Connect with us

Top Stories

FINANCIAL TRANSACTIONS IN THE SEPA ZONE INCUR COSTS IN THE BILLIONS 

FINANCIAL TRANSACTIONS IN THE SEPA ZONE INCUR COSTS IN THE BILLIONS 

By Dr. Hubertus von Poser, executive board member at PPI AG

Processing costs prove expensive for banks engaged in these financial transactions. Credit institutions in the SEPA zone expect total costs of almost 7.5 billion Euro each year. This includes costs for transactions, claims and marketing costs as well as employee salaries. This has been revealed by a benchmark study by PPI and ibi research and by an estimate based on the market expertise of PPI consultants. Many of these expenses can be reduced drastically by limiting the number of physical documents and increasing efficiency of expensive SWIFT payments. Compared to the rest of Europe, Great Britain and Ireland, for instance, still see a very high number of cheque deposits, which are expensive to process. This is because while electronic transfers and direct debits only incur costs of approximately two cents per transaction, cheque deposits and paper-based transfers cost between 28 and 92 cents each. SWIFT transfers costs approximately 4.50 Euro each. Brexit also contributes to increased transfer costs in Great Britain.

Great Britain will find itself in a unique situation as a result of Brexit. As Britain is leaving the EU transfer costs will rise. Universal EU regulations, such as the Payment Services Directive in particular, will then no longer apply. What is more, considerable resources will be tied up in the Brexit project – even at banks. This leaves the financial institutions little room to invest in improving efficiency such as optimising financial transactions, for example. However there are significant savings to be made in this regard as the following cost-report from the study shows.

EURO-based transactions in the SEPA zone 

In 2015, there were a total 72.9 billion financial transactions in the SEPA zone. Card payments constituted the majority of transactions at 40.5 percent, with transfers at 20.8 percent and direct debits at 26.1 percent. While the proportion of other transactions including online transactions increased considerably, they only amounted to 4.6 percent. However, 5.6 percent of all transactions still consisted of paper transactions or cheques, resulting in disproportionately high costs. The total expenses for processing of SEPA transfers amounted to 4.99 billion Euro. This includes all staff, resource and IT costs required for processing, the IT infrastructure, and improvements made to these.

The approximately 68.7 billion electronic transactions (transfers, direct debits, card transactions) incur costs of a mere 1.47 billion Euro, an average of around two cents per transaction. Meanwhile paper-based transfer and cheque deposits are the real cost drivers in financial transactions. The 2.66 billion cheque transactions alone which constitute 3.6 percent of all transactions incur a total of 2.68 billion Euro and 53.7 percent of all transaction costs. The two percent of paper-based transfers costs 655 million Euro and make up 13.1 percent of costs incurred. These figures also illustrate where there are savings to be made in SEPA financial transactions. Driving down the frequency of both of these payment methods alone could reduce the cost of financial transactions by around 67 percent.

Cheques still used too often

The number of internet transfers is rapidly increasing, particularly in retail-banking. The number of paper-based transactions is therefore steadily declining. Though in some SEPA countries this feat has been harder to achieve with cheques. The next solution is perhaps to eliminate checks altogether. The implementation of the Eurocheque guarantee in 2001, for example, proved very effective and resulted in a decline in cheque volume. Cheques are almost defunct in Germany (0.1 percent ). In Great Britain and Ireland (United Kingdom) the cheque is alive and well – with its share among financial transactions at around 1.9 percent in 2016. Despite an even higher proportion of cheques being used in France, Malta and Cyprus, this number is too high when compared with the rest of Europe. However it must be noted that the trend is already moving in the right direction in the United Kingdom too: Compared to the previous year, the number of cheques used in financial transactions fell by 0.5 percent. To compare: While in 2002 an average British citizen would deposit 31 cheques a year, by 2008 this number fell to 14. British banks had decided to completely phase out cheque payments by the end of 2018  after a transition period. After a number of objections this will not be implemented, however cheque payment guarantees using a guarantee card were eliminated in 2011.

In total, the 2.66 billion cheque transactions alone, chiefly in France at a total of 3.6 percent of all transactions, amount to 53.7 percent of the 2.68 billion Euro transaction costs. The two percent of paper-based transfers cost 655 million Euro, making up another 13.1 percent of all costs incurred. These figures also illustrate where there are savings to be made in SEPA financial transactions. Driving down the frequency of both of these payment methods alone could reduce the cost of financial transactions by around 67 percent. Although trends suggest that paper-based transactions are on the decline as a result of a rapid increase in online transfers, this feat is obviously far harder to achieve with cheques.

With the introduction of SEPA the number of claims made in the Euro zone has decreased significantly. On average, for every 14,000 payment orders or so, only one results in a claim now. This is especially true of international SEPA refund transactions where the process has become significantly easier. However, processing still incurs total costs of around 190 million Euro, an average of 35 Euro per transaction. The benchmark study revealed that with modern IT infrastructure and targeted process optimisation, costs can be lowered from 60 (worst case scenario pricing structure) to under 20 Euro.

SWIFT financial transactions are on the decline 

Financial transactions using the SWIFT platform includes express financial transactions in Euro via Target and Euro and foreign currency transactions within the SEPA zone as well as transnational, classic foreign transactions. The introduction of SEPA has resulted in a significant decrease in the number of SWIFT-based foreign transactions. Previously making up 1 percent of all payment orders, this slipped to 0.4 percent with the introduction of the SEPA initiative. Nevertheless, the costs for the necessary IT infrastructure could not be reduced. On the contrary, an increase in compliance requirements led to a significant increase in costs. And although the majority of banks made no radical upgrades or replacements to their systems for foreign payments and so avoided having to make additional cost allowances per unit, the costs of foreign transactions are still disproportionately high. They amount to 1.8 billion Euro, 24.3 percent of the total cost of SEPA financial transactions (the sum of processing and marketing costs). On average, each order incurs 4.50 Euro in costs. Furthermore, cheque payments which still make up a high proportion of transactions cost 15 to 18 Euro each. It is assumed for Austria in particular that the costs for completing non-SEPA transactions are relatively low as Austria is traditionally a strong performer in this respect, effecting a lot of transactions with Eastern Europe.

Significant costs are also incurred as a result of claims processing. On average, the number of claims makes up one percent of all orders in foreign transfers and so is significantly higher than the number of claims made in SEPA financial transactions. This is partly due to the consistently poor conditions in the banking infrastructure in many developing countries, particularly in Africa and parts of Asia and South America. The average costs incurred per claim are therefore in the 80 to 90 Euro range.

Marketing costs in the millions 

There are no reliable figures for Germany or Europe to show the number of employees processing financial transactions. To make a conservative estimate, assuming that there is one employee per credit institution who is exclusively responsible for processing financial transactions, which corresponds to roughly 0.25 percent of the total employees of credit institutions, this would easily result in around 1500 employees. Extrapolating the number in Germany for the whole SEPA zone, this would be a total of 6200 employees involved in processing financial transactions throughout the SEPA zone. If the total costs lie somewhere between 100,000 and 110,000 Euro, the marketing costs will then total 630 million Euro.

Total financial transaction costs

According to a relatively precise estimate, SEPA financial transactions made in Euro amount to almost 5 billion Euro. Payments made via the SWIFT platform add a further estimated 1.8 billion Euro. In addition to this there are the marketing costs which according to a rough but likely all too modest estimate come to at least 630 million Euro. This yields total costs of almost 7.5 billion Euro per year. So we are talking about enormous expenses which could be greatly reduced within a few years by taking measures such as reducing the amount of physical documentation – particularly cheques – and increasing the efficiency of very expensive SWIFT payments. In Great Britain in particular there is potential for cost optimisation in the usage of cheques and expensive foreign payments. Furthermore it is necessary to ensure that in spite of Brexit and its associated costs that arrangements are made to enable the optimisation of financial transactions. This comes down to the financial transaction managers!

About the study:

The estimates are based on PPI’s market expertise and on a benchmark study on SEPA financial transactions in Germany. This study was carried out by PPI and ibi research for the year SEPA was introduced. Eight banks, responsible for around 45 percent of all financial transactions effected in Germany, took part in the study.

On this basis we produced an estimation of the total costs of financial transactions for all banks in the SEPA zone. This includes all SEPA transactions as well as all SWIFT transactions within and those made to outside the SEPA zone, also known as foreign transactions. The costs of SEPA transactions made by non-German banks were estimated based on German figures. National differences and circumstances were also taken into account. The costs of SWIFT transactions were estimated based on the transaction costs of a medium-sized to large bank and then extrapolated for Europe. In addition to this there are the marketing costs for financial transactions for which conservative estimates have been made in the absence of statistical data.

Top Stories

Workforce Diversity Matters To Our ESG Evaluation

Workforce Diversity Matters To Our ESG Evaluation 1

We believe the limited representation of Black voices in key decision-making processes prevents companies from reaping the benefits of a diverse workforce. It also exposes companies’ reputations to allegations of discrimination, as shown by recent calls on social media to boycott certain businesses after apparently racist behavior of employees were captured on video and shared. As such, we believe companies need to be deliberate in how they recruit, hire, and develop Black talent if they want to achieve a sustainable and diverse workforce, thereby improving ESG performance.

As part of our social assessment in the ESG Evaluation, we assess how effective a company is at developing a productive and inclusive workforce. Key indicators include employee retention and turnover rates, labor standards, pay, benefits, and rewards. We also assess whether fair labor standards are entrenched across the value chain. Moreover, we evaluate an entity’s preparedness to respond to long-term risks and opportunities, including from changing demographics and social patterns. We assess the extent to which decision-making demonstrates the company’s commitment to its long-term strategy and sustainability, as well as its success at building an inclusive workplace culture. These practices are particularly important given the presence of systemic racism, which continues to disadvantage Black people in corporate environments, particularly in the U.S.

U.S. workplaces have yet to achieve equal opportunity for people of different races, and policies have so far not fully addressed the widespread issue of racism. According to the Center of Public Integrity and the Washington Post, from 2010 to 2017, one million discrimination complaints were filed with the U.S. Equal Employment Office Commission. More than 30% of these cases related to racial discrimination.

Labour Market Outcomes Are Rooted In Systemic Racism

The Black community has long been subject to civil and human injustices that have contributed to a vicious cycle of low educational attainment, high unemployment, and concentrated poverty. This has made it difficult for Black people to enter the workforce, advance in higher wage work, and accumulate generational wealth. Poverty serves as a systemic hurdle to Black employees because it creates barriers to higher educational attainment, thereby limiting their ability to procure employment and financial opportunities that would enable wealth accumulation. In 2018, the Kaiser Family Foundation revealed that Black Americans have the second-highest poverty rate in the U.S. (after Native Americans, another highly marginalized group). The study also highlighted a striking wealth disparity; while the median net worth of a white household in 2016 was $103,000, for Black households it was only $9,200 (see chart 1).

Chart 1

Workforce Diversity Matters To Our ESG Evaluation 2

Yet, structural hurdles and enduring biases have also historically disadvantaged Black jobseekers, regardless of educational attainment. In the U.S., only 31% of Black employees are in management or professional positions, and a low proportion is in upper management positions (see chart 2).

Chart 2

Black Employees are largely underrepresented in management and professional occupations
Educational attainment of the labor force, age and above in the U.S.

Workforce Diversity Matters To Our ESG Evaluation 3

What’s more, Black employees are often held to higher standards than their white counterparts. A 2015 study by the National Bureau of Economic Research found that Black workers receive extra scrutiny in the workplace, leading to lower wages, slower promotions, and sometimes even job loss. This legacy may also create an additional barrier to career advancement, which is apparent in the low proportion of Black employees in upper management positions. Of the Fortune 500 companies, Black employees only account for 3.2% of executive and senior management and only 0.8% of CEOs (four in total) are Black (see chart 3).

Chart 3

Diversity And Inclusion Policies Are Only The First Step

Workforce Diversity Matters To Our ESG Evaluation 4

In our opinion, D&I programs are an important mechanism for improving racial equity in the workplace. They aim to link a company’s strategies, mission, and business practices in a way that supports demographic differences among talent and enables an environment in which all employees are empowered to contribute their unique views and perspectives. As D&I programs have evolved, they’ve begun to encompass initiatives such as targeted recruitment, diversity education and training, career development, mentoring, and grievance procedures. Done well, D&I programs offer several business benefits, from improved productivity to innovation, which help boost a company’s ESG performance by helping it anticipate changing consumer preferences and consumption patterns.

Several studies have investigated the link between diverse workforces and a firm’s financial performance. According to a 2020 McKinsey & Co study, companies in the top quartile for racial and ethnic diversity are 36% more likely to show financial returns that exceed the national industry median. Another study by sociologist Cedric Herring, during his time at the University of Illinois, Chicago, found that companies with the highest racial diversity were able to generate nearly 15x more sales revenue than firms with the lowest levels of racial diversity. Herring suggests that racial diversity is the most important predictor of a company’s competitive positioning, and a better indicator of sales revenue and customer attainment than a company’s size, years in business, and overall employee headcount. Diversity has also been linked to increased innovation potential. Studies show that diversity supports, enhanced creativity, more informed decision-making, increased capacity for innovation, improved customer acquisition, stronger revenue-generating potential, and better talent management.

Analyzing Diversity Remains A Challenge

Where available, we analyze a company’s ethnic diversity metrics as one indicator for a diverse workforce. Businesses tend to focus mainly on the workforce composition and on recruiting employees from different identity groups, including race, gender, age, culture, cognition, and education. Social equality activists are increasingly demanding that companies release diversity statistics, thereby holding them accountable for persisting race gaps.

Although transparency practices are improving, the availability of data is a persistent issue. According to the U.K.’s Business in the Community (BITC) Race at Work 2018 Scorecard report, only 11% of employers report ethnicity and pay data. In France, a race-neutral policy approach to education and employment stands in contrast to that in other European countries. It is illegal for employers or institutions in France to ask about someone’s race or ethnicity. The intent of this was to avoid discrimination. However, in 2006, more than 25 years after the 1978 law prohibiting the collection of ethnic data, a poll by research company TNS-Sofres showed that more than half of France’s black adults said they had experienced racial discrimination. Furthermore, companies more frequently report strictly on percentages of minority employees without commenting, directly or otherwise, on the positions they occupy. This can mask some disparities in terms of job level, promotions, or lack of diversity in certain roles.

We also take into consideration companies’ strategies to increase diversity including quotas, targets, or affirmative action policies. Over the past few years, several European countries have proposed or implemented diversity quotas for boards of companies, principally to increase female participation. The U.S. state of California followed suit in 2018, while legislation is pending in other states. Although still controversial, quotas have helped increase the number of women on boards. Similar policies on ethnic diversity are largely missing. In the U.K., the 2017 Parker Review set a voluntary target for FTSE100 boards to have at least one director from an ethnic minority group by 2021. The Review’s 2020 update shows some progress but not full compliance with the recommendations.

Regardless of the approach a company takes to increase workforce diversity, it is clear that quality data is a necessary ingredient of an effective diversity strategy. As such, we believe transparency at all levels of the organization is imperative for companies to solidify the trust and loyalty of their employees, suppliers, and shareholders. In turn, this will help boost productivity and strengthen the potential for innovation, thereby supporting ESG performance.

The Emphasis Must Be On Inclusion

Recruiting ethnic minorities does not necessarily translate into an environment that’s free of discrimination, allowing each employee an equal opportunity to advance. In our opinion, employers with a culture that tolerates discriminatory practices and microaggression are vulnerable to productivity lapses, decreased innovation, and lower creativity. Therefore, we believe the success of D&I initiatives appears to hinge on the inclusion side of the equation, which should ensure employees feel their contributions are appreciated and full participation is encouraged. According to author and inclusion strategist Verna Myers, Vice President of Inclusion Strategy at

Netflix, “Diversity is about being invited to the party. Inclusion is about being asked to dance.” Analyzing inclusion practices could provide better insight into how companies manage more covert forms of discrimination associated with microaggression. In a U.S. national survey of over 3,700 office workers conducted by the National Opinion Research Center (NORC), 58% of black respondents said they have encountered racism at the workplace. According to the NORC, workplace prejudice often shows up in subtle ways, through microaggression, typically during employee interactions through comments that proliferate Black stereotypes. Examples include referring to Black employees as intimidating, or unprofessional because of their hairstyles, thus creating a situation in which these employees are perceived as “not right” for the job. Such a toxic environment can go undetected by senior management, particularly when people of color are underrepresented at the workplace and in management positions. Many instances of discrimination also likely go unreported, making it even more difficult to expose covert forms of racism in corporate culture. In some cases, microaggression could ultimately result in higher staff turnover rates, one of the factors that informs a company’s Social Profile in our ESG Evaluation.

Many corporate leaders have committed additional resources to D&I programs in the wake of the Black Lives Matter protests. However, the success of these programs lies in how they resonate with employees. Literature on this topic suggests that achieving true inclusion requires a shift in the organizational culture to acknowledge the value of different backgrounds, expose conscious and unconscious biases, and create an atmosphere of respect and empathy. Managers, in particular, play a crucial role in employee development and are therefore important stakeholders in supporting racial inclusion. However, many are not necessarily inclined to reflect on or talk about racial discrimination, and without a business culture that fosters inclusion, meaningful change is unlikely to result.

Companies have started promoting conversations with Black employees to better understand their experiences, which we believe is a starting point. Ultimately, achieving a sustainable diverse workforce and addressing system racism will require continued leadership and accountability. A 2018 Boston Consulting Group study of more than 1,700 companies in eight countries, across different industries and sizes, found that five key factors help diversity to flourish:

  • Participative leadership: managers support employee contributions;
  • Strategic priority: top management and the CEO clearly demonstrate support for diversity; – Frequent communication: free and open communication is encouraged within teams;
  • Culture of openness to new ideas: employees feel that they can express their perspectives without fear of retaliation; and
  • Fair employment practices: employees with equal roles achieve equal pay, and companies enact robust anti-discrimination policies.

Looking To The Future

The Black Lives Matter movement has ignited a broader awareness of racism in society that has put the corporate sector in the spotlight. We believe companies’ diversity track records will be increasingly scrutinized, making a diverse and inclusive workforce a reputational imperative. In our view, more corporate entities will treat the challenge of workplace diversity as they would any other existential risk, and therefore gather the right information, including opting into voluntary diversity initiatives, to make the most informed choices.

A Call To Action: The Race At Work Charter

In collaboration with the U.K. government, the BITC established the 2018 Race at Work Charter detailing five actions all employers, regardless of sector, could undertake to further support diversity and inclusion. Since the Charter’s inception, more than 100 companies have added their signatures, including the National Grid, Goldman Sachs, and Deutsche Bank. By joining this initiative, companies are committing to taking meaningful action against discrimination in the workplace. The five actions are to:

  • Appoint an executive sponsor for race.
  • Report ethnicity data metrics and monitor progress.
  • Commit, at the Board level, to zero tolerance of harassment and bullying.
  • Clearly state that promoting equality in the workplace is the responsibility of all managers.
  • Take meaningful action to support the career progression of ethnic minorities.

The success of a company’s D&I efforts will be reflected in several indicators, including: the proportion of Black employees in the workforce overall, also in management and leadership positions; and the pay gap between employees in similar roles. Large, technologically advanced companies will likely be among the first to back their D&I commitments with meaningful targets and report regularly on progress. In the end, an effective, inclusive framework that supports long-lasting diversity and ESG goals depends on sound communication and ongoing commitment of employees at all levels of the organization.

Related Research

  • Environmental, Social, And Governance: Why Corporations’ Responses To George Floyd Protests Matter, July 23, 2020
  • The ESG Pulse: Social Factors Could Drive More Rating Actions As Health And Inequality Remain In Focus, July 16, 2020
  • Environmental, Social, And Governance Evaluation Analytical Approach, June 17, 2020
  • Environmental, Social, And Governance: How We Apply Our ESG Evaluation Analytical Approach: Part 2, June 17, 2020
  • How We Apply Our ESG Evaluation Analytical Approach: Part 2, June 17, 2020
  • People Power: COVID-19 Will Redefine Workforce Dynamics In The Post-Pandemic Era, June 4, 2020
  • The ESG Lens on COVID-19, Part 2: How Companies Deal with Disruption, April 28, 2020
  • COVID 19: A Test Of The Stakeholder Approach, April 21, 2020
  • The ESG Lens On COVID-19, Part 1, April 20, 2020
  • How To Navigate The ESG Risk Atlas, April 11, 2019
  • How We Apply Our ESG Evaluation Analytical Approach, April 10, 2019
  • The ESG Advantage: Exploring Links To Corporate Financial Performance, April 8, 2019

External Research

  • https://www.washingtonpost.com/graphics/2019/business/discrimination-complaint-outcomes/
  • https://www.mckinsey.com/featured-insights/diversity-and-inclusion/diversity-wins-how-inclusion-matters#
  • https://journals.sagepub.com/doi/abs/10.1177/000312240907400203
  • https://assets.ey.com/content/dam/ey-sites/ey-com/en_uk/news/2020/02/ey-parker-review-2017-report-final.pdf – https://assets.ey.com/content/dam/ey-sites/ey-com/en_uk/news/2020/02/ey-parker-review-2020-report-final.pdf
  • https://www.talentinnovation.org/_private/assets/BeingBlack-KeyFindings-CTI.pdf
  • https://www.bcg.com/publications/2018/how-diverse-leadership-teams-boost-innovation
  • https://www.bitc.org.uk/race-at-work-charter-signatories/
Continue Reading

Top Stories

What is loneliness and how can you manage it?

What is loneliness and how can you manage it? 5

By Iris Schaden Your Business and Personal Coach

A mere century ago, almost no one lived alone. Today, many do and it is not unusual. The recent lockdowns and isolation periods have amplified feelings of loneliness. But why do we feel lonely? Why do our bodies experience social pain? Learn about what we can do to improve our situation, prevent chronic loneliness and minimise the tremendous impact it has on our health.

Solitude and choosing to be alone can be bliss. Over the last sixty years the number of people living alone has increased in developed countries by more than 50 percent. In countries such as Denmark, Sweden and Switzerland, it is very common for people to live alone. But this does not translate into higher levels of selfreported loneliness. Many people have friends or family they can interact with on a regular basis.

However, it is important to recognise that this choice is different to loneliness, which can be a state of profound distress. Loneliness is a purely subjective and individual experience that can be felt by anyone, no matter their social, educational, gender or age demographic. Humankind are social creatures by nature – we struggle without it – and social connections are important to our health and emotional wellbeing.

Loneliness is a problem when we feel that no place is home; when we are in a group and we still feel social separation; when we spend time with our family but we feel like we don’t belong; or when we lose a relationship and struggle to adjust. It is a growing phenomenon in modern times, a by-product of our individualism, long-distance study and career opportunities or time-consuming work commitments.

The pandemic, with its required isolation and social distancing, has added additional stress to many households, but feelings of loneliness or adverse effects of social isolation are particularly prevalent in one-person households and young people aged 12–25. According to a study by VicHealth, even before COVID-19 young adults and adolescents reported high levels of loneliness, social isolation, social anxiety and depressive symptoms. Additionally, it is men who tend to report higher levels of loneliness than women.

Reported loneliness is on the rise. In 2017 and 2018 former US Surgeon General Vivek H. Murthy declared ‘an epidemic of loneliness,’ and the UK appointed a Minister of Loneliness. In these two countries, one in five adults reported that they often or always feel alone; in Australia, it was one in four adults. And this was before COVID-19, which makes us realise the mental and emotional impact lockdown has on individuals.

What happens to our bodies when we experience loneliness?

Neuroscientists, such as John Cacioppo, identify loneliness as ‘a state of hypervigilance whose origins lie among our primate ancestors and in our own hunter-gatherer past’. Our ancestors needed to belong to an intimate social group to survive. Cacioppo explains that our bodies respond to being alone, or being with strangers, as though we were in a dangerous situation.

Separation from other people (the group) triggers a fight-flight-or-freeze response and we feel social pain. While physical pain is primarily a sensory experience, social pain is the emotional state that comes from the distress of being lonely. Like the bodily sensation of hunger, it alerts us to a need, but instead of food the need is social interaction.

Loneliness generates anxiety: our breathing quickens, our heart races, our blood pressure rises and we struggle to sleep or sleep well. If we don’t pay attention, over time we start to act more fearful, defensive and self-involved. All of these actions drive others away and tend to stop those experiencing loneliness from doing what would benefit them the most: reaching out to others. It is a vicious cycle and one that is especially challenging for older and younger individuals.  

Tactics to help cope with feelings of loneliness. 

To belong is to feel at home in a place or situation where you feel included, comfortable and connected with others. In his assessment, Vivek H. Murthy wrote, ‘To be at home is to be known … You can feel at home with friends, or at work, or in a college dining hall, or at church, or in Yankee Stadium, or at your neighbourhood bar. Loneliness is the feeling that no place is home.’ Having relocated to different cities and countries and re-establishing my life over and over again, I can certainly say that loneliness can be a challenge.

Iris Schaden

Iris Schaden

How can we combat the feelings of loneliness and the anxiety that comes with it, before it becomes chronic and we find ourselves even more isolated over time? 

The first step in moving forward is acknowledging how you feel. Give those feelings a name with a specific timeframe; for example, today I feel alone or since I’ve been in lockdown, I have felt alone or since I lost my partner, I feel disconnected and lost. By doing this, we focus on the present and do not label our entire existence as lonely.

My personal strategy is to go outside if the loneliness gets too ‘heavy’; connect with other people through looks and smiles (even under a face mask our eyes can smile); call friends and family regularly; or schedule a brunch or glass of wine with friends (in person or video chat).

Practising random acts of kindness and gratitude, for others and ourselves, is another very effective and very positive way of bringing us back into the present moment and improving our overall wellbeing. Energy flows where our focus goes. It takes effort and sometimes it is indeed easier to just give in and watch a light-hearted movie on the couch. And that’s fine too!

If you are ever experiencing loneliness, I recommend exercising your social muscles and also seeking support. Remember that your feelings are normal as we are biologically fine-tuned to being with and interacting with others. However, you will need to make changes to avoid jeopardising your health. Once loneliness becomes chronic it becomes self-sustained and you will begin exhibiting defensive behaviour. As a defence mechanism, loneliness makes you assume the worst of others and you (your brain) become hypersensitive to social signals that might be interpreted as hostile towards you, when in reality people might just be trying to help you.

Large studies have shown that feeling lonely has a tremendous impact on your health: it can make you age quicker, cause dementia to advance faster, weaken your immune system and lead to anxiety and depression. Many people turn to substance abuse which only serves to numb the symptoms, rather than treat the source. And while you can find so much information online, knowing is not enough. Remember that reaching out for help is not a sign of weakness but one of strength. So please reach out to your network, talk to your health professional or get in contact with me.

There are different ways to improve your overall wellbeing. Let’s discuss.

Continue Reading

Top Stories

Payments in a pandemic: UK consumer trends emerging from COVID-19

Payments in a pandemic: UK consumer trends emerging from COVID-19 6

By Philip McHugh CEO at Paysafe

The outbreak of COVID-19 has been a global catalyst impacting many industries, including payments. It has forced consumers to adjust to different ways of purchasing goods and services; according to our latest Lost in Transaction research, a survey in which 8,000 consumers globally were asked about their payment habits, over half (54%) of UK consumers said they have used a payment method new to them since COVID-19 began.

This change in consumer behavior will serve as a tipping point for the payments industry. Consumers are demanding more choice, and more convenience in how they pay, with 84% of people we surveyed admitting to thinking about payments differently in 2020.

Here are four trends coming out of the COVID-19 pandemic we believe will permanently alter the global payments landscape.

  1. Major shifts to digital

This pandemic has not only been the impetus for change from consumers, but for businesses too. For cash consumers, particularly those who are unbanked, the short and long-term impact of only having to access to products and services digitally is going to be substantial. Providing a smooth transition from retail to online payments will be key. According to our research findings, COVID-19 has led 21% of UK consumers to try online shopping for the first time and 12% using a digital wallet for the first time to make an online payment.

Digital merchants must take this into strong consideration when thinking about the evolution of their checkout. There are many viable options, including incorporating an eCash solution to give the buyer the option to maintain cash as their primary payment method, or introducing a digital wallet that enables people to shop online without sharing their financial data with merchants and potentially compromising their financial security. By 2023, digital wallets are expected to become the most popular online payment method in the UK, accounting for 33% of the market.

Already, nearly half of UK consumers (43%) said they increased their online shopping habits because of restricted access to high street stores and this percentage is expected to grow further. It’s vital that businesses begin to diversify their payment offerings otherwise they’ll fail to meet consumer expectations and risk losing out to their competitors.

  1. The growth of contactless

Despite the World Health Organization not issuing an official warning against using cash, the psychological perception of the safety of handling cash has made an impact.  Nearly two thirds (63%) of UK consumers surveyed said they will be using contactless more in the short term due to health and safety concerns, and 61% saying they are happier using contactless now than they were last year.

At the end of March, cash usage in Britain halved, according to Link , operator of the UK’s biggest network of ATMs. In addition, contactless card limits for in-store spending rose from £30 to £45 to cut the need for physical contact in shops. Increased adoption of mobile wallets like Apple Pay or Google Pay across all generations may be on the horizon, making payments more accessible to society. Restaurants and pubs are also encouraging the trend towards cashless as well, such as prompting people to use an order-ahead app to pay for drive-through orders or removing the need to press a “pay now” button before a contactless payment.

  1. The importance of remittances

With travel restrictions still in place around the world, sending money home quickly, seamlessly, and cost-effectively remains more vital than ever. Half of consumers have given money to family or friends since the crisis began, and nearly a quarter (20%) have done this at least three times. According to our research, 74% of consumers would use a digital payment method to send money abroad, either through a digital wallet, direct bank transfer, or online money transfer services. Effective remittance channels are needed to combat specific issues caused by this crisis, including being financially inclusive for those needing financial support for the first time and who may not have a bank account, or access to digital payment methods because of displacement and isolation.

  1. Embracing the power of technology

Our recent Lost in Transaction research shows that consumers are already adapting to challenges in purchasing, including getting to grips with alternative payment methods, and it is the industry’s job to make those methods even more accessible to society. Both payment providers and online retailers must adapt in line with the demands of consumers, and the requirements of the situation. Ultimately, the accelerated change and improvements made to digital commerce throughout this pandemic will pave the way for the future of both digital and in-store payments.

Once the world resumes ‘business as usual’, the payments industry, guided by changing consumer behavior, will develop further thanks to new technologies such as 5G technology, artificial intelligence and automation – all helping to speed up transactions, improve in-store payments, and enhance user experience. Online and mobile banking will become more ingrained in the mainstream and consumers will come to expect a fully-integrated, unified experience across all channels and touch points. We were already on this path, but the pandemic has served to accelerate consumer appetite for enhanced products and services.

Continue Reading

Call For Entries

Global Banking and Finance Review Awards Nominations 2020
2020 Global Banking & Finance Awards now open. Click Here

Latest Articles

Matt Kolling Matt Kolling
Banking3 hours ago

UBX appoints new Chief Investment Officer

In line with its strategy to explore and invest in companies and platforms of the future, UBX—the Fintech and Corporate...

Workforce Diversity Matters To Our ESG Evaluation 7 Workforce Diversity Matters To Our ESG Evaluation 8
Top Stories10 hours ago

Workforce Diversity Matters To Our ESG Evaluation

We believe the limited representation of Black voices in key decision-making processes prevents companies from reaping the benefits of a...

Blackline reveals CEO succession plan 12 Blackline reveals CEO succession plan 13
Technology11 hours ago

Blackline reveals CEO succession plan

By President & COO Marc Huffman appointed CEO as of Jan. 1st, 2021; Founder Therese Tucker to serve as executive...

From furlough to returning to work - employees are feeling insecure in their future 14 From furlough to returning to work - employees are feeling insecure in their future 15
Business12 hours ago

From furlough to returning to work – employees are feeling insecure in their future

New data looking into 6,273 employees, commissioned by Perkbox, the employee experience platform, has revealed the considerable impacts of the...

How mortgage regulations are changing globally 16 How mortgage regulations are changing globally 17
13 hours ago

How mortgage regulations are changing globally

By Globalaw members Oliver Foerster, Partner @ Huth Dietrich Hahn, Roberto Sparano, Partner @ Quorum Legal ,Paul Tully, Managing Director and Partner...

Return to work: Flexibility, preparation and communication are key 18 Return to work: Flexibility, preparation and communication are key 19
Business3 days ago

Return to work: Flexibility, preparation and communication are key

By Matt Weston, Managing Director, Robert Half UK As lockdown restrictions ease for the foreseeable future, conversations across the business...

How sustainable AI improves the triple bottom line 20 How sustainable AI improves the triple bottom line 21
Technology3 days ago

How sustainable AI improves the triple bottom line

An investment in green AI enables financial services firms to align people, profit, and planet By Nick Dale, EVP business...

The impact and implications of Covid-19 on financial reporting 22 The impact and implications of Covid-19 on financial reporting 23
Finance3 days ago

The impact and implications of Covid-19 on financial reporting

By Mark Billington, Regional Director, Greater China & South-East Asia, ICAEW The economic consequences of Covid-19 have been unprecedented, affecting...

Contis enters RBS Capability and Innovation Fund bid seeking £35 million for disruptive SME growth strategy   24 Contis enters RBS Capability and Innovation Fund bid seeking £35 million for disruptive SME growth strategy   25
Business3 days ago

Contis enters RBS Capability and Innovation Fund bid seeking £35 million for disruptive SME growth strategy  

Leading payments provider, Contis, has applied for two grants from the RBS & BCR Alternative Remedies Package, totalling £35 million.   Unlike most applicants who...

Four years of digital transformation in four weeks: UK lockdown puts pressure on brands to digitally deliver 26 Four years of digital transformation in four weeks: UK lockdown puts pressure on brands to digitally deliver 27
Business3 days ago

Four years of digital transformation in four weeks: UK lockdown puts pressure on brands to digitally deliver

Nearly a third (32%) of consumers would switch providers if a brand’s website is unavailable for more than 24 hours...