Here Kevin Wilbur, Senior Vice President of AP Automation at Tungsten discusses with Finance Monthly the practicalities of implementing new technologies in supply chains.

Trust in business is more vital than ever today. At a very basic level, it underpins what is required to agree employment contracts, retain customers and grow a business. However, when it comes to monetary transactions for the exchange of goods and services, trust is even more crucial.

Unfortunately, even when payment terms have been set and assets exchanged, trust can often be undermined. A delayed payment from a buyer is something many suppliers will have experienced, resulting in unnecessary stress and a loss of confidence in the trading relationship. Equally, supplier challenges, where data security is compromised or orders are not fulfilled, can cause headaches for buyers.

Certain sectors face greater supplier risk than others, making it even more important to ensure they have a robust supply chain. Finance businesses in particular hold a vast amount of sensitive data, so the ramifications of poor supplier service can be significant.

Widespread supply chain failures

Worryingly, our research shows that 84% of businesses have suffered from supply chain failures such as these. The biggest supplier risks were found to be security (ensuring data security and privacy standards) and information risk (accuracy, timeliness, and security of information exchanged with suppliers).

These risks or failures can have a huge financial impact, with 30% of firms reporting a loss in revenue or business partners. In addition, 22% of buyers said they faced higher insurance premiums, damaged reputation, a loss of customer trust, and/or significant legal and regulatory fines as a consequence of supply chain failures.

Many of these breakdowns in the supply chain arise from poor supplier management processes. Regrettably suppliers are often managed on an ad hoc basis with no consistency and very little attempt made to track and monitor spend. In many supply chains the sheer volume of suppliers involved means that it can be hard to stay on top of each relationship, and with the added pressures of cyber fraud, siloed customer data, insufficient cash for investment, and legacy technology systems, there are often layers of overlapping bureaucracy and confusion.

Managing and monitoring

To manage suppliers effectively and efficiently, supplier-related processes should be measured. From there buyers are able to optimise processes, which in turn enables automation. However, only 23% of buyers in our study achieved this level of maturity, and just 12% had optimised processes.

Buyers who describe themselves as having good supplier relationships have taken the time to map supplier activity, to establish a clear onboarding process, and to define a strategy that not only makes supplier management a priority, but also establishes responsibility between themselves and the suppliers they work with. Optimised firms ensure compliance with regulations and corporate social responsibility (CSR) standards by constantly monitoring their suppliers.

Low process maturity, revealed in more than a third of businesses (35%), can lead to poor sourcing decisions, because buyers lack high-quality, up-to-date information about suppliers’ past performance when awarding new contracts.

Technology that transforms

The research, which was conducted by Forrester Consulting on behalf of Tungsten Network, concludes that for businesses to thrive, they need to be properly managed using modern tools and processes that establish accountability, reduce uncertainty, and foster trust. This in turn enables the exploration of mutual growth opportunities for both buyers and suppliers.

Increasingly sophisticated technology exists that can genuinely strengthen supply chain relationships. For example, through a secure e-invoicing platform such as Tungsten Network, buyers and suppliers can have clear visibility on whether an invoice has been received and approved, and when payment is due. This means businesses have a single source of truth for invoice status information, which is monitored in real time. It can also help remove manual processes around invoice validation and compliance. This is a good example of where technology is enabling growth across the board, through developing trust in business relationships.

Often networks such as this provide value-added services that can serve as a source of competitive advantage. For example, through analysis of the real-time data generated from end-to-end e-invoicing capabilities, decision makers can more effectively predict demand and manage disruptions. Buyers and suppliers of all sizes can also find each other more easily and can build capabilities that benefit them both. They can also experiment with managing cash in new ways, such as by negotiating more flexible payment options like dynamic discounting and invoice financing.

The winners in the digital age will be the companies that best use technology to win, serve, and retain customers, and to enhance relationships throughout the supply chain. Technology can enable buyers and suppliers to more effectively use their data and manage their interactions, removing friction from the supply chain and strengthening trust, to the mutual benefit of all.

HR leaders in UK financial services firms are finding themselves caught between a rock and a hard place. Here, Steve Girdler, Managing Director EMEA at HireRight, looks at the future of FS firms in the UK and discusses the issue of skill shortage and migration of business.

On the one hand, the financial services (FS) sector is heavily reliant on the skills, diverse experience and local knowledge of the European workers who help make London a thriving international financial centre – a talent pool that’s at serious risk of drying up post-Brexit.

On the other hand, London’s historic advantages, which extend beyond its access to talent – factors like specialised infrastructure and even its geographical position between mainland Europe and the US – make it very hard for firms to conceive of a finance hub anywhere else in the continent that could rival the City, at least in the short term.

It is now a delicate balancing act, as firms look at hedging their bets to safeguard themselves against the potential risks of leaving the EU, while also keeping one foot firmly in the UK. With the challenge very much at the feet of HR departments, the approach taken over the months ahead will not only help to define what the future looks like but also determine how successfully and profitably their firms navigate through it.

Navigating the storm

Recent research from Deloitte shows that 47% of highly skilled UK workers – the lifeblood of the financial sector in London – are planning to quit the UK in the wake of Brexit. Inevitably, being highly skilled also means being highly sought after and these workers are not short of options if their future in the UK exceeds their appetite for risk and uncertainty.

But amid the storm clouds gathering over the City, there remain a few rays of sunshine. A recent study we conducted among over 2,500 HR leads around the world found that in the UK’s financial services sector, optimism remains. Almost two thirds (63%) of HR teams within UK FS firms expect their workforce to grow in the coming year. In contrast, only 4% are even discussing stopping recruitment in the UK in reaction to Brexit.

How not to gamble on the future

However, hiring in the UK will inevitably become more complicated as the government starts to dig into the specifics around which regulations to hold onto and which to scrap. This will be needed to keep us suitably in line with best practice on the continent, and identify what is likely to be tweaked to give the UK greater global appeal. These aren’t questions that it’s wise or even safe to try to assume answers to, because getting it wrong could prove costly.

Instead, a lot of companies are taking a middle approach, by trying to walk the line between cost efficiencies and covering all eventualities. A good example is the increase in UK FS giants opening up satellite units with head office potential in places like Frankfurt. In the current regulatory environment, it can take as long as two years to get an office fully functional in some European markets, so waiting to see what happens isn’t an option. If the UK becomes less hospitable, the escape route has been readied. If not, then the loss is limited to the short term maintenance of an additional office. Expensive, but not a disaster.

For HR teams the challenge is even more complicated. Reining in hiring of European workers may seem like the safe option to offset risk, but doing so en masse would bottom out the jobs market and speed up the exit of those talented foreign nationals. On the other hand, leaving themselves too reliant on the skills of non-UK workers comes with its own risks, especially if any form of “hard Brexit” becomes a reality.

No margin for error

One thing that’s immediately apparent is that any hires that are made need to be as risk free as possible, which means two things: trusting a candidate’s credentials – their ability to do the job honestly, fairly and diligently – and remaining compliant whatever the situation.

This calls for a high level of due diligence to be performed on all significant hires, or indeed anyone with access to sensitive information. Whichever way the regulation goes, backtracking from the recent Senior Managers Regime, where all senior staff must be thoroughly vetted, seems unlikely.

However, compliance with the FCA is only part of the picture. With budgets stretched by policies trying to offset risk, and growth restrained by uncertainty, a costly reputational scandal becomes an even greater concern, even if it’s not accompanied by a hefty fine.

A fork in the road

It’s going to be difficult for firms to know what the best course of action is with so much uncertainty ahead and no obvious stability on the radar. To come out the other side in the best shape, they need to forecast ahead to the regulatory landscape over the next few years.

But whether the UK develops its own unique position as a regulatory pioneer – as has been the case within the EU – or whether it aims to make itself more competitive by relaxing regulations, maintaining security precautions around the individuals at the top is one thing that’s almost guaranteed. Removing these measures would directly make banks more susceptible to malpractice, scandal and fraud, at a time when the UK is more worried than ever about its international reputation as a “strong and stable” finance hub.

ZEDRA is an independent global specialist in Trust, Corporate and Fund services.

Based in offices across eleven key jurisdictions, the company’s 370–strong team of industry experts is dedicated to creating and delivering bespoke solutions for a diverse client base including high-net-worth individuals and their families, international corporations, institutional investors and entrepreneurs.

Norson Harris is a Director at ZEDRA Trust Company in Jersey. In addition to his duties as a Director of the Company, Norson is responsible for looking after the interest of many of the families the firm has as clients, principally in Asia. We had the privilege of speaking to Norson, who told us in more detail about his role and achievements, the hottest trends within Jersey’s fiduciary services sector, ZEDRA’s approach to its clients and what makes the company a game changer.

What are the current hottest topics discussed in the fiduciary services sector?

The industry is looking in detail at the implications of the Common Reporting Standards (CRS) and the potential consequences of the cross-border reporting this will involve. This includes the obvious consequences such as tax transparency, but for some clients, this also includes perceived and apparent threats to security and confidentiality.

In the immediate future, the industry is also digesting the changes to the UK Resident Non- Domiciled Regime and how this impacts on residence and significantly, property ownership in the UK.

What are the most commonly sought after fiduciary services in Jersey?

Traditionally, this has been companies and trusts, but increasingly we are seeing the use of more complex structures such as Private Trust Companies. There is increasing interest in Jersey Foundations and amongst some of the largest families we represent at ZEDRA, we are looking at the use of close ended investment funds to hold their diverse assets.

A lot of focus is given to the existence of private trusts in the Islands, but often overlooked is the significance of the Island to the UK economy and the corporate services provided by companies such as ZEDRA. Jersey Finance, the Island’s promotional agency reports, “Jersey is a ‘jurisdiction of choice’ for listing holding companies on the Main Market of the London Stock Exchange. There are a number of ‘high profile’ FTSE listed Jersey companies and Jersey also has the greatest number of FTSE 100 companies registered outside the UK”. Jersey supports an estimated 250,000 British jobs and is a conduit for almost £500 billion of foreign investment into the country, according to a report into the jurisdiction’s value to the United Kingdom.

What are the primary risks and sensitive considerations you raise with your clients?

Confidentiality remains a sensitive issue. We have all experienced the ever greater need to disclose personal information to comply with International Regulatory Standards, but for some families this is a highly charged subject. It is recognised that there are needs to monitor and identify the financial relationships and funds held in the Island and within a jurisdiction such as Jersey with a politically neutral establishment and independent judiciary; this does not present a concern. However, where this information is then shared under international protocols, such as CRS, there are genuine concerns for some families as to what purpose this shared information is to be used. This is not a taxation concern as all companies in the fiduciary and wider finance industry recognise their responsibilities in this regard. What is of more concern is whether the information will be used to exploit the family in some way, or raise personal security issues, or be used for political advantage?

With over 25 years of experience in the international financial services industry, you are recognised as a fiduciary expert - how are you developing new strategies and ways to help clients?

It is funny, the longer I am in the industry, I realise that the same strategies I used at the very outset of my career remain the same. Personal, discrete, attentive service remains the driver to everything we do. The structuring may change over time, but more often than not, we are asked the same things; how to protect the wealth and interests of the families we represent. When I started my career, we were more concerned with family protection as the tax code was far less defined and my average client would invariably have been a ‘Landed Family’ in the UK or an industrialist, as they would be more likely known then. The industry over time became more focussed on the tax affairs of clients and in line with the political temperature and regulatory landscape in recent years, the fiduciary sector has again refocussed and there has been a return to more traditional structuring and less emphasis on tax structuring. Whilst my career has gone full circle and I still work with entrepreneurs, the Landed Families have been replaced by some of the world’s wealthiest international families.

You joined ZEDRA a year ago - what were your goals in driving change within the company?

I was actually approached the previous year by Barclays Private Bank & Trust Company to help with the positioning of the sale of the Barclays Offshore Fiduciary Group, which ultimately became ZEDRA. My goal then, which continues today, is to ensure the families we look after are supported in the transition from being owned by a global banking giant to an independent fiduciary group, whilst at the same time launching the ZEDRA identity.

This also required providing support and direction to the staff of the Jersey Company and the wider Group as we began not only the rebranding and launch of ZEDRA but helping to define and develop the new culture of the Company.

How would you evaluate your role and its impact over the last year or so?

I suspect my role individually has been quite minor, but I have been supported by an incredible team of industry practitioners and some very creative people. At the beginning of 2016, no one knew the name ZEDRA, but over the last 12 months, the global recognition of the brand and what it represents, has been quite remarkable. We are seeing an enormous amount of interest in the work we do and we are at the moment receiving a lot of attention from industry advisors looking to build relationships with ZERDA.

Regrettably, my global impact has been less complimentary as I believe I have travelled some 250,000 miles in the last two years.

What further goals are you currently working towards with the company and do you have a particular vision for the future of its services?

ZEDRA continues to expand both in our jurisdictional reach, but also in the number of staff globally that we now employ.  This allows the Group to develop its brand identity but also its corporate culture, all of which is very exciting. ZEDRA’s credo as a group is ‘Do More. Achieve More.’ and our goal is to provide those services that our families and clients need from us to support their own ambitions. As a consequence, we have deliberately told the teams at ZEDRA that we are happy to explore and consider all sensible prospects and business enquiries, thus creating an intuitive and flexible environment for clients from all around the world and in all sectors.

What challenges would you say you and the firm encounter on a regular basis? How are these resolved?

As with any launch, especially where a number of companies are brought together, trying to develop a corporate culture is critically important. It is essential to communicate with all employees as to what is happening and what the future looks like from a corporate perspective. In all such scenarios, there are early adopters and other members of the company who will be a little more reluctant to embrace the change. This is more so when one considers that for some of the staff at ZEDRA, their entire employment history may have been with Barclays previously.

Staff recruitment is always difficult, especially in the offshore world, but from discussions with a number of the recruitment agencies we employ, we are seeing enormous interest from people wishing to work for ZEDRA. We are doing something exciting and we strive to be the ‘employer of choice’.

What would you say are the company’s top three priorities towards its clients?

Understanding our client’s ambitions and concerns, developing close personal relationships with them and acting professionally and with integrity in everything we do.

What has been your biggest professional reward so far? And how will this help you achieve further for your clients in future?

I think being recognised by my peer group in the industry has been remarkably rewarding. I have been very fortunate to have received a number of awards over the years, but I recognise that these have been as a result of close collaboration with my colleagues and staff without whom it would have been a lot less interesting and rewarding. An exciting part of my role is to ‘pass the baton’ to the next generation of practitioners  who will continue to support me in my relationship with my clients, but who in the longer term (I am not quite done yet) will go on to lead their own relationships.

What lies on the horizon for the firm in 2017, and what big changes do you expect in the coming year?

ZEDRA will continue to consolidate our existing business within the Group and grow the offices to support our clients’ needs. We will also look to further jurisdictions to add to our global offering to ensure we meet those very exacting standards we set for ourselves and to meet the expectations of our clients.

Is there anything else you would like to add?

It may seem trite, but it really is a team effort to build and grow a diverse financial services Group like ZEDRA. We have been enormously fortunate to have the support of the Sarikhani and Nielsen families as our new owners. The massive contribution from all of the staff across the Group in this first year has been key in the success of ZEDRA but we must also recognise the patience and loyalty of our clients, without whom, it would not have been possible.

On the importance of technology in the workplace, Finance Monthly hears from Gary Turner, UK Managing Director and Co-Founder at Xero.

Small business in the UK is booming, with 2016 accommodating the birth of 500,000 new businesses across the country. The entrepreneurial spirit in the UK is defiant in the face of an uncertain 2017, an attitude I am wholeheartedly impressed by. What makes each of these 500,000 businesses unique is that, with their start, a culture is born. This is naturally built around the entrepreneur’s style and impacts every aspect of the day-to-day work.

The development of culture is often overlooked, and more new business owners should take into consideration how they can mould a culture that will benefit both the company and the employees themselves. That’s why I believe a commonality amongst SMB owners should be to teach and offer opportunities for their employees to become fluent in technology. The business world is becoming increasingly digitalised allowing for a more efficient work process, as well as offering employees the flexibility to work online from anywhere. As such, I believe today and not tomorrow is the time to get the culture at your office to become tech savvy. Here’s why:

1. Future-proofing your workers

First and foremost, the cloud is how almost all businesses will be working within the next 5 years. If your business is yet to be on the cloud, I recommend you search online or speak with peers on what software best suits your business needs, from managing payroll and employee time to invoices and balance sheets, cloud programmes are making the process incredibly simple. Getting your employees in the cloud will teach them skills that will pay dividends as they rise through the ranks in your business, and at which point they will become aware of cloud technology trends themselves and be making suggestions on moving the company forward.

2. Number savvy will benefit you all

Alongside familiarising your staff with the cloud, you will need to teach them how to read and analyse the numbers associated with your business. Employees will have access to the data and be able to recognise the performance of the company, identify shortcomings and where to optimise potential as the software will offer insights. This in turn, will get your employees showing initiative – a skill that is invaluable and difficult to teach.

3. Builds trust

Showing that you’re actively investing in your employees will help them believe that you’re there to help them improve and further their careers. A distant relationship between employer and employee will lead to a low staff retention rate and damage your company’s reputation for potential recruits. It also shows that you trust them with sensitive company data and, referring to my earlier point, will give them the opportunity to learn what makes a business tick and how they can act on their initiative to make suggestions based on the data provided.

4. A shared level of understanding

It takes a unique personality to be an entrepreneur, you allow the pressure to rest on your shoulders and have careers dependent on your success. However, allowing your workers to operate on the cloud and work with you, it provides the opportunity for more opinions and insight. Sharing insight can offer perspective; this can lead to great success.

Cloud is now the mainstream, so create a culture where operating on the cloud becomes mainstream too.

A third of Brits believe their partner is lying to them about how much money they spend. According to a survey conducted by Paymentsense on 2000 people in a relationship in the UK, people aren’t always honest to their partners about their spending habits.

Shockingly, 40% of women admit to lying to their partner about what they spend their money on, and how much they spend. However, it’s not always women that tell little white lies, 38% of men also admit to lying about money.

What the different genders lie about are quite different – 1 in 10 women lie about how much they spend on food and 23% of men have lied about how much they spend on alcohol. Throughout their relationship, men estimate they have lied about spending £73 on gambling and 1 in 20 men have admitted they have lied about spending money on strippers!

Women tend to be more trusting with their finances than men- almost a third of women admit their partner knows their chip and pin number and 43% say they trust their partner with their credit card. However, women are a bit sneakier than men. 16% of women admit they lie and say things were in sale so they can say purchases were cheaper than they were.

Does being in a relationship for longer mean you lie more or less?

Those who have been in a relationship for 4-7 years tend to lie to their partners about spending the most, and those who have been together 7 years+ lie the least. Quite worryingly, almost a third of people who have been in a relationship less than a year admit their partner knows their chip and pin, and 45% admit they trust their partner with their credit card. Only 46% of married people trust their partners with their credit cards.

The younger we are the more we lie about what we save, whether we save more than we say or less than we say – 30% of 18-24 year olds have lied about what they save. This age group are also the biggest fibbers when it comes to spending, 51% of this age group admit to lying to their partner. Almost 1 in 10 18-24 year olds admit to lying to their partner about how much they have spent on drugs, and 12% of 35-44 year olds have lied about how much they spend on nights out.

(Source: Paymentsense)