Current trends in the order-to-cash-process

N/A | June 17, 2019

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Finance professionals operate in a world that is constantly changing in response to emerging trends. Increasing automation of business processes is changing the tasks associated with the role. The Onguard Barometer asked more than 1000 finance professionals about the trends and developments they see in financial services. What trends are expected to have the greatest impact on the order-to-cash (O2C) process? And what kind of impact will they have? Their answers are explained in this infographic.

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How to Utilize Open Banking Opportunities in 2020

Article | April 27, 2020

Everyone wants to build a creamier, faster, and more efficient financial services journey — which in 2020 is not a point of controversy or friction. Today, customer demand is touching peaks. It is customer demand that forces businesses come out of their silos and collaborate with others to create products and services that are open-source, non-proprietary, and do not lock down users into an ecosystem. The launch of Open Banking is initiated to fundamentally change the way consumers, businesses, and banks pay and get paid, and how they maintain their data. The foundation of a unified Application Programming Interface, or API, across financial institutions, constitutes a foundation in which data can be seamlessly and securely shared right away. While open banking is in the initial stages of its evolution, many assume this trend to expedite and reshape the banking industry in significant ways. Thanks to open banking developments around the world, customers are becoming more informed of the essential value of their information and are increasingly seeking more command over their financial data. Table of Contents •Why is Open Banking Important? •How Does Open Banking Work? •Open banking in United States •The Wave of Change in Payment Arena •Cloud-based Processing Services •Conclusion Why is Open Banking Important? The most valuable asset in the 2020 world is data, and banking data is the finest of the crop, as it facilitates insight into how consumers and businesses are employing money, saving, and acquiring debt. The data has got value and the data that the bank holds and the customers, belongs to the customer and not to the bank, that’s a fundamental realism or premise that the government has is writ large in European legislation. You will be pestered by its called GDPR but fundamentally enshrines the fact that the data belongs to you, the consumer or to the SME, not to the financial institution. And if you as a consumer want to use that information to get access to better products and better services, it’s entirely your right to do so. That’s what open banking is trying to deliver. It holds the promise of making finance more convenient, better tailored and fundamentally smarter. From industry point of view, open banking promises to lower the barriers to entry to financial services and lower the barriers to innovation in financial services. That’s why it is so exciting for many of the fintechs. Open Banking delivers enormous opportunities in 2020, for the fintech ecosystem that goes beyond necessary to invigorate customer relationships and transform businesses. Through ecosystem partners, banks can enter customer journeys earlier than before and create added value to expertly serve enduring customers as well as attract new ones. Customers foresee seamless digital experiences, and platform-based business models, that are a quintessential element of the digital economy. When embracing the opportunities Open Banking brings, banks can leverage the ability, speed, effectiveness, and innovativeness of startups to enhance their product and service offerings. Banks also have access to other banks’ data. By genuinely performing multi-banking services, they can drag competitors’ customers and spread awareness of their brand. How Does Open Banking Work? Let’s put this into three: • What the banks do • How you get registered • What the customer sees The banks have put into places API’s, this means they have made huge technology decisions to expose customer data and access the data from other third parties. For open banking to work, you have to be governed by the OBIE rules. The OBIE is open banking implementation entity and you can either be an AISP or a PISP that sits under the OBIE. The AISP essentially means you are an account information services provider and PISP means you are payment initiation services provider. One means you can aggregate transaction data and customer data, the other means the payments that you can initiate from your third party, from your bank. The third element to this is TSP, a technology service provider. And they basically provide all the rails between the banks and between third parties to make sure that this whole system runs right. From the consumer perspective, at the end, it gives them the ability to share their data with third parties but crucially have the permissioning power to be able to do that. An AISP can condense reams of bank account statement data and pass it to the customer in a single interface, making it ideal for treasurers of multi-banked organizations. Payment service users – whether they are individuals or businesses, can guide their banks or payment service providers to share their bank balance and transaction data with regulated AISPs. To display this information on a user-friendly dashboard, the AISP can convert all this transaction data into the expected format and send it to the customer’s ERP or Treasury Management System. Before the initiation of Open Banking, businesses and consumers were logging into each bank individually to initiate payments, using various workflows and security etiquettes. With the arrival of Open Banking, individuals or businesses are now equipped to mandate their multiple banks or payment service providers to receive payment instructions via their PISP’s app. Learn more: Open banking in the same language Open banking in United States According to Deloitte Insights, The open data revolution is most obvious in Australia, the United Kingdom, and other countries in the European Union. Each has distinct regulations that require banks to share customer data with third-party providers as per customers’ instructions. Other countries, such as Canada, Japan, and Singapore, are also considering similar regulations. Australia, however, has taken it a step further: It has gone beyond the financial services sector, applying an expansive set of rules on consumer data rights and data-sharing to other industries as well. We do not know yet whether this will be a model for other countries, although, in the United Kingdom, similar efforts are underway. While the open banking model in the United States may take a different path, US banks can learn valuable lessons by looking at how it has been implemented in more regulatory-driven environments. Bank leaders may find it particularly helpful to review how different regions set technical and customer experience standards for data-sharing. To date, there are no signs that new open banking regulations are being developed in the United States. Learn more: Open banking model strategy The Wave of Change in Payment Arena One interesting example of the innovation encouraged by Open Banking is HSBC’s Connect Money application. This application enables customers to view all their accounts within single application-even if those accounts are scattered across different banks. According to an article by Accenture "How Open Banking is Catalyzing Payments Change" Connect Money demonstrates one of the most fascinating features of Open Banking. Many Open Banking products and services are subject to “network effects”—they become more valuable as more banks participate. If Connect Money allowed customers to track only HSBC accounts, it might have been somewhat useful. The fact that the app connects across many banks is what makes it powerful. This aspect of Open Banking can also make it easier for new entrants to grow and gain purchase in the market since more access to data means more opportunities to create value for customers. In the payments platform, Open Banking is advantageous to small and medium-sized businesses (SMEs). This is because it facilitates account aggregation, better financial management, easier credit checking of customers, and the unification of lending and accounting applications. With Open Banking, SMEs can receive and make payments using different platforms with better clarity and best momentum. Open Banking payments are validated instantly between consumers and their banks. This means the chargebacks that merchants must pay because of fraud or rejected payments becomes zero. This offers plentiful savings for all merchants. Payments powered by Open Banking also give real-time credit transfers, confirming the payment and empowering merchants to ship the product immediately. Cloud-based Processing Services Open Banking also maintains cloud-based processing services- a compelling alternative for decentralizing processing and encouraging payments innovation. The benefit includes: • More economical costs • More regular compliance maintenance • Advanced enterprise agility • The capacity to flex volumes quickly The new payment option, called IATA Pay, provides customers more extensive selection of payment methods when buying airline tickets. The most popular services that are being worked in 2020 covers Request to Pay and P2P payments services. We can anticipate seeing many more in the following years. Conclusion Open Banking scales to opportunities preferably, then threats. Done perfectly, banks can flourish, encouraging their customer franchises and brand, securing a defined culture, and fostering business through open collaboration with the world beyond financial services. We are witnessing the initial stages of a seismic industry migration that will come into full power over the next five years. The evolution of innovations with the potential to force simplicity and enhance flexibility is turning a once complicated web of financial institutions into centralized tools to maximize value creation. Open Banking scales to opportunities preferably, then threats. Done perfectly, banks can flourish, encouraging their customer franchises and brand, securing a defined culture, and fostering business through open collaboration with the world beyond financial services. Consequently, any bank that needs to stay consistent in 2030 must begin to design their Open Banking strategy immediately.

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Investor Insight: Digital Marketing Trends in the Banking Service Industry

Article | April 27, 2020

With the growth of social media and a slew of technological changes, banking has changed the way it functions. Just as online shopping and e-commerce are boosting sales, similarly social media, blogs and the technology for sharing videos are also creating buzz about specific brands and products. Businesses need to adapt and keep up with the changing trends in digital marketing. Digital marketing trends in the banking industry is becoming increasingly important Everybody's digital today. Virtually any bank will have a digital presence from social media to PPC ads across Google and Bing. Most banks believe that their digital marketing spending must be increased and efforts must be across every digital platform to make their advertising more efficient. The number of digital advertising and marketing companies now accounts for more than 50% of their marketing expenditure, compared to 14% of 2017. The similar banking marketing trend has occurred in mobile marketing, which spends less than 40% of its budget but is increasing. Although the importance of digital marketing trends in the banking business demonstrates increased competition, it also makes it harder to distinguish. This means that banks must take uniquely different techniques, showcasing consumers and success stories, bringing value to market offering, and making the most of a highly competitive digital world utilizing non-traditional awareness campaigns instead of normal publicity campaigns. Transition from paid to owned media Paying or buying media is called paid media where investment is made through search, showing ad networks, or in the form of affiliate marketing where one can pay for visits, audience reach or conversions. The big share of paid media spent is still crucial to conventional off-line media such as printing, TV, and direct mail. Owned media is the brand's media. This includes online company websites, blogs, and mobile apps on Facebook, LinkedIn or Twitter. Brochures or retail outlets may feature offline-owned media. While neither is new, digital marketers are clearly warming up banks' options for both owned and paid media. Financial institutions may use these sorts of media to organize their media activities and use the media mix according to their marketing plan and budget. Marketing to Gen X and Y As millennials continue to age into their 30s and 40s, banks must adapt to the needs of this increasingly powerful consumer market. As more millennials reach credit age, they must have access to affordable banking products from a wide range of sources. Recent research shows that young adults are three times more likely to engage in a high-cost activity like signing up for bank loans and credit cards than their elders were at the same age. In the last five years, the overall number of bank account applications has increased by 165% -- faster than any other age group, according to a report from ‘The Financial Conduct Authority (FCA).’ As the baby boom generation draws closer to retirement, banks have to figure out how to serve this growing generation of consumers. Marketing to millennials is no longer exclusively about offering something free or cheap -- think free travel or goods in exchange for checking out their accounts. Instead, examine how you can develop engagement with millennials as part of your overall banking experience and marketing mix. This includes pairing social media presence with mobile apps that allow millennials to check out different accounts or receive personalized services from banks. Consider a branded experience Fintech is a fast-paced field that allows users to interact with financial providers through apps and websites. The FinTech industry is growing rapidly, with a global reach and diverse competitive landscape. The FinTech culture is evolving rapidly regarding the customer base, service level, and governance factors. Digital transformation affects how organizations deliver services, deliver value and target their campaigns toward potential or current FinTech customers. Leveraging on the FinTech culture makes it possible for organizations to re-imagine their approach to customer service in a way that optimizes both results and cost-efficiency. There’s been an explosion in the world of FinTech. And not just in financial services but also software for everything from e-commerce to real estate. There has been a real shift in how people look at financial products. People want to feel comfortable investing their hard-earned cash in FinTech products -- including cryptocurrencies. It seems like everyone has an account at a financial services company. And they want access to new types of financial products that give them a branded experience. These services are designed to make it easier for ordinary people to get money from the banks, but not so easy that they miss out on exciting opportunities. Invest in personalized ad campaigns Personalization is the big concept behind any digital marketing campaign. It’s about figuring out which audience matches your interests so you can deliver the right product or service at the right time. In other words, personalization is about understanding your customer and discovering what makes them tick. How w0uld you know which customers will respond well to your marketing efforts is simply by understanding their specific needs and then tailoring your message to fulfil those needs. There is a growing shift from basic data science to more sophisticated personalization. Data science is an incredibly powerful way to understand your customer’s preferences, psychographic traits and other data points. Applied in the right way, it can provide a strong push toward providing more relevant content, special offers and better customer service. The challenge is applying that knowledge in a way that totally works for your bank. Integrate Digital Marketing Search Optimisation for banks The difficulty in creating effective digital marketing search strategies lies in the fact that customer expectations have never been higher. With e-commerce on the rise, customers expect to find what they are looking for quickly and easily. As a result, SEO strategies that are once suitable for traditional search engine optimization (SEO) are now impacting organic search results. The problem is that it can be difficult to determine which approach will deliver the best results for your business through digital marketing search engine optimization (SEO). Banks are beginning to pay more attention to digital marketing. They understand that by providing their customers with easy and convenient access to information. They will be more likely to spend money on the products and services said company offers. Digital marketing is not just about getting people to read blog posts or engage with social media pages - if that were the metric, everyone would read everything online! Instead, it’s about getting people who might not otherwise engage with business opportunities, or simply wouldn't know where to start looking for information. Maintain focus on customer experience and commitment The customer experience is the heart and soul of every bank’s digital marketing effort and every bank should strive to provide this level of customer service consistently. The digital marketing trend in the banking industry has taken to transparency and customer-focused messages. Many banks are beginning to understand how marketing messages can best stand on their own feet. With the ever-changing digital landscape, maintaining focus on customer experience is becoming ever more important. For banks and their customers, this means developing a continuous and interactive digital experience that allows them to stay engaged with their valued customers. In addition to branding and marketing campaigns designed to continue growing customer confidence, banks should also continue developing relationships with their fellow business partners through digital tools and social networking. The Take-Away There’s a numbers game attached to online marketing: The more you know about your audience, the better you can tailor your approach and demonstrate ROI. This is why marketers closely watch industry trends – it helps them to understand their customers better. In fact, according to a recent study by AdRoll, half of the businesses that use customer data to personalize their online ad campaigns have seen CTRs increase by 20%. Banks should be doing the same and looking to integrate data into their campaigns this year. Some Frequently Asked Questions What are the latest trends in digital marketing for banks? AI, augmented reality, voice search optimization, programmatic advertising, chatbots, personalization, automated email marketing, video marketing, Instagram reels, shoppable content, influencer marketing, and geofencing are just a few of the most recent digital marketing trends in the banking industry to watch out for. These new additions in the banking industry paves the way for a revolution in how financial institutes market their services. How do banks use digital marketing? Banks use the following types of digital marketing to gain attention: Explainer videos to make complex financial concepts more understandable. Make your website the primary point of contact for your customers. Set up a YouTube channel to provide information-dense content. Marketing through email Marketing via mobile device How valuable is digital marketing? Digital marketing not only helps in saving money by bringing in customers at a cheaper cost than conventional marketing techniques, but it also assists you in increasing your income. The value of digital marketing can now be evaluated more precisely and the influence it has on your business may have a significant positive impact. How do you advertise banking services? Make use of these five tried-and-true bank marketing strategies to raise awareness, attract customers, and do more: Content marketing: Content marketing is a kind of marketing that uses written content to promote a company's products and services. Develop textual, graphic, and interactive components for your website. Search engine optimization (SEO) Pay-per-click (PPC) advertising Social media marketing Online Reputation management { "@context": "https://schema.org", "@type": "FAQPage", "mainEntity": [{ "@type": "Question", "name": "What are the latest trends in digital marketing for banks?", "acceptedAnswer": { "@type": "Answer", "text": "AI, augmented reality, voice search optimization, programmatic advertising, chatbots, personalization, automated email marketing, video marketing, Instagram reels, shoppable content, influencer marketing, and geofencing are just a few of the most recent digital marketing trends in the banking industry to watch out for. These new additions in the banking industry pave the way for a revolution in how financial institutes market their services." } },{ "@type": "Question", "name": "How do banks use digital marketing?", "acceptedAnswer": { "@type": "Answer", "text": "Banks use the following types of digital marketing to gain attention: Explainer videos to make complex financial concepts more understandable. Make your website the primary point of contact for your customers. Set up a YouTube channel to provide information-dense content. Marketing through email Marketing via mobile device" } },{ "@type": "Question", "name": "How valuable is digital marketing?", "acceptedAnswer": { "@type": "Answer", "text": "Digital marketing not only helps in saving money by bringing in customers at a cheaper cost than conventional marketing techniques, but it also assists you in increasing your income. The value of digital marketing can now be evaluated more precisely and the influence it has on your business may have a significant positive impact." } },{ "@type": "Question", "name": "How do you advertise banking services?", "acceptedAnswer": { "@type": "Answer", "text": "Make use of these five tried-and-true bank marketing strategies to raise awareness, attract customers, and do more: Content marketing: Content marketing is a kind of marketing that uses written content to promote a company's products and services. Develop textual, graphic, and interactive components for your website. Search engine optimization (SEO) Pay-per-click (PPC) advertising Social media marketing Online Reputation management" } }] }

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Covid-19 and the rush to Digital banks

Article | April 27, 2020

Umberto Eco once wrote “Everything is repeated, in a circle. History is a master because it teaches us that it doesn't exist. It's the permutations that matter.” In addition to the effects on the supply and demand side, COVID-19 has jolted financial markets across the globe as oil, bond yields, and equity prices fall, and trillions of dollars, across all asset classes seek safety. As we career towards another global financial crisis, which banks have learnt the hard lessons of 2008?

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Machine Learning in Finance – Present and Future Applications

Article | April 27, 2020

Machine learning has had fruitful applications in finance well before the advent of mobile banking apps, proficient chatbots, or search engines. Given the high volume, accurate historical records, and quantitative nature of the finance world, few industries are better suited for artificial intelligence. There are more uses cases of machine learning in finance than ever before, a trend perpetuated by more accessible computing power and more accessible machine learning tools (such as Google’s Tensorflow).

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Mekong Capital

Mekong Capital is a Vietnam-focused Private Equity firm, specializing in consumer driven businesses. Mekong Capital’s investee companies are typically among the fastest growing and market leading companies in Vietnam’s consumer-driven sectors such as retail, restaurants, consumer products and distribution.

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