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thefintech

HOW MARKETING AUTOMATION IS HEATING UP FINANCIAL SERVICES

Marketing automation is a smoking hot topic for financial services companies like banks, credit unions and mortgage companies. Here’s why.

Financial institutions offer consumer and commercial products, as well as referral partners that drive sales, and each target segment requires a different approach to reach untapped consumers. This results in a lot of “marketing automation ground” to cover. With fintech disruption and similar products across banks, differentiating is a challenge.

The typical financial institution organization is very data-rich with back-office data and core banking data, but figuring out the front-end marketing to hit all the right buttons is not easy, particularly given the highly regulated nature of the financial sServices industry. Companies have to get their digital marketing strategy and automation right if they want to hit revenue growth targets and financial services companies are no exception.

For Pacific Point, a Salesforce consulting firm in Denver, we have seen financial services organizations topping the list of industries implementing marketing automation more than any of the other industries we serve, which include primarily health and life sciences, public sector and financial services. Bringing data sources together to create very targeted segments, and adjust a customer experience based on real time data from other sources – such as your customer relationship management (CRM) or other internal systems – elevates marketing automation. Tying in email, SMS, web forms, and advertising data allows financial services organizations to be personalized for the best results.

If you aren’t sure where to start, here are some of the most common starting points that we’ve seen financial services companies use to ignite marketing automation.

1. Create a customer journey

Welcoming and onboarding a new customer is a great way to leverage marketing automation. For example, onboard customers who just signed up for your deposit services with a welcome email containing a checklist of things that can optimize their banking experience with you. As they complete tasks – such as signing into online banking, enrolling in mobile banking, signing up for paperless statements, setting up automated billing, etc. – send personalized updates through the journey, sharing relevant tips and information along the way. Onboarding customers can apply to any new product or service and is a fantastic way to create a truly personalized customer experience.

2. Market to referral partners

Commercial and residential real estate agents are a great referral source for banks to gain new business. Drip campaigns on the latest rates and promos are a great way to be top-of -mind to these agents. This option can apply to many lines of business and is sometimes a preferred starting point because it is typically a simple way to start. Also, layering on advertising is a good next step for this target segment.

3. Create opt-in opportunities

The United States Federal Communications Commission (FCC) regulations limit SMS marketing to those who intentionally opt-in to receive messages. Salesforce Marketing Cloud easily hands simple unsubscribe of future emails and text messages, but what if you don’t have the opt-in to begin with? Starting with a promo or giveaway and requesting opt-in at the end of the form is an easy way to get started. Make it phygital (blending digital experiences with physical ones) by having these promotions advertised in your branches and offices, events, and through social, website, etc.

Once you get started in marketing automation, it sparks a flame that lives eternally, a unique long-lasting relationship with each and every customer.

Schedule a call to hear more about Pacific Point’s Salesforce marketing automation solutions.

Pacific Point is a certified Salesforce Consulting Partner, founded in 2011. Pacific Point is headquartered in Honolulu, Hawaii, with locations in Denver, Sydney and Singapore. Pacific Point has a 5 star AppExchange rating, successfully delivering valuable customer relationship management (CRM) solutions across a wide range of industries and clients.

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thefintech

5 TRENDS CURRENTLY BOOMING IN FINTECH SPACE

A2A payments, green initiatives, embedded finance, low-code solutions, and the metaverse are in the spotlight

Over the past two years, the payments market has faced more than one unprecedented challenge, starting with the pandemic, and ending with economic and political events, e.g., Brexit or the recent sanctions, aimed at Russia.

Despite the unrest, market players continue to innovate, giving rise to new trends which push the industry forward. Marius Galdikas, CEO at ConnectPay, has commented on what elements are currently shaping the payments market.

Booming A2A payments

Account-to-account (A2A) payments have become popular amongst merchants due to their inherent advantages regarding transaction speed and costs, to name a few. A2A payments are made directly between accounts — this helps to shave off processing fees, which accompany card transactions. As there are no intermediaries, merchants gain access to funds faster, reducing friction in online payments. With startups closing millions-worth of seed rounds, it’s highly likely more businesses will consider opting to incorporate A2A payments into their checkout experience.

“Card payments remain the dominating choice in the market, however, considering the pace at which interest in A2A is growing, this may push card schemes to a shaky position,” Galdikas commented. “That said, A2A payment providers still have a few challenges to address, if they want to get on the same level as prevalent payment methods, one of them – conveying value to  shoppers, as merchants — not their customers — remain the primary beneficiaries.”

Going green

United Nations has set an ambitious goal for the world – to reach net-zero emissions by 2050. Fintechs are stepping up to the plate, reevaluating their own impact on the environment, funding green innovation, and even rolling out solutions designed to help other companies lighten their carbon footprint. As the world continues moving towards a net-zero economy, the focus on carbon offsetting among fintech will only increase, most likely spurring more ‘green’ innovations as well.

“As digital trendsetters, fintechs could help facilitate the transition to becoming carbon neutral for others as well,” Galdikas noted, also emphasizing ‘climate fintech’ success in 2021. According to CommerzVentures’ report, last year funding for such fintechs was 3x higher than in all of the previous years.

Embedded finance

Embedded finance enables non-banks to offer financial services, which opened many new opportunities for businesses. A good example of this could be the Amazon marketplace, which itself cannot issue loans. However, having partnered with a ‘buy now, pay later’ provider Affirm, its clients can now get loans for their purchases.

Barclay reports that, in payments alone, embedded revenues in 2020 were $16.1 billion. In the next 10 years, the industry is predicted to be worth approximately $7 trillion.

“The demand for embedded finance products is not surprising, as it enables more companies to enter the fintech space as well as present their customers more tailored services, based on their spending behavior,” Galdikas commented.

No-code solutions

No-code or low-code describes an approach to software development where little to no coding skills are required, meaning, specialists without a coding background can easily edit or launch new products. According to Galdikas, this is a powerful tool for fintechs, leading to agile innovation.

“There are differences in how each company operates, so an off-the-shelf solution may not always support its workflow and processes,” Galdikas noted. “No-code or low-code solutions enable to not only build fintech software tailored specifically to the company but also involve diverse experts, such as designers or engineers, and create an overall better product.”

Exploring metaverse

Metaverse is still in a nascent stage, however, fintechs are already exploring what opportunities lie in this virtual world. Setting up a robust financial services framework will be key to enabling users to fully participate in the digital ecosystem.

“Fintechs are likely to be one the key players shaping Metaverse’s payments landscape, owning to their digital-first nature,” the expert shared. “Even though the concept of Metaverse does not match the reality yet, it has the potential to completely transform how online retailers interact with their customers, and fintech will be an important middleman to ensure it all goes smoothly.”

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thefintech.info

5 PERSONAL FINANCE THUMB RULES TO HELP YOU MAKE BETTER FINANCIAL PLANNING DECISIONS

The financial planning process requires due diligence at every step to lay out the income, expenses, and goals based on one’s risk-taking capacity. However, there are certain thumb rules that one may use to bring the personal finances on track. Once accustomed to the rules, proper financial planning exercises can be conducted to bring savings in line with the goals.

Here are five important thumb rules to help you make better financial planning decisions From the day you start earning, make sure you set aside a portion of your income as savings. Now, plan your discretionary and non-discretionary expenses from the balance. No matter how little you save, begin early and make saving a habit.

The rule is ‘Income minus savings is your expense’. If you already have your goals listed out, find out how much is required to achieve them and keep saving regularly towards it. Those who do not follow this rule, will spend first and then save whatever is left for the long-term goals. Avoid such a practice.

How much to save

Irrespective of the salary or business income you earn, set aside a portion towards savings. You can start with 5 percent and over time increase it to a higher percentage of even 25 or 30 percent of income. With age as goals become more prominent, your savings have to increase. During middle age, you need to save a higher percentage and can try to save the maximum amount. Remember, savings here refers to putting your money into high-yielding financial products and not merely keeping it in a bank account.

Emergency fund

Even before you start to invest, make sure you have adequate emergency funds. As a thumb rule, keep an amount equal to at least six months of expenditure in a mix of savings accounts and short-term or liquid funds. This will help to tide over financial emergencies such as job loss or a medical emergency requiring upfront cash.

Life cover

As a thumb rule, one should have life coverage of 10-15 times one’s take-home annual income. This will help survivors to maintain their standard of living in the absence of bread earners in the family. Other liabilities such as home loans etc. need to be accounted for additionally.

How much to save for retirement?

There’s no fixed rule but as a thumb rule, one may aim for a retirement target corpus of 20-30 times one’s annual income to retire comfortably. Again, this may vary as per one’s requirement but having a plan and saving towards it will eventually help retire with enough money.

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thefintech.info

WHAT IS CYBER INSURANCE AND DOES YOUR SMALL BUSINESS NEED IT?

Recent numbers tell the story of data breaches and SMBs. The Allianz Risk Barometer says global businesses are more worried about cyber risks than even the pandemic.

So, what does an enterprise do? How do they protect their hard-earned assets from a cyber-attack? Or a data breach that costs?

Here are some more small business data breach statistics to consider. Cyber insurance is the answer and here’s everything you need to know to protect your business.

What is Cyber Insurance?

These policies look after your SMBs’ cyber liability for data breaches when sensitive information like customers’ credit card numbers get hacked and stolen. They look after recovering from data loss too. And repairing a computer system after cyber-attacks. The cost of a data breach can be serious.

The public relations costs can be big after a cyber event. That’s why this kind of insurance company will let customers know when there has been a breach. Here are some business insurance benefits you won’t want to overlook.

Why Cyber Insurance for Small Business is so Important

Cyber coverage is vital because you don’t want to be swamped by legal fees if there’s a hack. And because the best way to protect businesses is to be proactive when it comes to cyber threats. Like a data breach.

Here are five more reasons you need to guard against these cyber risks with comprehensive policies.

  • You Get Coverage For Stolen or Lost Devices: Cyber liability insurance covers tablets, mobile phones, and laptops. Not just from malware-type cyber events. But from theft and loss.
  • You Get Forensics: Great network security coverage can determine how bad a breach is. Forensic services can uncover cyber incidents caused by employees or insiders.
  • You Get Protection From Hacking and Viruses Damage: A business interruption clause can cover lost income. Modern businesses need this cyber policy to cover compromised data too.
  • You Get Theft and Data Corruption Coverage: Data recovery after a hack is essential. Especially when company data and/or customer information is affected.
  • You Can Get PR Help: Good insurance policies can help rebuild your brand. Another reason to get business insurance like this.

What is Covered by a Cyber Insurance Policy?

Wondering about the specifics and the fine print when it comes to what a cyber insurance policy covers? Here are five of the big ones.

Privacy Liability Coverage

Good cyber security here defends against consumer class action litigation.

Network Security From a Cyber Attack

Cyber security insurance covers you in the event of a network security failure. Like ransomware, data breaches, and other issues resulting from social engineering attacks. And other types of cyber extortion. It can cover first-party costs too.

Media Liability

Insurance carriers and a good insurance broker suggest this when you advertise online. Covers costs when there’s intellectual property infringement.

Network Business Interruption Coverage

A system failure from bad software is covered. Get third-party coverage by a decent indemnity company when you’ve been hacked.

Errors and Omissions

Covers you when a cyber incident causes you to breach a contract.

What is Not Covered by Cyber Liability Insurance?

Like with traditional insurance policies, cyber insurers don’t cover everything. Here are some items left out.

  • Loss of Future Profits. Cyber liability insurance doesn’t cover lost profits. Even when there’s been a breach.
  • Loss of Value. When intellectual property is stolen and your business’s value suffers, there’s no coverage.
  • Upgrades. These aren’t covered either. Not even after a breach.

How Much is Cyber Insurance Cover?

What cyber insurance covers are important, but it needs to be balanced with cyber insurance costs. There will be differences based on options and business size. But a respected company like Insureon brings the median cost in at $140 per month.

There are lots of variances. However, you can get $25,000 worth of coverage for anywhere from $25 to $50 monthly.

How Much Cyber Insurance Cover Should Small Businesses Have?

How much cyber insurance coverage do you need? Enough to cover a small business from cyber exposures if:

  • You are storing credit card data for customers or patients.
  • You’re a business using point-of-sale systems.
  • You provide hardware or software services.
  • You store data on computers or in the cloud.

Many small businesses spend around $1 million.

How to Choose the Right Cyber Insurance for Your Business

Here are some tips for choosing the right insurance company. Remember the cyber insurance market has a lot to sort through.

Understand Third-Party Risk

A good insurance provider deals with supply chain vulnerabilities. Check out their underwriting guidelines.

Ask About Coverage

Get the details on the cyber insurance policies. Most cover both first-party coverage and third-party damages. Ask what happens if there’s a regulatory investigation.

Find Out About Exclusions

Ask an insurance company about the term “avoidable risks” and how that applies.

Ask About Response Times

You need to be fast when there’s been a breach.

How to Get Cyber Risk Insurance for Your Small Business

Understanding how to get a cyber insurance quote starts with following these steps. Beyond price and policies, you need to check the following cyber security boxes.

Remember to look for what are called silent cyber clauses in traditional policies.

Forensic Expenses.

These are security controls. To find out what kind of data was compromised.

Legal Expenses

To resolve claims from things like state and federal notification breaches due to technical errors.

ID Theft Repair/Credit Monitoring Expenses

These services should be offered to affected clients. Include data restoration.

Liability Costs

There’s more to think about than just regulatory investigations. Checking this box will help with class-action lawsuits. Covering all the bases is important when you’re looking at this type of insurance.

Make sure you have all of the above in a cyber liability insurance quote.

Is data breach insurance the same as cyber insurance?

No. There is a difference you need to be aware of. Cyber insurance looks after cyber risk from first-party and third-party incidents. Data breach insurance covers damage to data.

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thefintech.info

TOP TRENDS: TRANSFORMATION OF THE FINTECH MARKET IN 2022

The advancement of technologies expectedly leads to growing client requests, stimulating the Fintech industry to keep up with the times and be quick in offering popular services.

The last year spurred a substantial transformation in financial technologies and highlighted issues that need to be addressed in the nearest future.

Here is an overview of Fintech trends expected in 2022.

Crypto and CBDC to Raise Even More Investments

The popularity of cryptocurrencies is increasing each year. They are becoming more understandable to an average person. In 2021 all companies seeking our services already worked with altcoins. A mere three years ago they all preferred fiat money.

It is safe to predict that the cryptocurrency investment spree which started in 2021 will continue. According to Fast Future, the crypto economy capitalization will skyrocket to 7.5 trillion dollars—against 3 trillion dollars the previous year.

Up to date over 60 central banks are engaged in CBDC development, as evidenced by a PwC report. For instance, the Bahamas launched the Sand Dollar in 2020. The project can be considered successful as the islanders are actively using the digital dollar.

Also in 2020, China’s Central Bank proceeded to test its e-yuan. The country is currently expecting the official currency presentation which is scheduled in February during the Winter Olympics-2022 in Beijing,

Digital currencies will continue gaining popularity. An increasing number of countries plan to issue their own CBDC. According to experts, over 25 countries will introduce their digital currency by the end of this year.

Cryptocurrency Law: Enhanced Government Controls

The growing popularity of cryptocurrencies is drawing increased regulatory attention toward virtual assets. Countries are looking to adopt the rules of play in the cryptocurrency market to their regulatory framework.

For instance, several CIS states implemented cryptocurrency laws in 2021 to regulate the market.

Russia adopted the Digital Financial Assets Law which recognizes digital currencies as property and permits cryptocurrency exchange but payments for goods and services remain inaccessible.

Ukraine approved the Virtual Assets Law, under which virtual money is recognized as an intangible benefit. Cryptocurrencies are now not considered a payment means in Ukraine, but exchange transactions are allowed.

China banned mining, and Estonia imposed stricter rules for crypto companies operating in the territory.

So, we observe that many central banks fear losing control of the money stock, hence the negative moods about cryptocurrencies. This trend is likely to continue in 2022 as well.

Cyber Security and Data Protection as the Main Task of Fintech Companies

Passport particulars, phone numbers, social security numbers, email, income statements, addresses, bank details—all of that is now available to banks and financial institutions, and those data can fall into the hands of cybercriminals.

For that reason, companies will particularly focus on cyber security and safe-keeping of user data.

Neobanks Substantial Expanding their Geography

Neobanks will also continue emerging and growing thanks to the desire of customers to access online banking services and save some of their time.

The total number of neobanks worldwide exceeded 250 in 2021. An important side note: seven of them are Ukrainian companies: izibank, monobank, neobank, O.Bank, sportbank, todobank.

Speaking of European neobanks, the TOP 10 usually includes N26 (Germany), OakNorth Bank, Monzo and Revolut (Great Britain), Numbers (Switzerland), Starling Bank, Atom Bank, Monese, Tandem Bank, and Crypterium.

Round-the-clock wallet access and ease of use remain the key advantage of digital banking, raising more new investments exactly in this industry.

According to the latest research, the number of online banking users will reach 2.5 billion people by 2024.

We have described the top trends which will be observed in the Fintech market in 2022, and the main observation is demand breeds supply. Companies all over the world are guided by client requests, meaning that the financial technology market will continue growing in an attempt to offer newer and higher-quality services.

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thefintech.info

THE FUTURE OF INTERNATIONAL BANKING AND THE CHANGING NATURE OF PAYMENTS

The financial sector is entering a new phase in its evolution, as shifting banking methods herald a change in the way businesses send, receive, and process payments. The accelerated advancements of financial technology in recent years have given rise to lower operational fees, API-enabled tools, and accessible cross-border payment, helping SMBs around the world gain midmarket velocity, without midmarket headcount and expenditure.

Over 66 percent of bank executives now believe financial technology will impact wallets and payments on a global scale, and with the fintech sector predicted to experience a compound annual growth rate of 25 percent this year, the opportunity for fintech growth has never been greater. As businesses acclimatize to the capabilities afforded through increased automation and back-end efficiency, the decreased dependency on legacy systems spells a period of integration and adaptation for a sector in perpetual flux.

The Challenges Facing Traditional Banking Methods

The worldwide average time it takes to pay a supplier has reached 66 days. These extended processing periods for international buyers and sellers can have a severe financial and operational impact on a business, often denying them the chance to break into lucrative global marketplaces. Costly foreign exchange fees, wire charges, elaborate local legislation, and manual taxation processes can pose barriers to entry for businesses looking to expand their offering, and companies are finding it hard to streamline their operations using the existing banking infrastructure.

Traditionally, legacy banking methods arranged cross-border payments through slower local accounts in each new market before enterprises can begin trading there. But the eCommerce industry has proven mercurial in the last decade, adapting to the needs of rapidly growing businesses at a faster rate than banks, allowing fintech payments providers to meet the ever-changing requirements for funding suppliers and securing supply chains.

The acceleration of globalization is making our world more interconnected than ever, with global cross-border flows expected to reach $156 trillion in 2022. However, businesses can’t capitalize on this market using static processes designed for a bygone era – in the banking sector, a bad workman blames his tools is less accurate than ‘a bad workman isn’t using the right ones.

The importance of an efficient payments infrastructure

Failing to prepare is preparing to fail, and without an efficient, transparent payments infrastructure, buyers and sellers aren’t adequately equipping themselves. The advent of automated cross-border payment solutions has changed the payments ecosystem irrevocably, developing a host of features that curb the often expensive and slow processes offered by big banks.

Setting up a virtual bank through an automated payments provider can be done in minutes, providing instant reconciliation capabilities that allow for real-time payment transfer anywhere in the world, mitigating the effects of delays in shipping due to slow invoicing, consequently increasing trust in seller-supplier relationships. All-in-one payments providers can offer a frictionless, paperless virtual banking experience with platforms that automate VAT, taxation, and payroll processes. These added capabilities arm businesses with operational savings that can be reinvested into their global expansion plans, boosting profitability and reducing stagnation.

We live in a culture of convenience that traditional banking means are struggling to cater to in 2022. Businesses, entrepreneurs, and vendors seeking to grow internationally are adapting to modern methods of transaction, viewing financial technology as an enabling partner rather than a disruptive force. Although virtual bank accounts are moving the sector forward, the real test of time will be how these automated, tech-enabled methods of banking, and traditional methods, work harmoniously together for the benefit of the community.

 

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FSC LAUNCHES LOCUM ADVICE FOR FINANCIAL ADVISERS WEBINAR

The FSC has launched an invaluable guide to help professional financial advice providers to plan for business succession in times of disruption and change: its Locum Financial Advice Arrangements – A Guide for Financial Advice Providers document.

When financial advice was brought under the Financial Markets Conduct Act 2013 on 15 March 2021, industry regulation changed from supervising individuals to licensing and supervising financial advice providers (FAPs). With this change came an expectation that licensed FAPs possess the systems and processes necessary to continue providing financial advice if a key person becomes unavailable.

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