Connect with us

Finance

Frodo takes on the UK’s big banks and starts a revolution in on-line credit purchasing

Published

on

Frodo Financial
Frodo Financial is aiming to redefine the way in which consumers use overdrafts by introducing a new type of personal credit account and so go head to head with the mainstream UK banking community.Frodo Financial

The newly launched business is an independent and innovative financial technology company, launched by financial technology expert and CEO Kevin Lewis to provide consumers with an alternative way to borrow and pay for goods and services. Crucially, unlike the numerous new start up banks, Frodo does not seek to replace existing banking arrangements rather it seeks to complement them – a major factor given the reluctance of consumers to change their bank accounts.

While not needing to change bank accounts might appear good news to the high street banks, less welcome is the fact that Frodo is firmly positioned to compete in their prime lending market as it targets those customers who present the lowest risks. In this regard it is quite different to some of the new start up on-line loans businesses.
 
Frodo has three key products – two of which are aimed at the mainstream banks customers. Frodo Flexi has been designed for borrowers fed-up with the overdraft arrangements offered by their existing bank while Frodo Bond is for investors seeking income. Both products work together to provide what some have described as a ‘traditional banking service’ with money ‘in’ used only for lending ‘out’.
 
Except Frodo Financial is not a bank, rather its regulated under the consumer credit act to borrow and lend money. Its third core product Frodo Pay is a payment gateway set up to rival the likes of Visa, MasterCard and PayPal. FrodoPay, which is regulated by the Financial Services Authority (FSA), is the technological driver behind the new business.
 
Kevin Lewis set up Frodo Financial as a result of his own personal experience of attempting to arrange an overdraft with his existing bank. Lewis, an entrepreneur with a breadth of commercial awareness and business knowledge, felt that not only was the process of arranging an overdraft extremely cumbersome, but the cost of using the facility was too high. He was particularly irritated by his bank’s insistence on adding fees and charges to an already expensive headline interest rate. So he decided to do something about it by using his skills and expertise and so founded Frodo Financial.
 
“I’m not the only person who has been disappointed by the reaction of their bank when seeking an overdraft. Not only was the deal offered very poor but the whole process was cumbersome and difficult. Like most people I didn’t want to change my bank but felt there had to be a better way. So I started work on building Frodo and a financial regime fit for the 21st century in order to challenge ‘big banking’,” said Lewis
 
So how does Frodo and its products work? And why are they so revolutionary?
The Frodo Flexi account is a rolling cash-credit facility of up to £10,000.It is designed as an alternative to an overdraft but can be set up without the need to change banks – it also comes without fees and charges. The customer uses it when they need it – it does not cost the consumer anything if they do not. Interest starts accruing the day cash is borrowed and charged monthly. Once customer starts using their Flexi Account, the minimum monthly repayment is 10% of the outstanding balance up to 100%, plus an interest fee equivalent to a representative 16.9% APR variable. This is a highly competitive rate particularly for borrowings of over £1,000 and makes Frodo a powerful challenger to the high street banks’ overdraft business.
 
With your approved credit limit the customer can use Frodo Flexi to top up their bank accounts or make payments direct from their Frodo account. If they do so then another unique attribute of the account comes to the fore and that’s the very valuable Section 75 credit card type protection which is usually afforded only to credit card payments.
 
It also has the following additional benefits:

  • no upfront, monthly, quarterly, annual or renewal fees;
  • enables the customer to avoid the higher charges of borrowing for overdrafts with their existing bank
  • Flexi account applications are on line and decisions are quick – usually within five minutes;
  • Customers can use the account to top-up their bank account or make direct payments to over 2,500 online providers
  • Pay a bill – all you need is the account number, sort code and reference number
  • Pay directly for goods and services from our growing list of over 2500 selected online providers
Frodo is funding its lending by raising cash by issuing bonds and institutional funding. So far Lewis has issued two successful “Capital Secured Bonds” – all in advance of the FrodoFlexi accounts going live at the beginning of October 2012.
 
Most of the money came to Frodo from large private investors who understood the Frodo concept and were happy to back it with their own money – particularly given the headline rate of 7.5% (gross) per year. Two tranches of bonds were issued in succession – both were successful and both are now closed. Lewis believes that as Frodo becomes better know, then more main stream investors will be attracted to Frodo bonds – although he stresses he can’t guarantee the eye watering 7.5% will be on offer in future. A new bond issuance is being planned for the 12th November at a rate 7 % PA. Investors – whether individuals or companies – will still have to be UK based. The bonds are also available for SIPP pension scheme owners.
 
The final element of Frodo Financial is at the very heart of the business and reflects Lewis’s technical skills in financial technology. FrodoPay is a proprietary payment gateway which will rival Mastercard, Visa and PayPal. By re-engineering many of the processes involved in both overdrafts and on-line payments, Lewis has managed to cut out elements of the value chain so ensuring his processes are run at lower cost than existing providers. This re-engineering is likely to turbocharge Frodo as its scalable technology allows online retailers to accept payments by Frodo customers and also enables them to promote the Flexi account to its existing customer bases as an alternative payment process without incurring merchant fees, (which currently average around 2% of the transaction value). Frodo is also holding out the opportunity for retailers to introduce new business to this business.
 
Without doubt, Frodo is an innovative business. It has a technological platform which controls and integrates external web services into all parts of the customer journey and credit management without being reliant on a third party.
 
Lewis has developed a powerful tool in the fight with the banking competition. Unleashing such a tool on in the highly competitive world of on-line retail and credit, with big high street names vying for a competitive edge in everything from white goods to holidays, will almost certainly prove it’s making.
 
 
 
 
 
 
 

Finance

Corporate treasuries under pressure need multi-banking trade finance technology

Published

on

Corporate treasuries under pressure need multi-banking trade finance technology 1

By Andrew Raymond, CEO, Bolero International

The pressures on corporate treasuries in global trade have continued to mount since an HSBC survey last December found many felt ill-equipped to meet the demands placed on them.

Since then the pandemic has caused massive disruption and has overturned many carefully-laid plans. The same pressures identified in the survey remain, but have intensified. Treasurers still face ever-more complex flows of information from multiple systems while relying substantially on manual processes. At the same time they are expected to drive change and provide strategic insight.

It was no surprise then that two-thirds of treasurers in the survey were planning changes to the technology they used as part of transformation programmes to increase efficiency and bring greater visibility to treasury operations.

Reliance on manual methods and paper documents makes little sense and is unsafe

As we move through the pandemic, pressure on cashflow and working capital remain potent factors. Many treasurers working for enterprises engaged in global trade know that continuing to use manual methods to manage credit lines, and important trade finance instruments such as letters of credit (LCs) or guarantees is hard to justify in an age of digitisation and multi-banking trade finance solutions.

Not least because of the constant problem of fraud and forgery in relation to paper documents, which has led some banks to withdraw from involvement in commodity trade finance. The allegations of prolonged major fraud against the oil trader Hin Leong in Singapore are a case in point, sending tremors through the trade finance world. Court documents reportedly allege the fraudulent use of 58 import letters of credit that were not supported by any underlying transaction. Forged bank statements, bills of lading, sales contracts and invoices are also allegedly involved in very substantial fraud designed to cover losses and give a false impression of liquidity.

The case has not just exposed the susceptibility of paper trade documentation to forgery – it has also prompted some well-known European long-term commodity finance banks to withdraw or review their activities in this field. None of this makes everyday operations any easier for corporate treasuries still using paper in trade finance.

Reducing fraud through digitisation of trade finance

With fraud such a substantial problem, treasurers need to think hard about digitisation and how it reduces the risks. Paper documents can be forged when out of sight while being couriered around the globe. Once a document is digitised, however, fraud or forgery become extremely difficult because of encryption and audit trails. The electronic document remains completely visible at all time, but only to those engaged in the transaction and only the legitimate holder can amend it.

Increasing the efficiency of each trade transaction through digitisation

Digitisation substantially reduces the chances of fraud, but it also transforms how treasuries manage credit lines, letters of credit and guarantees, vastly increasing the speed and efficiency of transactions. It also maintains relationships with preferred banks.

In a digitised workflow, automation takes care of the data-uploading for LCs, while transfer between parties is at the click of a mouse across secure digital networks. LCs are notoriously complex instruments requiring close attention to detail and strict compliance with the rules governing their use. Compliance-checking can also be automated to reduce the administrative burden on treasuries and increase accuracy.

These advantages are important because the use of paper under LCs can imperil a transaction at many potential break-points. Documents must be presented physically, often to a prescribed location. Yet being time-limited, LCs (and bank guarantees) often expire before they are used, or their presentation periods are found to have been exceeded. Prevention of these problems requires constant supervision and many hours of work. When lines expire, new and potentially more expensive credit must be negotiated, while failure to present on time threatens transactions, leads to substantial extra costs, delays in releasing cargo and poor relationships between counterparties.

Consolidating credit lines and trade finance on a single, easy-to-use platform

The most effective form of digitisation for corporate treasuries is through a multi-bank trade finance platform which will slash the time involved in supervising credit lines, LCs and guarantees. An exporter may have thousands of LCs and guarantees with dozens of different banks. Optimising their use still requires laborious logging in and out of banking portals. Finding a single LC or guarantee relating to a transaction can be very difficult.

If treasuries implement multi-banking trade finance solutions, they will eliminate the need to toggle between different bank portals. They gain quick and easy access to all their banks, along with far greater visibility and control of all their credit lines and individual LCs. From a single platform they can manage and edit all their trade finance documentation and electronic presentations, as well as open account transactions and electronic bills of lading. All tracking and reporting is accomplished with a few mouse-clicks, while communications with banks remain secure. This is a major advantage when remote working is on the increase in so many areas of the globe.

As the world changes, but the pressures intensify, there is an urgent need for treasuries to grasp greater efficiency and visibility in their management and optimisation of credit lines and trade finance. It makes the adoption of multi-banking trade finance solutions an obvious first move.

Continue Reading

Finance

How can financial services companies deliver great customer service and retain customer loyalty? 

Published

on

How can financial services companies deliver great customer service and retain customer loyalty?  2

By Chris Angus, Senior Director, 8×8

The reality many banks are facing now is that given Amazon Prime can deliver goods to our doors in less than 24 hours, even during a pandemic, consumers expect the banks they use to keep up with their needs.

People want to be able to access their bank accounts, services and speak to an expert within a matter of minutes, whether it’s via an app on their device, web-chat or over the phone – their expectations are high. Adding to this, the World Health Organisation has advised consumers to use cards instead of banknotes during the Covid-19 pandemic – changing the way consumers pay for products.

With the recent health crisis forcing contact centres to shift to home working, collaboration can be more challenging, especially without the appropriate IT systems and applications in place. A delay in communication or unavailable information can, over time, cause reputational damage.

According to Deloitte, the bank of 2023 will look very different from today, making it clear that financial institutions should consider how they  prepare for the future.

  1. Review your business communications strategy – both inside and out.

A crucial part of this preparation needs to be on reviewing business communications – both internally and externally – ensuring that employees can seamlessly collaborate and connect regardless of their location.

And technology is key to this movement, not only between teams, but also with customers. With the right communication tools in place, employees can gain better insight and deliver services that meet customer expectations. This results in not only satisfied customers, but also happier, and more motivated employees. All of which goes towards truly building a solid foundation for business recovery and continuity.

For many businesses right now, the future feels uncertain, so it’s important to consider the flexibility of solutions before deployment. Cloud computing, for example, allows businesses to stay nimble, scaling up and down their requirements to reflect the needs of the business and their customers.

  1.  Implement an ‘Operate from anywhere’ strategy 

The first half of 2020 was defined by the need for agility, an adjustment in how we operate our day-to-day lives and how we communicate both professionally and personally. The remainder of 2020 and beyond will focus on the application of technology to define how we reinvent working and connecting with each other, our customers, partners, and beyond.

Chris Angus

Chris Angus

To deliver great customer service, while ensuring employees are happy, productive and most of all safe, businesses need to be able to operate from anywhere. Yet, for many with contact centre requirements, this is not an easy transition. Enabling contact centre agents to work flexibly and from remote locations is now a critical component of business operations that must be top of mind for the entire C-suite.

Agents need to have the right tools to ensure they can continue to provide the same level of customer service, from any location. For an operate-from-anywhere strategy to be effective, organisations should consider how they can combine voice, team chat and video meetings on a single technology platform.

The use of multiple apps for multiple purposes can have the opposite effect than intended. Unifying communication channels enables collaboration and productivity while minimizing complexity. It also means a more streamlined and efficient experience for both employees and customers aiding great customer service.

  1. Meeting expectations is key

Not only have recent events affected contact centres operations, but the traditional, in-person branch experience has also been significantly impacted. Bank branches can now only accommodate a small percentage of customers. These restrictions have accelerated the impetus for businesses to meet their customers’ needs online, but also, the expectations of customers  have also evolved rapidly.  Virtual instant communication between businesses and consumers is now becoming a basic customer need. For financial services, this means considering digital-first applications, such as chatbots or instant messaging, where possible.

Businesses now also need to be where their customers are and offer them an omnichannel experience. Via the cloud, businesses can continue to serve customer needs through multiple channels such as voice, video, email, SMS and more.

While meeting expectations needs to be a priority – it’s not enough. Financial services institutions need to ensure they meet those expectations at speed, being the new battleground for competition. When it comes to finances, consumers expect their problems to be dealt with at speed and to the highest standards.

In summary, taking a technology-first approach which enables both employees and consumers to operate and access their data and communication tools from anywhere is the defacto business priority. Helping the financial services industry empower employees to better serve customer expectations with speed and accuracy – and ultimately delivering great customer service.

Continue Reading

Finance

How payments can help streamline operations and boost customer satisfaction in the vending industry

Published

on

How payments can help streamline operations and boost customer satisfaction in the vending industry 3

By Darren Anderson, Business Development Manager, Self Service, Ingenico Enterprise Retail

The COVID-19 pandemic has had an astounding impact on the payments industry, causing cash usage to plummet as contactless and card-not-present volumes soared. Of course, this phenomenon was not unforeseen by payments professionals, who had predicted such a movement away from cash, but not at the speed the virus guidelines facilitated. In fact, due in part to the hygiene perks of contactless payment methods increasing its adoption, 50% of customers think that cash will disappear completely at some point in the future.

The unattended market was ahead of the pandemic in terms of contactless alternative payment method (APM) adoption, and it continues to upgrade its offerings to suit a wider range of industries. Nevertheless, the pain point for vending operators is that they’re often not sure exactly how these technologies work, or how to implement them. And with payments offerings constantly evolving, it’s becoming harder for vending operators to know which solution would be the best fit for their business.

As such, one easy way for vending operators to ease this load is to partner with a knowledgeable payments advisor who can not only provide the best solutions for their business, but guide them through the process and any need-to-knows. It’s also important to investigate the payments trends across the vending market, what the future might bring and what vending operators need to know about newer payments technology and the value it can bring to their unattended retail business operations.

Vending through the pandemic

Coronavirus has impacted the unattended market in various ways. In some cases, vending machine use has decreased as a result of lower footfall and closed premises. However, the nature of vending being self-service, for many it’s just been a case of upgrading systems to meet new guidelines and hygiene recommendations to start boosting their usage again. As cash usage decreased over the course of the pandemic, cards and APMs stepped in to provide a host of benefits, and as customers use and enjoy these seamless technologies, they are fast becoming the preference.

These developments have provided the opportunity for vending operators to embrace newer technologies which, although ultimately positive, can prove daunting if such retailers are not accustomed to working closely with payments. Fortunately, the vending market is in a great position to take advantage of new contactless technologies, being already low on human interaction and having 24/7 capabilities.

Darren Anderson

Darren Anderson

What’s more, the market can not only cater to consumers’ evolving needs, but it can also provide the flexibility and reliability that consumers are relying on as the world around them is changing. Many new technologies can also improve the general operations and management of vending, offering features such as easier on-the-go stock management and maintenance notification technology.

Keeping the consumer in mind

Consumers today want to enjoy the latest innovations and best-in-class customer experiences. These shoppers believe that self-service is a time-saver, and they also view cashless and contactless as faster and more seamless ways to pay – a fact which is reflected in the recent consumer demand for a wider variety of APMs. Customers now expect even more options to pay for their goods and services, from QR codes, to in-app payments and more.

Alongside the cashless trend, data-security and customer experience are two other factors driving the vending market evolution. With constantly evolving fraud developments in the online world, good security is more pertinent than ever, and has to be a central consideration to vending operators – as well as ensuring a seamless customer experience.

From a customer usage standpoint, mobile payments are becomingly increasing popular, as driven by the Gen Z market. According to our research, 63% of Gen Zers have said they would pay more for a mobile experience[1].

Trust and a good experience are also considerable factors across all customer groups, with 95% of customers claiming their loyalties lie with a company they trust[2], and 86% willing to pay more for a positive experience[3].

To appeal to ever-hungry consumers, vending operators need to provide the options they want. In the unattended market, this is relatively simple – not only do they provide a convenient and reliable method of payment for customers, but they also avoid face-to-face interaction. They can also supply a range of different products and accept a variety of payment methods to appeal to all customers, no matter their preference.

Using payments to drive revenue

Driving revenue is a two-pronged approach – you need to appeal to customers to keep them coming, and streamline operations to reduce overheads. In order to meet both parties’ expectations, it’s important to respond well to new vending challenges, taking note of the solutions that enable merchants to provide their customers with the payment methods they prefer.

Payments are complicated, so there’s no need to worry if you’re not hugely familiar with the offering out there, or unsure where to start – that’s where a payment service provider (PSP) can assist. With the expertise that a PSP brings, along with the technological solutions they offer, vending operators can improve customer journeys in all unattended environments.

Such technological solutions are flexible and can cater to specific business needs, while providing easy, quick, and secure payment methods that protect both the business and the customer’s personal data. They can also improve operational efficiency, increasing business performance with features such as real-time reporting and smart transaction management, to provide a best-in-class customer experience.

With smart devices, a secure gateway and advanced acquiring capabilities, PSPs can help vending operators design a flexible vending solution tailored to their individual and specific needs. To find out more about unattended retail and how your company can benefit from Ingenico’s unique expert knowledge, get in contact with Ingenico Enterprise Retail today at www.ingenico.com/smartselfvending.

Continue Reading
Editorial & Advertiser disclosureOur website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.

Call For Entries

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

Latest Articles

Covid-19 can reboot belt and road initiative towards a sustainable future 4 Covid-19 can reboot belt and road initiative towards a sustainable future 5
Business16 mins ago

Covid-19 can reboot belt and road initiative towards a sustainable future

A new CMS report reveals that Covid-19 has boosted Chinese enthusiasm for adopting the principles of BRI 2.0, leading to...

The (U)X Factor: The software bringing biometric payment cards to market 6 The (U)X Factor: The software bringing biometric payment cards to market 7
Technology19 mins ago

The (U)X Factor: The software bringing biometric payment cards to market

By Jonas Nilsson, Product Manager at Fingerprints With over 20 bank trials in progress and a second commercial roll-out imminent in...

Corporate treasuries under pressure need multi-banking trade finance technology 8 Corporate treasuries under pressure need multi-banking trade finance technology 9
Finance46 mins ago

Corporate treasuries under pressure need multi-banking trade finance technology

By Andrew Raymond, CEO, Bolero International The pressures on corporate treasuries in global trade have continued to mount since an...

How can financial services companies deliver great customer service and retain customer loyalty?  10 How can financial services companies deliver great customer service and retain customer loyalty?  11
Finance49 mins ago

How can financial services companies deliver great customer service and retain customer loyalty? 

By Chris Angus, Senior Director, 8×8 The reality many banks are facing now is that given Amazon Prime can deliver...

Embracing digital automation without compromising on customer experience 12 Embracing digital automation without compromising on customer experience 13
Technology57 mins ago

Embracing digital automation without compromising on customer experience

By Mang-Git NG, CEO & Founder of Anvil Community banks have always prided themselves on their ability to serve their...

Two-thirds of finance professionals are now more efficient due to the Covid-19 crisis 14 Two-thirds of finance professionals are now more efficient due to the Covid-19 crisis 15
Business1 hour ago

Two-thirds of finance professionals are now more efficient due to the Covid-19 crisis

The Covid-19 crisis is making a big impact on the efficiency of the UK’s finance departments, with 66% of financial...

Two thirds of people believe their work travel patterns have changed permanently 16 Two thirds of people believe their work travel patterns have changed permanently 17
Business1 hour ago

Two thirds of people believe their work travel patterns have changed permanently

Alphabet research shows accelerating demand for mobility and EVs after lockdown Only 35% of people expect to return to normal...

TCI: A time of critical importance 18 TCI: A time of critical importance 19
Top Stories2 hours ago

TCI: A time of critical importance

By Fabrice Desnos, head of Northern Europe Region, Euler Hermes, the world’s leading trade credit insurer, outlines the importance of...

What should I invest and How do I invest 20 What should I invest and How do I invest 21
Investing2 hours ago

What should I invest and How do I invest

By Imogen Clarke With all the uncertainty that has arisen from 2020, with lockdown threatening businesses and the warning of...

Death of the workplace friendship: study shows how remote working is eroding our meaningful connections with colleagues 22 Death of the workplace friendship: study shows how remote working is eroding our meaningful connections with colleagues 23
Business15 hours ago

Death of the workplace friendship: study shows how remote working is eroding our meaningful connections with colleagues

Employee experience platform Perkbox’s research on 1,296 employees and 300 business leaders reveal 65% think the ‘new way of working’...

Newsletters with Secrets & Analysis. Subscribe Now