January-February 2019 Archives - International Finance

Exis Telecom to be the first MVNO to launch in Mexico

International Finance Business Desk — Fri, 27 Nov 2020 11:53:55 +0000

Exis Telecom will be launching in Mexico in December using MDS Global’s VNOnDemand solution. The solution will help to enhance its business support systems. Exis Telecom is the first MVNO to launch in Mexico using VADSA’s end-to-end platform.

The company seeks to provide its customers with a host of additional services, along with connectivity. This points to fintech solutions and personal security.

Natalia Saenz, President of VADSA said: “We are thrilled to be launching Exis Telecom as the first MVNO on our platform and look forward to delivering their range of innovative services to the Mexican market. This is also the beginning of a new era for MVNOs in Mexico. We have shown that our platform smooths the path for new specialist operators looking to quickly enter the market, and we believe Exis will be the first of many to take advantage of our solution.”

In addition to these developments, the US has been urging Mexico to not import 5G infrastructure from network providers who are banned under the Clean Networks Programmes. Huawei is among those providers blacklisted under the programme.

The Clean Networks Programme is an important contributor to 5G infrastructure deployment in the country. That said, it will also help to protect the privacy of companies and the national security at large. Mexico is yet to launch the 5G network. But the US might encourage the Latin giant to join forces against inclusion of Huawei, with the ratification of the trade agreement between the US, Mexico and Canada.

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Digitising the banking experience for SMEs

Bharath Kumar — Tue, 15 Jan 2019 10:42:35 +0000

There are over 5.7 million SMEs in the UK, and none of them can function, let alone succeed without access to proper business banking services. And just like the retail banking customer, hardworking small business owners have also come to expect a seamless digital banking experience.
Yet, research has proven that, time and time again, the same is simply not being delivered to SMEs. Avoka’s recent research into How Banks Can Win New Small Business Customers, in partnership with Vanson Bourne, found that a significant two-thirds of SMEs across Europe have at some point abandoned a digital banking application before completion: that’s 3.8 million potential missed business opportunities for banks.
And it doesn’t stop there. The research identified a clear disconnect between what banks currently offer SME customers and what business owners need for their businesses to thrive. For instance, 83% of SME respondents said they want to be able to apply for banking products more quickly and easily, yet only 18% said they were satisfied by the overall service currently being provided by their banks.
But, it isn’t all doom and gloom. These results provide a learning opportunity for banks to better service their SME banking customers by providing a quick, easy and frictionless digital onboarding experience. It is only when banks optimise the digital customer journey that they can boost acquisition rates, increase revenues and, most importantly, win SME customer loyalty.
Skating on thin ice
By failing to adapt digitally, banks are taking a huge gamble on both business and reputation. According to the report, upon having a poor online banking experience, 20% of SME respondents said they would be extremely likely to communicate their experience to their peers, and worse, 10% would seriously consider switching banks. But don’t just take my word for it: in September of 2018 alone, over 2,000 small businesses switched banks, according to a recent report by BACS. In the often tight-knit communities of small business owners, that’s a serious consideration for banks to take.
Thawing out
So, how can banks ensure that their SME customers don’t jump ship? The answer is actually quite simple – they must focus on making their lives easier by delivering an engaging and optimised digital experience.
To avoid losing SME banking customers not only to fellow banks, but also to challenger start-ups that are getting more and more attention for their focus on customer service, banks can take the following steps to make their offering work for the small business owner:

Derek Corcoran
Chief Experience Officer, Avoka

Go digital or go home – In order to achieve a seamless customer journey, banks need to make sure that every step of the banking process can be executed digitally by the end user. Ensuring all documents and signatures can be provided electronically via desktop, mobile or tablet may seem obvious, but one stumbling block along the road can send abandonment rates flying. Indeed, 82% of respondents in the Vanson Bourne study said it would be helpful if they could submit documentation for business banking applications electronically.
Convenience is key – Small business owners are busy people. To keep the plates spinning, it’s essential that banking processes fit in around their other tasks. From reducing the number of questions on applications to the minimum required, to eliminating the need for repetitive input by pre-filling information already held, banks can take small but significant steps to make the SME banking customer’s life easier.
Adopt an omni-channel approach – Allowing multiple users to work on applications simultaneously or interchangeably is vital to ensure the customer’s experience is consistent, regardless of the device being used. Activating a ‘save and resume’ functionality affords small business owners the luxury of being able to complete tasks on the go when it suits them most.
And that’s just the tip of the iceberg. Ultimately, European banks have an invaluable chance to become trusted allies for their SME customers. But first, they need to shift their focus from the volume of transactions to the customer experience journey to deliver a seamless digital banking experience. After all: what’s the point in having a robust set of business banking products if the process that gets customers to apply for them isn’t effective?

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East Africa’s money-laundering scandals

Bharath Kumar — Tue, 15 Jan 2019 10:28:41 +0000

Kenya Commercial Bank (KCB), East Africa’s biggest lender by asset base and most profitable has been linked to money laundering on behalf of corrupt government officials in South Sudan, including senior military leaders sanctioned by the United Nations in the wake of the civil war which erupted in December 2013.
Also thought to be culpable includes the local Stanbic Bank which is member of the Standard Bank Group, based in Johannesburg, South Africa.
Predictably the two lenders have to date denied involvement in the fishy business.
On its part KCB ‘s Group CEO, Joshua Oigara said the lender being a regulated entity deployed global standards and had no proclivity to engage in money laundering in all the countries of its operations including Burundi, Kenya, Rwanda Tanzania , Uganda and South Sudan.
“KCB South Sudan continues to work closely with the Government of South Sudan and the Bank of South Sudan with regards to resolutions on UN Security Council Sanction List 2206,”Oigara said in a press release.
According to data from the Central Bank of Kenya (CBK), the monetary authority of Kenya, East Africa’s biggest economy, nine local banks had subsidiaries within the East Africa Community (EAC), which draws in six countries including, Burundi, Kenya, Rwanda, South Sudan, the United Republic of Tanzania, and the Republic of Uganda, with its headquarters in Arusha, Tanzania.
According to the US-based Sentry organization, a two-year investigation into the corruption in South Sudan, money movement and assets locations, found KCB has taken part in abetting money laundering on behalf of the elite in South Sudan.
Among the senior army generals in South Sudan who the report named as culpable was General Gabriel Jok Riak, who was called out for transferring hundreds of thousands of US dollars to his personal bank account in the Kenyan bank yet his monthly salary was less than $3,000 dollars, or only about $35,000 a year.
General Riak, commander of Sector One, which includes Divisions 3, 4, and 5, of the South Sudan’s army, the Sudan People’s Liberation Army (SPLA), has been under the United Nations sanctions for his brutality during the civil war. His known assets have been frozen and he is banned from travelling to foreign countries.
“Specifically, Gen. Jok Riak had command authority over a full-scale 2015 offensive across three states in violation of multiple ceasefires and resulting in the displacement of over 100,000 people and the commission of grave war crimes,” said The Sentry report, titled ‘War Crimes Shouldn’t Pay.’
“Bank records reviewed by The Sentry indicate that Gen. Jok Riak received large financial transfers totaling at least $367,000 to his personal bank account at Kenya Commercial Bank (KCB) from February to December 2014 alone—sums that dwarf his official annual salary of about $35,000,” The Sentry report revealed.
Also indicted include General Reuben Riak Rengu, who the report revealed was directly involved in procuring weapons and planning military offensives but also is involved in a wide range of commercial ventures and had received substantial payments from multinational firms from at least three countries that operate in South Sudan through KCB.
“Although Gen. Reuben Riak’s official annual salary is about $32,000, information obtained by The Sentry suggests that he is living well beyond what such a salary would support and appears to have received hundreds of thousands of dollars in payments from numerous multinational companies active in South Sudan,” the report revealed.
General Reuben has illegally transferred to his personal bank account at the Kenya Commercial Bank millions of US dollars, despite having a salary of less than $3,000 dollars a month.
“Documents reviewed by The Sentry show $3.03 million moving through Gen. Reuben Riak’s personal bank account—a US-dollar denominated account at Kenya Commercial Bank (KCB)—between January 2012 and early 2016,” the report further revealed.
The transactions recorded, it said, include more than $700,000 in cash deposits and large payments from several international construction companies operating in South Sudan.
Additionally, the report showed that over this four-year period, $1.16 million US dollars in cash was withdrawn from his KCB account.
The report further revealed documented proofs that General Reuben and many of his children have. According to the report, international banks are looking to mitigate the risk stemming from South Sudan’s banking sector in order to avoid regulatory fines and reputational harm.
“Larger banks operating in East Africa have a network of correspondent relationships and help connect smaller South Sudanese banks with the global financial system. Because of these ties to the regional correspondent banking network, South Sudanese banks hold nested accounts in Kenya and Uganda.” says Sentry. shares in companies operating in South Sudan.
Late this June, Ms. Sigal Mandelker, the US Treasury’s under-secretary for terrorism and financial intelligence while on a tour of East Africa publicly stated that some South Sudanese who are under UN sanctions had continued to invest illicit money in Kenya’s real estate market.
“I want to be very clear, those who profit from human rights violations and corruption, preying on the poor and innocent and mothers and children, must heed our warning,” Mandelker said at a press conference here in Nairobi.
“We will impose consequences, we will cut off your access to the US financial system and we will work with our partners in this region and elsewhere to do the same,” she added, repeating a warning she had delivered earlier in the week in neighbouring Uganda.
The political and military elite in South Sudan have been accused of corruption in hard-hitting reports by the US foundation The Sentry, co-founded by actor George Clooney.
Also thought to be involved in money laundering using Kenyan lenders include President Salva Kiir and his vice president Riek Machar. Both are said to have profiteered from the civil war, acquiring waste of the art homes in Kenya and neighbouring Uganda.
Mandelker said she met with top officials in Kenya’s government and the banking sector to urge them to watch out for money laundering from South Sudan.
She asked them to ban South Sudanese who have been on a US black list since 2015 and to freeze their bank accounts and seize their properties.
“Corrupt money is not wanted here,” she said.
“Those who profit on of the backs of individuals who are devastated by human rights abuses will no longer have access to the international financial system because we will block that access, kick them out and we will work together to eliminate such despicable profiteering.”
The Treasury under-secretary urged officials in Nairobi and Kampala to close loopholes that allow transfer of illicit funds from South Sudan.
“We hope Under Secretary Mandelker’s engagement with Kenyan authorities and banks will spark official inquiries into real estate purchased by South Sudanese officials potentially to hide unexplained wealth obtained in the context of war,” John Prendergast, co-founder of The Sentry, said after the visit of the US Government mandarin.
“Investigating, and if appropriate, seizing these homes would provide tremendous leverage for the peace process, and would be a critical step toward accountability for the systematic looting and mass atrocities committed since the country’s independence in 2011,” he said.
Kenya and Uganda do have the legal tools needed to investigate the suspect real-estate transactions and, if warranted, to seize those properties, The Sentry said.
The group notes that information it had provided led Australian authorities to initiate the seizure earlier this year of a Melbourne home owned by former South Sudanese Gen James Hoth Mai.
The Sentry has urged the Kenyan government to “follow Australia’s model to investigate unexplained wealth.”
“With support from NGOs, domestic banks and U.S law enforcement, Kenya — East Africa’s banking capital and home to a large South Sudanese Diaspora — is well-placed to take the lead in pursuing potentially corrupt assets,” The Sentry adds.
Early this Oct Mr. John- Alan Namu, CEO and Editorial Director of Africa Uncensored, an independent media house based in Kenya that specializes in unraveling nefarious acts that happen within the East Africa region had an expose on the money laundering business banned from running on one of Kenya’s top TV stations underlining the influence and perceived power local lenders and the elite South Sudanese have within the East Africa region.
“It is possible that money launderers have identified Kenya as a ‘safe haven’ to store ill-gotten wealth as the country boasts a robust economy with political stability. Hence, country dynamics (macro-economic and business environment) play an important role. Further, given Kenyan banks operate in the region, efficient movement of funds both to and from the domestic market is achieved,” said Patrick Mumu, an analyst at Genghis Capital, a local investment bank.

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Investing in Europe’s lucrative markets

Bharath Kumar — Tue, 15 Jan 2019 10:23:18 +0000

There’s no denying that there has been financial problems over the years for some countries in Europe, causing many businesses to drift away from the idea of tackling the market. However, Greece’s financial crisis has finally ended, and other countries are developing at rapid rates — something investors should take note of.

Today, more investors are looking to the Eurozone for their business ventures. But which industries are thriving in different countries?

Spain: A Focus On Fashion

More UK fashion companies are making the shift overseas to Spain — take going out dresses retailer QUIZ for example, who have recently opened up in Madrid. Spain is possibly one of the biggest hotspots for tourism and this is one of the main drives for retail sales. Euromonitor International found that Spain’s employment rate dropped to a low of 17% in 2017, which has had a positive impact on fashion sales as more people have shown a willingness to spend more on clothes.

For the industry itself, an annual growth of 11% is expected to arise between 2018 and 2022 — taking the market value up to $6.728m. Francesc Maristany, former president of Catalan Cluster of Fashion, commented: “Some people come for the luxury tourism and realise there are smaller brands with great products and excellent branding, and become drawn to them.” This shows that there has never been a better time than now to expand into Spain.

France: A Focus On Artificial Intelligence

Did you know that Paris has passed London as the most lucrative market in Europe for foreign investors? Although you may be making investments at home, it’s crucial to start looking at shifting your finances into opportunities in France.

The introduction of artificial intelligence is thriving in France, with companies and governments making use of it. Emmanuel Macron, the French President, has launched an initiative that will position the country as a leader in the field. Through this scheme, €1,5 billion will be invested in AI projects and start-ups. Is this something that your business could benefit from?

Germany: A Focus On Biotechnology

Foreign investment is at an all-time in Germany, so it would be foolish not to look into the country. So much so, that a total of 1,063 investment projects were launched in the country over the past 12 months. Within the same time frame, 7,785 jobs were created in Germany by external European companies — highlighting the number of opportunities across the country that must be taken advantage of.

The country is exceeding well in research and development, too. Germany prides itself on constant innovation and is known to have the most biotechnology firms on the continent, which has had a positive impact on employment across the nation.

Portugal: A Focus On Real Estate

Titled the most peaceful country in Europe, Portugal is thriving in real estate investments and general trade. However, it must be noted that the country’s Golden Visa Scheme has encouraged more foreign investments in property, as residency comes with an array of benefits, including education, healthcare, social security, tax concessions, and more.

Did you know that the gross rental yields in the country are one of the highest in the continent? 5% to 14% is realistic for the right property. Have you considered setting aside investments and obtaining a visa to a foreign country to obtain great financial benefits? Now might be the time!

The Netherlands: A Focus On Creative Industries (Advertising, TV, Music, and Gaming)

It’s believed that The Netherlands is one of the most innovative countries in the world. As a result, it is home to some of the leading creative brands. Amsterdam, in particular, is a hotspot for creativity. Its metropolitan area offers world-class infrastructures and Europe’s fastest broadband speeds – essential qualities for this sector.

Almost 50% of investors think that the business climate in this country will improve significantly over the next three years, so researching early is essential. This is a positive sign, as last year, only 38% agreed. The capital city is known for its influential start-up scene, with a tech-savvy community and a diverse talent pool. To illustrate the love of creative start-up businesses, the opening of gaming companies alone increased by 42% between 2011 and 2016.

UK: A Focus On Digital

It’s no surprise that the digital scene in the UK occupies 27% of projects in Europe. As well as this, the sector seems to generate the largest number of projects in the country, which has led to an increase in employability with around 1.1m people in work.

The digital sector in the UK is growing quicker than the national economy and is improving regional areas. Because of this, the value of the industry was boosted to £184bn (2017) from £170bn, which was its estimated worth in 2016. Ignoring the opportunity to invest in the UK’s digital sector could be a big mistake.

Sweden: A Focus On Financial Technology (FinTech)

It’s known that Sweden is one of the biggest hot spots for foreign investment, especially around tech projects. This renowned status factored in the statistic that a large portion of its workforce are in tech-based jobs.

Stockholm is the second-most prolific tech hub in the world after Silicon Valley. This is a great achievement for the nation, as investment continues to grow. When it comes to emerging fintech trends, crowdfunding opportunities, mortgages and pensions are developing areas that are disrupting the industry positively.

Finland: A Focus On Clean Technology And Renewable Energy

It won’t be a surprise that Finland is the world’s greenest country and has a core focus on renewable energy. Because of this core focus, 38% of the nation’s energy is produced by renewables — which is only set to grow further with future investments and continued extensive research.

For venture capital investments, this country ranks quite high due to cleantech solutions. Because of its willingness to improve the climate of our planet, it is also home to Slush, which is one of the biggest technology-focused innovation conferences in the world.

Sources

https://www.businesslocationcenter.de/en/business-location/business-location/investing-in-germany/location-advantages-for-investors
https://www.ey.com/Publication/vwLUAssets/EY-Germany-attractiveness-survey-2017-summary/$FILE/ey-germany-attractiveness-survey-2017-summary.pdf
https://www.research-in-germany.org/en/research-landscape/research-organisations/companies-industrial-research.html

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Ways to build your business

Bharath Kumar — Tue, 15 Jan 2019 10:16:01 +0000

Having built my first company to become the UK’s third largest Financial Services Network – with more than £3bn in fund under management – I have since launched Clarus Fortior, a specialist business growth consultancy that mentors businesses to achieve their financial goals.
Below I’ve listed my top five tips on how to build a successful organisation from the ground up.
Set clear goals
Clear and achievable goals will help you to map out the short, medium and long-term goals of the business. These should be agreed within a three or five-year plan. You may also want to set goals per week or month, so you have a clear idea of what success looks like on a rolling basis.
In my experience, business owners with clear goals will tend to achieve greater success. A goal-oriented environment means decisions can be made more efficiently, as you will have a clear and focused sense of your objectives throughout the process.
Without clear goals, decision-making can become confused and counterproductive.
Plan, plan, plan

Kevin Ronaldson
Founder Director, Clarus

You have your destination, now you need to map the journey. This is the track your business will run through to get there. There will inevitably be twists and turns, so the planning should be intuitive, allowing flexibility for unexpected changes or new opportunities to be factored in, understood and reacted to effectively.
I would recommend having a regularly updated business plan, a marketing plan and a product development plan. Depending on the business, you may also wish to plan for market research, fundraising and recruitment.
Team building is key
You should never underestimate the importance of the people around you. As William Blake wrote, “we become what we behold” – i.e. we inevitably come to reflect the behaviour and attitudes of those around us.
In my experience, collective endeavour is far more valuable than individual brilliance. However, this is only true if you create a team dynamic and culture that good people want to buy in to. Shared responsibility leads to a shared sense of purpose, ensuring your team will drive together towards the end goal. Sharing responsibility also means sharing the wealth created within the business – so never be afraid to bind the team in with equity, share options and bonus schemes.
The business case for diversity is also well-established now: in simple terms, your team’s diversity of background, thought and expertise will give the business a competitive advantage.
Build a ‘risk register’
These days the world is moving faster than ever, with disruptive brands applying intuitive technological solutions to quickly dominate entire industries within a matter of years. But industry disruption is just one of the threats to a business.
I would recommend spending some time auditing all potential risks, with a corresponding plan to mitigate each risk. I call this a ‘risk register’, as it allows risk to be understood and your responses planned in advance. By pre-empting risk, you know what to do if the worst happens.
What would you do if you turned up to the office and it had burnt down? Implement the disaster recovery plan, of course! Without a plan, nobody would know what do. Future acquirers and investors will also want to know about your risk mitigation plans.
Outsource where you can
Don’t feel that you have to build every capability within your business – outsource certain functions of the business wherever it is convenient and cost-effective to do so. There are a range of new digital tools and services that can make core business functions both cheaper and more efficient.
Outsourcing will keep central costs lower and allows you to access expertise without the need to pay for full time staff –this is particularly true for marketing, HR and IT. However, make sure you run due diligence on any new supplier!

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Managing people within a virtual workforce

Bharath Kumar — Tue, 15 Jan 2019 10:08:47 +0000

Businesses are increasingly looking to Intelligent Automation to reduce costs, improve customer service, ensure regulatory compliance, and tackle the productivity issues which threaten their future growth.
Pushing the boundaries of the digital workforce
Intelligent Automation (IA), which combines RPA with Artificial Intelligence (AI) functionality, is now enabling businesses to automate a far wider range of workplace processes. Within the world of financial services, the focus is now moving beyond tactical automation of basic back-office tasks and processes, (in the contact centre, HR function or accounts department), to more complex and strategic initiatives.
With IA, digital labor transfers from being primarily a cost reduction exercise to becoming a strategic asset to change and optimize the way banks run their entire operations. And with this shift, the benefits become greater – increased productivity, more robust regulatory compliance, enhanced capacity and more fulfilling work for staff.
Think about your people, not your robots
There is always a significant ‘people’ element to automation, beyond staff seeing their work automated, it also impacts the skills, mindset and cultural behaviours required to make automation a success. Intelligent Automation programmes depend on the willingness of operational staff to embrace automation and recognise the benefits it can deliver to them as individuals.
Organisations thinking about the ‘people’ side from the outset invariably find it easiest to integrate a virtual workforce. In fact, our white paper explores how to build a business case for workforce automation that presents a robust plan to communicate it effectively throughout the business. Every organisation has different drivers for implementing IA but, in my experience, cutting jobs is rarely a major objective. Robotics can release employees from the more tedious aspects of day to day activity and enable them to focus on the value-added work.
The challenge is getting staff to see this when so much of the narrative around automation remains highly emotive, fed by media reports that automation will lead to millions of jobs being replaced. Financial services is one of a number of industries that will see a whole range of strategic, high-value jobs being created in place of more tactical, lower-paid back-office roles. PwC released an insightful report on exactly this.

Terry Walby
CEO, Thoughtonomy

Automation for the people
Organisations need to tackle automation head on, and we’ve seen some wonderful examples of organisations who have engaged and educated staff in creative and fun ways about the benefits of a digital workforce. Running initiatives including naming virtual workers or nominating mundane laborious tasks ripe for automation get the entire workforce – thinking about the benefits of automation for themselves personally and an understanding how IA can improve their own working lives and careers.
Regulatory compliance is a huge driver for automation and a huge burden for many staff, by automating much of their compliance monitoring and reporting, they can free up their people to do the things they are best at and find most rewarding – strategic thinking, creative problem-solving and strengthening customer relationships.
Training and Automation Champions
Typically, organisations look to build an automation team by re-deploying people whose existing work is being automated. Re-training these people to give them the skills to oversee the automation programme is a great way to do this as it avoids the pain and cost of recruiting new people, and it’s good for the individuals concerned, who move to becoming trained in one of the most dynamic areas of business.
‘Automation champions’ who help their peers to get to grips with automation technology and work effectively alongside virtual workers help embed AI into the workplace smoother and quicker. These individuals also have a crucial role to play in identifying a pipeline of processes for automation – after all, it is the people working on the front line who are much better placed to identify tasks ripe for automation.
Automation culture
The ultimate goal for financial services is to instil a positive ‘culture of automation’, where people are proactively looking to automate some of their work to free up their capacity and feel comfortable handing tasks to a virtual worker.
Such a culture can be achieved by communicating positive, ‘good news’ stories around the deployment of Intelligent Automation, demonstrating the benefits to employees working alongside the virtual workers. The best IA programmes are essentially about people; about how they can be best deployed to add value to the business; how organisations can get more high value work with the same headcount; how productivity can be increased.
A golden opportunity for L&D leaders
What’s clear from the discussions we have with our clients is that HR and L&D is an important part of the automation agenda and needs to fulfil its role in delivering the right cultural shift and skills required for success.
By communicating the role of automation and recognising it as a positive shift for both the wider business and individual development, business leaders can claim an important role, championing the skills and people agenda within workplace automation initiatives.

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The unheard voices in the auditing sector

Bharath Kumar — Tue, 15 Jan 2019 09:58:00 +0000

Risk and compliance officers are becoming integral members of the payments innovation team but perceptions of these functions are changing as enlightened companies recognise the link between customer trust and higher revenue.
Payments have to offer everything and anything users are comfortable with. If a new product or channel is created, technology companies need to take a smart approach to making it secure and accessible.
Given the sheer pace of change in the payments industry, we have to think about the preferences of the next generation of users and how to use data to make better decisions – not just in terms of risk management but also regulatory compliance.
Consumers want secure solutions, but they also want authentication to move away from complicated processes that require them to remember lengthy passwords. In this environment, there is obvious potential for biometrics and other solutions – we can streamline the process and make the whole interface instant, secure and friendly, avoiding passwords and other painful experiences.
Single click payments, biometrics and other new processes will allow faster payments and instant payments. According to Mastercard, new EU regulations coming into effect in 2019 will lead to a significant increase in the use of biometric technology to authenticate who is paying.
In line with changes in authentication processes, risk assessment is also evolving. The vast quantities of data generated by ecommerce activity can be used to determine a consumer’s credit risk to a far higher degree of accuracy, ensuring consumers are offered products and services appropriate to their needs.

Marlies De Vries
Asst prof, nyendrode business

Risk and compliance has traditionally been viewed as the part of a company where the answer is always ‘no’. But rather than acting as a brake on innovation, risk management makes it possible to identify and successfully develop new payment solutions.
The task for risk and compliance as an enabler is to consider the future needs of customers and ensure that new functionality, channels and/or services are offered in a way that secures both the provider and the user.
For example, we are seeing behavioural data being used to make specific products available to individuals based on how they use their mobile device. This will allow the industry to move away from risk card-based decisions.
Artificial intelligence is already being used to evaluate risk and will become even more widely used in the future to ensure services are delivered securely for both the customer and the merchant. The influence of artificial intelligence on risk assessment is growing – one in eight consumer business respondents to PwC’s Global Economic Crime and Fraud Survey 2018 said predictive analytics and machine learning were useful for combatting or monitoring fraud and other economic crimes.
In the wider financial services space, Oliver Wyman research refers to the use of behavioural data-based models to help better judge which customers intend to repay their loans, thereby identifying potential fraud risk.
The reason payment service providers exist is because banks became too big and their IT environment too complicated to quickly offer goods and services to merchants in different currencies and markets.
Banks are happy for payment service providers to have this relationship because of the high level of risk attributed to fraud and merchant failure and we have become very effective at managing risk for merchants.
Of course, all these trends will be impacted by the approach of regulators, who have to date adopted a relatively light touch approach to ecommerce, which has been a positive development. They have not closed the door on merchants being cross-border, instead facilitating these businesses in reaching beyond their domestic market.
It might be controversial to suggest that GDPR has been a positive regulatory change. However, a regulation that limits what firms can use a consumer’s private data for, is a sensible safety net.
As Gartner research director Lydia Clougherty Jones puts it, implementing GDPR consent requirements is an opportunity for an organisation to acquire flexible rights to use and share data while maximising business value.
We spend a lot of time designing systems to ensure they work within the appropriate regulatory framework but we also have to be aware that customers want different things. Our job as risk and compliance specialists is to ensure that whether the focus is on faster throughput or solutions based on a specific marketplace or geography, innovation is delivered securely.
About Intrapay
Intrapay, part of the Sappaya payments ecosystem, launched in 2018 to refresh the payments industry with customer-driven innovation, driven by close relationships with customers, partners and industry leaders. It provides card processing, alternative payments, credit risk and compliance, chargeback prevention and currency optimisation across international geographies. Its flexible technology is built from the ground up to accommodate detours or diversions as demanded by the global industries its clients serve. It is the sister company to cashless experience companytappit. Visit intrapay.com for more information.

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The art of negotiation

Bharath Kumar — Tue, 15 Jan 2019 09:52:35 +0000

Much like many other human interactions, it all boils down to psychology – body language, tone of voice, and other communicative signals can all contribute to the way it plays out. Marry a good level of social awareness with strong business acumen, and you’re on track for a positive outcome.
The good news is, everyone can learn how to negotiate effectively – it’s all about doing the legwork in advance of the meeting and then knowing how to adapt your behaviour appropriately on the day. Here are a few things to consider for optimal success going forward.
Do your research
Turning up at a business meeting unprepared is unprofessional and could seriously hinder your chances at success. While there will be an element of improvisation that comes with any discussion, to gain the respect and attention of the other party, you should do your research and come equipped with your findings.
This doesn’t solely apply to the topic you are discussing, but also the person you are negotiating with. Spend time understanding what the company does, what their roles is and even a bit about their background. Once you’ve built a picture of who they are, it may shed some light on how you should approach the meeting – what will impress them and what’s likely to put them off.
Respond to their behaviour
The correct technique to adopt in a negotiation can vary depending on who you are meeting with as, what one person responds well to, may prove ineffective with another.

Denise Jeffrey
Negotiations and Communications Expert

Contrary to popular belief, negotiation is more about an individual’s behaviour than their personality. Somebody who is generally easy going may decide they’re going to play hardball to achieve their desired outcome, so you need to be reactive to their actions on the day.
Mimicking the other party’s behaviour can help you get on the same level as them and build a good rapport. If they’re being cooperative, be cooperative back; if they’re going into a lot of detail, try to offer the same in return, and so on. An exception to this is when they’re being overly dominant or aggressive. This is unprofessional, and you have the right to call them out on this sort of conduct.
You can read more of my advice about how to adapt your own behaviour according to another person’s in Hiscox’s guide to negotiations.
Listen to the other party’s point of view
The best negotiators are the ones that listen as effectively as they talk. By paying close attention to what the other person is saying, you’ll be better equipped to understand their perspective, and to respond to their offers in an informed and rational manner.
Really considering what they have to say will also help to nurture a positive relationship, gaining respect from them, which can be beneficial when it comes to striking a final arrangement.
Know when to close the deal
With each party fighting for their own desired outcome, it can be difficult to decipher when the negotiation is over.
If it’s apparent that you’re not going to get what you want out of the arrangement, sometimes the best thing to do is to walk away. While this isn’t the ideal situation, it’s better than settling on a less than satisfactory arrangement, and on occasion the threat of leaving could be what it takes for the other party to make concessions.
On the other hand, if you’ve struck an agreement that you’re happy with, try to wrap it up as quickly as possible, to avoid the other side renegotiating any terms. You can politely communicate your intent to close the negotiation by saying something along the lines of “to finish with…” or “to settle one final point…”. Once it’s settled, get the deal in writing as soon as possible. If it’s going to take a while to get signed off, write the details of the negotiation in an email, so there is a clear paper trail to refer back to in the meantime.
As mentioned above, anyone can learn how to become a good negotiator – it’s all about efficient planning and observing other people’s behaviour in order to respond in a way they will be receptive to. Hopefully, the above advice will provide you with a few key insights to go forward with when it comes to closing those all-important deals in the future. For more advice, you can read the full guide to negotiations by Hiscox.

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Why Banking as a Service is Transformational

Bharath Kumar — Tue, 15 Jan 2019 09:32:33 +0000

There’s no doubt that the way we pay for goods and services has been transformed by technology for the better. It’s thanks to innovative technology – and its integration into the systems of companies in the payments and banking sectors – that we are able to take advantage of the ‘one-click’ economy.
A major contributor to the extension of banking services – beyond those of traditional banks – has been Banking-as-a-Service (BaaS). Not only does it provide organisations with the ability to build, configure and manage their own financial services, it also gives them greater autonomy when providing for the needs of their clients.
The use of cloud-based infrastructures and APIs has allowed innovative fintechs to respond to market needs more quickly than traditional banks, who are hindered by legacy systems. This integration of cutting-edge technology results in enhancing a consumer’s digital experience with access to convenient and tailored banking services online.
The ‘cross-border issue’
Although FinTechs are greatly changing the way banking and payments are made, there are still challenges when it comes to offering “cross-border” services.
One difficulty is the inability to provide access to IBAN accounts for customers in order to enable easy cross-border transactions. While the creation of such accounts is strictly coordinated and regulated at a national level in the EU, it is still the case that IBAN issuing, as well as the corresponding banking and clearing are still dominated by traditional banks.
Additionally, financial service providers often face concerns from clients when it comes to multi-currency handling which often includes high transaction fees, and expensive exchange rates. Meeting the requirements for local and international banking and payment regulations is yet another challenge to master.
Despite these cross-border challenges, a growing number of innovative BaaS providers are benefiting from the power of open banking and the ‘plug and play’ principle of API technology. This allows them to offer highly customisable solutions for the changing needs of businesses operating across borders.
BaaS platforms and the opportunity to offer cross-border capabilities
In order to maintain strong growth, BaaS providers need to be able to offer merchants the ability to operate internationally.
Thanks to the power of global eCommerce, retailers have greater access to overseas customers than ever before. According to data from eMarketer¹, global retail eCommerce sales grew by four times the rate of overall retail in 2017, reaching $2.29trn.
To support this market, BaaS platforms aim to provide simple and secure payment tools for their customers regardless of where they are in the world. An important step in achieving this goal is for BaaS platforms to use the opportunities of open banking to develop an IBAN offering.
BaaS platforms with IBAN issuing capabilities can offer major benefits to clients. Let’s use the example of a phone service provider. In order to avoid reconciliation issues with invoice payments and numbers, a phone service provider could work with a BaaS platform to give every customer an IBAN that would directly reflect the balance on their account. Offering IBANs, therefore, not only allows BaaS platforms to help a customer make international payments, but offers other benefits, such as eliminating complex reconciliation problems for merchants.
In addition to IBAN accounts, cross-border transactions can be further streamlined by BaaS providers offering multi-currency management tools. With these tools, businesses are better equipped to collect foreign currencies and operate in foreign markets. The combination of IBAN issuing capabilities and simple and cost-efficient multi-currency management will make it easier for international businesses to rationalise and integrate payment flows into one easy-to-manage platform.
What’s more, they will still be able to take full advantage of all the other benefits of BaaS platforms – whether it’s optimising account management, performing settlements, reconciliation and onboarding, or navigating the ever-increasing number of regulations and directives that surround the banking and finance environments.
What does the future look like?
In order to allow businesses to take full advantage of the global opportunities on offer, BaaS providers must listen to their clients’ needs. Only by doing so can they provide a platform that is truly equipped to facilitate growth and efficiency.
Spotting the gap between what traditional banks have to offer and what FinTech companies aren’t currently providing, BaaS providers are beginning to launch cloud-based API-driven products which integrate the issuing of IBAN accounts. This is something that ONPEX has long pioneered, leading us to release our own BaaS platform with integrated IBAN accounts in August 2018.
Like ONPEX, BaaS providers are also realising the advantages of combining IBANs with multi-currency management. Overall, forward-thinking new entrants to the market are starting to make the administration of finances easier for multinational companies trading across borders.
With the total value of global B2B cross-border transactions reaching $136 trillion in 2017, and forecast to hit $218 trillion by 2022², it is time that businesses of all shapes, sizes and sectors, are given the ability to develop the financial services their customers need.
By integrating IBAN issuing and other services to facilitate cross-border transactions, leading BaaS providers are setting a new benchmark for FinTech organisations while enabling businesses to fulfil
their true potential on the global stage.
Giving merchants and customers what they need
With progress being made by BaaS providers such as ONPEX, FinTechs are offering merchants across the world the solutions and tools they need to grow whilst enabling them the ability to meet increasing customer service expectations – particularly when it comes to fast, simple and secure payments.
Any organisation that is looking to grow in a highly globalised environment, should be looking to use the power of solutions like BaaS.

1 https://www.emarketer.com/Report/Worldwide-Retail-Ecommerce-Sales-eMarketers-Estimates-20162021/2002090

2 Juniper Research (2018): Whitepaper “Why is there big money in B2B transfers?”. [online] Available from: https://www.juniperresearch.com/document-library/white-papers/why-is-there-big-money-in-b2b-transfers. Last accessed: 28.07.2018

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An early headstart to entrepreneurship

Bharath Kumar — Tue, 15 Jan 2019 07:29:20 +0000

Many of the entrepreneurs I admire and respect are in their 40, 50s and 60s – but while they are all very different, the one thread that binds them together is they are all natural born entrepreneurs and started their first business in their 20s… or earlier!
Take entrepreneur and investor, Jamie Waller, for example – he is 39 years old and worth around £40m. Like so many entrepreneurs, Jamie launched his first business (a window cleaning firm) when he was a teenager and started his most successful company in his early 20s.
If Jamie hadn’t followed his early drive and ambition – or hadn’t launched a business until he was in his thirties – I wonder if he would have had the same success or how long it would have taken him?
That is not to say there aren’t hugely successful business leaders who have launched companies later in life. My point is, that I suspect it’s just not as easy for a couple of important reasons:
Time
I launched webuycarstoday.co.uk when I was 22. I may not have had experience or wisdom on my side… but I had time and lots of it!
Not having a wife or kids means I am 100% free to focus on work and the business is my baby. Yes, my personal relationships may have suffered along the way but I’m still young and I’ve got all that to come. For now, I want to focus on making my own little dent in the world.
A typical day would kick off for me at 5.30am with a quick walk of the dog and then by 6.30am I’d start cracking on – and work through until about 8pm. Typically I’d work like this for six to seven days a week, every week…. and I still do.
Will I be able to do this in my 30s? I guess it’s a lifestyle choice, but I’d like to think if I do meet someone and have children I’d have a better work/life balance. Right now, there are no major distractions and I can put everything into the business and not feel guilty about it.
Energy and commitment
As a young entrepreneur, I have a different kind of energy and maybe this goes back to being committed. Let’s face it I’m not yet experiencing sleepless nights with a newborn or having to share the school-run with my wife, which certainly helps me stay energised and focused.
Like most entrepreneurs, I have a never-ending willingness to do and learn, and seeing what I’ve built already just makes me more motivated.
Inevitably, the older I get, the less energy I will have, so while I’m chomping at the bit to grind as hard as I can, I’m going to embrace it!
Risk taking
When I launched my company, I didn’t need to worry too much about overheads…. especially my own. I was lucky enough to stay rent free at my Mum’s. The support from my family meant I could save money and also take a few risks, which I’ve learnt is important if you want to grow your business.
While I don’t want to understate the importance of experience – sometimes the naivety of youth can also be a strength. For example, older entrepreneurs may have experienced many ups and downs in life which will make them more risk-averse. Whereas I am happy to take chances that I calculate will drive things forward.
I personally think it’s a big advantage. The larger the risk the larger the potential return and that really excites me! It’s a big part of the reason I’ve managed to grow this company so quickly. At the time of writing We Buy Cars Today is the UK’s third most used online car buying company. We simply wouldn’t have got this far if we hadn’t made a few gambles along the way.
All of the above said, I do recognise that I still have a huge amount to learn and I hope I don’t look back on this article in ten years’ time and think “what a plonker!”. As a young entrepreneur building his first empire, I am learning as I go and that means having no preconceived ideas of how I should and shouldn’t run my business. I’ve got plenty of common sense which stops me from making blatantly bad business decisions but really, I’m free to run things as I see fit.
The company is about to turnover £9m this year so I can help thinking, this young entrepreneur is on the road to success!

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