2023

Going digital has become the norm and is no longer the exception. Even the smallest SMEs require digitalisation at a fast pace.

by Ronan Gallagher, Head of Omnichannel, Trust Payments

One of the most important steps in this journey of transformation is digitising payments. Although the last hurdle to cross in most customer experiences, payments and transactions are crucial steps. This will dictate whether the customer makes the final decision to pay for your service or product and essentially decides whether your business makes a profit or not.

The SME landscape is cluttered with competition and even a small differentiator can make a huge impact. Today’s world is characterised by faster, smarter and more efficient functions. The pandemic has accelerated the need for more digital efficiency and solutions. Gone are the days when cash was considered easy and effective.

Payment quality over quantity

However, with tight constraints around investment, SMEs need to keep in mind that they don’t have to provide every payment option to their customers. The right mix of choices that suits their business needs and customer preferences is the best practice.

Apart from the benefit to customers in providing an overall smooth and consistent experience, a unified payment system also helps a business understand its sales and inventory, as well as reducing management time.

An omnichannel payment process also serves as a point of data collection, helping SMEs better understand their customers, and their journeys as well as recognise pain points. Consumers today have a multitude of choices across every industry and every purchase decision. An enriched pool of insights will help to deliver a unique and seamless customer payment experience.

The omnichannel experience

Omnichannel payment methods that offer customers multiple payment options at checkout are changing the way businesses interact with customers and vice versa. They are providing a far smoother payment experience while also reducing the amount of time, resources and effort required to sustain a traditional payment journey.

A process that accepts multiple payment options has a range of benefits. An integrated option that drives a smooth, secure and consistent experience can increase sales as well as improve retention of customers.

Omnichannel payment processing requires the integration of not just online but also offline payment processes. Whether a customer decides to make a purchase online or offline, they should be able to choose the right payment method without having to experience any hindrance.

Loyalty is king

Customers have become far more demanding and they are looking for convenience. They want to make payments whenever and however they choose.

In order to provide these options, SMEs need to know their customer pain points. Recognising what works best for your customers is imperative to running a successful business.

SMEs are constantly looking for ways to improve their services and come out on top in a very competitive market. Having the right technology in place gives SMEs a bird’s-eye view of their customers and how they interact with the business.

Real-time data, real-time benefits

One of the most notable benefits of a seamless and integrated payment system is that it allows for real-time data synchronisation. This helps SMEs track and update changes between systems as they happen.

Another advantage is that real-time synchronisation allows for data consistency over time, making it a continuous process that can provide insightful information for the business to grow. Customers choose options that they are familiar with and most convenient to them. Data allows your business to understand what these options might look like.

Whether it is building better offerings, integrating more cutting-edge tech or offering discounts and coupons based on customer patterns- data enables it all.

Customer-orientated incentives

This real-time characteristic of data can prove significant in building customer loyalty. Through this analysis and understanding, SMEs can build out customer-oriented incentives to drive loyalty and retain customers.

By ensuring data insights are implemented, businesses can provide a frictionless experience across all channels both in-store and online. This will also enable customers to make repeat purchases, spend more and even recommend others to your business.

Data will not only help SMEs offer the best and most secure payment options but whether incentives like basket abandoned reminder features, personalised discount add-ons and optimised checkouts are needed to get customers over the line.

A new type of commerce

The main aim of any commercial tech used by SMEs is to make functions easier and more efficient. At the same time, the tech used has to be adaptable and suit growing businesses. SMEs are prone to constant change and so the tech they use needs to be future-proof.

An emerging commerce concept at play here is Converged Commerce™. Born out of the idea that streamlined and cohesive solutions will improve customer journeys and how business will run in the future, connecting multichannel data gives SMEs rich insight to deliver memorable, personalised and consistent customer experiences.

If businesses put Converged Commerce into practice, they will forge and maintain deep and meaningful relationships, drive loyalty and increased sales.

The future of payments for SMEs

When SMEs think about their dream customer experiences, they think seamless; integrated. Customers do not want clunky and confusing journeys and are bound to shift to other offerings the second they feel uncomfortable. The right tech can help smooth over already existing infrastructure and at the same time support businesses as it expands and changes over time.

As the market gets more and more consumer-driven, hyper-personalised experiences are leading the way to build satisfying customer journeys. Only those businesses that can provide quality customer experience across all touchpoints are able to remain competitive.

While a seemingly large and daunting task with significant cost and resources, building a streamlined omnichannel payment experience is a lot simpler when harnessing the modern technology available at our fingertips. Payments are in an exciting place right now and taking a step in the right direction will be a gamechanger for SMEs looking to disrupt the landscape.

The decentralised nature of blockchain has underpinned its success from the earliest days of Bitcoin. The launch of Ether, the second-largest cryptocurrency by market capitalisation, introduced a new type of blockchain called Ethereum designed to do much more than send minted coins from A to B. Ethereum ushered in a new era for blockchain with the smart contract, a game changing feature that has since been used to make a whole plethora of DeFi applications and is rewriting the rule book on how we think about the role of centralised finance.

by Chris Aruliah, Chief Product Officer, BCB Group

Smart contracts are the driving force behind DeFi and have enabled a torrent of innovation on blockchain protocols attracting a rapidly growing user base. Anyone can deploy a smart contract onto a public blockchain which can be developed in a way that ensures the code is unchangeable and automatically runs whenever pre-programmed conditions are met by users. The unchangeable nature of such smart contracts removes the need for an overseer to check that an agreement is being carried out as intended. This trustless peer-to-peer environment is creating incredible efficiency and scale with the total value locked in smart contracts over $200 billion, up from $1 billion in 2020. As a result concepts like Web3 have become part of our lexicon with higher levels of liquidity flowing into smart contracts run on DeFi platforms.

DeFi exchanges like Uniswap and Pancakeswap don’t use fiat currency, which maintains a level of autonomy from traditional finance. Investors who want to profit from financial products unique to DeFi need to use centralised exchanges like Coinbase or Kraken to use their fiat to buy Ether or tokens compatible with DeFi platforms.

These newly acquired assets then need to be transferred to a wallet like MetaMask which makes it possible to connect with and use a decentralised exchange. To convert these assets back to fiat this process is done in reverse with funds returning to a CeFi system connected to fiat payment rails and banks. This highlights how reliant DeFi is on a reliable integration with traditional finance that requires compliant on and off KYC ramps. While this centralised and decentralised alliance is the start of opening up DeFi markets to institutional investors there are considerations such as counterparty risk that need to be taken into account.

A primary incentive for investors to lock their funds into DeFi smart contracts is the profit being made on yield farming and lending protocols generating returns with interest rates far exceeding opportunities on offer in traditional finance. The increased liquidity on these platforms has created a huge demand for borrowing with smart contracts automating the entire process. Unlike CeFi exchanges, DeFi exchange transactions are public with a high degree of transparency though users are pseudonymous, only represented by a series of numbers (wallet address), and while they have used KYC ramps on centralised exchanges to buy crypto assets needed to invest on DeFi platforms, institutions may also need to prove who they are lending to.

Providing a robust guarantee that all those participating in a DeFi liquidity pool have met stringent KYC and AML standards would provide institutional investors with the confidence to capitalise in this space. The most ardent supporters of decentralisation may argue that further centralised control would be a step backwards and that the reason for the success of DeFi has been because of the firm resistance to centralisation. The current hybrid approach of CeFi bridging the gap to DeFi from fiat to crypto liquidity pools will see further iterations to accommodate a wider market with both decentralisation purists and traditional finance players able to find DeFi platforms that leverage the latest smart contracts to best suit their individual needs.

With the rise of Covid-19 in 2020, countries worldwide began to introduce national lockdowns in an effort to stop the spread of the virus. Across the globe, people found ways to cope with navigating the so-called “new normal.”

by Karen Nadasen, CEO, PayU South Africa

Africa, for example, has long believed that “cash is king,” but with more than half of the population having limited or no access to traditional banking, mobile money has proven to be life-changing. Thanks to alternative payment methods, many African families were still able to access essential services simply through a mobile device. Fintech firms have been critical in facilitating these transactions throughout.

In general, fintech development has been directly linked with financial inclusion, poverty alleviation, and enabling economic progress in Africa. However, as the payments industry develops, the goal is to strike a balance between new benefits and long-term economic value. The integration of finance and technology creates an ideal environment in which the continent’s market economy can improve its efficiency.

As fintechs continue to build on existing mobile and telecommunications infrastructure, it is clear that we are only at the cusp of Africa’s potential as the next payment and e-commerce hub.

The current state of FinTech in Africa

Last year, Europe saw record-breaking fintech investment in the Nordic region ($4.8 billion), Germany ($2.5 billion), and France ($2 billion). When compared against Africa, there is still room for growth, but it is evident that African entrepreneurs are gradually catching up with research finding that in 2021, African entrepreneurs raised more than $4 billion in VC funding, with fintech startups accounting for more than half of total capital.

The same research also found that the top four countries with the biggest population of software developers received 81% of venture capital funding globally (Kenya, South Africa, Egypt and Nigeria).

These countries, in particular, have been progressively making a name for themselves as fintech leaders within the African region. South Africa had been notable due to its well-established banking system, with its top four banks providing 80% of banking services in the country. Kenya, on the other hand, continues to make significant strides as a result of M-Pesa, the mobile-based fintech. In fact, M-Pesa provides more than 51 million customers across seven countries in Africa with a secure and affordable way to send and receive money, top-up airtime, make bill payments, receive salaries and even receive short-term loans.

In Egypt, new government laws are making it easier to apply for banking licences. Because of this, the country has risen to prominence as a key supplier of fintech firms in the last year. That said, Nigeria remains the largest investment in developing fintech startups. Paystack and OPay are among Nigeria’s most well-known fintech unicorns, valued at more than $1 billion.

Additionally, while research shows that 45% of the population relies on a formal bank account, 81% have reported owning a mobile phone. Increasing mobile access is creating opportunities for fintech intervention to enable financial inclusion in the region.

Why access to mobile devices is key

According to World Mobile’s research, Africa’s internet economy will more than double in value over the next three years, from $115 billion today. Furthermore, 71% of investors expect mobile phone affordability in Africa to improve over the next three years, according to the same study.

14 years after the launch of M-Pesa in Kenya, there are now nearly 200 million consumers subscribed to mobile money services in Africa. In fact, mobile payments across the continent saw large growth even prior to the pandemic. Africa was actually responsible for two-thirds of total global mobile money transactions recorded in 2018 alone.

That said, there is still much to be done to enable fair access to mobile devices, such as data costs. Kenya and South Africa for example, have the most advanced mobile infrastructure and high internet traffic in the continent, yet it falls far behind the worldwide mobile data pricing list in 2021, with charges of $2.25 and $2.67 per gigabyte of data respectively. This, in comparison to the $0.27 charge in Sudan for example, is a significant barrier to further mobile adoption.

Countries like South Africa will see more widespread adoption of mobile payments once it becomes more accessible to all consumers. In September 2021, the number of banknotes and coins in circulation in South Africa represented 2.7% of the country’s R6.1 trillion GDP, reflecting the high demand for cash in South Africa. To ensure a noticeable shift to digital services across the entire continent, fintech innovation needs to consider accessibility and affordability.

Despite this, mobile payments continue to lead Africa’s fintech revolution and two things remain clear: the migration to digital payments is here to stay, and the acceleration of fintech-led solutions will continue to see support by governments and regulators due to its potential to promote economic growth.

Investing in Africa to drive financial inclusion in emerging markets

Financial services for cross-border trade, peer-to-peer remittances, personal money management, and more, will become more accessible and commonplace across Africa as technology advances and mobile payment capabilities improve. This, in turn, will create further opportunities for both merchants and consumers to build on the region’s economic growth.

There is still significant progress to be made, however, in shifting the preference for cash and ensuring affordable mobile data. Once this is addressed across the entire continent, mobile payments will see a steep increase in adoption, particularly due to the increased recognition of its socio-economic benefits. 2022 will see more partnerships occur between financial institutions, governments and mobile payments providers. This will ultimately create more choice, opportunity and day-to-day improvements for the millions of people across the globe’s largest continent.

#1 INNOVATE
The world is changing faster than you think. Being distinctive and innovative is key to your survival and success. Create a top 10 list of innovation ideas you can implement across all functions of your business in 2020 and get it done. As Nike says, Just Do It!

#2 FOCUS, FOCUS, FOCUS
Focus is everything is life. Nothing can be achieved without focus. Pick the areas you want to go after and then put all your resources behind them. The real challenge will be – can you stay disciplined and avoid the distractions? Sometimes it is better to have the blinkers on!

#3 DRIVE ENTERPRISE VALUE
Customer is king, and your human capital is valuable, but what about the shareholder? Time to give them some tender loving care. Listed or unlisted – track your enterprise value monthly. More importantly, for every main strategic initiative, ask the question – how will it drive enterprise value?

#4 IT’S ALL ABOUT THE CASH
Cash still remains king. Sometimes it good to learn some lessons from the often criticized PE industry. Measure your business on cashflow. Run it like a shop. When your shutter goes down at night – how much cash did you bring in?

#5 DISCARD & ADD
Too many companies sink under the weight of too many products they like to sell. 20% of products generate 80% of revenue. The tail is always too long. Have the guts to discard products that don’t generate revenue and add selectively to drive your innovation agenda.

#6 ONLINE IS KING
Your channels are changing as you sleep. While your office and stores are shut, the customers are at play. Fastest finger first on their favorite online sites. Make being a best-seller on the #1 online channel your priority. Getting online right could make the difference on whether you live or die.

#7 THE NEED FOR SPEED
Patience is out of style. Customers want everything now. Clients wanted it yesterday. If you can’t take care of them, somebody else will. Online has made the world flat. Crash the turn-around-times of every key process in your organization. Go Formula 1!

#8 UNLOCK YOUR HUMAN CAPITAL
People are important, but not at the price of success. Structure right, have the right headcount and competency, but more importantly create a performance oriented organization. Reward the performers and clean up the tail every year in a humane way – yes, it is possible to do both together.

#9 GO COOLTECH, GO DIGITAL
The world has gone digital. Maybe this time the trees can really be saved. Automate to the maximum. Word’s like AI, Machine Learning, Robotic Process Automation are not Latin anymore. Simple applications using these technologies are available for all businesses. Use them. The robots have arrived!

#10 WORK & LIFE CAN BE BALANCED!
It’s true. Starts with your cell phone. Look at it every hour or two during the work day and once every evening at the most. Twice on the weekend. Sorry I can’t be more generous. And focus your free time on your family and friends – not Netflix. It is possible to work hard and play hard.

Have a great 2020, and see you on the other side of the calendar!

 

Regards

The Online Safety Bill, a landmark piece of legislation which has been five years in the making, has stirred up a lot of debate in recent weeks.

by Martin Wilson, CEO, Digital Identity Net 

It is designed to lay down in law a set of rules about how online platforms should behave to better protect their customers and users. The bill covers a wide range of issues including the spreading of illegal content, protecting children from harmful material and protecting individuals against fraud.

Even before its introduction, various parts of the bill were drip-fed via the media, such as measures to protect people from anonymous trolls, protect children from pornography and stamp out illegal content. Each development was met with intense scrutiny.

And since its introduction, this has continued with many current and former politicians, tech execs and business leaders sharing their views on the bill described by the UK government as ‘another important step towards ending the damaging era of tech self-regulation’.

But is it enough to protect people online?

Welcome change

The rules the bill sets out to change have needed updated for a long time. The bill brings more clarity and should be easier to police.

At last, big tech will be held accountable as the bill imposes a duty of care on social media platforms to protect users from harmful content, at the risk of a substantial fine brought by Ofcom, the communications industry regulator implementing the act.

It’s a step towards making the internet a safer, collaborative place for all users, rather than leaving it in its current ‘Wild West’ state, where many people are vulnerable to abuse, fraud, violence and in some cases even loss of life.

User verification

An initial issue I had with the earlier version of the bill, is that it positions algorithms which can spot and deal with abusive content as the main solution. This does not prevent the problem; it merely enables action to be taken after the event.

Arguably in recognition of this, the UK Government recently added the introduction of user verification on social media. It will enable people to choose only see content from users who have verified they are who they say they are – all of which are welcomed.

But the Government isn’t clear on what those accounts look like and its suggestions on how people can verify their identity are flawed. The likes of passports and sending a text to a smartphone simply aren’t fit for the digital age.

Account options

 In my view, there should be three account options for social media users.

• Anonymous accounts: available for those who need it e.g., whistle blowers, journalists or people under threat. There will still be a minority who use this for nefarious reasons, but this is a necessary price to pay to maintain anonymity for those who need it. The bad actors will receive the focus of AI to identify and remove content and hold the platforms to account.
• Verified account: Orthonymous (real name) – accounts that use a real name online (e.g., LinkedIn) and are linked to a verified person.
• Verified accounts: Pseudonymous – accounts that use an online name that does not necessarily identify the actual user to peers on the network (e.g., some Twitter), but are linked to verified accounts by the services of an independent third-party provider. Leaving identification in the hands of the social media platforms would only enable them to further exploit personal information for their own gain and not engender the security and trust a person needs to use such a service. The beauty of this approach is that it remains entirely voluntary and in the control of each individual to choose whether to verify themselves or continue to engage in the anonymous world we currently live in.

We expect that most users would choose to only interact with verified accounts if such a service was available and so the abuse and bile from anonymous, unverified accounts can be turned off. After all, who doesn’t want a nicer internet where there are no trolls or scammers?

Verifying users

In terms of verification, the solution is a simple one. Let’s look to digital identity systems which let people prove who they are without laborious and potentially unreliable manual identity checks.

Using data from the banks, which have already verified 98% of the UK adult population, social media firms can ensure their users are who they say they are, while users share only the data they want to, so protecting their privacy. This system can also protect underage people from age-restricted content.

Such digital identity systems already exist in countries such as Belgium, Norway and Sweden and have seen strong adoption and usage for a range of use cases. There is of course no suggestion that such a service will eradicate online abuse all on its own, but it would certainly be a big step in the right direction.

Buy-in required

With the introduction of the Online Safety Bill, the UK is now leading the charge on protecting people online and its approach is consistent to those being considered around the world.

However, the Government needs buy-in from social media firms, banks, businesses and consumers to win this fight. By working together and utilising the right tools and partners, we can all help protect people online, making the internet and social media platforms a safer place for all.

Accelerated changes in the lending industry are reshaping the competitive landscape of loan origination. Borrowers have come to expect the same immediacy in applying for a loan as they do when online shopping for goods or entertainment.

by Brandi Hamilton, Director Marketing Communications, Equifax

Financial institutions (FIs) of all sizes are working diligently to adapt to new customer expectations of speedy and efficient transactions, as well as a fair chance in the lending approval process. Incorporating automation and cloud technology into the lending process will allow FIs to gauge loan repayment propensity more efficiently and allow lenders to say “yes” to more loan applicants.

There are four lending trends that will help FIs create a frictionless loan origination experience for borrowers, while also asserting themselves as industry leaders.

The very meaning of having a job is changing

The workforce has become more mobile, embracing the concept of employees working from home — allowing leeway for traditional employees to take on freelance work or start small businesses to earn additional income. Some have left the traditional workforce altogether and are pursuing solopreneurship full-time. People with jobs are quitting them en masse, and for the 30 to 45 age group — the largest cohort of homebuyers — resignation rates were up more than 20 percent from 2020 to 2021. Many workers simply do not want to return to the office. They may also be quitting for various reasons: to look for a new job, join the gig economy, or forge their path as an entrepreneur. The shift was perhaps triggered by the coronavirus pandemic and the resulting move to remote work, but it is here to stay. The unpredictable nature of their income complicates these consumers’ financial capacity and how FIs can measure their ability to repay loans.

With potential borrowers diverting away from multi-year histories of job stability and high credit scores, FIs must expand the scope of creditworthiness. Lenders should consider that changes in the way people work do not always equate to loan affordability issues. Borrowers with complex employment profiles should not be denied financial equality due to outdated methods for an individual’s propensity to repay loans.

Financial inclusion

Many Americans who are entering the workforce for the first time face a Catch-22: they can’t get credit because they don’t already have credit. Others are seeking to recover from damage to their credit records because of an extended period of unemployment, family changes, or other life events. By considering alternative data for determining creditworthiness, lenders can foster greater financial inclusion.

Financial inclusion leads to FIs attracting diverse groups of borrowers across all generations, regardless of their credit file. “Thin file” or “credit invisible” applicants face higher rates of denial amongst underserved demographics.

FIs embracing alternative data will allow expanded access to credit inclusion through tailored digital experiences that better serve marginalized communities and those with unique circumstances. Ensuring underserved consumers aren’t continually left without access to credit and capital can be a critical step to financial inclusion.

Fortunately, there are a few easy ways for lenders to address more financial inclusion for all — while reaping the benefits along the way. And it all starts with data.

Alternative data and APIs

Historically, consumers had less access to credit and data information. But today, collaboration and access technologies enable third-party access to personal account data through application programming interfaces (APIs). This open data exchange allows fintechs, banks, and third-party providers to share financial data through a digital ecosystem that requires little effort. These instant and seamless data transfers enable consumers to get loans faster and more efficiently.

APIs and the use of alternative data also create opportunities for potential borrowers by narrowing the space between traditional banking and lending and the evolving fintech category. For example, FIs can expand their use of data to capture more accurate financial strength indicators, resulting in lenders having the ability to say “yes” to more applicants while reducing risk and default rates and improving operational efficiencies.

This holistic view potentially enables an untapped demographic of quality borrowers to get approved for loans, establishing security and wealth development for underserved communities.

Low friction lending could mean improved customer experience

When it comes to lending, many borrowers demand the same speed when applying for a loan as they do when they make purchases with large online retailers. Automating loan origination tasks and processes allows for a fast, flexible, low friction lending process that feels easy and convenient. In addition, evolving consumer trends and preferences mean lenders should continue to streamline processes and leverage data to meet consumer expectations. Banks leveraging these and other technologies can reduce the number of steps consumers may encounter applying for a loan – filling out a cumbersome application, contacting employers to provide proof of income and employment, or providing sensitive banking log-in or payroll credentials to share data.

Having automated and secure technology solutions integrated during decisioning can reduce the need to request sensitive banking log-in credentials or outdated paper-based processes. As a result, some applicants may walk away from business transactions that inconvenience them. Adopting a digital lending process that attracts diverse borrowers across all generations, regardless of their credit file, and providing exceptional lending experiences is key to surviving the evolving lending landscape.

Keeping up with these consumer trends will better equip FIs to serve their borrowers’ unique circumstances better. A positive and fast borrower interaction without friction is critical to FIs reaping success. Lenders that meet the demands for a digital-first, frictionless experience and incorporate open data will become preferred lenders of the future.

With the European Commission first adopting the PSD2 proposals in 2015, Strong Customer Authentication (SCA) has now officially come into force across the UK. Now that this long-anticipated wait is over, we can start to look at what SCA means in practice and how merchants can do go beyond these regulations.

by Scott Dawson, Director of Operations, Pixxles

How SCA impacts merchants

In simple terms, SCA requires a customer to verify themselves with two of the three following pieces of information, such as a password, mobile device, fingerprints, facial recognition, or even subtle cues like how they type before payments can be processed. Although these regulations introduce increased friction in the payments process, SCA is necessary to prevent fraud.

Overall, the roll-out of SCA across Europe as a whole has been smooth, despite alarming news of a third of all transactions being blocked and losses of €100 billion. This is likely to be down to the flexibility built into SCA from the outset: transactions under €30 were exempt, and many merchants will receive exemptions on transactions up to €30 if their acquirer’s fraud rate is below 13 basis points and €250 if their fraud rate is below 6bps. This flexibility encourages acquirers and merchants to be proactive about fraud, as the lowered friction from a lack of SCA challenges will likely translate into more sales.

Despite offering increased protection, European eCommerce merchants have seen fraud rates rise as much as 350%. However, this does not indicate that SCA is not effective. The sharp influx in fraud, in general, is down to the rise in new eCommerce shoppers during the pandemic. In fact, if SCA was not in place, it is possible that this figure could have been even greater. Therefore, SCA should be seen as one of many systems that a merchant should have in place if they want to reduce fraud on their eCommerce site.

A collaborative approach to reducing fraud

With that said, what then are merchants’ options for going beyond to minimise fraud rates even further than SCA regulation currently allows, whilst maintaining a frictionless payment process for legitimate customers?

First and foremost, it is important to understand the exemptions process and what level of protection is available to your company. For example, if your fraud rate is already very low, you might have the option of exempting customers from SCA. In order to do this, you will need to contact your current acquirer, and if your current payments partner can’t offer you high enough exemptions you may need to consider changing acquirers.

Next is to adopt additional security technology to support SCA. There are a number of systems that use AI and machine learning to spot the signatures of fraud before it gets to the payment stage. Very few fraud attempts are carried out by a human being on a computer – instead, bot networks with increasingly sophisticated and humanlike behaviour are used to carry out hundreds of automated attacks simultaneously. This is a powerful tool, but there are some obvious tell-tale signs when attacks are carried out by machines that AI can spot. Due to the accuracy of AI, even when attacks break through machine learning can be used to prevent them from happening again.

Lastly, attacks are not always malicious in nature. Around 90% of merchants say that ‘cardholder abuse of the chargeback process is a leading concern for their business. While sometimes this abuse can be intentional, it could also be innocent. For example, a customer might not recognise a charge on their card statement and, instead of looking into it, asks their card provider for a chargeback. It is possible to put systems in place that can dramatically reduce both malicious chargebacks and unintentional ‘friendly fraud’. Having robust order-tracking systems in place is one way to cut down on chargeback claims from customers who think that their order has been lost when it is in fact running late.

Continually evolving to fight fraud

When it comes to fraud prevention, collaboration in terms of tools and expertise is key. As we have seen, by itself SCA isn’t the one and only solution for fraud, but when combined with multiple anti-fraud systems and a focus on learning more about current threats it can become part of a multi-factor solution.

Therefore, although SCA is a step in the right direction, in order to keep up with the fraud ecosystem you will need to be continually evolving too.

The World Bank cites financial inclusion as one of the key enablers to reducing extreme poverty and boosting shared prosperity. Unfortunately, many countries still fall way behind on levels of financial inclusion and are unable to offer their citizens equitable access to essential financial services. When this occurs, we get financial exclusion. Sadly, this remains an issue around the world, which is preventing nearly 1.2 billion people from fulfilling their true economic potential.

by Patrick Reily, Co-founder, Uplinq

The knock-on effects of financial exclusion are felt by everyone. Essentially, individuals who are excluded from economies are in turn, unable to make meaningful contributions to them. As a result, economic growth in these areas can be limited, which has created a tremendous incentive to promote levels of financial inclusion across the world. In particular, there’s a real need to boost financial inclusivity in regions, such as Africa and Latin America, where the issue may be leading to diminished growth.

Why is financial exclusion problematic?

There are several ways to assess the economic harm caused by financial exclusion. As mentioned, the phenomena contribute to both microeconomic and macroeconomic problems. On a personal level, financial exclusion inhibits a person’s ability to access mainstream financial services, such as savings and pension schemes. Unfortunately, such limitations increase the likelihood of personal debt and limit opportunities for education, personal development and access to employment.

What’s more, financial exclusion overlaps significantly with issues like poverty, as well as broader challenges, such as social exclusion. To this end, without equitable access to financial services, individuals may begin to feel cut off from society. Simply put, these people don’t have access to the same security frameworks afforded to others. Sadly, this can then manifest into a myriad of further economic and societal problems.

Does financial exclusion hurt businesses?

While some of us may be deeply concerned about the plight of the financially excluded, others may feel less concerned as they deal with problems of their own. However, financial exclusion has a negative economic impact on all of us. On the broader scale, financial exclusion can stymy economic growth, lower educational attainment and limit the development of innovation and intellectual property. Directly or indirectly, we all pay an enormous price.

What’s more, the concept of financial exclusion also extends to businesses. In this instance, it applies to companies who are unable to access traditional financial services in the same manner as market competitors. Primarily, this issue tends to affect small-to-medium-sized businesses (SMBs), many of whom find themselves at a disadvantage to larger counterparts when looking to access essential financial services, such as lending capital. Without equitable access to lending capital, the ability of SMBs to reach new markets is severely limited.

Why do SMBs matter?

With high levels of financial exclusion, businesses, as well as the economies they function within, are unable to reach their maximum economic potential. As such, there is a need for all of us to combat the issue. At Uplinq, we believe the fight to promote financial inclusion begins by tackling the issue within the SMB market. If we do that, we can take the first step towards building a more inclusive world for all.

Ultimately, SMBs are the lifeblood of most Western economies, providing around 63% of new private-sector jobs created in the US alone. To properly scale, many of these businesses need access to lending capital, which isn’t always available. Furthermore, on account of their size, many SMBs lack the requisite financial data to pass traditional credit checks. This is not to say these businesses aren’t worthy of receiving lending capital, but instead, simply struggle to effectively make the case within the context of existing decision-making frameworks.

Building a more inclusive world

So, how do we go about building a more financially inclusive world? At Uplinq, we believe a radical overhaul of traditional decision-making systems is required. Specifically, it’s time to update the antiquated decision-making processes used for SMB lending decisions. For too long, these services have relied on limited data sets to generate results. As such, many existing systems are unable to offer an accurate picture of a businesses’ true financial viability, which limits lending opportunities.

Thankfully, modern technologies now exist, which offer dramatic improvements in this area. Notably, solutions like Uplinq can assess billions of alternative data points to create a more comprehensive picture of a business’ financial viability, regardless of its size or status. By implementing these technologies within their systems, lending companies can begin to serve the SMB market in a far more inclusive manner.

If we can achieve this goal, then we can begin to build a more inclusive world, which will benefit us all. This is the objective we’re working towards every day. Our innovative solution can allow credit lending providers to generate the most accurate lending decisions possible. To this end, our solution can help a greater number of SMBs receive lending when they need it most, helping to close the gap between them and their more established counterparts.

While consumers’ online activity had seen steady growth for years, Covid-19 turbocharged this. In retail, internet transactions as a percentage of total sales hit a high of 38% in January 2021, against 20% before the pandemic, according to the ONS. Even a year later, with all restrictions lifted, they remain at 27%.

by Clare Beardmore, Head of Broker and Propositions, & Jodie White, Head of Product and Transformation, Legal & General Mortgage Club 

Meanwhile, online banking was already well developed prior to Covid-19. More than three-quarters of adults in Britain used internet banking in the opening months of 2020. Yet open banking services have also witnessed rapid and massive growth over the past two years. January 2020 saw the number of customers using open banking in the UK pass one million. Nine months later, that doubled. Today, there are five million users.

There’s little doubt when it comes to the public’s appetite for digitally-enabled services. Among brokers, however, it’s been more mixed, and uptake varies widely.

But customer expectations are growing. Developments inside and outside the sector are leading to increased expectations for fast, smooth digital experiences. Customers increasingly demand solutions that will make their mortgage journey easier and quicker. And they want to be able to choose how to work with their broker.

Advisers that fail to offer a digital approach and communicate through online channels will only be restricting their ability to reach these customers. In this environment, the bar set by market leaders soon becomes the standard. Those who are yet to offer a range of digital communication channels risk hindering customer retention or may find themselves bogged down with administrative tasks, preventing them from doing what they do best: providing advice.

In short, a strong digital offering is becoming table stakes in the advice sector.

No need to reinvent the wheel

The good news, however, is that brokers don’t have to do this by themselves, and they don’t have to do everything. They’re not technology businesses after all.

Instead, brokers should avoid the gimmicks and look for technology that adds value for themselves and their customers. In most cases, they are one and the same: Technology that reduces inefficiencies in the mortgage process and friction cuts brokers’ costs, as well as the inconvenience and delay for clients.

Any serious adoption of technology must focus on the impact on the end customer. Consequently, a serious examination of existing technology cannot do better than begin with customer relationship management (CRM) systems.

Customer relationship management is critical to the client’s journey. It plays a central role in capturing and managing borrower information and streamlining the loan process. Its importance has meant that a wide range of robust existing systems is currently available. There’s no need to reinvent the wheel – nor even to invest; Legal and General’s Mortgage Club, for instance, provides certain members with free licenses to the Smartr365 technology platform, which includes a comprehensive set of CRM tools.

By automating tasks, eliminating effort, and providing workflows to accelerate the mortgage process, CRM systems are critical to meeting modern customer expectations. However, they can’t and don’t aim to replace the broker.

The human touch

For advice, the human factor is still vital. That’s reflected in the continued dominance of intermediaries in lending. Over seven in ten buyers used an adviser for their most recent purchase. With borrowers facing a sustained rise in interest rates for the first time in a decade, and finances squeezed by rising inflation and a cost of living crisis, that’s not going to change.

CRM technology, however, can boost efficiency and free time for brokers to spend working with clients to find the best solutions. It also promotes continued engagement to enhance retention.

Rather than replacing the broker’s expertise, the technology enhances advice by enabling advisers to apply their knowledge more effectively. To give one example, intuitive checks built into an affordability calculator share a far more complete picture by revealing why certain inbound leads might be failing. That allows intermediaries to offer better-tailored advice to customers.

Crucially, the technology must serve the advice journey, not determine it. The way to avoid that is to integrate digital capabilities in a wider transformation journey focused on using the tools available to meet customer needs and support advice. To do so, brokers must embrace technology, as their customers already have done.

Those that don’t could be bringing the next crisis on themselves.

As personal and business banking customers across the UK adopt digital technology at an accelerated rate in their everyday lives, this raises the industry benchmark for smarter, sleeker, and more innovative banking solutions.

by Jon Munnery, Insolvency & Restructuring Expert, UK Liquidators

The coronavirus pandemic is a testament to business agility, as financial institutions swiftly transitioned to online operations under unprecedented economic conditions and overhauled communication infrastructures to maintain customer relationships virtually. The banking industry witnessed a watershed moment in consumer behaviour as the temporary closure of bank branches pushed those most resistant to change and opposed to embracing digital banking to test the waters.

Now that most Covid-19 restrictions have been lifted, how has this affected the footfall of bank branches?

Is it the end of an era for high street bank branches?

Taking it back to before the pandemic, customers moved to online banking in droves which saw footfall figures gradually dwindle, and further decline when the pandemic hit. This led to a record number of branch closures, with hundreds more set to close in 2022.

According to a House of Commons briefing paper, the number of bank branches in the UK roughly halved from 1986 to 2014. The decline in bank branches can be attributed to the following factors:

• Cost-cutting measures
• Mergers within the industry
• Competitive pressures from new entrants in the banking sector
• Increasing popularity of internet banking.

Which? have been actively tracking UK bank branch closures since 2015 and can confidently conclude that bank branches are closing at a rate of around 54 each month.

The NatWest Group, which comprises NatWest, Royal Bank of Scotland and Ulster Bank, will have closed 1,154 branches by the end of 2022 – the most of any banking group.

Lloyds Banking Group, made up of Lloyds Bank, Halifax and Bank of Scotland, has shut down 769 sites, rising to 830 in 2022.

Barclays is the individual bank that has reduced its network the most, with 841 branches having closed – or scheduled to – by the end of 2022.

The pandemic sped up the shift to online and mobile banking and provided banks with the optimum opportunity to showcase the potential of their digital services on offer. Data gathered by YouGov Custom reveals that over half (56%) of consumers say they will avoid bank branches in the future – thanks to coronavirus.

A new age of cutting-edge banking technology

While the hospitality industry speeds the way in innovative food delivery and the retail industry revolutionises in-store customer experiences – the banking industry is cementing its position as a trailblazer in fintech.

Here are some technological trends in the banking industry that are making bank branches redundant.

• Mobile banking – The continued rollout of mobile banking services has drawn fierce competition from challenger banks responsible for driving away customers from household high street banking giants. The UK is leading the challenger bank revolution as the likes of Monzo and Revolut are best known for dominating the UK market. Revolut recently became the UK’s biggest fintech firm as its valuation peaked at £24 billion.

According to the Which? consumer champion’s current account survey, challenger banks are outperforming traditional high street banks, with users ranking Starling Bank, Monzo, and Triodos highly for their customer service and mobile apps.

The survey also found many traditional high street banks languishing at the bottom of the customer satisfaction table, often ranking poorly for service in branches. This not only diverts customers online, but fuels the takeover of digital banks and therefore, the decline of bank branches.

• Chatbots – Digital humans or robo advisors powered by artificial intelligence are in use by many banking providers to streamline the customer service journey and generate an instant response to customer queries. It also cuts out any necessary time spent by human chat agents to answer non-complex queries, for which answers can be automatically populated from the website.

Artificial intelligence is also being used to improve the efficiency of back-end processes, such as data classification and risk analysis.

• Mobile branches – Although digital banking is accessible for the majority, not everyone can navigate online banking services with ease. The demand for in-person services remains, albeit small, which brings us to the introduction of mobile branches. NatWest and Lloyds provide access to mobile bank branches to allow individuals to carry out basic banking, such as deposits and withdrawals.

While customers no longer need to visit a physical branch due to the advanced functionality of online and mobile banking, the expectation for fast and immediate customer services remains as customer support transitions online. In a world where support can be accessed almost instantaneously through the click of a button, the stakes are high for digital banks, their reputation and customer loyalty.