One of the hardest things to do is stop yourself from spending money. We've all been there and it's incredibly hard to be frugal and save money when we live in a world encouraging you to buy everything and buy it now.
What is impulse buying?
Impulse buying is the concept of purchasing something you hadn't intended to. This is normally a purchase made in the spur of the moment, which can be categorised as sudden or unplanned.
It can be seen in products such as chocolate, clothes, mobile phones or tablets, and even big-ticket items such as cars or jewellery. The decision to buy a product such as this is sometimes irrational therefore, marketers will tap into this to try and encourage sales.
What are examples of impulse buying?
The simplest example is buying chocolate when you're food shopping. It's not something you need, it's not necessarily on your shopping list, but it's something you might pick up when shopping due to a series of triggers. You could have had a bad day, or you could be feeling a little down, why not have some chocolate to perk you up? It's as simple as that.
How do I stop impulse buying?
It's difficult to stop yourself from impulse buying in these situations so here are several ways to stop yourself from buying:
#1 - Stick to your shopping lists
This seems simple, but we all make emotional decisions. We've all been in our local shop with a shopping list in hand and picked up something extra because we're a bit hungry, or maybe we're feeling tired and picked up something like an energy drink. The answer is to stick to your list. Make sure you take a list and outline what you need.
#2 - Stop and think before purchasing
Sometimes, the simple things work. Let's say for example you're stood looking at a new TV. You may already have a TV, but there is a great deal on this TV. It's better than the one you have, it's bigger, it's got a better screen, it has built-in apps. You want this TV, but let's stop and think for a moment. Sometimes, we all need to take a moment and just really consider whether you need the product you're looking at. It may be shinier, it may be bigger and it may be a great deal, but you don't need it. Sometimes all we need to do is stop and think about the product we're looking at. Do you need it? It doesn't have to be a TV, it could be a chocolate bar, it could be a laptop, maybe a new smartphone. The reality is in a lot of cases, we don't need it, we want it. These can be large outlays, even chocolate bars these days aren't cheap! So stop and consider the impact this will have on your budget, what does that mean for the rest of the week or month? Yes, you could have a new shiny TV, but would that £300-500 have gone further elsewhere in your budget?
#3 - Set yourself some rules
The shopping list rule helps when you're out at the shops, but when you're at home scrolling on your phone and see some clothes on sale, or maybe a new video game, how do you stop yourself from impulse buying? A good rule is a 24-hour rule where instead of making a snap decision at the moment, tell yourself no. Wait 24 hours and reflect on the decision to buy the product. In most cases, the time will allow you to take a moment and make the decision that you may want said product, but you don't need it. Perhaps the sale on the clothes you want may be a good deal, but do you have the money to spend on it?
#4 - Avoiding temptation on social media
Most people these days use social media, I'm sure we all sit scrolling our phones for an hour or two a day. We all get served ads on social media, it's just part of using it. However, one thing social media does is encourage you to follow people, they may be famous, or they may be someone involved in something you enjoy. We all have hobbies, we all have interests, and we'll all follow people on social media as a result of that. That means that these people we follow will be on our timelines pushing products as part of those hobbies and we can all be influenced by this in some way shape or form, sometimes, it's completely unintentional. You could enjoy reading and follow someone who suggests books to read every month in a book club. That encourages you to spend money every month on a book. It may not sound like much, but if a book is £10, you could be spending £120 per year. The best way to stop impulse buying here is to unfollow those tempting accounts. It's a shame to stop following, but the reality is you need to protect yourself and your impulse buying habits from yourself.
#5 - Create long-term goals
We've spoken a lot so far about short-term solutions. Now we talk about the long-term solution. What does impulse buying stop you from being able to do? Impulse buying stops you from saving money to put towards long-term saving projects such as buying houses. In order to get a mortgage, you would need a deposit which is no small amount of money to most people. If you have a long-term goal such as this, it can help you when taking the previously suggested steps. Instead of buying that new TV, stop and take a moment to consider that the expenditure could put you back in your goal to save for a deposit.
Save your money!
One of the main reasons to stop impulse buying is to save your money! It's boring, it's hard but ultimately, saving your money in the long-term will be more gratifying than the short-term gratification of impulse buying. It also means that should something happen, let's say your boiler breaks down, it means you have the cash available to cover that cost instead of having to borrow to cover it.
Financial discipline is difficult, and it's incredibly hard to stop yourself from impulse buying. But by using the steps above you can stop yourself from spending money you didn't expect to, and instead spend it where you need to!
The financial services (FS) sector is under more pressure than ever. Juggling the effects of the pandemic, technological disruption and high customer expectations, coupled with maintaining business continuity, has been a difficult balancing act – and yet these factors are critical to FS. Neil Murphy, Global VP at ABBYY, explores how this has led some teams to butt up against the long-held rules and processes of the sector.
In order to see success, banks and FS firms need to take a long, hard look at how their business really works. This means getting visibility into business processes as they actually behave, identifying variances in them, and discovering how they can better meet customer and business needs.
With the world under unprecedented pressure, finding out how best to manage rules and processes can alleviate the strain and set your business on the path to success. Our recent research found that almost half (46%) of banking and FS workers and 30% of insurance staff rigorously follow the rules – giving the industry a good head start in coping with what’s thrown at them.
But is following the rules always the best route? And what happens when employees break the rules?
Rules – there to be followed?
Banking and financial services staff are working harder than ever before to help customers, keep businesses afloat, and also digitally transform. In such a process-driven industry, honing the many rules and processes could be the key to survival in this economy.
Our recent research found that almost half (46%) of banking and FS workers and 30% of insurance staff rigorously follow the rules – giving the industry a good head start in coping with what’s thrown at them.
At this point in time, it’s vital that banks and FS teams check in on their processes often to see where issues lie, which processes are most problematic, and which are ripe for automating. Following the rules is the cornerstone of achieving the potential of digital transformation, according to a McKinsey study which found that half of the value from digital transformation can be realised from as few as 10-20 end-to-end processes.
What tech brings to the table
While digital transformation is nothing new to most banks and financial institutions, now more than ever, they must rely on technology. It will help them conduct better business, comply with regulations, connect with customers, and deal with an ongoing flood of emergency business issues.
Getting your processes in order before automating them is a crucial step to avoiding failure. Yet many banking and FS staff claim that processes are too complex or there are too many to follow.
This is where technology comes in, and encouragingly leaders are open to helping their staff using technologies that can lighten the burden. According to our research, almost all banking and FS bosses think process mining technologies would be helpful to their business (98%), as did 89% of insurance bosses. These technologies can free up time for finance staff, enabling them to work on more pressing business matters that require the human touch.
Bending the rules
Rigorous rule-keeping is a trait the financial industry needs to uphold, in order to comply with stringent industry regulations. But there is a flipside.
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Key to a bank or financial institution’s success, especially in this digital age, is how they adapt and respond to customer needs. This means that even in a process-driven industry like financial services, employees occasionally break the rules. Sometimes, they have good reason: the most common reason to break the rules is to provide good customer service, which is more critical than ever before. Our research found that 62% of insurance bosses have confidence that their employees break rules so they can meet the needs of customers, and 50% of banking and FS bosses agree.
Relationship-building services like customer care, supplier management, or simply supporting colleagues and staff, can go a long way in benefiting a business and boosting morale. Being willing to bend the rules when it’s better for customers illustrates that rather than financial services staff being solely process-driven, they are driven even more by customer satisfaction.
So where do we start?
Unfortunately, customers are used to delays and layers of processes when it comes to banking. But it doesn’t have to be that way. To better serve customers, while also ensuring staff aren’t straying too far from the rulebook, the FS industry needs to be able to identify the bottlenecks and blind spots in every engagement. They also need the ability to analyse and discover processes using all the data they have.
Process intelligence technologies offer a deep understanding and real-time monitoring of processes. It helps you drill down into the details, explain why processes don’t work and how to fix them, and provides the tools to solve problems a business didn’t even know existed.
Say a customer loses their debit card. They shouldn’t need to go through the time-consuming process of calling various support teams, keying in endless numbers, and being put on hold, only for their account to be frozen as a precaution. By having every process mapped out and every piece of data available on an analytics dashboard, staff are given the knowledge of where customer service bottlenecks lie and why delays happen, so they can resolve issues much more quickly and securely.
Process intelligence technologies offer a deep understanding and real-time monitoring of processes.
But it’s not only useful for directly customer-facing interactions. Take anti-money laundering and anti-fraud compliance efforts. At a time when fraud is more prevalent than ever, nailing the processes that catch odd customer behaviour patterns in your data, and being able to action them automatically, means customers’ accounts are safer and more secure, even with less staff in the office and more fraudsters in the system.
Looking ahead
A clear understanding of your business’ processes will identify inefficiencies that may be impacting the customer experience – that you would never have known about otherwise. Empowering your staff with the tools to analyse less-structured processes, identify opportunities for improvement, and increase both the speed and accuracy of executing said processes, will reap many rewards.
Not only will it ensure businesses are getting the most out of their huge investment in digital transformation – it will also ensure customers are getting the best possible service. Right now, there’s nothing more vital than that.
Martin Kisby, Head of Compliance at Equiniti Credit Services, explores the motivations behind the evolution of compliance functions in consumer credit firms.
Risk and compliance departments, once held in low esteem by other business units, have evolved into a crucial function for protecting profitability. This is still a controversial statement in the consumer credit industry, but it’s easily justifiable. To do so, let’s take a look back.
It’s 2008. The consumer credit market is regulated by the Office of Fair Trading (OFT). Firms have a set of guidelines they are required to adhere to, but in reality can interpret or even circumvent them entirely. Business objectives are often, if not always, placed ahead of consumer needs.
So what was the role of the compliance function back then? Well, it provided some assurance to the OFT that firms were not ignoring its guidelines in their pursuit of profits.
This often led to compliance functions being derided as the ‘Business Prevention Unit’ or ‘Profit Police’ and being allocated minimal resource.
Fast forward to 2014: the financial crash has altered the consumer credit landscape dramatically. Trends in mis-selling, together with poor consumer outcomes, have highlighted the need for fundamental change. The creation of the Financial Conduct Authority (FCA), by merging the OFT and Financial Services Association (FSA), is intended to add more stability and oversight to the sector, ensuring better service delivery for consumers.
Big changes ensued.
The FCA developed a more robust and detailed handbook, which not only provided guidance on how firms across the sector should be operating, but also changed what was previously ‘advice’ into hard and fast rules.
Firms were given only interim permissions and needed to complete an approval process to gain full FCA authorisation. This required firms to demonstrate strict adherence to the new and updated rules and guidelines.
From this point onwards, the role of compliance was transformed. Firms began to allocate significant resource to this function to ensure they could provide continued assurance to the FCA that its rules and guidelines were being followed. It became imperative to demonstrate that mis-selling, unreasonable collections practices, affordability issues and poor customer service were being eliminated.
The compliance department evolved from the ‘Profit Police’ into a pivotal function in every FCA regulated firm.
Risk management also became more prevalent under the new regulatory body, as the System and Controls section of the FCA’s handbook requires firms to assess and manage their risks, and have a Chief Risk Officer as one of their Approved Persons – individuals the FCA has approved to undertake one or more controlled functions.
These complimentary objectives meant that compliance and risk departments were consolidated. Compliance plans were established to monitor specific elements of the FCA handbook and verify adherence to them. Any identified control inadequacies could be migrated onto a firm’s risk register for monitoring and remediation.
Back to the present. Four years on from the introduction of the FCA, firms have, overall, implemented the necessary oversight to demonstrate that they are meeting their regulatory requirements and treating customers fairly.
But let’s be honest – there are selfish motivations too. A strong compliance department, empowered to change processes as best practice dictates, reduces the risk of both regulatory fines and exposure to defaults. This increases revenue and protects profit margins.
In a sector competing on cost at a scale never seen before, and where consumer brand loyalty is decreasing by the day, protecting a firm’s margins is crucial.
As compliance has increased in importance, technology has kept pace and evolved to reduce the time and cost burden regulation could otherwise have imposed. Now, best-of-breed credit management solutions seamlessly integrate compliance monitoring and reporting into their sourcing, approval and collections processes.
Happily, this combination of motivations and technological developments has created a win-win for lenders and borrowers alike: an established and proactive risk and compliance function that not only protects consumers but also contributes to the strategic objectives of the lender’s business.
Below, Richard Smith, Director of Business Strategy at Inprova Energy discusses phase two of ESOS, the latest energy compliance rules.
Phase 2 of the UK Government's Energy Savings Opportunity Scheme (ESOS) has been given the official go ahead by each of the UK's environment agencies. This ends recent uncertainty surrounding the future of the mandatory energy assessment scheme, which was under review as part of the previous government's 2015 energy efficiency tax landscape reform.
Who does ESOS concern?
ESOS applies across the UK to 'large undertakings', such as organisations with more than 250 employees, or a turnover in excess of 50 million Euros and balance sheet worth more than 43 million Euros. It requires qualifying organisations to measure their total energy consumption and identify energy efficiency opportunities, but is not applicable to organisations that are required to comply with the Public Contracts Regulations.
There are four-yearly compliance phases. The first phase covered from 6 December 2011 to 5 December 2015 and phase 2 follows on from 6 December 2015 to 5 December 2019. Organisations that participated in ESOS phase 1 must repeat the exercise if they continue to meet the criteria, but cannot use the same data. There are also likely to be a number of new organisations that now qualify for the second phase due to a growth in employee numbers or turnover.
The scheme administrators have taken robust action to penalise organisations that fail to comply with phase one of ESOS. As well as fines of up to £50,000, non-compliant organisations are also 'named and shamed'.
How to comply with ESOS phase 2
- Determine if your organisation qualifies under ESOS legislation. Smaller businesses that are part of a larger corporate group may find that they fall into the scheme if one of the organisations in the group exceeds the employee and turnover thresholds. The qualification date is 31 December 2018.
- Appoint an accredited ESOS lead assessor to support the compliance process. While audit work can be carried out by suitably qualified individuals, the overall compliance process must be verified by an accredited lead assessor.
- Carry out compliant assessment activities/audits, identifying cost effective energy saving opportunities.
- Measure and record your organisation's total UK energy consumption for a continuous minimum 12 month period. This must include all buildings, industrial processes and transport activities and must include or span the qualification date of 31 December 2018.
- Complete your evidence pack and report on ESOS compliance to the Environment Agency by the compliance date of 5th December 2019.
Benefits of ESOS
Although ESOS doesn't yet require organisations to implement the recommended energy saving measures, there is powerful evidence of the financial wisdom.
From more than 150 ESOS audits completed by Inprova Energy during phase 1 of the scheme, our assessors identified energy savings opportunities ranging from 5 to 20%. This could amount to tens and hundreds of thousands of pounds worth of potential cost savings for typical sites.
Routes to compliance
Organisations can achieve automatic compliance with ESOS by gaining accreditation under the international ISO 50001 Energy Management Standard, which specifies the requirements for building, maintaining and continually improving a high functioning energy management system. When choosing this route to compliance, it is important for all of your organisation's energy data to come within the scope of your ISO 50001 certification.
Alternative routes include implementing ESOS compliant energy surveys to identify energy saving opportunities; commissioning Display Energy Certificates (DECs) with accompanying advisory reports; or Green Deal Assessments.
ESOS Lead Assessors may also be able to consider audit work undertaken within the four-year compliance period (2015 -19) as part of other energy audit schemes, such as activity under the Carbon Trust Standard, and Logistics and Green Fleet Reviews, where these meet the requirements of ESOS.
The environment agencies are encouraging organisations to begin the auditing process as soon as possible. In particular, the ISO 50001 route requires early action, as it can often take well over 12 months to achieve certification and put in place a high performing energy management system. Allowing plenty of time will also avoid the last minute bottlenecks experienc
