By Rezaah Ahmad, CEO WiseAlpha Technologies
We have never been in more exciting times in the financial industry. The surge in new firms using financial technology to provide more efficient and transparent alternatives to banking and asset management models will bring dramatic changes to the debt capital markets.
WiseAlpha was born with the idea of bringing an online marketplace to the corporate debt markets and giving equality of access to investors of all sizes but crucially doing so in a transparent and responsible manner. Having started my career in banking, structuring corporate loans and then moving on to invest in the loans themselves, it always amazed me at how archaic the functioning of the loan market is in comparison to other financial markets. What if the credit markets were as liquid and transparent as the equity markets – would that have prevented some of the practices that led to the last financial crisis?
Although we have just launched, the mood in our office is one of anticipation and optimism as we strive to emulate the success of FinTech firms in other niches.
WiseAlpha is an online investment platform offering its members access to senior secured loan investments in large, established companies. Although from a glance many mistake us for a P2P lender our model is very different. We do not solicit, structure or issue loans on behalf of companies looking to borrow but instead we allow our members to invest in loans that have already been made by major international banks to corporate borrowers.
WiseAlpha takes the first step in selecting which loans are listed on the platform but importantly we then allow our members to assess and choose which companies they want to invest in and manage their own exposure. We want our members to feel the satisfaction of making individual investments and to have the option of avoiding the numerous middlemen that can be involved in the traditional investment chain.
Over time we aim to foster a liquid “secondary market” for members to buy and sell from each other.
The rationale for senior secured loans
In light of stock market volatility, high bond valuations and low savings account rates wiseAlpha is looking to bring senior secured corporate loans into the mainstream and offer investors an alternative asset that can provide them with income and re-investment opportunities.
For those new to senior secured loans they have the following features:
- First ranking security over the assets of the borrowing company which offers a degree of capital and structural protection for investors
- Floating rate coupons (LIBOR plus a fixed margin) provide a potential hedge against long duration and inflation. In a rising interest rate environment loans should perform well versus fixed income bonds with low coupons and extended maturities
- Typically low price volatility versus the equity and bond markets which are more closely correlated to changes in the macroeconomic and interest rate outlook. As an example during August while the stock markets swung wildly the Credit Suisse Western European Leveraged Loan Index saw a drop of only 0.17%1
- Loans are generally callable at par and can be refinanced at any time meaning that the price of the loan tends to stay relatively close to par unless there is a negative credit event reinforcing price stability
Independent studies2 show that the senior secured asset class also compares favourably on a risk-adjusted return basis versus alternative asset classes such as high yield bonds and equities.
Symbiotic relationship with Banks
New Fintech platforms have been viewed with some trepidation by banks who see these platforms as a threat to the traditional banking model. Here at wiseAlpha we see FinTech platforms like ourselves forming a co-operative approach with banks. With global investment banks now focussed on arranging and syndicating their loan exposure therein lies a symbiotic relationship with wiseAlpha’s model. Specifically we see the following benefits:
- Arranging banks free up more capital to increase their lending by being able to syndicate their loan exposure into a wider investment base but in a responsible manner
- A wider spread of risk assets to potentially longer-term income driven investors less focussed on using leverage to bolster their returns thereby reducing leverage in the banking system and the ‘shadow’ banking system3 Greater liquidity and demand in the asset class should stimulate issuance benefiting corporate issuers
Technology is at our heart
wiseAlpha is fundamentally a technology company servicing the investor and banking community.
At the corporate level the senior secured loan asset class has remained the happy hunting ground for banks and funds in a relationship driven market. This combined with the long procedures for transfer and settlement tend to put off many investors.
By running an online platform we seek to create a wider investment audience for the asset class and replace the substantial costs and complexity of investing in the product with a simpler, faster and more cost effective way to invest.
As some of my peers in the FinTech world have stated technology has successfully disrupted many industries to the benefit of society at large but to the detriment of incumbents.However it has also created opportunities for those incumbents who see the benefit of cross collaboration in creating a bigger market.
Equality of access
Today investors both small and large are prevented from accessing the asset class due to the ‘club’ nature of the asset class, high minimum denominations for specialist loan funds or because of the complexity of setting up loan investment vehicles.In addition high upfront fees, long lock-ins and opaque fund structures have also inhibited investors.
I believe wiseAlpha has the potential to profoundly improve access for investors to attractive asset classes such as senior secured loans over the coming years and as we grow to pass on the benefits of scale to investors.
Our mission of transforming the wider investment industry and the capital markets is audacious but we firmly believe it is possible.
1Credit Suisse Leveraged Finance Strategy Monthly 03 September 2015
2Credit Suisse Leveraged Finance Strategy Weekly Report 10 January 2014, Credit Suisse Leveraged Finance Strategy Monthly 03 September 2015
3The term ‘shadow banking’ was coined in 2007 by Paul McCulley, PIMCO’s former chief economist referring to the “the whole alphabet soup of levered up non-bank investment conduits, vehicles, and structures” that contributed to the lending boom from 2005-2007.
Young adults lean towards ‘on-the-job’ learning as 6 in 10 say pandemic has impacted educational plans
- Six in 10 (61%) of 16-25s agree learning ‘on-the-job’ is the best way to get on the jobs ladder in the current environment
- 59% would rather study a degree subject connected to a profession than one they are good at
- 59% believe tech sector offers strong career opportunities and is voted most futureproof sector by 16-25s following the pandemic
- QuickBooks launches free online programming course with Amigoscode to help young people kickstart their tech career
Nearly two thirds (63%) of 16-25s have seen their future educational plans impacted by the pandemic, new research from Intuit QuickBooks1 – the financial software provider – reveals, with the uncertainty caused by COVID-19 driving young people to look for faster and more secure ways to get jobs.
And with more than half a million young people now unemployed – a rise of 35,000 from the previous quarter2 – six in ten (61%) 16-25s agree that learning ‘on-the-job’ is the best way of getting on the careers ladder in the current environment.
With COVID-19 highlighting the importance of more ‘futureproof’ career options, the technology sector has been identified by 16-25s as offering particularly strong career opportunities (59%).
To help young people kickstart their tech career, QuickBooks – home to top UK tech talent – has launched a free online programming course with Amigoscode.
Careers-focused learning takes priority
If they were to attend university or study for a degree, 59% of 16-25s would rather study a subject connected to a profession than one they’re good at, while nearly a third (31%) would only consider studying for a degree that would help them get a job in a sector that is likely to grow in future.
However, almost half (45%) of 16-25s are now reconsidering attending university at all. A quarter (26%) believe it is now more important to get on the job ladder than get a degree, while 19% don’t want to go to university because they are worried about their safety.
As remote learning becomes the new norm, more than a quarter (28%) of 16-25s now plan to carry out an online university degree (such as those offered by the Open University) instead of physically going to university.
Technology sector is voted most futureproof
The research reveals 16-25s believe the technology sector is the most futureproof (40%), ranking significantly higher above the second most popular option (construction – 27%).
Almost a fifth (19%) of the 16-25s surveyed already have a career in the technology sector, while 34% are considering it – rising to 38% of those aged 16-19.
Of those who are interested in the sector but are not currently considering it, the biggest barrier is simply not knowing how to get a job in this area (32%), closely followed by having never received any information about the sector from careers advisors etc. (30%). A quarter (25%) don’t think they could afford to undertake the necessary training or qualifications to get a job in the sector.
Ben Brown, Head of Engineering at Intuit QuickBooks, comments:
“With COVID-19 causing economic uncertainty and driving unemployment levels, young people are increasingly looking for ways to fast-track onto the careers ladder. And getting straight into the tech sector, which has proven to be resilient in the face of the pandemic, is particularly appealing. Technology, after all, is the fuel that has allowed many other sectors to continue operating.
“On-the-job learning is common in the tech sector, but to be a successful candidate, applicants need to demonstrate genuine interest and enthusiasm by having carried out their own independent learning. Employers can enable this by creating opportunities for young people to take part in free training courses and taster sessions, which helps them to gain valuable skills and decide if the sector is for them.
“QuickBooks engineers frequently host and coach participants through Code First Girls sessions – which are aimed at women looking to learn more about programming – and we are thrilled to be partnering with Amigoscode to offer a free programming course.”
Nelson Djalo, Founder of free coding resource Amigoscode and Software Engineer, comments:
“The perception of not having enough knowledge is the main barrier to young people getting into the technology sector. Skills can be built over time – passion, drive and a willingness to learn are the most important qualities to have. People from lots of different backgrounds and interests can get into the sector, and there are a whole host of roles aside from programming and software engineering.
“I offer programming courses and coding tutorials because I believe the sector should be accessible to anyone. I’m pleased to be partnering with QuickBooks to offer a tailormade course for anyone who is interested in getting into the industry and wants to learn more about programming.”
The Amigoscode x QuickBooks course is available here as a video, and here as a playlist. The 2.5 hour course and video playlist covers the basics of programming; the basics of Python and a project task (building a CV). Participants will also build a portfolio which could be the starting point of their tech journey/career.
Watch Nelson’s other tutorials on the Amigoscode YouTube channel here.
Case studies of young QuickBooks software engineers are available on request.
Five things to consider when organising a remote work Christmas party
By Kate Palmer, HR Advice and Consultancy Director at Peninsula
Christmas is usually a time of cheer and celebration, and the perfect way for employers to incorporate this in the workplace is by organising a Christmas party for their staff. However, things will have to be a little different this year due to the ongoing disruption caused by the coronavirus pandemic. While the easiest, and cheapest, option for employers is to not go ahead with their annual festive plans, in the spirit of keeping Christmas alive some may choose to organise a remote party.
There are, however, some important things that employers should be aware of.
- The coronavirus pandemic has highlighted the need for employers to keep their employees’ wellbeing in mind, much more than ever before. This is why, even with something that can be considered a ‘treat’ for employees, people who are working carers, have been struggling with work-related stresses, may not want to partake in a Christmas party this year, however well-intentioned it may be on the employer’s part. It is therefore advisable that remote parties should be optional and not constrained to a certain timeframe in which staff must be in attendance.
- Employers should ensure that those in attendance do not feel excluded from any activities during the party. For example, if an employee does not drink alcohol and a virtual wine tasting activity makes up the bulk of the event, such a person would not be able to contribute to the fun and may therefore feel left out. Consequently, it may be better for employers to ensure that there is a wide range of activities available that cater to the individuals who are attending.
- When attendees and potential attendees, have been established and the activities have been finalised, it is in the best interest of the company to send out emails to them. It should detail what is expected of them at the event and highlight that the same conduct is expected of them at a remote party as it would be at an in-person event. It should also outline that the same disciplinary procedures would apply in a situation where an employee commits a form of misconduct during the event.
- Similarly, employees should be made aware that the same grievance produce applies – to ensure that if company rules are broken by an employee or a grievance with the company itself, the affected employee will be able to raise this with the company.
- Finally, while employees can use their social media accounts in their own personal time, including at work social gatherings, employers must ensure that the use of social media should be done in a manner that does not adversely affect the company’s reputation.
To conclude, remote parties are the perfect way to ensure that social distancing rules are adhered to and that employees are rewarded for their efforts, there should be a mutual sense of responsibility on the part of the company and its employees.
Reasons to remote manage in a socially distanced world
By Paul Routledge Country Manager D-Link UK and Ireland
As the world continues to adapt in varying degrees to the ongoing COVID-19 pandemic, many businesses and enterprises will find themselves adjusting to more permanent, new ways of working, problem-solving and service delivery. Governments and global leaders have already introduced new measures to support these adjustments, and as a result we have already seen many companies re-evaluate how they work as well as how teams are organized and provided for. As the pandemic remains a fixture of this year of which the impact will continue to be felt in the year ahead, it’s becoming clear that the role of technology and the innovation therein will be key to ensuring businesses can weather ongoing the crisis.
For many businesses, until recent years, the vast bulk of network management was conducted and carried out on location at the client site. However, the value of remote network management has fast become an asset to businesses in the 21st century – giving IT service providers more capacity to manage a larger number of customer sites at any given time.
In addition, remote network management solutions play an important role in increasing transparency across sites by providing a complete view of the status of different networks via comprehensive interactive dashboards and informative management systems. For example, Nuclias by D-Link offers an easy to set up network management solution that provides flexibility to make onboarding, studying, troubleshooting, and reporting network activity quick and easy.
For IT service providers, establishing new ways of working is particularly important. As they seek alternative methods of supporting customers in different locations, many will be looking to the advantages that remote network management has to offer.
Before the pandemic, D-Link Europe explored the state of play of network management and challenges its partners were facing in this space. The study found that, 75% of IT service providers in Europe were already using remote access tools to support or manage network infrastructure on customer sites, yet a quarter (25%) were still relying on in-person visits to resolve network issues for customers.
Interestingly, the findings show that the larger the number of clients a provider has, the less likely they are to use remote management tools. Only 22% of European IT service providers surveyed provide more than 50 customers with remote management services. Complete adoption of remote network management methods will be a gradual process, yet the pandemic and the government restrictions in place across much of Europe have a part to play in creating the circumstances where in-person visits occur much less often if at all.
As a result, it is likely we will see a more permanent adoption of remote networking management systems – as businesses work hard to adapt to a ‘new normal’ and an unpredicatable year ahead. The point of this will not only to provide network management services in a more efficient and less time-consuming way but also to uphold the safety measures now expected of most workplaces.
This is particularly pertinent in an environement where businesses are limiting contact in the workplace and adhering to safetymechanisms also seen more widely in society – including technologies such as group temperature screening cameras as well as track and trace systems. There is a clear opportunity for IT service providers to make the most of remote networking management tools’ benefits to uphold the safety and health of their own employees, as well as personnel at client sites by reducing unnecessary human contact.
An additional benefit to be reaped from remote network management is how IT service providers can economise on time spent travelling to and from client sites, in addition to time spent resolving issues on-site. D-Link research found that 60% of European IT service providers spend between four to six hours per week installing and configuring new wireless or wired networks at client sites. This additional time spent travelling to and from client sites puts employees at particular risk, especially as they often travel long distances to get there.
What’s more, in terms of the time technicians usually spend at client sites, when it comes to configuring a replacement wireless access point, only 31% of providers feel they can keep this service under one hour. Remote network management allows technicians to use this time more effectively. Nuclias by D-Link, for example, will enable administrators to stay on top of any management tasks like creating guest networks, adding Wi-Fi to additional locations, updating devices and upholding network security.
Furthermore, IT service providers will be able to offer their clients more benefits, by providing centralised management and more visibility of their network, allowing them to act on network disruptions and problems before they become pervasive issues. Nuclias Cloud is designed for smaller businesses who lack in-house IT skills, such as hospitality and retail chains. These companies can benefit from easy network expansion and implementation of updates without the need for additional training.
Remote management solutions, like Nuclias, are also well-placed to support the growth of IT service providers as they look to offer more managed services. Not only do they enable teams to provide deployments but also increased administration services and supervision of client networks; resulting in improved reactivity to issues and better quality of service. The added advantage of unlimited scalability, thanks to the use of cloud-enabled devices, means providers can also keep resources and costs low – generating a more significant return on investment.
Right now, it still feels like there is some way to go before normal life resumes – however, as the long-term impacts of COVID-19 become more apparent, companies worldwide will need to continue to relying on innovative technology to tackle workplace concerns. With solutions such as remote network management playing an important role in supporting service providers and their clients as they do.
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