People unlock their phone and, increasingly, shop and pay with the touch of their finger. They don’t get locked out when they forget a password because it has been replaced with a simpler, more secure option – mobile biometrics.  Whether using a fingerprint, an iris scan or a “selfie” to confirm identity, banks see biometric technology as a way to provide greater convenience and security to customers as they use their accounts. But, it’s still early days in mobile biometrics, and a new report from Mastercard and the Department of Computer Science at the University of Oxford highlights a big barrier. Only 36% of relevant banking executives feel they have adequate experience to deliver.

To overcome this knowledge gap, ‘Mobile Biometrics in Financial Services: A Five Factor Framework’ explores this fast-evolving technology landscape and provides bank executives with guidelines to successfully bring mobile biometrics to life. Simply put, they need to focus on Performance, Usability, Interoperability, Security and Privacy.

Some of these factors are more visible to the consumer, having a real impact on user experience, while others operate behind the scenes. But, long-term success for a bank requires that they address all factors equally to protect against threats. The framework can help financial service companies avoid the trap of focusing only on the ones their customers see.

“Biometric authentication has a lot of potential, but it is important to address the objectives of each of the Five Factors when designing solutions. Working together with Mastercard enables us to solve for realistic threats to the industry with the best technical and scientific ideas. Users will need consistency, quality and assured security for this technology to thrive,” said Professor Ivan Martinovic, Department of Computer Science at the University of Oxford.

Ajay Bhalla, president, Global Enterprise Risk & Security, Mastercard, commented on the research initiative in a blog, saying: “Effective mobile biometrics melt into the broader experience of consumer-centric financial services, giving people the power to instantly access their financial information or make a payment. They’re driving the trend toward a password-free future where digital identity is all about who we are, not what we remember.”

Considering that global sales of smartphones are expected to reach $400 billion by next year, people everywhere will increasingly have access to the tool that makes mobile biometrics possible. Banks see that as an opportunity, and with initiatives like the collaboration with the University of Oxford and pioneering biometrics solutions like Mastercard Identity Check Mobile, Mastercard is a partner to deliver widespread and responsible adoption of mobile biometric solutions in financial services.

As Bhalla continued, “This framework is fundamental to accelerating the deployment of mobile biometrics for consumers and industry alike, but collaboration is key. We can only achieve this if industry, academia, governments and technology vendors understand and contribute to the evolution of the Five Factor Framework for mobile biometrics.”

“Mastercard and Oxford have done important work in exposing some of the root causes for the inconsistent adoption of mobile biometrics in financial services,” said Ravin Sanjith, Program Director: Intelligent Authentication, Opus Research. “We expect the Five Factor Framework to become an indispensable aide for industry professionals and decision makers to have better informed, strategic discussions that drive towards more efficient and successful high-scale implementations.”

Anthony Duffy, Director of Retail Banking, UK and Ireland at Fujitsu told Finance Monthly:

“The news that biometric authentication is now consumers” preferred choice for their financial services security is further evidence that biometric technologies are coming of age. Biometric solutions have been used overseas for many years, with Brazilian, Japanese and Turkish banks all using Fujitsu biometric solutions to support day-to-day banking transactions. However, it is only recently that British banks have started to deploy the technology on a significant scale. We are seeing a growing confidence in the security and effectiveness of biometric technologies, perhaps in part brought about by both Android and Apple mobile devices using finger/thumb print scanner technology as an unlocking option. After all, as the technology goes from new to familiar, there’s a natural acceptance and understanding, which breaks down previous barriers to entry.

“Financial institutions are keen to enhance their security measures further and to improve customer service. Biometric technologies, by being unique to the individual, help achieve both goals. Their use often reduces the use of passwords, or even eliminates them altogether, while often also providing an audit trail. When deployed to help identify customers, their use can speed up the identification and log-on process, by removing the need for security questions.

“The reliability, security and accuracy of biometrics make them ideal for banking. Add to that the widespread adoption of biometrics on mobile devices, and it’s clear the technology is set to flourish. Consequently, at Fujitsu, we believe that the use of biometrics in banking is something we will see much more of in coming years.”

(Source: University of Oxford)

Collinson Group research has revealed that just 38 percent of bank and financial service customers in the UK feel rewarded for their custom. Customers are looking for more opportunities to earn loyalty currency and more choice when redeeming their points.

Reward and recognition are becoming increasingly important for customer retention and revenue growth. As regulators encourage greater competition in the financial services market, new competitors emerge and consumers are given more opportunities to compare and switch services. Brands must consider how best to remain attractive to this sophisticated set of consumers who have a greater access to information and are always after the best value for money.

The Collinson Group research with 2,250 consumers across the United States, United Kingdom, Singapore and the UAE revealed that more than three quarters of respondents (77 percent) look for loyalty programmes with a greater choice of rewards. Furthermore, four in five respondents (82 percent), said that the value of a programme decreases when there is only a limited range of rewards available.

In the UK, research respondents cited three ways that financial services loyalty programmes could be improved: the ability to combine points with cash (37 percent), have a larger selection of rewards (37 percent) and a simpler user experience (33 percent). This indicates that usability and accessibility of rewards are top of mind for financial services loyalty programme members.

Two of the strongest categories of reward that are most popular with global financial services customers are travel and leisure. In the UK, customers consistently place a high value on benefits such as airport lounge access, concierge services and unique social and cultural leisure experiences[1]. Collinson Group research reinforces that customers value products and experiences offered outside of company core inventory as part of a financial services loyalty programme.

Respondents also expressed a desire to have more redemption opportunities. In fact, 66 percent of global financial service customers said that they specifically look for a loyalty programme that has both in-store and online redemption capabilities. This capability does not currently feature in many financial services loyalty programmes, with 70 percent of UK respondents revealing that they would like the opportunity to redeem in-store. An enhanced redemption experience is delivered through a programme that offers the customer the ability to redeem in both retail outlets and leisure stores, as well as an e-commerce platform. Survey respondents were clear that the value of a loyalty programme decreases if points cannot be redeemed in physical retail outlets, with 51 percent in the country agreeing.

Christopher Evans, Director at Collinson Group said:

“Traditional financial services models continue to evolve, with a focus on improved digital services and experiences, but a key area brands need to consider is how they recognise and reward existing customers. Other sectors such as travel and retail are demonstrating new ways of offering more personalised, timely and relevant rewards.

“A key element in enabling this is providing customers with more ways to earn and redeem loyalty currency. Offering the opportunity to ‘spend’ points against non-financial products such as travel, leisure or more altruistic rewards is increasingly attractive to programme members. The chance to redeem points in physical stores such as retailers and to part-pay with loyalty points and cash all make programmes more relevant and therefore more valuable to consumers.”

[1] Collinson Group mass affluent research – rethinking the customer relationship: https://www.collinsongroup.com/insights/consumers-shun-loyalty-programmes-forcing-brands-to-rethink-the-customer-relationship

Recent banking research from Accuity has revealed that between 2009 and 2016, correspondent banking relationships, where one financial institution provides services on behalf of another in a different location to facilitate cross-border payments, have reduced globally by 25%. This comes despite the fact that global GDP per capita grew during the same period, following the 2008 financial crisis.

Commenting on the findings, Henry Balani, Global Head of Strategic Affairs at Accuity, said: "Correspondent banking represents the cornerstone of the global payment system designed to serve the settlement of financial transactions across country borders. Our Research highlights some important trends in de-risking and its impact on international trade and global banking.

"The irony is that regulation designed to protect the global financial system is, in a sense, having an opposite effect and forcing whole regions outside the regulated financial system. This matters because allowing de-risking to continue unfettered is like living in a world where some airports don't have the same levels of security screening - before long, the consequences will be disastrous for everyone."

Measuring the cost of global de-risking

Since the global financial crisis of 2008, regulators have imposed requirements for greater transparency, established higher liquidity thresholds for banks as well as stepping up enforcement actions on institutions that violate anti-money laundering (AML) regulations.

In 2014, AML penalties peaked at $10 billion compounding the challenges banks face in high-risk geographies (Figure1). In this climate, the threat to banks of doing business in these geographies potentially outweighs the benefits of services to their clients, even if there may be good business opportunities to pursue.

The challenges of increased operational costs, competitive and regulatory pressures have driven banks to withdraw from correspondent banking relationships. Historically, these relationships were provided as services to international customers, but this is no longer viable, as banks cannot justify the increased compliance cost associated with offering correspondent banking services to their local customers. As a result, businesses in the regions most affected are struggling to access the global financial systems to finance their operations. Without this access, local banks are forced to use non-regulated, higher cost sources of finance and expose themselves to nefarious actors and shadow banking.

Henry Balani added: "A number of factors have contributed to derisking, the most important being that the risk / reward balance has become unfavourable for large clearing banks and in response they have taken a country / region risk view in deciding who they can do business with. If we want to reverse this trend and begin to 're-risk', then the 'antidote' will require more granular level due diligence and proper risk assessments to provide large clearers with the confidence that they can deal with low risk businesses in high risk jurisdictions."

Decline in USD relationships is either indicative of a concentration in relationships or a reduction in USD dominance

• The number of USD correspondent relationships declined by 15% with Euro relationships showing a steeper decline of 23%
• The number of Chinese Renminbi (RMB) correspondent relationships increased by 8%
• Global bank locations in developing economies increased by 31% since 2014

Findings from this research reflect the number of correspondent banking relationships transacting in particular currencies rather than the volume of currency transactions. Research shows a steady decline in the number of USD correspondent banking relationships globally since 2014. The USD was the currency of choice as the global economy recovered from the global financial crisis in 2008. While USD continues to be the currency of choice, the rate of decline in the number of USD relationships further accelerated with a drop of 13% between 2015 and 2016 from a decline of 2% between 2014 and 2015.

While the 25% drop in global correspondent relationships is greater than the USD correspondents decline, the trend for USD is particularly significant when compared to the contrarian increase in the number of Chinese RMB correspondent banking relationships.  Since 2014, research shows an 8% increase and since 2012, the number of the RMB relationships showed a dramatic increase from 3,600 to 8,800 relationships in 2016 (albeit from a low base). The research further reveals a peak in the number of RMB correspondent banking relationships in 2015 as the USD continued to decline.

There are two explanations for this decline in USD relationships when compared to the RMB. Either there is a concentration in USD relationships, with more transactions settled through fewer relationships, or there is a decline in the dominance of USD.

Global bank locations in developing economies have also increased by 31% since 2014, largely due to growth in China and APAC. This is significant as the number of banks in established global financial centers are in decline.

China prevails as region with highest growth in correspondent banking relationships

Actions from US and European regulators have resulted in banks shunning higher risk economies while missing out on the potentially profitable use of their currencies for correspondent banking, in the process.

Our Research reveals that the areas benefiting from the changes are largely in the East. For instance, China has experienced a 133% increase in the number of banks since 2009 and an astounding 3,355% growth in correspondent banking relationships during the same period.

Balani added: "The decline in USD relationships has several explanations: either we are seeing a concentration in USD relationships among fewer correspondent banks, or we are seeing a decline in USD dominance. The shift can also be attributed to the potential AML penalties associated with using these currencies. Since the financial crash of 2008, we have also seen significant commitment from financial institutions in emerging economies to demonstrate they are not high risk. We see this playing out in the East and the increased number of relationships reflects their commitment."

Balani concluded: "As we see more regulation come into place, global banks can support growth in local businesses by investing in technology that can securely and quickly determine the risk of a transaction in a high-risk geography."

(Source: Accuity)

The UK’s private sector outsourcing market recorded its strongest quarterly performance in five years in Q1, with businesses agreeing deals worth £2.42 billion, according to the Arvato UK Outsourcing Index.

The research, compiled by business process outsourcing (BPO) partner Arvato and industry analyst NelsonHall, revealed the largest private sector spend since Q4 2011 (£4.04 billion) as companies ramped-up investment in digital transformation.

Of the £1.74 billion spent by businesses on IT outsourcing (ITO) in Q1, 68% (£1.65 billion) was invested in introducing new technology projects, compared with £217 million in January to March last year.

The findings show continued commitment to improving customer experience also led to an increase in spending on BPO deals in Q1. Companies signed customer service outsourcing contracts worth £437 million in the first three months of 2017, with the overall value of private sector BPO deals more than doubling year-on-year to £682 million (Q1 2016: £284 million), according to the research.

Debra Maxwell, CEO of CRM Solutions, Arvato UK & Ireland, said: “The strong start to the year illustrates the resilience of the UK outsourcing market to political and economic pressures, with companies increasingly seeing value in procuring external expertise and experience. From improving customer experiences to delivering new efficiencies across the front and back office, continuing to innovate is crucial to stay ahead of the game, and business leaders are turning to outsourcing partners for selecting and implementing the technology that can help differentiate them in increasingly competitive markets.”

Overall, the findings revealed outsourcing contracts worth £2.73 billion were signed across the UK public and private sectors between January and March, representing a 13% year-on-year rise.

The research found that services outsourced in the UK are being increasingly delivered onshore. No deals agreed in Q1 are to be delivered fully overseas, compared with six% in Q1 2016 and eight% in the period October to December last year.

According to the research partners, a decrease in government spend was partly responsible for the drop in contract volume from 49 agreed in Q1 2016 to 22 in the same period this year, as public sector organisations adopt a ‘wait and see’ approach in the wake of Brexit and the upcoming General Election. Government departments spent £304 million on outsourcing in Q1, compared to £1.6 billion in January to March 2016.

Telecoms investment rise driven by customer services

The telecoms sector accounted for 18% of all UK outsourcing deals agreed between January and March, according to the findings.

The value of contracts signed by businesses across the industry more than doubled year-on-year, with agreements worth £514 million procured in Q1 compared to £217 million in the same period in 2016.

The research reveals significant investment in improving customer experience is behind the rise. Companies in the sector agreed deals for customer service worth £274 million in the first three months of the year, up from the £126 million spent in Q1 2016.

Debra Maxwell added: “The telecoms sector is an intensely competitive marketplace and exceptional customer service is now a key differentiator. Providing a seamless customer journey across digital and traditional channels is key, and a growing number of operators are partnering with third party experts to deliver outstanding experiences.”

The Arvato UK Outsourcing Index is compiled by leading BPO and IT outsourcing research and analysis firm Nelson Hall, in partnership with Arvato UK. The research is based on an analysis of all outsourcing contracts procured in the UK market during Q1 2017.

Other headlines from the Q1 2017 Index include:

• Overall 89% of spend came from the private sector, with 11% coming from government bodies.
• A total of £846 million was spent on business process outsourcing (BPO) deals, representing 31% of the overall UK outsourcing spend.
• The value of ITO contracts accounted for 69% of the UK market, with contracts signed last year worth £1.88 billion.

(Source: Arvato UK & Ireland)

Growth in the number of SMEs in the technical and professional sector² has outstripped every other industry since 2010, according to the latest study from specialist challenger bank Hampshire Trust Bank.

The research conducted in partnership with the Centre for Economics and Business Research (CEBR), reveals there are almost 40% more legal services SMEs, architects and vets than in 2010. Other sectors which have seen high levels of growth³ since 2010 are information and communication (33%) and business services (25%). Looking at the UK as a whole, there has been a 17% rise in the number of SMEs from 2010.

The study highlighted that despite a lower percentage of start-ups entering retail and construction⁴, these sectors do have higher numbers of SMEs overall. However these two sectors attributed financial concerns as barriers to growth in their industries which may deter start-ups in the sectors. Nearly two in five (39%) retail and three in 10 (28%) construction companies said competition in the market was the biggest barrier to growth.

Sectors by level of growth

The sectors experiencing a higher number of start-ups correspond to those demonstrating a greater level of confidence when it comes to the long-term economic prospects of the industry they operate in – with three in five (59%) accountancy, IT and communication firms saying they feel optimistic.

Mark Sismey-Durrant, Chief Executive Officer at Hampshire Trust Bank, said: “Our report identifies the critical role of SMEs within the economy, particularly the many micro firms that are emerging in the UK.  It’s encouraging to see SMEs enter all sectors from 2010 – 15 and from our experience many are identifying opportunities for growth in the future. These figures should be seen as a source of optimism for the government in terms of providing employment and long-term economic prosperity for the years ahead.

“As the government prepares to set out plans for leaving the EU, I urge them to keep the spotlight on smaller companies by creating conditions and opportunities which will support the levels of growth our research has identified.”

Nina Skero, Managing Economist at CEBR, said: “This study is yet another indicator of how strong UK SMEs are and the vital role they play within the UK economy. It’s encouraging to see SMEs across various industries posting a strong performance. This further highlights how vital it is to nurture the optimism they are demonstrating if they are to continue driving economic growth.”

(Source: CEBR)

Startup Genome, in partnership with the Global Entrepreneurship Network, recently released The Global Startup Ecosystem Report 2017 (GSER), a comprehensive look at how regions foster and sustain vibrant startup ecosystems. It reveals how successful tech innovation is being led by young entrepreneurs all over the world. The top five regions in this year's ranking are Silicon Valley, New York City, London, Beijing and Boston. All 55 cities participating in this year's research were rigorously analyzed based on their performance and eight factors driving startup success: funding, market reach, global connectedness, technical talent, startup experience, resource attraction, corporate involvement, founder ambition and strategy.

The latest report, which is Startup Genome's third and most comprehensive effort to date, draws upon the voice of entrepreneurs -- with more than 10,000 startup leaders participating - gathered through the efforts of 300 partner organizations. At a time when many regions feel left behind by a startup and innovation economy that has concentrated in super-regions globally, GSER's data and analysis is intended as a guidepost for helping founders, employers, policymakers and regional leaders to accelerate the growth of their local startup ecosystems.

Major report findings include:

• London is now a top 3 startup ecosystem globally, moving from its prior ranking position of #6
• Assessed for the first time, Beijing and Shanghai came in at #4 and #8, respectively
• Of the top 20 cities, Los Angeles and Chicago saw the biggest drop in this year's rankings mainly due to their lower global connectedness
• Montreal, Moscow and Sao Paulo all departed the top 20
• Silicon Valley lost its first place in the 'Talent' category due to high salaries and challenges for early-stage startups to attract experienced talent
• Beijing was ranked 2 in the 'startup experience' category, beating out New York City, London and Boston
• Due to its impressive performance for its relatively small size, Stockholm ranked #14

Major insights revealed by this year's report include:

• Concentration remains a major concern: a handful of geographic markets today are capitalizing on the economic benefits of global startup innovation, with four clusters capturing most of the global activity. In 2015 and 2016, the top 10 ecosystems by sum of exit value (not the top 10 according to our multi-variable ranking) captured about 85 percent of the global exit value of tech startups. These 10 cities are all located in only four countries. It's important that the tech industry diversifies geographically in order for more cities to participate in the job creation and economic growth created by the tech sector and for it to become more evenly distributed.
• Global connectedness can be measured and is a predictor of success: it is now demonstrably possible to quantify the networks that are created by entrepreneurs and to prove that global connectedness leads to faster growth and greater odds of creating globally leading startups. The impact of global connectedness comes when a company can understand the global market need, sell to customers in other markets and "go global," all of which are critical for startups to grow beyond local ambitions toward high-value outcomes. Global connectedness is ultimately a key ingredient towards leveling the playing field and distributing startup ecosystems more evenly
• The time to invest is now, but the investment required is substantial: it's generally accepted that it requires at least 10 years if not 20 for a vibrant entrepreneurial ecosystem to develop in a city or region. In New York City, where a vibrant startup ecosystem has only coalesced in the last few years, the seeds were planted at least two decades ago. Building on prior efforts, Israel and Singapore implemented innovative and aggressive policies in the 1990s to spur the growth of their startup ecosystems. Singapore appeared in the top 10 ranking for the first time in 2015.

The importance of tech is increasing exponentially and cities and civic leaders must invest aggressively now in order to create a conducive environment for tech founders to build global companies from the ground up and to attract the most advanced thinking and intellectual input from potential partners, customers and investors.

"We're seeing a lot of demand for insight into what makes the world's most successful innovation ecosystems tick, and how this knowledge can be replicated and scaled in different regions around the world," said JF Gauthier, CEO, Startup Genome. "Civic leaders want to invest in innovation, entrepreneurship and job creation, but they often lack the know-how to quantify what development stage their local ecosystem is at and what tangible policies and activities to focus on in order to accelerate through the ecosystem lifecycle. This report offers a concrete starting point."

"Startup Genome has a track record of producing strong analysis of what drives innovation at the local and regional level. That's one of the reasons we partnered with them for this year's report," said Jonathan Ortmans, President, Global Entrepreneurship Network. "Our mission is to connect entrepreneurs, investors, researchers, policymakers and other startup champions around the world and to begin defining concrete metrics around what drives innovation. This year's report and data provide the perfect backdrop for discussions at the Global Entrepreneurship Congress and we are excited that it is being released here with thousands of delegates from 170 countries."

(Source: Startup Genome)

With Americans losing tens of billions of dollars annually to investment fraud schemes, what mindsets and behaviors are common among those who fall victim? A new survey by the AARP Fraud Watch Network finds that the most susceptible typically exhibit an unusually high degree of confidence in unregulated investments and tend to trade more actively than the general investor population. More of the investment scam victims also reported that they value wealth accumulation as a significant measure of success in life and acknowledged being open to unsolicited telephone and email sales pitches.

Based on these findings, the AARP Fraud Watch Network has launched a campaign to warn consumers about the inclinations and activities common to investment fraud victims. The campaign includes an online quiz designed to prompt investors to consider adjusting their investment approach if results show they fit the profile of those most at risk of becoming a victim.

AARP's survey report notes that economic forces have converged to make the current environment ideal for investment swindlers to practice their craft. "The decline in traditional pensions has prompted millions of relatively inexperienced Americans to take on the job of investing their own money in a fast-moving and complex market," said Doug Shadel, Ph.D., lead researcher for the AARP Fraud Watch Network. "Meanwhile, today's sophisticated technology makes it significantly easier for scammers to reach large numbers of investors."

The Fraud Watch Network survey, conducted in August and September 2016, included interviews with more than 200 known victims of investment fraud and 800 interviews with members of the general investing public.

"While previous surveys in this area have developed a demographic picture of investment fraud victims – usually older, financially literate males who are more educated and have higher incomes – our goal with this survey was to learn about why people fall prey and how it can be avoided," said Shadel.

The AARP survey found stark differences between the past investment fraud victims and regular investors in three areas:

Psychological Mindset – More victims reported preferring unregulated investments, valuing wealth accumulation as a measure of success in life, being open to sales pitches, being willing to take risks, and describing themselves as ideologically conservative.

Behavioral Characteristics – Victims reported that they more frequently receive targeted phone calls and emails from brokers, they make five or more investment decisions each year, and more of them respond to remote sales pitches – those delivered via telephone, email or television commercials.

Demographics – Somewhat replicating the previous industry studies, higher percentages of victims were found to be of older age, male, married and military veterans.

By taking the AARP Fraud Watch Network's online quiz, investors can learn whether they possess the characteristics that may predict likely fraud victimization. Investors who score high on the quiz are urged to apply a new level of caution when they receive unsolicited investment overtures, and adhere to the following investor protection tips:

• Do: Invest only with registered advisors and investments.
• Don't: Make an investment decision based solely on a TV ad, a telemarketing call or an email.
• Do: Put yourself on the Do Not Call list.
• Do: Get a telephone call blocking system to screen out potential scammers.
• Do: Limit the amount of personal information you give to salespersons until you verify their credentials.
• Don't: Make an investment decision when you are under stress. For example, when you've recently experienced a stressful life event such as the loss of a job, an illness or death of a loved one.

The AARP Fraud Watch Network was launched in 2013 as a free resource for people of all ages. The website provides information about fraud and scams, prevention tips from experts, an interactive scam-tracking map, fun educational quizzes, and video presentations featuring Fraud Watch Network Ambassador Frank Abagnale. Users may sign up for "Watchdog Alert" emails that deliver breaking scam information, or call a free helpline at 877-908-3360 to speak with volunteers trained in fraud counseling.

(Source: AARP)

Outsourcing spend by UK financial services firms reached £769 million in 2016, an 11% rise year-on-year, as businesses boosted investments in back-office transformation, according to the latest Arvato Outsourcing Index.

The research, compiled by business process outsourcing (BPO) provider Arvato and industry analyst NelsonHall, revealed that spending on BPO contracts rose sharply across the sector last year with companies procuring outsourced services in policy services, HR and property and casualty claims processing.

The Index found that BPO agreements worth £621 million were signed across the sector in 2016, up 87% on the previous 12 months.

The research revealed that the boost in back-office spending contributed to the rise in deal value agreed in the industry last year. Contracts signed by financial services firms accounted for 12% of the overall UK outsourcing market in 2016, according to the findings. Only government (42%) and telecoms and media (19%) accounted for more spending.

Patrick Quinn, CEO of Arvato Financial Solutions UK & Ireland, said: “The financial services industry remains under pressure to transform, both in terms of improving services for customers and finding new cost savings.”

“It’s clear from the research that a growing number of companies across the industry see outsourcing as a viable strategy to address these challenges through introducing new innovations and ways of working. There are some very positive signs for the sector’s health looking forward, with a high proportion of first-time outsourcing deals (57%) procured last year.”

The Arvato UK Outsourcing Index is compiled by leading BPO and IT outsourcing research and analysis firm Nelson Hall, in partnership with Arvato UK. The research is based on an analysis of all outsourcing contracts procured in the UK market during 2016.

Outsourcing deals worth a total of £6.2 billion were agreed in the UK last year.

(Source: Arvato UK)

Business and organisations in the UK are facing a fraud epidemic with fraudsters increasingly taking advantage of technology and corporate inaction.

New research from national audit, tax and advisory firm Crowe Clark Whitehill, together with the University of Portsmouth’s Centre for Counter Fraud Studies (CCFS), suggests that fraud is costing the UK £125 billion each year.

“The Financial Cost of Fraud 2017” shows that annual losses as a result of fraud and error are now at the highest level ever recorded. Since the recession in 2008 there has been a 43% increase – up from 4.57% of business expenditure to 6.54%.

The report is based on research which has reviewed 19 years of data where total losses have been measured in an accurate and statistically valid way. The dataset covers loss measurement exercises in different countries and across many different sectors. The total value of the expenditure where losses have been measured is over £13.2 trillion.

Jim Gee, Head of Forensics and Counter-Fraud at Crowe Clark Whitehill, comments:

“Fraud is a pernicious problem which affects every area of society. Businesses are less financially stable and profitable; the quality of public services is diminished; and even charities do not get the full benefit of the donations which are made.”

“Organisations constantly analyse costs and seek to reduce them to the point of optimal efficiency, but fraud is being overlooked.”

“The complexity of business systems and the decrease in moral conscience that technological, rather than face-to-face, interactions have bred, combined with a lack of investment in tackling fraud, has created an epidemic.”

The latest government crime statistics – released in January – reflect this, showing that fraud and cyber-crime now represent almost half of all crime in the UK.

However, the Financial Cost of Fraud 2017 report stresses that a pro-active counter fraud approach can stem the flow of criminal abuse. It highlights real examples where organisations have reduced the cost of fraud by as much as 40% within 12 months.

Jim Gee, Head of Forensics and Counter-Fraud at Crowe Clark Whitehill, comments:

“The sums involved are huge. Organisations’ behaviour towards measuring and countering fraud can be the difference between a mediocre annual performance and stable growth. Businesses can no longer afford to bury their heads in the sand.”

“However, there is good news. The evidence revealed in this report shows that losses can be reduced, and this provides a real opportunity. Private companies can gain a competitive advantage if the cost of fraud is reduced; public expenditure reductions can be less painful; and the charity sector can increase the resources it has available to deliver on important charitable initiatives.”

“Ensuring that organisations are properly protected against fraud could provide a £50 billion shot in the arm for the UK economy.”

Mark Button, Director of the Centre for Counter Fraud Studies, University of Portsmouth, adds:

“This report shows the real value of academic research, highlighting a business cost which is sometimes overlooked, and providing an evidence base for action. In a post-Brexit world, UK organisations need to be as efficient as possible and properly protect themselves against fraud to minimise this unnecessary cost.”

The report indicates the findings of global research, concluding that the total global annual cost of fraud and error now stands around £3.55 trillion. This is a sum more than two-thirds greater than the UK’s entire GDP and more than twice as much as the sum which Europe spent on healthcare in 2014.

(Source: Crowe Clark Whitehill)

Employee printing and the use of traditional filing methods to store documents can cost a small business as much as £14,616 each year, according to research by software developers Reckon.

The average UK office worker prints out 6,000 sides of A4 each year; that’s a whopping 500 sheets – or one ream each – per month. Furthermore, there are also the costs of running and maintaining a printer, which average at around £148 per employee for a medium sized business.

Coupling the price of paper and printing with the cost of maintaining filing cabinets, which can be as high as £690**per cabinet in central London, shows just how much businesses are spending in order to manage and safely store documentation.

Reckon, developers of Virtual Cabinet and Reckon One, found that the space taken by a standard sized filing cabinet is typically £360 per year, although this cost is significantly higher in major cities and of course the capital.

A typical filing cabinet takes up more than five square feet of commercial space including the space needed to open and operate the drawers, a significant cost when the average commercial rent of £115 per square foot in London and £60 per square foot in the wider UK is taken into account. Pairing this expense with the price of printing and of course the paper itself, demonstrates just how costly using traditional business processes can be.

Commercial rates are expected to continue to rise at a steady rate, meaning a rent increase of 25% could leave a business in the City of London spending as much as £863 in rent annually for each filing cabinet within the next five years. ONS research shows that office-based employment has grown each year since 2008 and will continue to do so, meaning the need for office space and storage will become greater and that making efficient use of a premises will become all the more important.

Mark Woolley, commercial director at Reckon, said: “The figures we’ve compiled highlight the high cost of printing and storing documents, especially for those in the accounting, legal, insolvency and property sectors. While these figures make for expensive reading, they don’t even begin to include other documentation expenses, such as postage, retrieval of documents onsite and/or off site at storage facilities along with the cost of time taken to manage filing cabinets.

“When every square foot matters in terms of cost and efficiency, it’s important to make the best possible use of an office space. Document storage can take up room which forces business owners to maintain a larger than necessary space and can stop a business from using its floor-space for more productive uses, such as meeting space or even a workstation for a new team member. Likewise a printer and its associated products can be a bulky addition to a tight office space.

“As we continue to move towards more digital ways of working, it’s surprising to see how many businesses still rely on paper documents. The savings made by digitalisation mean that much needed new colleagues can be hired or that the business can even downsize to more appropriate premises that will save serious money on rent.”

Reckon complied the cost of £14,616 using the following stats, which were applied to a business of 50 employees using ten standard size filing cabinets:

• A cost for the rent of the space occupied by the cabinet of £360 per cabinet. This figure takes into account the space used by the cabinet itself, as well as the space needed to open and use the cabinet;
• Each employee printing 6,000 sheets of A4 paper each year;
• A cost of £148 per employee to use and maintain the printer itself;
• The paper used being A4 printer paper at a cost of £1 per ream.

(Source: Reckon)

Challenging the status quo thinking that more government spending boosts the economy, a new report released by the Pacific Research Institute found that bigger government does very little to boost the economy. Part 2 of Beyond the New Normal concludes that high taxes and government spending actually takes away the ability of people to spend and invest, and grow the private-sector.

"Government often 'invests' tax dollars on new programs and assumes that if you spend the people's money, you will grow the economy," said Dr. Wayne Winegarden, PRI Senior Fellow in Business and Economics, and co-author of Beyond the New Normal. "What Washington fails to understand is that government overspending doesn't grow the economy. The best way to create jobs and lift people out of poverty is to reduce high tax rates and let Americans decide for themselves how to spend or invest their money."

Among the key points:

• Total federal, state, and local government expenditures are near all-time highs relative to the ability of taxpayers to afford these expenditures.
• When government spends money, all that is known are the costs that have been incurred. Without further analysis, it is unknown whether these expenditures are adding value to the economy. Government expenditures only add value to the private economy only when the benefits from those expenditures exceed the economic costs imposed on the economy.
• Tracing out the growth and composition of current government expenditures, as well as the large costs inherent in the current tax system, additional government expenditures are not meeting this criterion.
• Treating the costs of providing government goods and services as if they represent the value added from that spending creates a distorted view of the impact from government expenditures on the economy. It automatically assumes increasing the cost of government increases the value created for the private economy. This assumption is particularly problematic given the current size and composition of government expenditures.
• Additionally, whether government expenditures are adding value to the economy should also be judged based on the goals of the government programs. For instance, based on the original goal of income support programs (e.g. the elimination of poverty), expenditures on income support programs are not achieving their designated goal.
• Policymakers should focus on assessing the value created by government expenditures, and acknowledging that government expenditure programs with low or negative net value do not stimulate the economy.

Beyond the New Normal is a multi-part study by Dr. Wayne Winegarden and Niles Chura, which makes the case that future US economic growth can meet – or exceed – past growth trends if the right economic policies are adopted.

Dr. Wayne Winegarden is a Senior Fellow in Business and Economics at Pacific Research Institute. He is also the Principal of Capitol Economic Advisors and a Contributing Editor for EconoSTATS.  Niles Chura is the founder of Ouray Capital.

(Source: Pacific Research Institute)

Today's typical business intelligence (BI) user increasingly prioritizes mobile, fast, and customizable platform options, and platform providers are feeling the pressure to evolve quickly to meet the demand from customers.

A new survey from Clutch finds that 70% of data analytics users consider a mobile application crucial to their use of BI software. Even those users who said they don't consider a mobile application crucial have taken notice; nearly 60% of those users said they recognize mobile BI applications as increasingly important to their business.

User emphasis on mobility has grown significantly in a short amount of time. Clutch's 2016 BI survey found that only 41% of data analytics users even used a mobile phone or tablet to access their BI data--now almost double that number believe mobility is crucial to their use of the software.

Hyper-paced work environments, the need to perform complex analytics 'on-the-go,' and the stronger processing power of smartphones and tablets have all led to greater demand for easy-to-use and powerful, mobile BI platforms. Users now look for platforms that seamlessly transition between desktop and mobile, beyond the basic mobile capabilities that many BI organizations already provide.

"Simple dashboards on mobile exist in most BI tools out there," explains Yair Weinberger, CTO and Co-Founder of Alooma, a data warehousing and analytics platform. "But mobile BI software for data analytics users who want to research deeper, drill down into the data, or split the data according to some parameters or features, is still lacking."

Data analytics users who increasingly see BI as a fast, mobile, and constantly available tool, are also concerned with the reliability of speed and simplicity when they access their data. Accessing their data is "not simple" according to 31% of users, while 36% say they wait, on average, more than a day to gain access to their data.

Less than 20% of respondents say they typically only wait a few minutes to gain access to their data. In the business intelligence industry, a time delay of hours or more to access data can pose a problem for employees attempting to collaborate quickly and efficiently with colleagues.

The desire to have more control over data accessibility may be why 85% of data analytics users are likely to use open source software in the future, according to the Clutch survey. Open source software offers users the opportunity to operate on the cutting edge of BI technology and play a more direct role in their data analysis.

However, experts say they are confident that commercial options will remain competitive as a time-saving, safer, more supportive software option. "The open source software community doesn't have an advantage when it comes to the constant, quality support that commercial options offer," says Derick Bai, Global Vice President of Engineering at DrivenBI.

(Source: Clutch)