Andrew Raymond, CEO of Bolero International, shares his advice with Finance Monthly.

Reliance on paper documentation and manual processes means banks are struggling to meet the needs of exporters and importers as we emerge from the COVID-19 crisis.

The demand for fast digital services with minimal human involvement is gathering pace as global trade prepares itself for the big task of recovery. The WTO (World Trade Organisation) estimates trade could plummet by anything between 13% and 32% this year alone.

The critical role of paperless trade systems in fostering recovery is recognised in the ten-point plan issued by UNCTAD (The United Nations Conference on Trade and Development), which makes their introduction a key priority.

Apart from sheer speed of transfer, electronic versions of essential trade documents have the distinct advantage of not being held up at borders or lost during movement restrictions. This has become a vital attribute. Bills of lading, for example, are crucial trade documents that serve many purposes. Created by carriers, they can be used by exporters to draw under letters of credit from the buyer’s bank payable at sight, or to obtain finance in case of deferred payment. As “documents of title”, they confer ownership of a shipment and are forwarded to the buyer’s bank in exchange for payment against the letter of credit. The buyer will also use the bill to claim the consignment, once delivered.

The demand for fast digital services with minimal human involvement is gathering pace as global trade prepares itself for the big task of recovery.

Clearly, severe consequences ensue if documents such as bills of lading go missing or are held up. Fees and penalties mount as cargoes sit in port longer than necessary. This is where the advantages of digitisation are most obvious. Exchanged on a secure, purpose-built trade digitisation platform, trade finance instruments, electronic bills of lading (eBLs) and other digitised trade documentation, take hours to process instead of days or weeks for paper equivalents.

This is why banks are more likely to invest in paperless systems in the aftermath of the coronavirus pandemic. Yet digital trade finance solutions vary hugely and corporates must take care they do not sign up to services that are poorly designed, lack connectivity or have little acceptance in the wider trade sphere.

Here, then, are five points for corporates to ask a bank when it comes to trade digitisation.

1. Can you manage everything end-to-end from a single interface?

Any digital solution in trade finance must be comprehensive in every sense. From a single interface it should be possible to manage all the documentation required to support a transaction.

A single interface should provide simple access to multiple banks for fast comparison of credit lines, rates, fees and offers. This is the primary means by which corporate treasuries will improve their cash flow and use of working capital. Fast access to a wide choice of credit lines also reduces the need for expensive bank instruments.

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2. Does the solution bring everyone together?

Buyers, sellers and carriers – they all need to be on one platform. There needs to be a good, secure flow of information between all parties. Your bank’s digitisation solution should connect seamlessly with your back-office and your own eco-system, giving access to alternative funders and third-party providers such as logistics companies, carriers, insurers and counterparties. This is connectivity that should be easy and open to increase efficiency and provide customisation.

3. Does the bank and its proposed solution have the necessary expertise in-built?

It’s vital to ask if a bank and its solution-providers have the necessary understanding of trade flows and how your business fits in. Does the proposed solution have a proven network of users among banks and significant corporates, and is it sanctioned by national authorities and recognised within the trade community? Many platforms focus on their integration with emerging blockchain solutions. This is important but still requires a current network of users and documents based on real working practices in global trade.

4. Is the platform secure, compliant and fit for trade after COVID-19?

A critical electronic document such as an eBL must be underpinned by a respected body of law, such as English common law, to give both yourself and customers greater confidence. A platform must also conduct compliance checking in line with international trade rules such as those prescribed by the International Chamber of Commerce eUCP which govern letters of credit.  For many corporates, the immediate post-COVID era will be one in which they cannot be certain of the solvency of their trading counterparties. Know Your Customer protocols need to part of the solution but not so laborious they become a barrier.

A critical electronic document such as an eBL must be underpinned by a respected body of law, such as English common law, to give both yourself and customers greater confidence.

5. Does the solution offer visibility of bills of lading as well as letters of credit from multiple banks?

A digital platform must give corporates access to electronic bills of lading (eBLs) as well as letters of credit and other trade finance options.  As we have seen, bills of lading are critical documents, but often subject to change, which requires visibility and vigilance.

Ideally, a bank’s trade finance digitisation platform should offer you the ability to use critical trade documents such as eBL under any transaction. With so much competition in some of the toughest conditions ever experienced, open account trading is set to continue its dominance in cross-border transactions, so having access to eBLs is an important requirement.

These are just five points but they cover the main areas that corporates need to explore. It is important to weigh up the options quickly, but also to take the right decisions on trade document digitisation in order to maximise revenues as the world recovers from the pandemic and new rules apply.

Now more so than ever, it is crucial that small businesses use all of the resources at their disposal to attract leads, capital, and revenue. If you have concerns over how your business will survive and thrive in the coming months, then it's time to become more adaptive.

Businesses of all sizes and industries will need to be more competitive in order to cut through the noise and capture a slice of a shrinking customer and client base.

Fortunately, there are resources out there for businesses just like yours that can ensure your business model becomes more targeted, leaner, and more effective. Here are 10 essential tools that will bring more capital to your business in 2020.

Automated Mailing Software: Sendinblue

Precise, tailored, and personalised marketing campaigns are a powerful way of ensuring that your business reaches customers and clients more effectively than the competition. If you want to stop your marketing emails from heading straight to the Trash folder, then use an automated email personalisation tool like Sendinblue, which allows you to automatically tailor emails based on the details of those on your mailing list.

SEO Tools: SEMrush

The vast majority of consumers now conduct web searches about a product or service before making a purchase. That's why making sure your business appears on the first page of Google results can be the difference between success and failure. One of the most comprehensive Search Engine Optimisation tools around right now is SEMrush, which provides users with detailed information on the keywords, outbound links, and formatting needed to push their websites to the top.

The vast majority of consumers now conduct web searches about a product or service before making a purchase.

Lead and Contact Generation: Lusha

The key to effective lead generation is quality data. To boost the productivity and efficiency of your sales team, the B2B lead generation tool Lusha can help. This smart piece of software scans the LinkedIn profiles of potential clients and gives you all of the essential information you need to reach out to them in a targeted, effective manner. This simple web plugin will give you a contacts list that you can actually use.

Social Media Campaign Planning: Hootsuite

If you don't have a comprehensive, goal-oriented social media campaign, then you are already falling behind your competitors. Building a brand identity and a clear voice is essential for small business success - something that cannot be achieved in the modern age without social media. Using a social media management tool like Hootsuite will allow you to curate professional SM campaigns and track your success and engagement throughout.

Content Marketing Resources: Feedly

Content marketing is now used by a staggering 86% of B2C marketers, as it has been identified as one of the single most effective ways to reach diverse audiences. Of course, you will want to avoid the mistake of simply creating content on the fly and hoping that it sticks. With Feedly, you will receive bespoke content marketing suggestions based on data about your company, industry, and target audience.

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Influencer Marketing Platform: Fourstarzz Media

An increasing number of both B2B and B2C businesses now rely on a network of influencers and micro-influencers to boost their profile and generate sales. Of course, it can be exceedingly difficult to reach out and connect with influencers on your own. That's why companies like Fourstrarzz Media exist, to connect you with relevant influencers that they know are happy to market your products and services to their audiences.

Spend Management Software: Spendesk

If you're a small business you likely already operate on thin margins. If you want to widen this margin by reducing waste, then comprehensive spend management software is crucial. With Spendesk, you can track every penny that goes in and out of your company, in order to use your cashflow more efficiently. In addition, Spendesk's automated expense report and payslip generation platform will save your company time and money.

Small Business Loans: SBA

Whether you're just starting out in business or have been in the game for years, it's important to remember that help exists for when times are tough. The Small Business Administration is an extensive platform of government and non-profit-backed loans and credit available to small businesses. If you want a loan to help your business grow, this is the most reputable resource to apply for it.

Whether you're just starting out in business or have been in the game for years, it's important to remember that help exists for when times are tough.

Visual Content: Adobe

Engaging, aesthetically appealing visual content will go a long way toward getting your business noticed by potential leads. You might not have the resources to hire a full-time graphic designer, but that doesn't matter. With Adobe, you can create stunning, cross-platform visuals that are guaranteed to set you apart from the competition and enhance your brand identity.

Free Web Hosting: GoDaddy

If you're in need of a web host that is cost-free, high-quality, and secure, then head to GoDaddy to create a business website that won't cost you a penny. GoDaddy also has a range of helpful tools to get your website off the ground and ensure that it is SEO-formatted, visually appealing, and user-friendly. For business newbies, this is an essential resource.

With these tools, you can set your business above your competitors and attract additional levels of capital through increased sales, revenues, savings, and funding.

Well, all too often these processes utilise simplistic methods, such as spreadsheets. This ignores the multiple benefits that more technologically advanced processes can bring, most notably far greater accuracy. More accurate forecasts will help businesses in many ways, from securing funding from banks or investors to identifying future shortfalls. While rethinking how to approach cash flow forecasting will always be relevant and beneficial for businesses, in today’s uncertain climate of business instability due to COVID-19, it is especially important. 

In fact, cash flow forecasts are almost useless if they are inaccurate and it is only the businesses with accurate forecasts that will flourish. Accurate forecasts allow businesses to run predictably, generate funding and make informed decisions on capital investment. In contrast, inaccurate forecasts can lead to potentially devastating outcomes. At the lighter end of the scale, an inaccurate cash flow forecast can result in missed opportunities while the business had surplus cash in the bank. Whereas, at the heavier end, an inaccurate forecast could lead to overtrading and the end of the business. It is clear that this must be avoided and remedied, but how? Andy Campbell, Global Solution Evangelist at FinancialForce, shares an alternative method with Finance Monthly.

The Difficulties

Although popular, the spreadsheet presents many issues as a tool for cash flow forecasting. The first of these is that future income and future expenses are typically completed in monthly increments. This is an issue because it means that the future is generated using data from the past so by the time the forecast has been generated, the data is out of date and, therefore, no longer accurate. Another issue is that it takes a lot of time to assimilate data from the many different sources required for this process which causes further delays. A solution to this problem is that all data from each department be made visible to the finance teams so that they can create an accurate and real-time data set.

A well-built data set will become the foundation for accurate forecasting, so it must be able to process the variety of data produced by each department. This is because companies generally process a combination of both product and service-based revenues. Therefore, the data set must be able to manage both of these sources and their different payment structures.

Although popular, the spreadsheet presents many issues as a tool for cash flow forecasting.

Volatility presents another difficulty to be reckoned with. As the current pandemic has shown, volatility can come in unexpected forms and not all can be protected against. However, preparation is key, and some volatility is more predictable. For example, businesses themselves are volatile by their very nature with the changing of business models in line with the latest developments. Therefore, it is to be expected that business revenues would also be prone to volatility. This can be mitigated against by ensuring that all data has human oversight and is regularly reviewed. Doing so will ensure that any projection is in line with the company’s strategy and should prevent unexpected outcomes.

Cash flow forecasting comes hand in hand with revenue forecasting, which is the greatest of all these challenges. Revenue generation crosses all departments: starting in marketing, it is then delivered by sales, realised by operations and, finally, measured by finance. As already stated, the collating of data from multiple departments is tricky, revenue generation crosses all departments so presents a tangible difficulty here. Currently, the typical finance department addresses this using a complicated interlinking system of spreadsheets which often presents further problems. Another issue is that there can be disconnect between departments where a lack of trust means that data is not readily shared. To solve this, businesses must remove the culture where each department treats its goals separately rather than looking at one overarching goal and working together.

How to Overcome These Difficulties

The problems can be broken down into two main categories – technology and people. In terms of people, this comes down to the business culture and only a business that can successfully change its culture will be able to successfully implement new technologies. It is very important that employees are properly briefed and trained in the new processes or technologies that businesses want to implement so that they feel part of the processes and are adequately prepared. Simply enforcing a new process and expecting it to be a success will not work and there will be no visible improvements to the business.  Successful change to a business culture, at all levels of seniority and across all departments, will result in more tangible improvements.

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In regards to technology, the days of spreadsheets are over, it is time to retire them and let new technology take over. Finance needs to have clear and direct visibility into active opportunities to be able to generate accurate cash flow forecasts. A simple way to do this is to integrate the CRM with finance which will give a window directly into the required processes. The data set can be further strengthened using data from the past, for example past win rates and payments can indicate what the future may hold. AI can analyse historic data sets to identify customers who were slow to pay in the past and, therefore, are likely to be slow to pay in the future.

Ultimately, the more integrated a business is, both in terms of people and technology, the more smoothly it will run and the better its outcomes will be. Having a finance team that can produce accurate cash flow forecasting and a business reaping the rewards is not as difficult as it may seem. There are tools and technologies to help along the way. It is time to say goodbye to spreadsheets and to embrace the new way to approach cash flow forecasting.

The COVID-19 pandemic has not just had a devastating impact on health and society, it has dominated economic and business matters unlike anything we’ve seen in peacetime history, and, across the globe, schools, companies, charities and self-employed professionals are still adjusting to a brand new remote working contingency plan.

Fortunately, as a society, we are extremely well-equipped to adapt to remote working with a turnaround time of just a few days. This was proven by the sheer quantity of businesses, many of whom care for thousands of employees, who just a few weeks ago managed to transform their entire internal structure to a digital environment. Not only is this an inspiring example of human  collaboration at a time of crisis but also a true testament to the power of the technology at our disposal.

In fact, remote working has proven itself so effective for some organisations, that it has gone beyond a short term contingency plan; it’s starting to look like remote, or at least flexible working, will be incorporated in the long term for thousands of office-based workers. Clement Desportes De La Fosse, Co-founder and Chief Operating and Financial Officer at Spearvest, shares his thoughts on how the finance sector will be forever changed by the pandemic.

Although it may sound premature to think about a post COVID-19 world, a majority of industry operations are sure to change forever, and, none more so than in the financial sector. For many years, traditional banks and financial institutions have been associated with outdated infrastructure and slow legacy IT systems, which are a burden for financial professionals and consumers alike. In fact, a recent study in 2019 revealed that UK banks were hit by ‘at least one’ online banking outage every day across a nine month period.

Today, the demand for banking and financial services has never been higher: emergency loans, government payment schemes and personal finance management are required for people to survive. What’s more, visiting a branch in person is no longer an option, and therefore financial institutions are forced to invest in capable IT infrastructure and relevant automation, regulation, and finance technology to deal with influx of demand.

For many years, traditional banks and financial institutions have been associated with outdated infrastructure and slow legacy IT systems, which are a burden for financial professionals and consumers alike.

Whilst it could be argued that this much-need update was inevitable, the pandemic has certainly forced many banks’ hands in enforcing this change, and means our financial institutions will emerge from the crisis with a much more capable IT infrastructure. The following areas are where banks are, or should be investing, in the coming weeks, months and years, with insight into how exactly these cutting-edge technologies are impacting the financial services sector for the better.

Artificial Intelligence

Artificial Intelligence (AI) has been a growing trend in finance in the past decade, primarily being used to address key pressure points, reduce costs and mitigate risks. However, the demand for digital banking services as a result of COVID-19 will likely push the sector in the direction of developing and incorporating sophisticated automation and customer service AI.

We’re a few years off the mass adoption of robotics technology of this nature, but it’s safe to say the COVID-19 threat has highlighted the pressing need for more automation and better service technology.

Public Cloud

The shift toward cloud-based computing has already been significant, with most financial institution operating cloud-based Software-as-a-Service (SaaS) applications for business processes, such as HR, accounting, admin solutions and even security analytics and know-your-customer verification.

However, advancements being made in cloud technologies and increasing demand for SaaS applications for remote workers means that soon we could see core services in the financial sector, such as consumer payments, credit scoring and billing, to become stored and managed in cloud-based SaaS solutions.

RegTech

Much like the increasing demand for AI and Cloud-based SaaS applications, regulatory technology (RegTech), can do important work in ensuring financial work remains regulated and legal. The right RegTech, such as automated customer onboarding technology, can also save a firm a lot of time, freeing-up much-needed time to focus on the work that can not be completed by software or a robot.

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Big Data

Customer intelligence facilitated by big data and consumer behaviour is an incredibly important tool which can be used for extremely accurate decision making, risk-assessments and revenue and profitability forecasts, to name just a few use-case example.

Some modern financial institutions and start-ups have been using big data and analytics technology for a number of years, and those more ‘traditional’ which may have neglected this cutting-edge technology are depriving their customers of top tier financial advice and insight at a time when they are in need of it most.

Security

Cyber attacks, money laundering and hackers have always threatened the financial services to a large extent. However, with entire workforces online, operating in a remote, sometime unsecure environment, the cyber-threat facing consumers has never been larger.

Thus, cyber-security has, and should, be invested in heavily by financial institutions looking to protect their own client, employee and company sensitive information. At the same time, safe internet and banking practice should be implemented and taught to all members of the general public to ensure they do not give away sensitive information such as payment details.

Fast forward, five years from now, we will look at the pandemic as a trigger that enabled us to spend our time more efficiently, and digital technology and the cloud will be key in facilitating this positive change.

Modern automation and computer systems, particularly in sensitive national industries like financial services, need accurate time to function efficiently and they depend heavily on satellite systems to provide it. Simon Kenny, CEO of Hoptroff, shares his insight on the importance of time as part of modern financial infrastructure.

Satellite Navigation Systems are today’s under-acknowledged global good. Knowing where you are appears to be yesterday’s problem; whip your phone out, and you can establish where you are and find where you need to go very easily using the GPS. However, the UK does not own or control a satellite timing and location system, we rely on the systems built by others, such as the USA, Russia, and the EU, to give us time and location.

We rely on them for our vital financial services industry to accurately execute transactions. If those systems were to be suddenly unavailable either because of accident, deliberate spoofing/jamming or because the provision policy of the owners were to change, then time accuracy would be heavily disrupted in the UK and so would the performance of automated systems that need accurate time to function. Financial services rely on stable time feeds to verify thousands of transactions a second and most of those time feeds are satellite derived, so in the absence of our own UK owned and operated system, we cannot take the risk of it suddenly being unavailable. This is why the UK Government is investing in the National Timing Centre, which will develop a system for distributing time across the UK that is independent of GPS and which would enable the tracking of transactions to continue should the satellite connections be lost.

Software – the efficient, reliable solution

A pound of butter is a pound of butter; it is part of a measurement of weight that it should not change suddenly. It is fixed, but time is cumulative, it is part of its nature that it should change. So, to know what the time is, you care about the total number of seconds that have elapsed and as even tiny errors happen, they quickly become noticeable and clocks begin to disagree. To correct this disagreement the only option is to reach a consensus between national standards bodies about what the time is and then share it freely. This consensus is UTC (Universal Time), the standard to which everybody regulates their clocks.

Financial services rely on stable time feeds to verify thousands of transactions a second and most of those time feeds are satellite derived, so in the absence of our own UK owned and operated system, we cannot take the risk of it suddenly being unavailable.

The importance of highly accurate and synchronised time across different points in a distributed process was made clear at the end of last year when the Bank of England discovered early access to Bank announcements was being sold as a service. An audio feed, set up to provide a resilient back up to the video stream, was received eight seconds earlier at key co-locations than the video. Eight seconds providing a clear window in which to arbitrage any market sensitive announcement by the bank.

To effectively release sensitive market information, it is necessary not just to release the information at the same time to everyone, but to also manage the delivery of that information vis different media so that it arrives simultaneously at sensitive market venues or Co-Locations. When early access to data can be leveraged into a trading advantage, accurate synchronization of devices is required to correct the distortion and allow markets to operate transparently.

The science of real time data can only be coherent if that time consensus can be distributed ubiquitously at low cost, and at greater accuracy than the speed with which machines make decisions and take actions. If the accuracy is not good enough, or access to reference source is lost altogether, then systems will be disrupted and records of what a machine has done will be unreliable. That sweet spot is around twenty microseconds today: the time is accurate enough to measure and monitor server activity, but it can be delivered through software and existing connectivity without the need for expensive timing infrastructure to be installed.  If synchronized time is to become ubiquitous, then it needs to be cost effective and easy to manage.

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Software timestamping is a great solution to help financial institutions comply with MiFID II and CAT timestamping requirements not only because it is very cost effective, but because it can accept a time feed from different sources; a satellite or via a network cable feed, if the satellite becomes unavailable. It has been tested and verified that existing telecoms networks can distribute accurate time to any major data centre reliably and at scale. It is not necessary to have satellite antennae at each data centre location to connect to GPS. Resilient network connections, plus a local “Armageddon clock”, which can take over timing in the event of an interruption in connectivity, are less expensive and easier to maintain. The National Timing Centre will serve to expand the availability of a UTC time signal via multiple fibre networks, so the UK finance industry will have a cost-effective and resilient alternative to satellite available for all financial services companies.

The potential of nationally distributed timing infrastructure

If all the devices in a distributed process don’t share the same time to sufficient accuracy, then the records they produce will put events in the wrong sequence and with incorrect intervals.  However, if the UK finance industry had cheap, ubiquitous, accurate time coming from a reference source, then UK market participants would be able to enjoy the benefits of a unique “Time Fabric” where all timestamps, in any application, would be verified and capable of acting as reference data in any analysis. Time intervals could be used to authenticate proper execution and identify early when a process is not performing as intended. A national timing infrastructure offers the potential to improve the quality and utility of market data not just in financial services, but in any industry using automated systems that chooses to adopt it.

The global COVID-19 crisis has triggered the most disruptive period to British society in peacetime history. The impact on the public and our healthcare system has been devastating, and our economy is facing the prospect of a recession much deeper and more painful than the economic crash of 2008.

However, this must be seen differently to 2008; a time where a culture of risk-taking by banks and from within the financial services industry left consumers and businesses reeling as credit lines were pulled. Back then the ‘casino culture’, which was so widespread in the city, was seen as the root cause of the crash, triggering substantial unemployment and misery for millions. 

Now, we are all in it together, with the coronavirus hitting start-ups, small traders, shopkeepers and global businesses without discrimination. Companies are already collapsing into administration, with millions of workers furloughed on 80% salaries, and having to be supported by government finance and emergency loans. Wayne Johnson, CEO of Encompass Corporation explains to Finance Monthly why now is the time for banks to prove themselves.

Let us be quite clear - businesses and the general public need banks more than ever in this challenging time. It is certainly true that many of the major providers have already stepped up and  emergency banking proposals have already been enacted to help businesses and individuals in these trying times. The Bank of England, for example, has already cut interest rates on their loans to 0.1%, and are working with HM Treasury to support large businesses by offering cash for their corporate debt. Elsewhere, many major consumer banks are offering mortgage, credit card and overdraft payment holidays for up to three months.

However, there is still a gulf of trust between businesses and banks, with many organisations still feeling that financial services firms do not always have their best interests at heart.

Today, the banks are in a much better position, with deeper capital buffers and better regulation. Thus, major financial service providers are in a unique position whereby they can potentially regain the trust of the British public with a strong stance, deep pockets, and generous investment in struggling businesses.

Let us be quite clear - businesses and the general public need banks more than ever in this challenging time.

Moving forward, banks should continue their dedication towards their customers and British business in general through swift action and financial support that proves ongoing, selfless commitment to the economy and its people.

This concerted effort requires adaptation from the financial services industry. The increased dependency on loans and support will inevitably have an overwhelming impact on the skeleton crew of bankers, who are themselves having to deal with the transition to remote working and unprecedented economic climate brought upon us by COVID-19.

Fortunately, there is an abundance of automation and regulatory technology (RegTech) at the banking sectors’ disposal. Recommendations from the Financial Action Task Force (FATF) and updated legislation from the Fifth Money Laundering Directive (5MLD), for example, has increasingly pushed banks towards using automation in recent years. While it is no secret that client onboarding and background checks are greatly improved with the assistance of the right RegTech, many financial services organisations can be somewhat hesitant when it comes to introducing new technology to their centuries old trade.

This has to change now. Automated customer onboarding is effective, efficient and empowers analysts at a time when human interaction is, in many cases,  no longer an option during this unprecedented time.

Furthermore, the efficiency of proven RegTech software can ensure financial institutions are in a position to comfortably manage, and even accelerate, payment processes – a particularly useful function for SMEs, organisations and individuals at a time when they need access to finances and payment processes more than ever.

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Additionally, in today’s landscape, where consumers have come to expect instant services in all sectors of customer experience, automation is all the more crucial. Statistics from recent research that we published found that 38% of UK businesses have deliberately abandoned an application for banking services due to ‘slow due diligence processes’. Furthermore, nearly one third of businesses said they now trust challenger banking brands and fintech providers - known for their slick and fast digital onboarding - more than traditional banks.

COVID-19 has put consumers in an unprecedented position, as thousands are having to lean on traditional banks, modern fintechs and lenders. Thus, it’s a better time than ever to speed up and smooth out processes, if no less for the purpose of providing the best possible services for those who desperately require it.

Finally, there has been an increased trend in opportunistic cyber criminals looking to profit as a result of  the current climate and, more specifically, from the influx of remote workers - many of whom have not been trained with even the most basic fraud detection or cyber security measures. Such criminals have been known to exploit the goodwill of remote workers through fake charities and financial fraud schemes, before laundering stolen money through overworked and under resourced financial services.

With the right technology in place, financial institutions can reduce the strain on their employees and resources, and flag criminal or suspicious activity at a rate never before possible. This will help combat the wave of online financial crime facing workers and businesses in lockdown, and ensure that accountants and banking services are not unknowingly contributing to money laundering during the crisis, which is set to afflict the nation for the foreseeable future.

Artificial intelligence has already made a significant, positive impact on the financial services ecosystem and we can only expect this trend to accelerate in years to come. AI has the potential to radically transform businesses but only if they deploy it with appropriate diligence and care. A 2020 report by EY and Invesco anticipates that AI will expand the workforce in fintech by 19% by 2030 as the industry stands to be one of the largest to benefit from the efficiency gains and innovation the technology can bring through operational optimisation, reduction of human biases and minimisation of errors in anomalous data. Alex Housley, CEO and founder of Seldon, further analyses the recent changes in the role of AI and the impact it is set to have on the finance sector in years to come.

Talent Shortage Within FS

According to a report by Bloomberg, listings for AI-based jobs within the financial sector increased by approximately 60% from 2018 to 2019. This demand for workers with AI expertise is not only seen within the financial industry but across a variety of other professional sectors, such as e-commerce, digital marketing and social media. The jobs market has had little time to respond, resulting in a shortage in access to talent. A study by SnapLogic found that whilst 93% of UK and US organisations are fully invested in the use of AI as a priority in their business, many lack access to the right technology, data, and most importantly, talent to carry these goals out. This ‘skills shortage’ is a major obstacle to the adoption of AI in business, with 51% of those surveyed acknowledging that they don’t have enough individuals trained in-house to make their strategies a reality. Machine learning can offer benefits in many forms and different businesses have varying needs. There is no ‘one size fits all approach’ when adopting and deploying AI, which can make it a costly process for many organisations not equipped with the right tools.

Fortunately, there is ample opportunity to enhance the responsibilities of numerous roles within their organisation or let employees get on with more strategic work. SEB, a large Swedish bank, uses a virtual assistant called Aida which is able to handle natural-language conversations and so can answer a trove of customer FAQs. This means customer service professionals have been redeployed to focus on complex requests and their more meaningful responsibilities. Even employees currently working within the industry are looking to broaden their skills to become more versatile across new technology-driven roles. In particular, financial services companies are looking to upskill their data scientists and analysts. They have the base skill set required and can do tremendously well with the right engineering support. Deploying artificial intelligence within a business’s infrastructure means it can take care of mindless, repetitive tasks and free up employees to focus on other, more rewarding parts of the business, maximising automation and cutting costs.

There is no ‘one size fits all approach’ when adopting and deploying AI, which can make it a costly process for many organisations not equipped with the right tools.

Enhancing Fraud Detection

One of the biggest use cases of artificial intelligence within financial services is fraud protection. With the rise of online banking and the exponential growth of digital payments, banks have to monitor huge swathes of transactions for fraudulent behaviour. This huge influx of data points poses major issues for the human brain but actually maximises the effectiveness of ML systems. We’ve seen significant growth in the use of deep learning, with most major retail banks now relying on machine learning tools to recognise and flag suspicious activity. To keep up with the pace of criminals and comply with stricter regulations, service providers have to look beyond traditional methods and implement hybrid strategies built around holistic understandings of behavioural and anomalous data.

Indeed, research by AI Opportunity Landscape found that approximately 26% of funding raised for AI startups within the financial services industry were for fraud or cybersecurity applications, dwarfing other use cases. This number is expected to rise as fraud detection and mitigation continues to be one the highest priorities for customer-facing organisations as consumers increasingly hand over their data in exchange for services.

Better Serving Customer Needs

Financial services companies are increasingly leveraging artificial intelligence to deliver tailored services and products for their client base. For those banks mining data effectively, AI provides the ability to serve customer needs across multiple channels, and in some cases to grow operations at an unprecedented scale. Tools such as chatbots, voice automation and facial recognition are just a few of the ways banks are using AI to streamline and personalise the user journey for their customers. Importantly, consumers are increasingly literate in automated services and their expectations are constantly rising as the technology improves, meaning organisations must constantly adapt or risk being left behind.

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Chatbots and voice agents are also able to detect and predict changes in consumer behaviour, giving feedback on each interaction with a customer. All the results from customer touch-points are shared across the organisation, ensuring decisions and recommendations involving a human or machine are more intelligent and precise. Over time, these analytics mean businesses can make real-time decisions with their customers in mind, boosting engagement and personalisation.

In order to detect customer data from online purchases, web browsing and in-store interactions, banks must have AI in place to collect the data and automate decision-making. By adapting these technologies banks can connect their data, amplifying their offering effectively across all channels.

Continuous Adoption of Artificial Intelligence

Artificial intelligence and machine learning have already enhanced numerous capabilities for the financial sector, improving recommendations, customer experience, and efficiencies via  automation. AI will continue to dominate different parts of the financial sector, and the acquisition of machine learning and data science talent will become the norm. A recent survey from the World Economic Forum attests to this, with nearly two-thirds of financial services leaders expecting to be mass adopters of AI in two years compared to just 16% today.

Acquiring the right talent to drive machine learning and AI in organisations will remain a challenge as innovation is focused in different areas and new technologies are being implemented. In lockstep with this will be the constantly evolving regulatory landscape surrounding adoption of AI in financial services as each side races to match and often contain the other. However, the multiple benefits that come from implementing AI and machine learning are clear, and it will be a key area of focus and growth for businesses within financial services over the next decade.

Sarah Taylor is a Content Author at High Speed Training, the specialist online training provider to the hospitality sector. She advises cafes, pubs and restaurants on how they can adapt their business for delivery services in response to Government guidelines in order to stay profitable:

Following the Government’s call to close cafes, pubs and restaurants, many establishments have taken the initiative to temporarily change their business models in order to keep a source of revenue and operate solely as a ‘takeaway’ or delivery service. Customers are keen to show their support, as demonstrated by the widespread use of #supportlocal on social media. Meltwater data tells us that on the day businesses closed their doors to dine-in customers, the hashtag was mentioned 21,700 times in 24 hours.

In the first week of business since shutdown measures were introduced, we collaborated with market research company OnePoll to conduct a nationally representative survey of more than 2,000 people in the UK. The nationally representative survey highlighted continued widespread support and demand for local hospitality venues to serve their communities during lockdown – 83% of people would order food and drink to enjoy at home. Businesses therefore have the opportunity to continue generating an income off the back of customers’ new found appetite for supporting local establishments.

While the new legislation allowing takeaway and delivery services, as well as the online public support, represents a much-needed lifeline for hospitality businesses, it brings with it new challenges and a steep learning curve to ensure operations are run effectively, safely and are still profitable. New food hygiene procedures and contactless delivery methods are two of the many considerations that managers across the UK are grappling with.

Businesses therefore have the opportunity to continue generating an income off the back of customers’ new found appetite for supporting local establishments.

To help guide pubs, cafes and restaurants as they create new survival strategies, we asked the nation what would make them more likely to order a takeaway or delivery service from their ‘local’. Paying online and the promise of high food hygiene standards were the two most popular criteria, both voted for by 42% of Brits, providing a useful indicator for the information businesses should be promoting  in order to continue generating revenue during these turbulent times. ‘Contactless’ delivery with no face-to-face contact was third (28%).

Recognising the demands on supermarkets currently, many people also pointed to a preference to avoid stores where possible (25%), or a lack of available delivery slots (22%), which provides a solid rationale for businesses selling groceries direct to the public such as freshly made pasta and sauces to tap into a new pool of potential customers.

From a marketing perspective, a quarter of people (25%) indicated that they would like to be made aware of healthy meal options. Online interaction whether via websites or social media channels was revealed to be the least likely way to prompt an order and increase profitability, for example hosting virtual cooking classes.

Looking internally, implementing new operations at the same time as meeting a surge in demand for delivery can be extremely difficult for businesses to manage. Wherever possible, businesses should try to develop short, medium and long-term contingency plans that factor in processes for keeping standards high, timely order fulfilment, balancing good stock levels of fresh ingredients and increase income as a result.

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One of the biggest challenges will be choosing how to fulfil orders. Look at the benefits and limitations for delivering food direct to customers or signing up to a delivery provider if within a catchment area. The likes of Deliveroo and Uber Eats have recently published guidelines for restaurants as they see sign-ups in urban areas soar. Those outside of their catchment areas or that prefer to go solo may prefer to utilise software from the likes of Access Hospitality. Whichever route is chosen, the method of serving customers needs to be in line with profit margins in place, adhere to the legal requirements for food delivery services and work efficiently for both the business and consumer.

As well as choosing the most convenient delivery model, businesses should also review and condense their menu to streamline their service and adjust opening hours to target peak time periods in order to guarantee profitability. These are disruptive and defining times for the hospitality sector, and businesses need to be reacting quickly to the constantly evolving situation. Fully grasping how and why Brits are changing their eating habits, as well as carefully reviewing how best to modify their offering are just some of the simple steps businesses need to be taking into account in order to keep up with the change in demand.

This exceptional situation has exposed some interesting insights in terms of how technology can enable the way we work in our industry. However, it has also uncovered some critical gaps that many companies have to fill in their digital capabilities to truly enable their businesses to be adequately set up for the future.

In today’s world, our new ways of working fall into two ends of a spectrum:

• knowledge work that can be done remotely using technology
• collaborative “agile” work which is done using cross-functional teams (often co-located)

We are only now starting to make this distinction between these two ways of working outside of a traditional office environment, which for financial services, in particular, has long been the norm due to the heavy bands of regulation that envelope the industry and legacy cultures that sit within it.

Enabling daily work with technology

In these first few weeks of the crisis, many of us have rightly been focusing on the urgent business at hand - making sure our people are safe, activating our contingency plans (or putting them in place for some), figuring out how we are going to operate over the few next weeks, or even months given the uncertainty that surrounds this pandemic.

As we start to settle into this new normal, it is becoming increasingly clear that much of the ‘knowledge’ work doesn’t need to be done face-to-face. Technology like Zoom and Microsoft Teams enables many of us to do this work without travel, without offices - with just a phone, laptop, and a decent internet connection to hand.

But it requires us to adapt, to become more comfortable with the idea of being “remote” – where we can discuss and make decisions without physically being in the same room, or equally as important, accessing day-to-day social and support systems over technology; we’ve seen waves of people hosting virtual happy hours and team-building sessions to break up the working week. This change is happening in real-time and poses some very interesting questions over the future of office-based work.

It’s important to remember that a widespread shift to remote working also necessitates investment in technology infrastructure and bandwidth. We’ve all experienced first-hand how technology can get overwhelmed when overloaded. With more people logging on at the same time, pressures are put on infrastructure. We need to put the days of grainy video calls behind us and focus on ensuring our tools and bandwidth can enable this new way of working without unnecessary friction.

 Impact of the Digital gap on employee safety, customer service, and cost

The Digital gap has become apparent in several scenarios. For example, we have seen customer service centres that are highly tech-savvy who are doing a phenomenal job of protecting their people while continuing to deliver great service, while others have limited ability to do so.

The tech-enabled companies have been able to have their employees start working from home practically (and literally) at the flip of a switch. Their telephone technology is cloud-based or cloud-ready, and they use automated workforce management systems that enable them to have the flexibility they need with staff in times of crisis.

Technology like Zoom and Microsoft Teams enables many of us to do this work without travel, without offices - with just a phone, laptop, and a decent internet connection to hand.

On the other hand, those with legacy technology have been slow to respond – they have had people still coming into the office in smaller shifts to answer the phones, lowering service levels for customers and creating potential health risks among employees. Furthermore, these older operating models are more expensive for organisations to operate – historically, there hasn’t been a real priority to replace them.

In this day and age, in our industry, companies must look to transition from these legacy technologies to more cloud-based digital capabilities that enable flexibility and drive tremendous efficiencies. Perhaps this crisis will provide the impetus for making these necessary investments.

What about collaboration in agile?

 Over the past few years, companies in the financial services industry have started down the path of becoming highly collaborative and iterative across their businesses, enabling them to bring ideas and products to market in record time and with real relevance to their customers. The “agile” trend really started in the technology function but has now taken hold and is creating real value on the business side as well.

This collaborative, agile work is currently harder to reimagine with digital capabilities; many companies are experimenting with tools and methods that enable teams to work without being co-located. However, the teams that are in the same room, around the same whiteboard, and working together closely are usually more productive and typically drive better solutions than ones that are collaborating remotely. In the end, there will have to be a calculated tradeoff between in-person collaboration and technology-enabled remote working to drive real value.

Conclusion

 There is a spectrum of how we do work – pure knowledge (highly tech-enabled) to pure collaborative (highly co-located) – this situation has shown us how we can push ourselves further down toward the collaborative side of the spectrum using technology…never fully replacing co-location, but understanding where it is critical to deliver results and where it is not. It has not only exposed opportunities to work in new and different ways in times of crises, but also in the times that follow.

Cyber-attacks are the new normal, so CEOs are looking for ways to protect their businesses from emerging risks. From large corporations to small businesses, everyone is a potential target for hackers.

In 2020, the trend does not seem to be submerging. Hence, many are looking into a form of cyber insurance that would cover them if worse comes to worst.

The question presents itself: what is this insurance coverage, and what does it leave out? And, more importantly, what are its main pros and cons?

Cyber Insurance: What Does It Cover?

In no particular order of importance, cyber insurance covers the following:

1.     Media Liability

Advertising your services can result in intellectual property infringement. Cover insurance covers its consequences (patent infringement not included). Do note that it covers both online and offline forms of advertising.

2.     Network Security

With information and privacy risks abound, you need to keep your bases covered against network security failure. It includes malware infection, business email compromise, cyber extortion demand, and ransomware.

If you have cyber insurance, you can recover first-party costs related to:

• IT forensics,
• data restoration,
• legal expenses,
• notifying your customers of the breach,
• public relations,
• identity restoration.

Cyber insurance covers against malware infection, business email compromise, cyber extortion demand, and ransomware.

3.     Errors and Omissions

If a cyber-attack hits you, you could find yourself no longer able to fulfill your contractual obligations. That leaves your customers hanging.

You won’t afford to focus on consulting, upkeep, and other services. Once there is a cyber incident, all your time and energy go toward addressing its repercussions and minimizing the damage.

Since your customers may not be as understanding as you’d like them to be, it makes sense to protect yourself by investing in cyber insurance.

4.     Network Business Interruption

Modern businesses tend to rely on advanced technology to remain operational. In the event of an incident, some form of interruption is imminent.

For instance, if your provider’s network goes down, you can’t recover expenses sustained as a result and lose profits as well. Think of system failures, unstable system patches, security failures, human error, and more.

5.     Privacy Liability

When a breach happens, it can expose the sensitive data of your customers that lies on your servers. As a result, your business could be held liable.

So if it comes to a class-action lawsuit, there will be legal fees to cover. Regulatory fines resulting from the likes of GDPR are another threat. It could bring your company to its knees. Without insurance, you could find yourself closing down the doors for good.

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What is Left Out?

As comprehensive as it may be, do bear in mind that cyber insurance does not cover everything. For instance, losing value due to theft is not part of it. Nor does it cover the loss of potential profits in the future. It also doesn’t allow you to improve your existing internal technology systems or amass the funds to make security upgrades.

The Advantages of Cyber Insurance

To sum it up, these are pros of cyber insurance:

• Improved standard of security. The work done by insurance companies could improve and redefine security standards.
• Financial incentives to improve IT security. Better insurance coverage at lower rates could become a possibility.
• Greater executive awareness. Recognizing the scope of cyber risks and the severity of their consequences could pave the way for much-needed security initiatives.

The Disadvantages of Cyber Insurance

As with all things insurance-related, there are also some downsides to it:

• Smaller companies could stay behind. If a business operates with a more modest budget, they may not have the funds necessary for insurance. Compared to large corporations, they would have a disadvantage as a result.
• Increased burden of legislation. Lawmakers are not IT or cybersecurity experts. Their moves may not be accurate in addressing the risks involved.
• A false sense of security. After insuring themselves, businesses may not put in enough effort into developing policies and investing in their security.

If a business operates with a more modest budget, they may not have the funds necessary for insurance.

What are The Additional Measures to Take?

As you can see, there is no one-size-fits-all solution. You need to protect your business on multiple fronts.

• Update often. As soon as developers discover a program or OS vulnerability, they rush to release a security update for it. But if you don’t take the time to install it, it may not help you in time.
• Invest in cybersecurity solutions. For starters, you should protect your systems against malware infection by using antivirus software. But there are more solutions to aid you, including firewalls, VPNs, monitoring programs, and so on.
• Educate yourself and your employees on how to protect your business against digital threats. For instance, by knowing what a VPN is and how to use it, employees can protect sensitive data from being intercepted by hackers.

Conclusion

Cyber insurance remains an important consideration for every executive. The more your company depends on technology, the greater is its role. Once again, assessing the risks lies on your shoulders. Depending on the nature of your business, you stand to gain more than there is to lose.

Automation has played a critical role in the advancement of financial technology, with tried and tested processes being replaced with modern, more efficient software. With all this innovation breathing life into businesses of all sizes and industries, the question may be asked about what role an accountant plays in the age of automation. Let’s discuss what the changes are, who they impact, and what an accountant's role looks like in the modern era. 

What financial automation have we seen in the last few years?

Not surprisingly, technology has had a significant impact on accounting businesses, departments and professionals, many of which implicate an accountants role as we know it. We have seen changes to employee tax and wages occurred globally, allowing employees to report on this data more easily and more frequently, with employees accessing their own earning statements centrally and independently. These changes have led to a need for more sophisticated software, many of which feature other functions that improve efficiencies through automation. Businesses can now comply with new legislation and complete payroll responsibilities without tasking a greater number of employees to that task. Australia has even coined this legislation change ‘single touch payroll software’, capturing the ease of the automation process. Accountants no longer need to conduct manual tasks, with automation offering expense tracking, payroll and invoicing. 

Bots are another automation that is rolling out to industries beyond just eCommerce, with bots able to capture and respond to a range of enquiries, allowing accountants to not be hamstrung to administrative requests. This communication method can be built into a business’ website or social media pages, but won’t be relevant for all business sizes. Outsourced accounting and payroll services are another automation that allows businesses to hand their financial responsibilities to a third party, contracting rather than employing professionals. 

Accountants no longer need to conduct manual tasks, with automation offering expense tracking, payroll and invoicing. 

What are the benefits of automated accounting processes?

There is a misconception that enhanced accounting services will nullify the critical element an accountant plays within a business, but this is not the case at all. These automated processes simply make operations more efficient, often adding structure and simpler frameworks where there were none. Automation also assures a certain level of accuracy that can’t always be achieved manually, and this is a significant consideration when it’s concerning payroll and business revenue. 

It’s not only accountants that stand to benefit from automation, business owners are also attracted to this option. Accounting automation can reduce or manage a department/business’ headcount, and taking these tasks offsite means that employers don’t need to factor in the physical space nor the employee benefits that come with employing another accountant. Less time in the details means your accountant can be more strategic with their time, which is why outsourced options have been wildly successful.

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What’s the future for accountants with automation continuing to innovate the industry?

Despite the automation that appears to be replacing certain accounting functions, the future is still bright for accounting professionals operating in organisations of all sizes. Automation innovations simply allow existing accountants to fine-tune their practice, implementing and optimising strategies with the mundane tasks taken care of. Whether accountants choose to implement software, outsource to a team or leverage reactive bots, one or all of these automation options can harness a greater output and overall performance of your business.

Automation is not something to be feared, as embracing its benefits can propel your business forward. Take a step back and assess what the growth plans are for your business, and explore what functions can be tightened in your financial sector. If there is an opportunity to enhance productivity and support your growth plans, trial some of these functions that are working effectively for those early adopters.

Here Gareth Jones, Chief Information Officer at Fraedom, explains how banks can move to the cloud in stages, picking the most pressing workloads and moving them to the cloud incrementally, and adopt a hybrid technology infrastructure, touching on the inherent benefits therein.

Banks have traditionally been reliant on legacy systems, however, now almost half (46%) of bankers see these legacy systems as the biggest barriers to the growth of commercial banks. Technology is becoming an integral part of the banking industry and the pressure is on for these institutions to innovate and adopt the latest capabilities. Therefore, banks must overcome the reluctance to make changes to their IT infrastructure.

As new challenger banks increasingly launch directly to the cloud and consumers demand the latest technologies, it’s time for traditional banks to consider migrating to the cloud. Here’s how they can do this and the potential benefits they can expect to experience:

An incremental move to the cloud

Fortunately, banks needn’t see the adoption of the cloud as an all or nothing venture. Instead, it is possible to migrate in stages. Vitally, banks must acknowledge that doing a ‘lift and shift’ will offer limited benefit to their organisation or their customers as their workloads won’t be cloud-ready or scalable. Banks should see the move to the cloud as a gradual transition and start by migrating the most pressing workloads and services to the cloud in a controlled manner. This will ensure workloads are moved across securely, nothing is lost in the process and that customers aren’t impacted by significant periods of downtime. This will result in the adoption of hybrid technology infrastructure, at least in the short-term, which research by IBM found that 87% of outperforming banks are using to reduce operational costs. This approach is favoured by more than two-thirds of global banking executives surveyed by Accenture who intend to operate in a “bimodal” way — maintaining key legacy systems and those not easily replicated on cloud platforms, while transferring other systems and adding new applications in the cloud.

Fortunately, banks needn’t see the adoption of the cloud as an all or nothing venture. Instead, it is possible to migrate in stages.

As many banks are reliant on legacy systems, moving to the cloud, even as part of a gradual transition, can seem daunting. Therefore, seeking assistance from third-party fintechs that are much more accustomed to the technology and have the experience of carrying out many cloud migrations, can help to ensure that the process is smooth and secure.

The benefits of the cloud adoption

Cost reduction

One of the most significant benefits of the cloud is its potential to help banks reduce core costs, particularly those associated with delivering new solutions, as well as overall operating costs. This is due in part to the fact it removes the cost of the upgrade cycle that comes with physical infrastructure. It also means banks no longer need on-site infrastructure management, allowing banks to focus resources on value added functions more closely aligned with their core business objectives. In the long-term, cloud adoption can help banks enhance customer satisfaction and bring products to market faster, therefore allowing them to maximise return on investment.

Scalability

A further benefit of cloud adoption is increased scalability. Currently, organisations not utilising cloud services must invest in additional hardware in order to scale. This incurs a greater impact in time and money. Adopting cloud allows banks to scale on-demand, with cloud services able to expand and contract as needed almost immediately. This provides a far better capability to manage costs in line with user and business demands.

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Agility and innovation

Legacy systems are still largely important to many banks’ daily operations, but moving to more agile systems is essential to growth and innovation. Therefore, migrating to the cloud helps banks overcome this issue, whilst also offering additional cost-savings.

With so many benefits, traditional banks can’t afford to ignore cloud technology any longer. While legacy systems may have once played an integral role in their business, these systems now widely act as inhibitors. A gradual transition to the cloud will enable increased operational efficiencies, while also providing the infrastructure through which they can begin to foster the same level of innovation as their cloud-native competitors. This will allow traditional banks to not only keep up with the changing technological landscape, but the ability to develop more innovative products and services faster will also help them to answer customer demands and compete with challenger banks.