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This refers to a banking practice that gives third-party financial service providers open access to consumer banking, transactions and other financial information via application programming interfaces (APIs). The sharing of financial information has enabled customers to access user-friendly interfaces and make faster, easier and more secure payments.

It’s a modern, straightforward and highly effective approach, so it’s no surprise that open banking is so popular, particularly in light of COVID-19 which forced the industry to digitise even faster than originally expected. In the UK, for example, there are currently three million open banking users — three times more than in 2020.

One area of the finance sector that looks set to reap significant benefits from open banking is cross-border payments. Due to the various time zones, intermediaries and legal requirements involved in a transaction, sending money internationally has always been somewhat challenging. However, open banking can go some way in solving the problems financial institutions, businesses and consumers have all traditionally faced, ensuring that cross-border payment services are cheaper, faster and better for all parties involved. Stan Cole, Head of Financial Institutions at Inpay, delves into the topic.

APIs and cross-border payments

Open banking enables third-party financial services providers to access data from banks and other financial institutions, with APIs offering access to account information services (AIS) and payment initiation services (PIS), allowing apps to directly interact with bank accounts. Although APIs take a great deal of effort to design and implement, they are time-saving and cost-effective in the long term. This is because with these solutions, financial institutions don’t need to create custom solutions for every FinTech they intend to integrate with. APIs also allow new financial services to be developed more quickly around these interfaces.

So, what does this have to do with cross-border payments? Well, in our globalised world, sending money abroad is commonplace, whether that’s due to trade and e-commerce, international investments, global supply chains, or the sending of money via international remittances. And according to the Bank of England, cross-border flows are expected to grow significantly in the coming years, from $150 trillion in 2017 to an estimated $250 billion by 2027. As a result, banks, financial institutions and other global businesses must be able to facilitate these transactions with ease and efficiency if they want to attract and retain their customers. Partnering with FinTechs using APIs can play a significant role in achieving this.

The benefits of open banking for cross-border payments

Cost & speed

Open banking enables senders and recipients to bypass the intermediaries that would otherwise be involved in facilitating cross-border transactions. For instance, direct access to customers’ bank accounts means that a business or financial institution could verify their identity and creditworthiness without the help of a third party. This results in reduced fees and quicker services. Time and money can also be saved because FinTechs using open banking will provide an efficient alternative to the slow, expensive legacy systems currently in use.

Ease

Open banking can make it considerably easier to make cross-border payments. APIs can be designed to provide a streamlined, responsive user interface and thereby provide an excellent customer experience. In addition, open banking makes know-your-customer (eKYC) processes much simpler as they can be entirely digitised, gaining the required information in seconds rather than days.

Safety

As well as improving KYC processes, open banking allows banks, financial institutions and businesses to reduce the risks associated with cross-border payments. They can immediately check that customers are able to afford the transaction, for example, and set precise limits. FinTechs using APIs are also likely to have stronger cybersecurity measures in place compared to dated legacy systems.

Competition

Open banking means financial institutions and businesses can stay flexible and meet evolving customer demands, with APIs allowing them to offer exceptional customer experiences. As a result, there is increased competition, encouraging innovation and giving customers more choice over the companies and services they use.

Open banking and cross-border payments today

Open banking is already making waves in the cross-border payments sphere, with many companies already responding to the clear benefits APIs can bring. Some exciting services to have emerged include API-driven live FX pricing and API-based currency hedging automation, while many big names in the financial services sector (including Visa, Mastercard and Western Union) have teamed up with forward-thinking FinTechs in order to use open banking to improve their cross-border payment services.

The most exciting part of this is that open banking is still in its relative infancy and is continuing to evolve. With new tools regularly launching to accommodate various markets and purposes, financial institutions and businesses can take advantage of this phenomenon to provide the best possible customer experiences to anybody that needs to make a cross-border transaction. However, to do so, they must find the right FinTechs to support them as they strive to bring their financial services into the present day.

These are just three innovative examples of accessible designing that led to wider adoption, beyond the intended user subgroup. This very theme underpinned the keynote speech during this year’s Diversity Project’s Accessibility webinar on Global Accessibility Day and comes up, recurringly, in research, about improved experiences for diverse groups when we get the design process right for people with a disability.

Change and Transformation

Digital transformation in the investment and savings sector is recognised as being behind; attributed to a culture of traditionalism and inertia, due to a lack of industry diversity.  However, asset and wealth management firms have historically serviced very traditional investor and adviser communities – with their own inertia and habitual behaviours. Technology and regulation also play their part; legacy operating systems lack interoperability and agility, while mandatory post-MIFID changes have hindered more creative-led initiatives. Looking ahead, is change on the horizon as we navigate through a global pandemic and uncertain future?

In 2020, two significant changes brought with them new ways of thinking; mounting pressure on firms to commit to ESG policies and an acceleration of online investors. According to a US study, companies committing to accessible inclusion under their ESG frameworks achieved a 28% higher return, while investment platforms reported significant growth, particularly from home-based working millennials, during the pandemic and periods of market price swing – bringing down the average investor age. Either side of this demographic is a next-generation cohort entering the workforce under auto-enrolment pension schemes, within an ageing population. By 2037, 1 in 4 of us, in the UK, are expected to be aged 65 and over.

Intergenerational needs

This intergenerational spread is transforming and reshaping our population. Future digital engagement requires a coexistent, yet differentiated, model. With more conditions, including Autism Spectrum Disorder (ASD) and Dyslexia, being correctly identified, and diagnosed, demand for accessibility in younger generations is increasing.  Nearly 1 in 5 people live with a disability, with a household spending and saving power of £274 billion.

As our population’s median age shifts towards later years, inclusive design practice must address the contextual and everchanging needs of vulnerable savers and those experiencing ageing functional limitations. As older investors live longer and move through their later-life stages, many will be affected by undiagnosed conditions: visual and hearing impairment, deterioration of fine motor skills and cognitive decline. By 2050, visual impairment in the UK is estimated to affect 4.1 million people, currently 2.1 million. Those aged 55 to 64-years old today, will move into the older age category over the next ten years; many already digitally connected and engaged across social media platforms.  This will shift much of our future focus towards digital experience and retention of older investors.

Practical approaches

Despite legislation and guidelines designed to support protected characteristics, many users remain affected by accessibility challenges. Digital inclusion goes beyond a checklist and disclosure statement. Primarily, it’s about user interaction. Four core experiences that firms should empathetically build into their designs are:

Accessible designing involves hours of work and effort to adapt formats and channels, across language jurisdictions. Integrating universal design principles from the beginning of a project is less costly and complicated than attempting to adapt post-live products, with a blend of human and artificial intelligence, optimising the investor experience. Prototypes across all media – chatbots, websites, apps, video, print and email – should contain inclusive functionality; while wider test groups will help to capture real-life user experiences, without biased or pre-determined outcomes.

Design concepts should be as much about connecting customer journeys, as they are about making individual touchpoints accessible. A single Customer Communication Management (CCM) platform, integrating multiple data sources, offers greater personalised experiences and, therefore, a higher opportunity for inclusion - from incoming-to-outgoing messages, for both digital and traditional media. While documents should be adaptable to the screen size of any device, the FCA’s newly proposed Consumer Duty principles question how digestible lengthy T&Cs are via digital devices.

The most effective design solutions can still fail to address non-physical barriers. Online mistrust and investment complexity can lead to financial exclusion. Of 3.8 million cases of UK fraud, 15% were committed via digital channels, as opposed to 1%  through postal correspondence.  Developing secure and easy-to-use authentication, email encryption and signposting safety techniques can improve security for retail investors. Language remediation and localised translation can powerfully enhance an investor’s understanding and increase the digestion of information through a simplified or converted format.  This includes the use of plain language, avoiding jargon and reducing heavily formatted content - across interactive, visual and auditory channels for communications including, Key Investor Documents (KIDs) and bereavement instructions.

Conclusion

Inclusive marketing and communications are about creating the right interactions at the optimal time, under an investor-centric approach. Overcoming industry barriers built around institutional practices and regulatory restrictions can lead to adaptive cultural change and harness innovation, as wider technology evolves and improves accessible functionality. Ultimately, this combination will create stronger outcomes across the diverse needs of everyday savers.

John Dovey, Paragon Customer Communications

John Dovey is Client Relationship Director – Asset Wealth & Pensions at Paragon Customer Communications, a leading provider of end-to-end omnichannel services for regulatory and transactional communication solutions for some of the world’s foremost financial services companies.

He has worked closely in the financial services industry for almost two decades, driving customer engagement and outcomes in communication and digital strategy. During that time he has worked with, and supported, various organisations and stakeholders across the industry to deliver outstanding experiences.

With a range of experience and an extensive knowledge in both client and vendor roles within financial services, John is equipped with a deep understanding of industry challenges and regulatory requirements, including changing consumer trends in the market.

 

Africa

The vision of Satoshi Nakamoto for Bitcoin to promote financial inclusivity has more likely been met considering the boom of the crypto market in third world countries such as those in Africa. It is noteworthy that the daddy of all cryptocurrencies was created so that there would be a chance for outsiders to gain access to an informal financial system with a digital platform. No wonder it has opened investment opportunities on trading platforms such as the BitiQ website for the African people renowned for using cryptocurrencies.

A report has recently claimed that Africa has become the global leader in terms of cryptocurrency adoption. Despite attempts of the government to restrict operations by mandating banking institutions to cut ties with crypto exchanges, the market was able to survive with a shift into a platform that no longer needs local banks as intermediaries. And the crypto market has flourished since then, away from state regulations. It appears that the free market is working at the advantage of African investors. 

East Asia

While Africa is still in the phase of adopting cryptocurrencies, perhaps it would be fair to say that Asia has already been immersed in this market. A study conducted last year claimed that over 30% of crypto transactions took place in East Asia, which includes China, Japan and South Korea. The trend is expected to carry on as countries in other parts of Asia are being drawn into the market. It would buffer the impact of China now shutting its doors to foreign cryptocurrencies.

Moreover, Japan has been among the most progressive countries in Asia to embrace opportunities brought about by crypto trading. It has managed to strengthen laws to protect the local crypto market from cybercrimes in the likes of hacking and money laundering. There has also been a regulation of crypto exchanges through documentary requirements that would prove legitimacy. More likely, this will be an additional layer of protection taken as a preventive measure to deter cyber crypto heists. 

Latin America 

It can be recalled that the founder of this cryptocurrency originally intended the use of virtual money as a medium of exchange. Following the historic move of El Salvador declaring Bitcoin as an official legal tender in the country, there is so much expectation hanging over its shoulders. The government anticipates economic growth brought about by overseas remittances in the form of Bitcoin. Besides, it is a practical approach for a developing country with people devoid of access to the financial system.  

Paraguay is set to follow in the footsteps of its neighbour with the intention recently made known by one of its lawmakers. A bill has been submitted in Congress to legitimise the use of Bitcoin as an official legal tender. The legislation intends to bank on the financial opportunities drawn by the crypto market. Like El Salvador, the nation is poised to become the next crypto hub in the region. 

United States of America

America has been the ultimate hub of cryptocurrencies, with Bitcoin finding its roots in San Diego, California.  From paying for some Papa John’s pizza, there is no doubt that the father of all cryptocurrencies has come a long way. It is considered the market leader after gaining a huge number of followers still on board. The United States is now facing challenges on how to best regulate the crypto market to protect investors. As the SEC Chairperson has put it, he is neutral in terms of technology but not in terms of consumer protection. 

Consequently, the Chairman of the Federal Reserve has already expressed his intention to promote crypto regulations. He is advocating for the possibility of digital banknotes and stable coins to compete with cryptocurrencies. These virtual currencies would be backed by the government’s financial system to draw the interest of investors, given the relatively low risks. 

Conclusion

This is how the crypto market has taken the world one region after another all through the years from the United States, Latin America, East Asia, and Africa.

According to Bloomberg's Billionaires Index, in 2018, Jeff Bezos, Founder and CEO of Amazon, took up the throne as richest man alive, having crossed the $150 billion mark and replacing Bill Gates, Co-Founder or Microsoft, who held the position for several years, and whose all-time high net worth was valued at just above $100 billion in 1999.

However, throughout history, there have been richer men. Yet sadly, no richer women. Taking into account inflation and the value of wealth held, Jeff Bezos actually sits much further down in the richest people ever list, with the likes of Genghis Khan and John D. Rockefeller taking precedence.

But who is truly the richest person that ever lived?

At an estimated value of $400 billion, Mansa Musa I of Mali is the richest person who ever lived. Born in 1280, Mansa Musa was ruler of the Malian empire, and acquired the most part of his wealth from the production and trade of salt and gold; more than half of the world’s supply at the time in fact.

You’ve likely never heard of this ruler, unless of course you live in a country that was heavily influenced by his rule, which would be several African countries with Muslim heritage. Still today there are mosques standing that were built on the back of Musa’s immense wealth.

Dying in 1337, Musa left his huge amount of money to his heirs, who not only squandered the best part, but failed to protect the family worth just two generations down the line, when the empire was overturned in civil war and conquered by invading foreign nations. Musa was the tenth Mansa of the Malian empire and ruled over the better part of what was previously the Ghana empire, today known as Mauritania and Mali.

His titles, surprisingly unrelated to his stacks of cash, include among others: "Emir of Melle," "Lord of the Mines of Wangara," and "Conqueror of Ghanata." According to David C. Conrad's "Empires of Medieval West Africa: Ghana, Mali, and Songhay," during his rule, Musa conquered 24 cities and their surrounding districts, amassing wealth left, right and centre. On top of this, he was the world’s biggest gold producer and distributor, as gold was a highly sought commodity at the time, and an important indication of status and affluence.

TED Ed reports that in order to fulfill one of the five pillars of Islam, Mansa Musa made a 4,000 mile pilgrimage to Mecca, and spent silly amounts of cash in doing so, as of course a Mansa as such had to travel in both style and luxury. TED Ed writer Jessica Smith says: "Not one to travel on a budget, he brought a caravan stretching as far as the eye could see.” The 60,000 strong caravan was rumoured to have included 1,000 helpers, 100 gold-packed camels, endless musicians the Mansa enjoyed, and 500 or more slaves with golden staffs.

Alongside his heritage Musa’s assets are estimated to be worth an inconceivable amount, and although historians and economists have rounded said value to around $400 billion, according to Time magazine: "There's really no way to put an accurate number on his wealth." In fact, some believe that Mansa Musa’s incredible fortune may have been slightly exaggerated by his contemporaries, and that the Rothschild Family, the most successful banking family in history, may be in fact the front runner for the richest person/persons who ever lived.

"There's really no way to put an accurate number on his wealth."

- Time Magazine

Nonetheless, this legendary ruler stands among the richest of the rich, and while today’s generations may have forgotten him, time remembers him through the many monuments, mosques and madrasas that he had built and still stand in Gao and Timbuktu, but more notably, the Sankoré University, which today is a fully staffed university with over 25,000 students and one of the largest libraries in the world at roughly 1,000,000 historical manuscripts.

Bill Gates and Jeff Bezos are names we hear daily nowadays, and names we most associate with real billionaires, but these guys aren’t much in comparison to Mansa Musa, the richest person who ever lived.

Sources:

http://time.com/money/3977798/the-10-richest-people-of-all-time-2/

https://en.wikipedia.org/wiki/List_of_wealthiest_historical_figures

https://www.celebritynetworth.com/articles/entertainment-articles/25-richest-people-lived-inflation-adjusted/

https://worldpolicy.org/2012/04/10/lessons-from-timbuktu-what-malis-manuscripts-teach-about-peace/

https://ed.ted.com/lessons/mansa-musa-one-of-the-wealthiest-people-who-ever-lived-jessica-smith#watch

https://www.amazon.com/dp/B00BT68Q2I/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1&tag=bisafetynet2-20

https://www.bloomberg.com/billionaires/

A decade after the global recession, the world’s economy is vulnerable again. Ryan Avent, our economics columnist, considers how the next recession might happen—and what governments can do about it

A decade after the global recession, the world’s economy is vulnerable again. Ryan Avent, our economics columnist, considers how the next recession might happen—and what governments can do about it.

The biggest risk to stock market investors right now is US Federal Reserve policy error - not a sharp bond market sell-off.

Tom Elliott, International Investment Strategist at deVere Group, is speaking out as financial markets have shown increasing nervousness in recent days.

Mr Elliott comments: “Investors in all assets can be forgiven for fearing a bond market sell-off, given the recent sharp increase in Treasury yields. Higher Treasury yields are likely to lift yields in other core government bond markets, increasing the risk-free rates that other assets have to compete against.

“But if the stock market rally is about to end, is it really going to be because bond investors become afraid of the growth and inflation risks of the strong US economy?

“This is, surely, not realistic given the modest inflation data.

“Fed chair, Jay Powell, has repeatedly made clear his nervousness of reading too much into the recent uptick in US wage growth, and the tightening labour market, which are often considered key determinates for inflation.

“Indeed, it is worth noting not only that September’s hourly wage growth, of 2.8% year-on-year, was actually lower than August’s 2.9%, but also that inflation expectations are broadly stable.

“The Fed’s preferred measure of inflation, the core PCE index, stands at just 2%.”

He continues: “With three more interest rate hikes expected next year, which would take the Fed’s target range to 2.75% – 3%, there is a growing risk not of inflation derailing the U.S economy, but Fed policy error whereby growth is harmed because of an overly-aggressive policy mix.

“This would include not only raising interest rates too fast, but also its quantitative tightening programme that is withdrawing $50bn a month from the U.S. economy, and so contributing to higher bond yields.”

Mr Elliott concludes: “Therefore, the risk to stock market investors comes not from a sharp bond market sell-off which raises the risk-free yields on Treasuries. It is from the Fed ignoring its chair’s own advice and tightening monetary policy faster than the American economy can stand.”

(Source: deVere Group)

Zac Cohen, General Manager at Trulioo, discusses the key considerations for businesses before engaging in commerce in high-risk countries.

Doing business internationally is a complicated undertaking. Aside from the standard logistical challenges associated with doing business globally, organisations have to factor in considerations specific to different regions and countries. These considerations may include factors such as legislative, political, currency and transparency challenges.

Nevertheless, globalisation is storming ahead and businesses must be prepared to look beyond their domestic surroundings if they are to remain competitive in our global marketplace. International trade secretary Liam Fox has endorsed a move for UK-based businesses to adopt a more international focus, highlighting the importance of global competitiveness. Consequently, UK businesses are feeling the pressure to ramp up their efforts to target a more international consumer base. As if this wasn’t enough for international businesses and investors to grapple with, further complications and difficulties are liable to arise when doing business with “high risk” countries.

  1. Fraud and Corruption

A recent study by the World Bank estimated that an extra 10 per cent is added to the cost of doing business internationally as a direct result of bribery and corruption.1 Considering the immense amount of international trade, this figure is significant. The danger of doing business with countries considered to be “high risk” – defined by the Financial Action Task Force (FATF) as any country with weak measures to combat money laundering and terrorist financing – is the heightened potential of inviting transactions that are either fraudulent or otherwise corrupt.1 The following considerations should be carefully observed before entering into any commercial dealings with a country considered to be high-risk.

  1. Enhanced Due Diligence

As a result of the 4th Anti Money Laundering (AMLD4) directive, developed by the European Union, businesses have to adopt a risk-based outlook. The AMLD4 specifies that EU-based businesses must collect relevant official documents directly from official sources like government registers and public documents, rather than from the organisation in question. If a potential trading partner is located in a high-risk country, or serves an industry that has a higher than normal risk of money laundering, then that partner must conduct Enhanced Due Diligence (EDD) on the business entity. This Enhanced Due Diligence process involves additional searches that must be carried out by any firm seeking to do business with this kind of organisation. These searches may include parameters such as the location of the organisation, the purpose of the transaction, the payment method and the expected origin of the payment.

  1. Ultimate Beneficial Owners

AMLD4 also outlines the need to discover the ultimate beneficial owner of a business, whether they are customers, partners, suppliers or connected to you in another business relationship.

According to the Financial Action Task Force (FATF),

Beneficial owner refers to the natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted. It also includes those persons who exercise ultimate effective control over a legal person or arrangement.

This is important as businesses need to understand who they are dealing with when physical verification is not a practical option. Difficulties could arise when verifying UBOs in high-risk countries as some national jurisdictions impose secrecy policies which block access to verification documentation. This problem is compounded when checking UBOs against international sanction and watch lists as there are more than 200 lists, which vary in scale and uniformity.

  1. Virtual Identification

However, verification can still be successful. Many are now turning to software that helps businesses to perform the necessary diligence checks. We gave a lot of consideration to the specific complexities of working with high-risk countries when developing our Global Gateway platform. Programmes such as these are designed to allow companies to perform the Enhanced Due Diligence, Know Your Business and Know your Customer checks that are required when doing business internationally, particularly with high-risk countries. Compliance with the various pieces of legislation on this topic should be at the forefront when implementing the necessary verification checks.

Across the world, markets are becoming increasingly more open, paving the way to a truly global economy. If companies can get to grips with the key due diligence requirements, this is a move that will ultimately benefit the global consumer and customers alike.

Politicians have a widespread and long term impact on so many things every time they speak or do anything. But to what extent do they affect currency volatility?

Forex market experts DailyFX have created a guide that looks at 59 key dates in 2017/18 where world leaders may have had significant influence on currencies. The lists of key dates includes US President Donald Trump, UK Prime Minister Theresa May, Japanese Prime Minister Shinzo Abe, Canadian Prime Minister Justin Trudeau, Australian Prime Minister Malcolm Turnbull and the President of the European Commission Jean-Claude Juncker.

Brought to you by DailyFX

With holiday season in full swing, people will either be looking to book something last minute or counting the days until they set off. Aside from dreaming of stunning beaches or culture-rich city getaways, there’s a good chance many of you will be imagining the prospect a nice relaxing beer abroad. On top of that, the world cup calls for a few more pints.

For those who enjoy a tipple on their travels, it’s good to know how much you’re likely to spend – especially in an unfamiliar place. Price comparison experts Money Guru have looked at 29 of the world’s most popular city destinations to produce an essential holiday beer guide.

Their research has identified that the cheapest pint is available in Prague where you’ll only be shelling out £1.17 per beer. At the opposite end of the scale, to get yourself a pint in Dubai you’re looking at £9 each.

Here is the rundown of the top five priciest and cheapest pints you’ll find across the globe.

Top 5 – Priciest Pints

Top 5 – Cheapest Pints

Iconic tourist destinations like London (£5.19), New York and Paris (both £5.32) seem to be taking full advantage of their popularity by bumping up the cost of beer. Nordic countries also demand higher prices for pints with Copenhagen (£4.81), Stockholm (£5.14) and Oslo (£7) all sitting in the more expensive half of the leaderboard.

An eclectic mixture of destinations populates the middle of the leaderboard with Toronto (£4.10), Barcelona (£4.18), Kuala Lumpur (£3.81) and Tokyo (£3.53) all providing beers at prices that aren’t likely to make people perform a double take.

However, for the more price conscious traveller there are plenty of options available, with a range of popular bucket list destinations including Johannesburg (£1.63) and Rio de Janeiro (£2.21) offering beer prices that won’t break the bank.

There are also some surprises to be found, cities that most would consider to be on the costly end of the spectrum such as Berlin (£2.72) and Seoul (£3.28) are actually relatively reasonable when it comes to beer.

Commenting on the findings, James MacDonald, Head of Digital at Money Guru said: “It’s eye-opening to uncover such a large difference in the price of a pint of beer across the globe. The disparity in cost turns what should be an enjoyable experience into a penny-pinching exercise. Luckily Money Guru’s research highlights the top cities to get more pint for your pound.”

So, whether you’re a beer aficionado, a social drinker or just like a couple every so often, it’s wise to factor alcohol into your holiday budget. For more information on their findings, you can see the entirety of Money Guru’s research here.

The latest research from national audit, tax and advisory firm Crowe Clark Whitehill, together with the University of Portsmouth’s Centre for Counter Fraud Studies (CCFS), reveals a national fraud pandemic totalling £110 billion a year. For context, that figure would build more than 110 Wembley Stadiums, or cover the annual budget for every single local authority in England combined. Put differently, the figure would cover the UK’s Brexit divorce bill almost three times over, or cover the salaries of 4.8 million nurses for a year.

The Financial Cost of Fraud 2018’ estimates that the UK economy could be boosted by £44 billion annually if organisations step up efforts to tackle fraud and error.

Globally, fraud is costing £3.24 trillion each year, a sum equal to the combined GDP of the UK and Italy, or enough to build more than 3,000 Wembley Stadiums.

The report, which is the only one of its kind, draws on 20 years of extensive global research from 40 sectors, where the total cost of fraud has been accurately measured across expenditure totalling £15.6 trillion.

Since 2008, there has been a startling 49.5% increase in average losses with businesses losing an average of 6.8% of total expenditure. Driven by technological advances and increasing digitisation, businesses now face a threat which is growing in scale and mutating in complexity.

Fraud is the last great unreduced business cost. Included in the report are examples where fraud has been accurately measured, managed and losses minimised, including a major mining company which reduced losses due to procurement fraud by over 51% within a two-year period, equating to USD 20 million at a time when commodity prices were falling.

Insurance fraud is an another sector to look into. It is happened by changing the beneficiaries. A proper investigation can minimize the vast effect. When any individual is getting life insurance over 75 years, the particular company must go through all the original documentation and proper channels.

Jim Gee, Head of Forensic & Counter Fraud at Crowe Clark Whitehill, comments: “The threat of fraud is becoming increasingly like a clinical virus – it is ever-present and ever-evolving. The bad news is that digitalisation of information storage, and process complexity, coupled with the pace of business change, have created an environment where fraud has thrived, grown and continued to mutate. The better news is that there are examples where organisations have measured and minimised fraud like any other business cost and greatly strengthened their finances.”

“In the current climate, to not consider the financial benefits of making relatively painless reductions in losses to fraud and error is foolhardy. The message to all organisations is measure, mitigate and manage fraud, or your bottom line will continue to suffer.”

Mark Button, Director of the Centre for Counter Fraud Studies at the, University of Portsmouth, adds: “This research shows that the most accurate measurement of fraud in organisations continues to show an upward trend. Many organisations are losing significant amounts to fraud and much more can be done to reduce losses.”

“Organisations could do much more to enhance prevention through a number of measures such as effective vetting of new staff, investing in data analytics and developing an anti-fraud culture.”

(Source: Crowe Clark Whitehill)

Contactless and online banking have pulled cash out of the pockets of most people, and while there are those that believe cash will always be a vital part of the international economy, there are some parts of the world that are borderline cashless. Below Shane Leahy, CEO of Tola Mobile, elves into the possibilities of cashless countries around the world.

With more digital payment options now readily available to consumers than ever before, the depreciation in use of traditional forms of payment, such as bank notes and the humble coin, has been inevitable. When we would once delve into our pockets for some cash, consumers today are now increasingly reaching for their mobile devices to complete purchases quickly and conveniently.

The rise of mobile payments technology over the last few years has played a particularly huge hand in enabling both merchants and customers worldwide to facilitate more cashless transactions. With the global mobile payment transaction market forecast to reach US$2.89 trillion in revenue by 2020, the rapid uptake of mobile-centric methods and the resulting shift towards a more cashless consumer culture is showing no signs of slowing.

Yet, not only have these technologies made fast digital payments accessible for smartphone owners in the more technologically advanced areas of the world; it has also empowered consumers in many emerging markets around the world to undertake instant and secure payments through their mobiles, without the need for physical cash or a registered bank accounts. In fact, it is these same developing regions in which we are now seeing the most widespread and advanced adoptions of mobile payment solutions, which are rapidly eliminating cash as a dominant form of payment amongst consumers within these markets.

One particular area of the world in which cashless payments have broken down many of the previous barriers to entry for both merchants and consumers is Sub-Saharan Africa. It has been demonstrating a rapid mass-market adoption of mobile money services of late and has so far outstripped the rest of the world in terms of its approach to cashless payments. So much so that it now accounts for more than half of the total 277 mobile money deployments worldwide.

One of the biggest driving forces behind this development has been mPesa, the mobile phone based money transfer service which now boasts over 30 million subscribers across various African countries, including Kenya, Congo, Tanzania, Mozambique and Ghana. Unlike apps such as Paypal and NFC-based mobile enabled credit card methods like Apple Pay and Samsung Pay which have been gaining traction in Western regions, the sheer simplicity of the technology required to conduct cashless payments across Africa has contributed to its growing uptake of mobile money options.

In contrast to these methods, which require users to invest in a modern and more expensive smartphones to utilise the technology, mobile money transactions across Africa can be carried out using the most basic handset and without needing an internet or data connection. By leveraging a low-level service menu provided on every GSM phone, this technology is widely accessible and therefore able to support the region’s current technological infrastructure.

What’s more, services such as Apple Pay and Paypal still also require users to link a bank account in order to complete mobile payments, making these methods largely inaccessible for the millions of unbanked consumers in developing regions. These factors also have an impact on merchants as they will have to pay more to process transactions conducted through a linked bank account, than they would if it was made directly through a physical credit or debit card.

With this and the growing preference towards cashless payment methods globally combined, it is unsurprising that the rate at which Sub-Saharan Africa is adopting mobile money is much faster than that of any other region. At the end of 2016, there were over 500m registered mobile money accounts in the region alone, a figure which has undoubtedly now significantly increased.

The establishment of mobile money across Sub-Saharan Africa is now giving much of its previously unbanked population unprecedented levels of financial inclusion and freedom to make purchases anywhere, at any time, a move which has undoubtedly played a significant role in the growth of cashless transactions and gradual decline in other payment methods. What’s more, these services have significantly reduced the concerns over carrying physical cash for consumers within these countries and have replaced them with a simple and secure means for them to instantly access funds and pay for goods and services.

Not only has this rise in mobile money use facilitated an increase in consumer empowerment; it has also paved way for merchants who have previously combatted against the region’s developing infrastructure, in which periods of downtime and network outages cause huge disruption and can often lead to lost funds when payments are made via credit cards. By ensuring a seamless and instant digital transfer of funds from customers to the merchants, the appeal of cashless options has increased dramatically, providing merchants with more business continuity and offering these countries an opportunity to drive economic growth.

While there is still some way to go before cash is rendered expendable globally, there are various countries Sub-Saharan Africa, such as Kenya and Tanzania which are currently leading the way in terms of changing consumer behaviour and quickly adopting a cashless approach. For now, cash still remains king across most Western and other countries. However, as consumers continue to seek convenience and security, it is certain that we will see a growing shift towards digital payment methods and a continued demise of physical cash worldwide.

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