Politicians challenged to sign entrepreneurship pledge ahead of election that guarantees they ‘walk the walk’ if they win
Leading business accelerator programme Entrepreneurial Spark is challenging candidates across all political parties to support Britain’s entrepreneurs and sign up to a pledge card that will ensure pre-election talk turns into effective action to bolster the building blocks of the economy this summer.
The start-up support specialist – which is already the world’s largest free business accelerator for early stage and growing ventures and is expanding into more UK cities this year – wants all the main parties to commit to five concrete measures that together would provide a huge boost to entrepreneurship and ultimately Britain’s economy.
Entrepreneurial Spark says young businesses across the country want to see:
- A Minister for Entrepreneurs to represent their views in Cabinet, independently of the department representing big business.
- A significant rise in the threshold at which businesses must register for VAT, from £82,000 currently to at least £100,000.
- Further tax and NI breaks for start-ups that take on staff in their first three years.
- Free business space and support for all start-ups.
- Tax breaks for larger corporations that support entrepreneurs.
It follows scrutiny of the pre-election promises of the UK’s main political parties which shows that, despite plenty of talk, there are few propositions on offer with the potential to give entrepreneurship in Britain a real boost.
Entrepreneurial Spark chief executive Jim Duffy said: “In the lead up to the General Election politicians from all parties have been keen to talk up their backing for entrepreneurs and small businesses, which they rightly recognise as the growth engine of the economy.
“These are the people creating the wealth and jobs that can pull Britain away from recovery and austerity, into a new phase of sustained growth. But that will only happen if entrepreneurship and ambition is supported, and that is why we are calling on politicians of all parties to embrace our challenge and sign up to our policies for entrepreneurial growth.
“These five measures are relatively cheap and would pay for themselves many times over through the growth they would create. But they would send a message to entrepreneurs throughout the world that Britain means business and is supporting its start-ups by cutting red tape, providing funding options and help to grow, and giving them a voice at the heart of government.”
HOW THE PARTIES CURRENTLY STACK UP ON ENTREPRENEURSHIP
Says “the proposal to create a specific minister for entrepreneurs will be considered by the Prime Minister.”
“Conservatives are enthusiastic about lowering the tax and regulatory burden on small businesses. This is why VAT threshold has risen from £68,000 to £82,000 over our last five years in Government.”
Aims to provide support and advice across the country for business start-ups, as well as finance through the Start-up Loan scheme and targeted support through schemes like UK Trade and Investment’s guidance for small exporters.
Says its 2015 manifesto “will contain measures to build upon the successes of the last five years: 760,000 new businesses, the creation of the Start-up Loan scheme benefiting 27,000 entrepreneurs with over £140 million in loans and the Great Business campaign, publicising the wide range of information and support available from the Government.”
Says Cabinet Minister for Entrepreneurs should not be necessary. “There is more than enough representation for entrepreneurship but the emphasis certainly needs to change to supporting small businesses rather than large corporations.”
Wants to see VAT replaced with “more appropriate taxes” based on how much environmental damage a product causes.
Would bring in free business start-up support. It says: “We would like to see this done at the lowest level possible so probably by Local Authority run Enterprise Centres or something similar. There is more than enough money sloshing around in Local Enterprise Partnership budgets that could be passed down to Local Authorities for this.”
Wants to see preferential rates of corporation tax for smaller businesses, and make it easier for small businesses to employ people and pay a higher Minimum Wage based on the Living Wage by reducing Employers’ NI.
Would “tackle rising business costs” by maintaining the corporation tax rate, cutting and then freezing business rates for more than 1.5 million small business properties and freezing their energy bills.
Says it would “make it easier for firms to get the finance they need to grow and create jobs, by establishing a British Investment Bank with a mission to lend money to small- and medium-sized businesses and support a network of regional banks.”
Would increase the National Minimum Wage to more than £8 an hour by October 2019, but would also promote the Living Wage by giving a tax rebate to companies that sign up to become Living Wage employers in the first year of the next Parliament.
*Taken from the Labour Party manifesto as Labour did not respond to questions from Entrepreneurial Spark.
Says Vince Cable’s role as Secretary of State for Business, Innovation and Skills has “ensured that entrepreneurs have a voice at the highest level of government”.
It says: “We recognise that entrepreneurs are integral to driving the economy and so we have made sure that we have reduced the regulatory and tax burden by cutting swathes of red tape and providing billions of pounds of Business Rate Relief for small businesses.”
Would continue to reform business tax “to ensure it stays competitive”, prioritising tax cuts for SME’s.
Would freeze fuel duty for another year and extend the Funding for Lending Scheme, working with the Bank of England, “to reduce the cost of lending across the system to SME’s and continue to give local leaders the freedom and control they need to shape their economic future through our City Deals and Local Growth Deals”.
Would consider introducing a Cabinet Minister for Entrepreneurs, and says it is “fully committed to helping start-up companies”.
It says: “What Plaid Cymru would do is extend the Small Business Rate Relief Scheme in Wales to help all businesses with a Rateable Value of £15,000 or less – 83,000 businesses would benefit and more than 70,000 would be taken out of business rates altogether.”
Would create a Welsh Development Bank whose primary role would be to ensure adequate credit lines for Welsh businesses and support expansion to create additional jobs within Wales.
Would give more Welsh public sector contracts to companies working in Wales.
Will seek to ensure small businesses are paid on time by pushing for prompt payment measures to be put into law.
Would Support a Universal Services Obligation for broadband and telecoms providers to ensure equal access to communications for people across the UK, and seek additional investment to support a more rapid roll out of superfast broadband and 4G across Scotland.
Says it will “make the case for a targeted approach to business taxation, with targeted changes in tax allowances.”
Would continue the Small Business Bonus, a graded system of rates relief currently benefitting 96,265 businesses in Scotland.
*Taken from the SNP manifesto as SNP did not respond to questions from Entrepreneurial Spark.
Says Government as a whole should be aware of entrepreneurs of all sizes: “talent is individual and we should be encouraging entrepreneurs and small businesses but one person – a Cabinet Minister – is too limited.”
Would definitely not raise the VAT threshold.
“Yes in principle” to free business start-up support, but would want budding businesses to “tick all the boxes to ensure they had a solid business plan.”
Would “cut business rates, extend free parking in town centres, encourage specialist forms of banking to help entrepreneurs, stop scandal of late payments, cut green taxes to help with energy bills, strengthen attack on Brussels to stop over-regulation and red tape, conduct skills review in education and push forward broadband for rural businesses”.
Pandemic risks eclipse treasury priorities as businesses diversify investments to mitigate impact
The Covid-19 pandemic has shunted aside existing challenges to sit atop treasurers’ priority lists, according to “The resilient treasury: Optimising strategy in the face of covid-19”, a survey run by the Economist Intelligence Unit (EIU) and sponsored by Deutsche Bank.
The results show that treasurers are looking to diversify their investments in a bid to mitigate the pandemic impacts, including heightened liquidity, foreign-exchange and interest-rate risk. As many as 55% plan to increase investments in long-term instruments, with 48% increasing investments in bank deposits, another 48% in local investment products, and 47% in money-market funds.
“The Covid-19 pandemic has drastically altered business plans in 2020. It has placed a certain level of strain on treasury processes, but the challenge it presents has been managed by traditional treasury skills. It is clear that pandemic risk will be on the treasury checklist for years to come, but it is one of many risks the department faces and will continue to manage,” says Melanie Noronha, the EIU editor of the report.
Despite Covid-19 looming large, other challenges wait in the wings. Notably, the replacement of the London Interbank Offered Rate was identified by 38% of respondents as the main challenge of their function.
Technology, meanwhile, continues to be a pressing issue, with treasury teams becoming increasingly reliant on IT solutions. Here, data quality is rising up the list of concerns. Already highlighted as very or somewhat concerning in 2019 by 69% of respondents, the figure rose to 78% in 2020. Acquiring the necessary skill sets to realise the full benefits of this data and technology is also a continuing priority – with some progress registered from last year. In 2020, 30% of respondents say they have all the skills they need to manage technological change, up from 22% in 2018.
“Treasury’s focus on technology is not only helping teams operate more efficiently in a remote-working environment, it has long played – and continues to play – a key role in realising their long-term priorities,” notes Ole Matthiessen, Head of Cash Management, Corporate Bank, Deutsche Bank. The survey shows that
Release 1 | 2 managing relationships with banks and suppliers (highlighted by 32% of respondents) and collaborating with other functions of the business (also 32%) remain top of the agenda – and seamless digital systems will help give treasurers the bandwidth and insight to be more effective partners for both internal and external stakeholders.
Based on a global survey of 300 treasury executives, conducted between April and May, the survey explores stakeholders’ attitudes among corporate treasurers towards the drivers of strategic change in the treasury function – from the pandemic through to regulation and technology – and their priorities for the next five years.
Digital collaboration: Shaping the Future of Finance
By Ryan Lester, Senior Director of Customer Experience Technologies at LogMeIn
With heightened economic uncertainty and increased customer expectation becoming the norm in the banking industry, it is understandable that the sector is struggling to keep afloat. Due to its precarious nature, banking institutions are trying their best to ensure they remain relevant in the competitive landscape and guarantee that their customers continue to be a priority.
When it comes to the first half of this year, the pandemic has shown how easy it is for industries to fail. Customers and companies alike had to get used to the new normal, as physical locations started to close. The banking industry felt this first hand, as banks were made to restructure how their business ran, with restricted opening hours and a wider push to motivate people to use online banking.
While some had already embraced digital options prior to the pandemic, this proved to be a stark contrast to the elderly population, who frequently visited branches to access their finances. Moving forward, banks have to adopt new methods to ensure customers get the most out of our their accounts, without their experience suffering.
Heightened Customer Expectations
When the pandemic reached its peak, people were encouraged to use online banking, as telephone contact was under strain with long waiting times and pressure mounting on contact centre agents. According to Fidelity National Information Services (FIS), which works with 50 of the world’s largest banks, there was a 200% jump in new mobile banking registrations in early April, while mobile banking traffic rose 85%.
With branches remaining closed, customers were continuously being urged to limit the amount of calls they made to the most urgent cases and consider whether they could solve their answers through mobile online banking or checking the company website. Although already being adopted in pockets of the industry, this was a real catalyst that spurred banks to up their game on digital channels and with self-service tools.
Banks are challenged with precariously balancing customer needs with the cost of personalised support. With the demographic of customers changing over the last few years, customers are becoming increasingly younger and more comfortable with technology. Influenced by the “Amazon Effect”, their expectations have raised to an all-time high, placing record strain on the sector
Customer experience isn’t just about support anymore, it’s about serving your customer at every point in the journey. Companies have an opportunity to elevate the experience they provide by moving beyond one-and-done interactions to create continuous engagements with their customers. It is starting to become a primary competitive differentiator in the market and one that doesn’t have a lot of variation. Deploying AI chatbot technology will be able to strategically help banks improve customer experience and raise the level of support that agents provide.
Digital collaboration: Working around the Clock
The benefits of adopting digital channels and self-service tools are second to none. By implementing chatbots, fuelled by conversational AI, banks will be able to help serve a wide range of customer queries and ensure they are protected from fraud and scams.
Conversational AI is exactly what it sounds like: a computer programme that engages in a conversation with a human. When it comes to service delivery, conversational AI can be deployed across multiple channels to engage with customers in ways that effectively address evolving customer needs. At a time defined by COVID-19, self-service tools such a conversational chatbots can work around the clock to solve customer queries in a concise and timely way. Of course, self-service tools won’t completely replace human agents in the banking industry, but they will help companies re-distribute customer traffic and workflows in ways that enhance customer experience. Self-service tools fuelled by conversational AI can also improve employee experience because service employees can handle fewer, but higher-level service tasks that chatbots might escalate to them.
Adopting new tools to help facilitate consistent and concise answers and help maintain customer experience is on the forefront of many industry minds. Banks such as the Natwest Group have seen this first-hand and are testament to the benefits that a good digital experience can provide. Simon Johnson, Capability Consultant, Digital at NatWest Group highlights NatWest’s use of digital tools during lockdown, “Over the last few months, we’ve learnt how to use digital tools to help our employees remotely. From a banking perspective, there have been a lot of changes including base rates, waive fees and the best ways of contacting our vulnerable customers, ensuring we keep them protected from frauds and scams.
“By introducing our Bold360 chatbot interface, Ella, we’ve been able to get relevant information out quickly, apply the best practice and ensure that our customer journeys are being developed correctly. Due to the volume of questions, some of our customers were finding themselves waiting longer than usual. So digital channels become essential to helping reduce the wait time. Using Bold360, we were able to mitigate issues and answer questions in a more timely way through our chatbot.
“Moving forward, as we open more digital services, we are analysing our data to see if customer will return back to their usual way of banking, now that they’ve seen what a good digital experience can provide. Either way, with Ella, we are ready.”
Chatbots and Humans: The Best Option for Customer Service
Over the last year, banking institutions have recognised the power that digital collaboration can have to their success. Delivering exceptional customer service and support is key for any business wanting to stay competitive in today’s market and banks are especially challenged with precariously balancing customer needs with the cost of personalised support. Leveraging the right technology, such as AI-powered chatbots, will enable the banking industry to provide better support and a more robust customer experience in the long term. Other institutions must follow suit, or risk becoming obsolete.
A sleeping digital giant wakes? 4 key trends accelerating payments transformation in the US
By Lauren Jones, International Payments Ambassador, Icon Solutions
The US payments industry is undoubtedly ripe for change. Before the unprecedented shock of COVID-19, digitization and payments transformation initiatives had been organic, piecemeal and predominately the preserve of the largest banks.
Now, increasing pressure means that financial institutions of all sizes are working to define a digital strategy to unlock new opportunities, drive business value, and stay competitive. But beyond the immediate impact of COVID, what underlying trends are accelerating digitization in the US?
- Real-time payments – the stimulus for change
Real-time payments have been met with a degree of caution by US financial institutions. Risking traditional profit generators in return for potential revenues down the line is a gamble many have not been willing to take. But immediate payments are coming to the US whether banks like it or not.
Major payments infrastructure providers, including NACHA and The Clearing House (TCH), have moved to encourage immediate payment adoption in recent years. But the Fed, frustrated with a slow rate of progress, has announced that it is pressing ahead with the implementation of its FedNow system (despite significant industry objection). Although the Fed’s true intentions are open to interpretation and this may just be a play to accelerate private initiatives, it is a clear signal that they mean business.
This means holdouts risk their own ‘Kodak’ moment if they miss the huge opportunities in front of them by fixating on traditional revenue streams. Banks are in a position to support innovation across entire industries such as healthcare, which could be released from the constraints of paper-based bureaucracy and slow, expensive transactions.
Another opportunity that can be unlocked via instant payments is ISO 20022 (used in the TCH RTP system). It is the future of payments messaging standards and can greatly enhance various payments processes through increased data-carrying capabilities. More importantly given the current climate, citizens reliant on federal or state support can benefit from RTPs combined with additional data to immediately access emergency funds.
- The kids are growing up
The US is getting older. Consumers who were 10 when the iPhone first launched are now 23. This means we are seeing a ramp-up of digitally native Gen Z consumers (roughly those born between 1995 and 2010) accessing banking services.
Demographics are an inexact science and not perfect predictors (there are technophobe college students and 100-year-old Instagram influencers), but we can detect noticeable trends.
Younger customers don’t usually choose a bank because there is an ATM in their neighbourhood, a slightly better interest rate or an advert in the newspaper. Rather, a strong digital presence, personalised tools, rewards and experiences, and the trusted recommendations of friends and family, will have a more significant impact on customer acquisition.
Banks must look at the effect this will have on their longer-term digitalization strategy and be able to segment what this emerging customer base might want and how they will interact in years to come.
- Checkmate? Evolving corporate requirements
Corporate treasurers are people and their experience of seamless, immediate payments in their personal lives shapes expectations in the workplace. Although check usage for business-to-business (B2B) transactions is still the norm in the US and barriers remain, corporates are increasingly demanding the ability to transact in a real-time, omnichannel environment, 24×7.
The benefits are clear. Corporate treasurers stand to enjoy enhanced liquidity management and transparency, greater control over payments and enhanced data for reconciliation purposes. And for consumers, alternative digital payment options such as buy now pay later promote choice and flexibility.
- Increasing competition
A significant consequence of emerging consumer and business demand for digital offerings is the increase in competition from fintechs, technology giants and other third-parties. Traditionally, incumbent banks have enjoyed the advantage of consumer trust to offset more limited innovation. But as consumers become more comfortable entrusting their financial transactions to non-banks, banks must differentiate and digitize to remain competitive.
Data is where the technology giants excel, and their ability to personalise experiences and emotionally connect with their users is unprecedented. Banks need to learn from the positive aspects of this model to better understand their users and deliver meaningful, useful products and services.
For data to become the cornerstone of a banks’ customer relationship and take services to the next level, breaking the channel silos and extracting value from a comprehensive dataset will be decisive. But with only 18% of banks reporting that they are in the process of shifting from a transactional revenue model to a data-driven revenue model, this work has some way to go.
Taking customer propositions to the next level
Customers now expect services that work for them, not their banks. All banks, no matter the footprint, need to move quickly to offer a broad digital service platform that adds value to both the customer and the bank.
By defining a robust payments transformation strategy, banks of all sizes can remain fiercely competitive by rapidly lowering costs, unlocking revenues and promoting innovation
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