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FAILURE TO INNOVATE AND MEET EVOLVING CUSTOMER NEEDS DAMAGING FINANCIAL COMPANIES’ COMPETITIVENESS, GLOBAL AUTOMIC STUDY REVEALS

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FAILURE TO INNOVATE AND MEET EVOLVING CUSTOMER NEEDS DAMAGING FINANCIAL COMPANIES’ COMPETITIVENESS, GLOBAL AUTOMIC STUDY REVEALS

78% of financial services companies believe that a failure to meet customer needs will result in a loss of revenue; 77% anticipate a decline in number of customers

Almost one third of Financial Services organizations worldwide believe that the failure to innovate and keep up with evolving customer needs will have the biggest negative impact on their company in the next five years, according to the new global study, “Innovate or Perish”, sponsored by Automic Software and conducted by Vanson Bourne. This concern is shared by 30% of Retail organizations and 37% of Telecommunications companies.

The study surveyed a sample of 400 business decision makers (BDMs) and 4,000 consumers in the U.S, France, the U.K. and Germany (100 BDMs and 1,000 consumers in the U.K). Alongside Financial Services, respondents spanned three other verticals: energy and utilities, retail and telecommunications.

The vast majority of BDMs in Financial Services companies also believe their organization will suffer if their business fails to adapt in tandem with technical change within the next year. Some 78% forecast a reduction in revenue if they fail to evolve, 77% anticipate a decline in the number of customers and 69% expect international operations to decline.

The survey also highlights that just 17% of BDMs feel that their organization is on the cutting edge of technology (albeit 5% above the telecommunications sector); further, only 18% feel their organization has kept up completely with changing customer demands (1% less than the retail industry and 7% ahead of the telecommunications sector).

“This survey highlights the growing importance of utilizing technology—especially business automation— as a key instrument in delivering innovation and change in the finance sector,” says Chris Boorman, Chief Marketing Officer, Automic. “Those Financial Services institutions that don’t embrace new technologies risk permanently damaging customer relationships and revenue streams as they fail to meet market needs.”

A recent Gartner study predicted that customer experience and expectations would now be the new competitive battlefield, forcing organizations to become more innovative and creative. Gartner argues, “With an overabundance of alternatives and ubiquitous access to pricing and product information, consumers have little reason to remain loyal to a particular brand. To narrow the capabilities gap in customer experience, organizations must implement new tools, new people and changes in culture.”[1]

Gartner’s predictions align with the findings from the Automic Innovate or Perish study. It shows that innovation is as important to consumers as it is to financial services organizations: 84% of consumers say it is important that the organizations they buy from are innovative in the goods/services they offer, while 79% think it is important that the organizations are innovative in the way they interact with the customer. Lastly, 93% of UK respondents state that their use of an organization would decline if they failed to meet their needs as a customer.

Boorman concludes, “As Gartner has stated, ‘Growing business will depend on your ability to deliver convenience and delight consumers in today’s connected economy. The rules of competition have changed; the battlefield has shifted’ [2]. As such, we believe the only response to increasingly technological complexity and the multitude of customer demands is automation. The strategic application of a business automation program will enable organizations to dynamically and proactively engage with customers – ultimately increasing competitive advantage and bottom line.”

Other key findings include:

  • A mismatch exists between consumer expectations and financial services companies’ engagement plans.BDMs in financial services companies believe that the priorities for customers when they engage with the organization online are speed of service (cited by 58%) and personalization (cited by 43%). However, the overriding priority for consumers is the price of good and services (cited by 62%), with speed trailing at 54% and personalization cited by only 14%.
  • Regulatory challenges are crippling financial services innovation. As a heavily regulated industry, it comes as little surprise to find that 43% of financial services companies believe that failure to innovate to keep up with evolving regulatory challenges will have the biggest negative impact on their company. This regulatory hurdle compares with 26% in retail and 32% in telecommunications.
  • Lack of budget is less of a barrier to innovation in financial services than in other verticals.Some 49% of financial services organizations cite budget constraints as being a barrier to innovation, compared with 64% in the energy and utilities sector and 62% in telecommunications.
  • Customer service innovations more of a priority for financial services companies than other sectors. 44% of financial companies are looking to innovate customer service over the next year, compared with 27% in retail and 28% in telecommunications.

[1] Gartner, Gartner Predicts a Customer Experience Battlefield, December 18, 2014 ,

 http://gartnernews.com/gartner-predicts-a-customer-experience-battlefield

[2] Gartner, Gartner Predicts a Customer Experience Battlefield, December 18, 2014 ,

 http://gartnernews.com/gartner-predicts-a-customer-experience-battlefield

Finance

Elon Musk says bitcoin is slightly better than holding cash

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Elon Musk says bitcoin is slightly better than holding cash 1

(Reuters) – Tesla Inc CEO Elon Musk on Thursday said that owning bitcoin was only a little better than holding conventional cash, but that the slight difference made it a better asset to hold.

“However, when fiat currency has negative real interest, only a fool wouldn’t look elsewhere,” Musk said in a tweet. “Bitcoin is almost as bs as fiat money. The key word is ‘almost’.”

He also defended Tesla’s action to invest in bitcoin, saying that the difference with cash made it “adventurous enough” for the S&P 500 company to hold the cryptocurrency.

Tesla’s $1.5 billion bitcoin purchase set the cryptocurrency soaring toward this week’s record peak above $50,000 while Musk’s recent promotion of dogecoin on Twitter also lifted the price of that cryptocurrency.

Bitcoin was steady just below a record peak of $51,284 on Friday.

(Reporting by Aishwarya Nair and Shubham Kalia in Bengaluru; Editing by Sam Holmes)

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COVID response drives $24 trillion surge in global debt: IIF

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COVID response drives $24 trillion surge in global debt: IIF 2

By Marc Jones

LONDON (Reuters) – The COVID pandemic has added $24 trillion to the global debt mountain over the last year a new study has shown, leaving it at a record $281 trillion and the worldwide debt-to-GDP ratio at over 355%.

The Institute of International Finance’s global debt monitor estimated government support programmes had accounted for half of the rise, while global firms, banks and households added $5.4 trillion, 3.9 trillion and $2.6 trillion respectively.

It has meant that debt as a ratio of world economic output known as gross domestic product surged by 35 percentage points to over 355% of GDP.

That upswing is well beyond the rise seen during the global financial crisis, when 2008 and 2009 saw 10 percentage points and 15 percentage points respective debt-to-GDP jumps.

There is also little sign of a near-term stablisation.

Borrowing levels are expected to run well above pre-COVID levels in many countries and sectors again this year, supported by still low interest rates, although a reopening of economies should help on the GDP side of the equation.

“We expect global government debt to increase by another $10 trillion this year and surpass $92 trillion,” the IIF report said, adding that winding down support could also prove even more challenging than it was after the financial crisis.

“Political and social pressure could limit governments’ efforts to reduce deficits and debt, jeopardizing their ability to cope with future crises.”

“This could also constrain policy responses to mitigate the adverse impacts of climate change and natural capital loss,” it added.

EUROPE DEBT

Debt rises were particularly sharp in Europe, with non-financial sector debt-to-GDP ratios in France, Spain, and Greece increasing some 50 percentage points.

The rapid build-up was mostly driven by governments, particularly in Greece, Spain, Britain and Canada. Switzerland was the only mature market economy in the IIF’s 61-country analysis to record a decline in its debt ratio.

In emerging markets, China saw the biggest rise in debt ratios excluding banks, followed by Turkey, Korea, and the United Arab Emirates. South Africa and India recorded the largest increases just in terms of government debt ratios.

“Premature withdrawal of supportive government measures could mean a surge in bankruptcies and a new wave of non-performing loans,” the IIF said.

However, sustained reliance on government support could pose “systemic risks” as well by encouraging so-called ‘zombie’ firms – the weakest and most indebted corporates – to take on even more debt.

(Reporting by Marc Jones; Editing by Toby Chopra)

 

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Bitcoin’s record price unsustainable without lower volatility – JPMorgan

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Bitcoin's record price unsustainable without lower volatility - JPMorgan 3

LONDON (Reuters) – Bitcoin’s charge to a record north of $50,000 isn’t sustainable unless the cryptocurrency’s price swings cool down quickly, JPMorgan analysts said in a note.

The world’s biggest digital currency hit a record of $51,300 on Wednesday after smashing the $50,000 mark for the first time a day earlier, fuelled by signs it is winning acceptance among mainstream investors and companies.

Bitcoin’s three-month realised volatility, or actual price moves, is 87% versus 16% for gold – an asset proponents say it could threaten, the U.S. investment bank said in a note published on Tuesday.

The value of all bitcoin in circulation has swollen to $900 billion from $200 billion in September, the analysts said. The $700 billion jump has come the back of a total flow of just $11 billion from institutional investors into major trusts and futures markets.

Bitcoin’s limited supply – based on “miners” producing a set number of new coins – has led to a holders charging a premium on bitcoin coming to market, JPMorgan said. Retail flows may have also magnified institutional flows, it added.

(Reporting by Tom Wilson; editing by Thyagaraju Adinarayan)

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