector, the confidential and highly sensitive data-driven nature of financial work makes security absolutely paramount. Early in the pandemic, we saw multiple viral videos of conferencing platforms being hijacked by pranksters – and amusing as this is, it is only the tip of the iceberg. According to Deloitte, cyber-attacks are becoming increasingly sophisticated, with those using unseen malware methods rising from 20% to 35% since the outbreak of the pandemic led to a change in working practices.
This is why a recent study by Gartner found that worldwide spending on information security and risk management technology and services was predicted to grow 12.4% in 2021 to $150.4 billion. And it is necessary too: a 2021 study by Skybox Security, found that 42% of UK financial services and law firms believe their cyber threat visibility and detection systems are inadequately equipped to manage remote employees. Legacy technology and broken processes tend to be the reasons given, but after a year of remote working, the call to modernise is becoming more urgent than ever. Leaders must prepare for the financial industry’s new normal.
The cost of security breaches that come from hybrid working
No matter whether the issues stem from a cyber security breach or a phishing attack, the impact can be far-reaching. And as financial organisations are often the most common targets for cyber attacks, the need to be hypervigilant is understandable. In the UK and Europe, as more people go cashless, PII (personal identifiable information) can be redirected via physical credit scanners or online payment forms and used for malicious activity. Banks that are taken hostage may have to pay hundreds of thousands of pounds to recover lost data, risking the trust of their customers and other financial institutions. They could also face fines and sanctions for breaching data protection laws, as well as having a negative impact on staff morale.
The rise of cyber and phishing attacks caused by mobility and human error
The sharp rise in the number of employees carrying their laptops from home to the office and wherever else they choose to work has seen a dramatic increase in cyber and phishing attacks over the last two years, with human error an increasing cause of data breaches.
Findings from Sophos revealed that even though the number of ransomware attacks has actually decreased over the past year, the average recovery cost has more than doubled to $1.85 million. The mobility of hybrid workers has prompted cyber criminals to shift their attention “from larger scale, generic, automated attacks to more targeted attacks that include human hands-on-keyboard hacking.”
Ransomware is not the only threat, of course. Today, there is a wide range of attack methods that need to be considered and resisted. SonicWall’s Cyber Threat Report recently recorded 56.9 million IoT attacks, 5.6 billion malware attacks, and 4.8 trillion intrusion attempts. This helps to explain why, according to Dynabook, over one-third of Europe’s IT leaders pinpointed network or device security as the most difficult element of their IT infrastructure to manage during the pandemic.
Securing the mobile workforce
So how can organisations secure the data of their increasingly mobile workforce? It begins with protecting the front-line by equipping employees with robust devices that meet the high level of security required today. Biometric tools including two-factor authentication offer a strong first line of defence, for example, combining fingerprint and iris detection to restrict entry to a device.
Yet it’s also important to ensure devices feature deeper in-built security measures from a software and firmware perspective too, such as Trusted Platform Module 2.0 for enhanced encryption. Meanwhile, for IT teams, remote access control is essential so that strict permissions can be put in place, enabling them to manage which employees have access to certain files. From a policy perspective, we’re seeing more organisations take a zero-trust approach too – something which is particularly important in today’s hybrid environment to manage not just employees but partner organisations as well.
Business benefits of mobile secure client solutions for a mobile workforce
Beyond in-built security, mobile secure client solutions can also help to eliminate a significant cause for concern in terms of the device threat by adding boot-level security – something which is particularly important as we see the rise of hybrid working models.
In addition, by removing data from the device, storing it centrally and then making it accessible via a Virtual Desktop Infrastructure (VDI), such solutions provide the perfect balance of ultra-secure and ultra-productive mobile working. Employees can get on with their work, wherever they choose to be, knowing that the risk of data breaches through malware or lost and stolen devices has been nullified. With cybersecurity rated as the 2nd highest source of risk in Gartner’s 2021 Board of Directors Survey, we can expect to see these mobile secure client solutions rise in popularity.
One thing is certain – this is a problem that will not be going away any time soon. With technologies advancing rapidly and hybrid working increasingly looking like the permanent norm, the threat of security breaches will continue to grow. IT leaders must embrace new solutions now to protect against this ever-increasing threat.
Until the virus hit, around 50% of customers were still banking in branches. Now almost 100% of customers must bank online purely out of necessity.
There are a few companies that had already made significant progress solely in online banking. Companies like Stripe, an online payments company, were early in their plans on contactless banking, and rightfully stated: “the COVID-19 crisis underscored the need for reliable, easy-to-use infrastructure for internet businesses”. In September, during their Series G funding round, Stripe secured $250 million and they recently raised an additional $600 million. “With more than $2 billion on its balance sheet, a capital-efficient business model, and a highly-diversified, growing, global user base, Stripe is in a position to both provide uninterrupted service to its users in a time of stress and invest in long-term improvements”, the company said.
Another example of COVID-19’s impact is new customer interest in Stash, an investment platform that just reached their million customer mark, and hit $1 billion in AUM in February. Branch closures have caused customers to look for easy to use online platforms. While Stash began offering bank accounts over a year ago, they have seen a 100% increase in weekly customer deposits in the past two months.
In this uncertain time, customers aren’t interested in scrambling to understand their options and they don’t want to worry about their investments. They want to ensure their banking experience is user friendly and the platform is trustworthy. Both Stripe and Stash check those boxes since they were already set up as a solely online platform and understand the urgently of meeting their customers’ needs.
Until the virus hit, around 50% of customers were still banking in branches. Now almost 100% of customers must bank online purely out of necessity.
Banks should be doing 3 things in order to compete with these online-only platforms, stay relevant and retain their customers.
Embrace a Tech-Centric Culture Focused on Customers
Financial institutions have to make the customer the centre of their business strategy, and technology is the path to get there. Customers need to be delighted with their experience, and proper technology is the conduit ensuring that stickiness with the customer base. Until now it has been very common for banks to partner with providers and implement their off-the-shelf technology solutions, but in order to truly survive this exceptional time, banks need to embrace technology as an integral part of their business. This means they need to customise tools for their customers’ specific needs and develop solutions that will work for both the bank and the customer. This is not going to be a one-size-fits-all solution for banks, but rather a collaborative effort across many facets of the organisation as well as key strategic partnerships. In keeping the customer at the forefront of their strategy, and recognising that right now people need access to liquidity for survival, banks must ensure the tech experience is optimal for the user.
Optimise Business Lending
On Thursday 16th April, the SBA’s rescue loan program hit its $349 billion limit. In our lifetime, we have never seen such a demand for loans. Banks were not prepared to handle the onslaught of applications for PPP and EDLI loans. Business owners were not prepared for the web of intricacies they are continuing to face. The largest complaint among small businesses is the confusing application processes, a notable lack of communication on application status, and generally the inability to get to the funds.
While it appears we may be close to extending funds for the programs, the pace at which the initial $349 billion program was exhausted showcases the severity that state-imposed business closures are having among retailers across the country. Over 70% of small businesses applied for loans before the application process was shut down. Assuming more funds are procured, banks need to quickly ensure they are 1) communicating effectively with customers who already have a loan in process and 2) ready for the second onslaught of applications. Financial institutions should be capitalising in areas where they don’t need to onboard a new SMB borrower as they have pre-existing data from that borrower’s existing banking relationships, which can expedite the process when it comes to AML and KYC. If banks don’t take care of their existing customers during this time, it is likely those customers will turn to other banks that can help them keep their businesses running.
Increase Personalisation and Communication
Now more than ever, customers need a seamless experience. They want to hear from their banks directly and should not have to seek out information on their own. To ease customers’ worries, banks should have leaders from their C-suites talking about what is happening in an authentic way. This means genuinely connecting with their customers by having multiple leaders in a real-time online forum, discussing what the bank is currently doing, answering customers’ questions, providing financial tips, and above all offering reassurance.
To compete in the era of COVID-19 and beyond, banks need to invest in online technology that customers can use easily, ensure that loans are processed quickly and provide straightforward answers to their customers' most urgent questions.
In October, Orange Bank launched the financing of mobile devices and other purchases in Orange stores. Orange Bank has also just signed a partnership with the real estate services platform Nexity, to propose a home loans offer. Lastly, Google Pay will soon be available for customers with Android phones.
Over 20,000 new customers per month
With over 500,000 customers coming from Orange stores, Groupama branches and digital channels, Orange Bank is acquiring new customers at a respectable rate of over 20,000 per month. Apart from the volumes, the success is down to added value: ¼ of customers are acquired through loans, a major difference with other online banks, and ¾ through bank accounts which enjoy a high level of activity as 54% of these customers carry out an average of more than one transaction per week. An average of 10% of accounts are now being opened with the Visa Premium card.
A major advantage for Orange Bank is the link with the Orange and Groupama store and branch networks which is proving very effective. The Orange stores now propose over the counter loans representing nearly 5,000 sales since its launch, and the holders of a Visa Premium card benefit from a 5% discount on their purchases in Orange stores. At Groupama, car insurance is also available with a car loan for customers who wish to benefit from it.
Partnership with Nexity
The development of the bank's distribution network has been enriched by a partnership with Nexity, the real estate services platform, intended to finance real estate projects. Through this partnership, seen as being of strategic importance, Nexity intends to become a source of new business for Orange Bank, with a shared vision: to be a player in the digital transformation of lifestyles. The first applications are expected to be processed by the end of 2019.
In response to the growth of its customer base and the diversification of its range of offers, Orange Bank is investing in resources; unlike many online banks, its 878 employees are based in France, Montreuil and Amiens, and benefit from an average per capita training budget that is 40% higher than other French banks. This justifies the attractiveness of Orange Bank which receives 20,000 job applications per year. This investment in human resources, as well as the gradual digitisation of the bank, has helped to increase the productivity of the customer relations centres and back offices by 30% to 40% depending on the activities.
According to Pierre-Antoine Dusoulier, CEO and Founder, iBanFirst, they need these qualities in order to make accurate projections and ultimately to develop strong business strategies.
Whether for internal planning or securing external investment, managers need to have a clear handle on how much they are going to be charged for goods, services and people – and how those costs stack up in the wider marketplace.
But while some business costs are relatively easy to predict and calculate, others can be somewhat murkier, particularly for small and medium sized enterprises (SMEs). Foreign currency exchange payments are one such area.
In a globalised economy, being able to make and receive foreign currency payments in a fast and reliable way is crucial for more and more businesses, even the smallest. Foreign currency payments enable businesses to forge relationships with customers, partners and suppliers all over the world and to expand into new markets.
In a globalised economy, being able to make and receive foreign currency payments in a fast and reliable way is crucial for more and more businesses, even the smallest.
Indeed, back in 2013, Oxford Economics statistics predicted that the number of small businesses doing business in more than six countries would increase by 129% over the next three years, whilst the most recent Oxford Economics SME Pulse report found optimism in the global economy and an international outlook. In November of last year, the ONS reported that the number of UK SMEs exporting internationally had increased to 232,000, representing around 9.8% of all SMEs.
International business requires international currency payments. However, there are multiple costs associated with such payments, and small businesses are disproportionately affected.
First, and most obviously, banks levy fees for making and receiving foreign currency payments – and unfortunately, these can be substantial, particularly for SMEs. Additional costs are often hidden and absorbed into the exchange rates offered. This makes it very difficult for smaller organisations to understand both exactly how much they are being charged for foreign exchange currency payments, and how those charges compare to those offered to bigger businesses. Studies have found total spreads of up to 3.71% being charged, including fixed fees, and as a result it has been suggested that the UK’s small businesses hand over around £4 billion to the major banks every year, simply in order to buy goods and services abroad.
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Then there’s the question of currency hedging. Organisations of all sizes engaged in transactions in foreign currencies are exposed to currency risk, which can in turn have a significant impact on commercial margins. Once again, SMEs are particularly at risk, because their banks are less likely to offer them currency hedging solutions compared to those on offer to larger organisations. The Brexit referendum result was a stark reminder of how quickly currencies can suffer sharp devaluations, with pound sterling diving against the euro. Many small businesses experienced double-digit losses thanks to that devaluation, because their banks did not offer them a currency hedging option.
So what is to be done? All organisations, but particularly SMEs, need a foreign exchange model which is cost-effective, efficient, transparent and reliable. They need to be able to have greater visibility of the costs of foreign exchange payments by incorporating them into their existing business plans to manage risk effectively.
For businesses to thrive in an international environment they need to harness financial solutions that can equip them with a foreign exchange offering which helps them facilitate transactions in real time, providing the most favourable currency rates to drive cost savings across their business.
By harnessing new FX technologies CFOs can reduce the time spent on foreign exchange transactions and their associated costs. Meanwhile, through having greater visibility over foreign currency payments, CFOs can effectively mitigate risk and focus on what is important: taking a strategic role in growing the business.
While some are interested in obtaining a bit of extra liquidity for personal use, others are motivated due to the fact that such funds can be used to become partnered with a trusted B2B ecommerce platform.
The main question involves whether or not virtual trading represents a sound fiscal strategy or an unnecessary risk. Let us take a look at this subject from a decidedly objective point of view in order to better appreciate the big picture.
Valid Promises or Smoke and Mirrors?
Countless virtual trading platforms claim that financial freedom is only moments away when using their utilities and tools. However, the fine print tells another story. It stresses the fact that online trading involves a fair share of risk and such a strategy should only be undertaken by those who are capable of absorbing substantial losses within a short period of time. The main question therefore involves whether or not both of these claims are justified.
The first main takeaway point is that each trader will have to define his or her own levels of acceptable risk. As opposed to trading for fun or as a side project, those who are looking to obtain extra liquidity for a business venture need to be very careful in regards to what strategies are adopted. In other words, is the ultimate risk worth the expected reward?
It should be mentioned that any online investment portal is only as useful and lucrative as the experience of the trader in question. This is why some individuals will enjoy substantial returns while others will inevitably falter. So, what approaches should be taken in order to mitigate the chances of incurring a fiscal loss?
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Safe Investment Strategies to Adopt
Anyone who is contemplating an investment for business purposes should adopt a conservative approach. High-risk assets such as Forex pairs and initial public offerings (IPOs) are best to avoid, as losses can occur within a very short period of time. It is better to focus upon areas such as:
- Precious metals
- Commodities
- Blue-chip holdings
- Contracts for difference
- Bonds and treasuries
The main point to stress here is that longitudinal returns tend to be much more predictable when compared to short-term "punts". This is also the very same reason why some of the most successful online investors are always looking towards the horizon as opposed to remaining focused on any single trade.
Is online investing the right option for you? This is a very subjective question. The answer will normally involve how much liquidity you wish to obtain as well as the level of risk you are willing to accept at any given time. If performed correctly, such a strategy can offer up amazing results. However, always remember that the inherent dangers associated with any type of investment will need to be balanced with the potential rewards
The average American has a credit score of 704. If your Fair Isaac Corporation (FICO) score is around that number, that’s fantastic. But even though that’s a pretty healthy figure, there’s still plenty of room for improvement. And if your score is lower than that, don’t lose heart. You can do plenty to bring up your credit score - it all boils down to making the right financial choices over time.
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Get A Copy Of Your Credit Report
If your credit score is lower than expected and you’re not sure why, it’s a good idea to get a copy of your credit report. This document spells out all your credit-related activities. You should be able to get a free copy of your credit report each year and Best way to repair credit from either Experian, Equifax, and TransUnion.
Go through the document thoroughly to check for errors or fraudulent activity. If you don’t find any, you should be able to find out what’s affecting your score, such as late payments, repossessions, and so forth. By having a clear picture of your credit standing, you’ll have a better idea of how to improve it.
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Pay Your Bills On Time
Your payment history shows potential creditors how reliable of a borrower you are, as they’re indicative of how you’ll be paying in the future. Doing something as simple as paying bills on time can make a significant positive difference to your credit score. Conversely, paying late — or less than the agreed-upon amount — can damage your credit score.
Your credit card bills are the most important when it comes to your credit score, but this can also be affected by your other bills, such as student loans, rent, and even your phone bill. To make sure that you don’t miss any deadlines, you can set up automatic payments or calendar reminders to help you stay on schedule. If you’re behind on payments, try to catch up as soon as you can.
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Improve Your Credit Utilization Ratio
Your credit utilization ratio (or credit utilization rate) measures the balance you owe on your credit cards relative to your credit limit. If your credit limit is $10,000 and your current balance is $5,000, your credit utilization is 50 percent. A high utilization ratio shows that you could be overspending, which is why it can damage your score.
To improve your credit utilization ratio, the best thing to do is paying off your debt. And if you have any unused credit cards, keep them open — especially if you’re not paying any annual fees. You can lower your ratio by getting a higher credit limit. There are two easy ways to do this: either by simply asking your credit card provider for a higher limit, or even applying for another card. (However, it’s important to note that this could tempt you to spend even more than you can afford to pay back, wreaking more havoc on your credit score.)
Your payment history and credit utilization ratios are two of the most important factors when calculating your credit score. Together, they make up to 70 percent of your credit score, so keeping these two in check is crucial. It takes time for your credit score to improve — late payments, for example, stay on your credit report for seven years. But the sooner you get started, the better.
They're not called Zuckerbucks but Facebook just reinvented digital money. Facebook's Libra cryptocurrency that will launch early next year is more like PayPal than Bitcoin — it's designed to be easy enough for everyone to use. But it's still complicated to understand so I'm going to break it down for you nice and simple.
Here Sarah Jackson, Director at Equiniti Credit Services, reveals some surprising stats about millennials’ attitudes to credit and explores with Finance Monthly what it all means for lenders targeting this demographic.
According to Equiniti Credit Service’s latest UK research report ‘A three part harmony: how regulation, data and CX are evolving consumer attitudes to credit’, despite millennial borrowing increasing annually by a healthy 8%, three fifths of this age group will still only consider borrowing from a traditional, well-established lender, or one that they had dealt with before.
That’s weird
Right. Particularly when it’s clear that alternative lending is gaining traction across other age groups and showing strong overall growth of 15% in 2018. The same report revealed that some 62% of all UK consumers would consider alternative sources of credit (I.e. a non-bank, such as a retailer or car finance provider) the next time they apply for a loan. While consideration does not equal action, the figures about take-up also support the trend: over a quarter of consumers who borrowed over £1000 in the last year did, in fact, use an alternative lender over a traditional high street bank.
If both millennial borrowing and alternative lending are on the up, why is there a disconnect between the two?
So, while non-traditional lenders are not yet competing with banks in loan volumes, they have certainly established themselves within the market. Which begs a question: if both millennial borrowing and alternative lending are on the up, why is there a disconnect between the two?
Customer inexperience
The story, as usual, lies in the data. Although 70% of UK consumers are comfortable completing loan application processes digitally, this figure drops to 57% for millennials specifically. Considering this age group’s well documented digital literacy, this can only be chalked up to financial inexperience. Older generations have not only had more time to become comfortable with the credit processes involved with a loan application, but most have also had more opportunity. External factors play a big part here too. House prices are such that for many millennials, unlike previous generations, the prospect of buying a house and applying for a mortgage at a relatively young age doesn’t even feature on the radar. As such, this group has less exposure to credit processes.
Financial inexperience creates a need for more careful guidance and reassurance. This likely explains why over half (58%) of millennials would only consider borrowing from well-known or previously used lenders.
A helping hand
For lenders, this is both a problem and a huge opportunity. With many millennials now in their mid-thirties, their collective buying power is set to increase substantially over the next decade, making this an increasingly lucrative target market.
That this knowledge gap exists is a chance for the smartest non-traditional credit providers to differentiate themselves as genuine and credible sources of information and guidance for these nervy borrowers.
A great user experience (UX) will undoubtedly help, but will need to be far more than a facility for fast and convenient access to credit.
A great user experience (UX) will undoubtedly help, but will need to be far more than a facility for fast and convenient access to credit. This notion is given further weight by the same report which indicates that one in seven applicants cite clarity of the product’s documentation as the most important factor when deciding between lenders. Persuasive and confidence inspiring UX goes far beyond origination – it must resonate throughout the entire loan lifecycle.
To successfully target millennials, this means balancing investment in a slick digital user interface and the development of clear and simple documentation. Since this group values one-to-one guidance, the contact centre will be a key battleground for business. Here, engaging a specialist outsourcing partner may well be the way to go. These providers are trained and skilled in supporting the kind of dialogue that younger generations need to confidently apply for credit.
If you run operations across multiple jurisdictions you may need to invest in the support of an experienced tech companies that can help you connect the dots.
Steven Smith, Europe Proposition Lead, Corporates, at Thomson Reuters, looks at the challenges that businesses face in being tax compliant across indirect tax, corporate tax returns and year-end accounts across multiple jurisdictions.
Governments around the world are rapidly moving away from the established ‘old’ standard of gathering taxpayers’ information. These changes are not uniform and vary from country to country, with, for example, Spain requesting invoice details every four days, Hungary demanding them at the point of invoicing, and Italy adopting a clearance model (with Greece following suit in 2020).
Fraud and tax avoidance are the driving forces behind governments refining tax processes. By adding transparency to the invoicing process, tax authorities can quickly identify where one party or another may be cheating the system. In countries, such as India, goods and services taxes (GST) have been introduced, which enable authorities to see both sides of a transaction. China has also introduced a very similar process. It really boils down to compliance and data. If a multinational organisation is striving to comply across different jurisdictions, it must be sure that its data is correct, even before an invoice is raised. Are the buyer details correct? Does the invoice meet the criteria to calculate the correct VAT liability? All of this data needs to be present before the finance department starts raising invoices.
Tax avoidance in the UK is not on the same scale when compared to countries like Brazil and Poland. Indeed, HMRC believes that UK corporate taxpayers are far more compliant and as a result it is very unlikely to introduce intrusive reporting such as Security Industry Association (SIA), however, there is still a gap that needs to be filled so initiatives such as Making Tax Digital (MTD) are only the start of more detailed information requests.
But meeting MTD in the UK is just one thing. It’s a very different story for multinationals. Many are firefighting and taking a ‘sticking plaster’ approach to help meet the myriad of tax requirements across different territories. They tend to focus on one particular country at a time, and that focus is driven by audits. And then once that requirement has been met, they simply switch their ‘firefighting’ mode to the next country and wherever the greater risk for non-compliance rests. However, they’re missing a huge opportunity by taking this case-by-case approach rather than looking at the entire organisation’s global footprint.
Meeting MTD in the UK is just one thing. It’s a very different story for multinationals. Many are firefighting and taking a ‘sticking plaster’ approach to help meet the myriad of tax requirements across different territories.
The sticking plaster approach of hopping from one country audit to the next has left a huge mess and many organisations are now in the position where they could be much smarter in the way they store and utilise their tax data. Organisations need to review how much business they’re doing country by country and prioritise by compliance risks. Now is the time to clean up and identify and rectify problem areas before the authorities come calling.
No company is the same and so it is difficult for businesses to know which country to concentrate their efforts on at a particular time. What they can do though is connect the tax dots. By working with a technology partner that operates across multiple jurisdictions and by prioritising countries, organisations can work to meet immediate requirements and add other countries as they come onboard. Working with one partner to meet these requirements means there’s no need to repeatedly hire new people, partners or add different processes as all the tools are available in one place.
Connecting the dots isn’t just about working more effectively across multiple countries though. It’s also about how invoices and indirect tax relates to the company’s corporate tax position, about corporate pricing arrangements and corporate income tax. And it’s about connecting all that internal information and driving greater collaboration across the tax and finance departments so that all parties have a clearer view of the organisation’s financial position.
MTD is just a tiny piece of the indirect tax puzzle, yet keeping records digitally will not only help to ensure a business is compliant but will also provide far greater insight into operations. Global businesses will always have more important, more urgent things to focus on, but they’d be mistaken to ignore the opportunity digital tax has to offer the business, as well as the tax authorities.
Here Finance Monthly hears from Hannah Conway, Consultant at Brandpie, on exactly why shifts in consumer trust are what drive and alter the financial landscape.
The financial crisis of 2008 had far-reaching consequences, some of which can still be felt. Public trust in traditional banking institutions has eroded and brands in the sector are dealing with the reputational damages endured. One needn’t look further than Chase Bank capitalising on the trend of being relatable on social media only to face public wrath for bailouts that occurred ten years earlier.
Consumers have clearly not forgotten the crisis. In fact, the 2018 Edelman Trust Barometer ranked financial services as the least trusted industry worldwide. In the same report, technology ranked as the most trusted. Silicon Valley flourished in the decade following the financial crisis, with organisations small and large introducing technologies that would come to revolutionise consumer finance.
In this landscape, tech conglomerates, have been able to make serious in-roads into different aspects of consumer finance, a process that shows no signs of waning.
Amazon was among the trailblazers innovating in this space, introducing one-click ordering as early as 2000. With an ecosystem boasting 310 million active customer accounts, over 100 million Prime subscribers and over 5 million sellers across 12 marketplaces, Amazon is no rookie. The retail giant is building an array of financial services to increase further participation in the Amazon ecosystem, ranging from payments infrastructure to Amazon Pay – which already has 33 million customers worldwide.
Amazon Cash, which launched in 2017, enables customers to deposit cash to their Amazon.com balance by showing a barcode at participating retailers. The cash is applied to their Amazon account immediately, giving “cash customers”, such as anyone who doesn’t have a bank account or debit and credit cards, the ability to shop on the e-tail giant.
The technological advancements in voice will ultimately enable Amazon to make further encroachments into consumer finance. Virtual assistant Alexa is set to dominate voice shopping, currently having the largest market share of smart speakers, more than twice that of its competitors, Google and Microsoft. Purchases processed through voice are expected to skyrocket to $40 billion by 2022. As consumers were already using the platform, the introduction of new customer-friendly payment experiences serve to further boost Amazon’s position.
The technological advancements in voice will ultimately enable Amazon to make further encroachments into consumer finance. Virtual assistant Alexa is set to dominate voice shopping, currently having the largest market share of smart speakers, more than twice that of its competitors, Google and Microsoft.
Apple has similarly made great strides in the space. ApplePay is already available in 33 countries, with over 250 million users worldwide.
CEO Tim Cook recently announced Apple Card, a new credit card, which is expected to be released in the US this summer before potentially being rolled out globally. Purchases from Apple’s physical stores, website, App Store or iTunes will come with a 3% cash back, with all other purchases at 1%, all in the form of Daily Cash, which will then be added in Apple’s Wallet app.
Apple is building an ecosystem which will see consumers use Apple products to pay, with the cash back options leading to more purchasing. In addition to the seamless customer experience across its portfolio, the giant is pushing privacy as its main differentiator, with its latest “Privacy Matters” commercial prime example. Apple wants to assure customers that all their private information on their phone is safe, with its new credit card offering similarly touting security and ease of use.
Facebook introduced peer-to-peer payment in its messenger app back in 2015, but it is the company’s subsidiary Instagram that is making significant in-roads to consumer finance.
Facebook usage might be steadily dwindling, but Instagram is on the rise. As Instagram is a highly visual medium and users have the feed to interact with their favourite brands, it was a logical next step that the network would introduce purchasing and payment mechanisms sooner rather than later. This became a reality earlier in the year with Instagram enabling in-app checkout for its shoppable posts. In April 2019, the offering was extended from brands to influencers, significantly boosting Instagram’s reach. Deutsche Bank analysts have already predicted Instagram’s move into social shopping could be worth $10 billion by as soon as 2021.
But while the West is fast encroaching this space, no one has managed to catch up to WeChat’s fast ascension into the sphere of digital payments. With over 1 billion active users, and thanks to its own in-app shopping and payment system, the Chinese social media network is a force to be reckoned with. It provides a seamless mobile lifestyle through which consumers can order food, send and receive money, pay utility bills, shop and more.
With over 1 billion active users, and thanks to its own in-app shopping and payment system, the Chinese social media network (WeChat) is a force to be reckoned with. It provides a seamless mobile lifestyle through which consumers can order food, send and receive money, pay utility bills, shop and more.
Social payments are the norm. Consumers can buy a friend a cup of coffee and send it through WeChat Pay. Busking musicians no longer expect coins or notes, they have signs with their WeChat Pay QR codes on them. WeChat Pay leads the way with over 600 million users, outranking most of its competitors. Tencent, the company that owns WeChat recently joined forces with JD.com, China’s leading e-commerce platform to cover both online and offline markets.
Thanks to the innovative way they use technology to communicate integrity, security and trust, as well as creating a better customer experience, tech organisations have seen younger generations and seasoned consumers alike gravitate towards digital-first offerings.
But while challengers were ahead of the curve in evaluating how consumers want to interact with banks, traditional players need not despair. From designing apps that introduce a more mobile-first offering to embracing cutting-edge tech, such as AI and IoT, to enable predictive and hyper-personalised interactions, there is plenty traditional banks can do to create captivating customer journeys to meet customers’ ever-evolving expectations.
You came to the right place. In this article, we will see how to apply and secure a personal loan.
What to Do Before Applying for a Personal Loan
1. Check Your Credit Score
A higher credit score will make it easy for you to get a loan. If your credit score isn’t good enough, then take steps to increase it before applying for a loan.
You can get a loan with a low credit score but at a higher interest rate.
2. Consider Different Lender Options Online
People usually go to banks to take a loan. Since the banks would be aware of your financial credibility, they would be flexible in offering you a loan.
However, you can also consider other lenders and any Non-Banking Financial Company (NBFC). Verify their credibility before approaching them. Check for loan costs, interest rates, terms and tenure.
3. Compare the Interest Rates
Shop around to check what interest rates different lenders are offering. Compare the loan amounts and the required monthly payments too. Some financial institutions may offer you an unsecured personal loan while a local bank may offer better interest rates.
Apart from comparing personal loan interest rates, check what other charges you may have to bear. These may include processing fees, payment penalties, and foreclosure charges.
4. Check your Eligibility
Banks or other lenders require you to be salaried or self-employed to be eligible for a loan. You should be in a particular age bracket as well.
5. Check the Documentation Required
Check all the documents you require to apply for the loan. These may include your recent payslips, letter of employment, current address, photographs, etc.
6. Choose the Appropriate Lender
Choose a lender who gives you a flexible tenure and different EMI options to pay off the loan. Use an EMI and personal loan interest calculator online to estimate your monthly cash outflow.
7. Read the T&C Document Carefully
Make sure you understand all the terms and conditions before you apply and secure the loan. If you have any queries, ask the lender immediately.
Once you complete the above-mentioned steps, you can apply for the loan – either online or through the financial institution’s app.
How to Apply for a Personal loan
8. Online Application
Fill up the online form and upload all the required documents. In this step, you need to mention:
- Desired loan amount
- Contact details
- Email ID
This is the stage when all the documents will be verified. The financial institute will check whether you are eligible for the loan or not. Once all the documents are verified, you will get an instant e-approval.
After the verification, the loan disbursal process will be initiated. You will have to e-sign the loan agreement document. By doing this, you agree to abide by the terms and conditions of the lender.
Once you e-sign the document, disbursal process will be started. Provide your bank account details where the loan amount will be disbursed.
9. Requests through E-mail or Phone Banking
Leave a request for a personal loan with the bank either through the customer service centre or an e-mail. The financial institute will review your eligibility and contact you to take the process ahead.
10. Offline Request at the Bank
If you don’t want to go the online route, go to the nearest bank of your choice. Talk to a relationship manager and request a loan.
Getting a personal loan has become a very simple process. You can use instant personal loan apps and have the loan amount in your bank account in no time.
