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How banks – and merchants – can leverage big data in 2013

Dan Brassington

2013 will be the year that banks and merchants will be able to analyse – and leverage – the 11 billion transactions that take place in the UK every year, says ERN co-founder and CEO Dan Brassington (www.ernglobal.com).

Have you ever stopped to think about how much valuable data your bank is letting slip through its fingertips? Analysed properly, it has the potential to unearth all sorts of information about your customers – from their favourite brands, the regularity with which they buy a particular item, even the time of day they’re most likely to buy it.Dan Brassington

Instead of discarding this data, it could be used to create highly-targeted, value-added products to catch the eye of your customers – for example bespoke discounts when buying a certain item, all linked to the use of your bank’s credit card. Similarly, merchants could use the data to send their customers timely, targeted offers on items they’re are likely to buy, at the exact time they’re to purchase them.

To a consumer, deals like this have obvious value. For banks looking to open new revenue streams, the ability to partner with merchants to create value-added products for customers that’ll promote their credit cards to the top of a consumer’s wallet is a massive opportunity. For merchants that want to boost loyalty among their customer base and create attractive offers to keep trade ticking over during leaner times of the year, it’s equally appealing.

So if this transactional data can tell banks and merchants so much about both individual customers and groups of consumers, why is it not being utilised?

The problem for banks lies in their IT infrastructure. Out-of-date and incapable of handling the volume of transactional data that their customers’ purchasing generates, the banks are reduced to seeing only basic, top-line information. It then usually takes a couple of days for this information to be processed and incorporated into a customer’s statement, with all of the really valuable information – the item-line detail – missing.

Similarly, merchants often rely on years-old IT systems that aren’t fit for purpose. The link with the consumer for the vast majority of sales – whether online or in stores – is severed by the click of a computer mouse or when the consumer walks out of a shop. But it’s this missing link that has the potential to deliver real and sustained benefits to both consumers and merchants.

Banks and merchants realise the value of the transaction isn’t confined to the monetary amount involved. It’s in the detailed analysis of this ‘big data’ to gain an insight into lifestyle and future shopping behaviour – and then leveraging this information to influence future product development and promotions along with the tailoring and pricing of future promotions.

A system capable of processing and analysing this big data is what these banks and merchants are crying out for. This February at the FinovateEurope 2013 conference in London, ERN will be launching a global platform of live payment, analysis and tracking products developed for use by banks, merchants and consumers. It’s capable of processing 100,000 transactions per second – to put that in context, 600 transactions take place every second in the UK.

It’s built to be completely scalable and secure, utilising Tier 4 data centres with bank grade security in the UK, US and Singapore. Deployment times and costs are kept to a minimum, while the data insights it can provide for banks and merchants will be huge.

The benefits that these banks and merchants can reap – partnerships and help with targeting individual customers, as well as large groups of customers – are considerable. And consumers stand to benefit from the system too, not only with well-targeted, personalised and timely offers for items they’re actually interested in buying – not lazy, one-size-fits-all deals – but with ERN’s smartphone app.

The app will be the missing link between merchant and customer – rather than the transaction ending with a near-useless paper receipt, customers will have the app to store and organise all of their receipts. The app will also let the merchant make contact with the customer again, by acting as a container for coupons. These coupons can be timed to arrive when the customer is in a certain location, or at a moment when data from past purchasing behaviour shows them to be at their most receptive.

And the benefits of the app don’t stop there. Customers using the app will be able to break down their spending in fine detail, so they can see how much they spend, on what, how often and when – all in real time. This will benefit those who need to keep a close eye on their budget, and those who need to be in full control of all of their receipts for self-assessed tax returns. For the first time they’ll have all of their transactional data presented to them in a useful way.

2013 will be the year that canny banks and merchants can haul themselves into the 21st Century and get ahead of their competitors – and big data will be the key to their doing so.

About ERN: Established in 2011, ERN (www.ernglobal.com) has developed an integrated card transactional data analytics, coupon, loyalty and ‘Big Data’ platform.

ERN’s innovative global infrastructure is designed to offer a completely scalable, reliable and secure suite of products to card providers, giving a deep level of analytical detail about consumer behaviour. This then enables the card provider to open up new revenue streams with additional value-added services for customers, boosting customer loyalty and promoting its card to the top of the consumer’s wallet.

The company’s board consists of a number of experts in the fields of financial services, payments, mobile, technology and corporate management. Co-Founder and CEO Dan Brassington has 17 years of experience within the IT industry including senior technical roles at investment banks such as JPMorgan, Citigroup and RBS. Executive Chairman Derek Tullett CBE has played a leading role in the development of the UK’s financial services sector.

 

 

Banking

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 Venture Capital arm of Union Bank of the Philippines (UnionBank) — is announcing the appointment of Matthew Kolling as the company’s Chief Investment Officer (CIO).

Matt Kolling

Matt Kolling

As CIO, Kolling will be managing UBX’s Corporate Venture Capital (CVC) fund. He will also play a key role in raising capital for UBX while assisting the company in key corporate transactions, including the structuring of joint ventures and acquisitions.

Prior to his appointment at UBX, Kolling has been Head of Venture Investments at Aboitiz & Company since 2019, wherein he had been working with UBX on investment portfolio decisions. Before that, he held senior positions in Private Equity, Venture Capital, and Investment Banking at firms such as Providence Equity Partners and Morgan Stanley in New York.

Kolling has more than 20 years of experience in managing investments and deals in the Technology and Telecommunications industries and is active in Venture Capital and startup communities in the Philippines and the Southeast Asian region. He currently chairs the Manila Angel Investors Network, among others.

“We at UBX are excited to welcome Matt as our new CIO. We firmly believe that Matt will be instrumental in driving value creation opportunities, both within the CVC fund and our corporate ventures. We look forward to working with him as we fulfill UBX’s vision of a future where banking services are embedded into everyday experiences that matter,” said UBX president and CEO John Januszczak.

Meanwhile, UnionBank president and CEO Edwin Bautista said, “The addition of world-class talents in our pool reinforces our strategy to future-proof the organization and our business as we prepare for many new opportunities that come with the changing times.”

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Banking

It’s all relative: Older generations feel helping out the family financially is more important since the Covid-19 outbreak

It’s all relative: Older generations feel helping out the family financially is more important since the Covid-19 outbreak 1

Before Covid, 23% of people prioritised helping younger generations out financially, that increased to a third as a result of the pandemic

A recent survey* conducted by Hodge has revealed that the Covid pandemic has led to more people wanting to help younger family members financially.

A third (31%)** of those questioned said that since the Covid outbreak giving a financial gift to children or grandchildren is more important to them, compared to 23% who said it was a priority before the pandemic.

The traditional “Bank of Mum and Dad” is still very much open for financial help, with parents being responsible for 72% of the gifts, but the study also revealed that financial gifts can come from all corners of the family – including children (14%) and siblings (14%).

The survey also found that a third of people have received a financial gift from family, with those aged between 25-34 as the most likely to receive

The most popular reason for gifting money to family is for special occasions such as a quarter of gifts were given for weddings and birthdays but 11% of people have received money to help with big purchases such as cars and houses. In addition, 19% of people have received help with day to day finances, with around 14% of those receiving a gift have done so to pay off debt.

Emma Graham, Business Development Director at Hodge, said of the research: “Our study showed that, as a nation, we all want to help our family out when it comes to money. And whilst we all think of the Bank of Mum and Dad or Gran and Grandad as a traditional source, we were surprised to see that 14% of brothers and sisters are also helping out.”

The findings come from a recent intergenerational study conducted by Hodge, who interviewed over 3000 people about their attitudes towards finances and their aspirations for the future. The full research findings can be found at https://hodgebank.co.uk/2020/05/19/money-its-all-relative/.

As part of the study, people were also asked about paying back the gift, with 40% of beneficiaries expecting to pay their parents back, but this dropped to 28% if the gift came from grandparents.

From the gift donor’s perspective, 26% expect the gift to be paid back, however just 15% of grandparents expected the money back.

Hodge has produced a set of guides on how families can navigate the tricky subject of giving financial gifts within a family, as well as the considerations and steps that be families should think about taking before a gift is given, such as is it a loan or a gift and thinking about contingencies if the family member’s circumstances change. The guides can be found here: https://hodgebank.co.uk/news/

Emma continued: “It’s clear that families feel strongly about offering financial support to each other if they are able and this has increased since the Covid pandemic. Before Covid, 23% of people prioritised helping their families out financially in the next five years. Since the Covid-19 outbreak that has increased to a third of people saying helping a family member financially had become more important.

“So, it is clear that the Covid-19 lockdown and subsequent predicted economic downturn, has led to more families looking to share wealth to help younger children or grandchildren during this difficult time. Many people may look to Later Life mortgages, where many products have reduced their rates and have flexible lending criteria, to help out a loved during these difficult times.”

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Banking

New report identifies the factors which will determine SMEs’ chances of a successful COVID recovery

New report identifies the factors which will determine SMEs’ chances of a successful COVID recovery 2

·         Analysis of the performance of over 1,000 UK small and medium-sized businesses by Allica Bank provides roadmap for SMEs 

·         Regular training, an openness to innovation, and a clear vision all contribute heavily to an SMEs’ chances of success  

·         Allica Bank has launched a programme of free workshops to expand on the findings and support business owners 

Business bank, Allica Bank has combined data and insight from over 1,000 UK SMEs with a multiple regression analysis to determine what factors most closely aligned with an SMEs’ chances of success and separated the highest-performing businesses from their peers. These ‘rules for success’ have been compiled from the research data to support British businesses as they look to chart a course to post-Covid recovery.  

The full report identifies six behaviours for small and medium businesses to follow, to maximise their chances of a successful COVID recovery. The six top-line rules emphasised by the data were: 

Rule 1: SMEs should regularly train staff 

Of the top-performing businesses analysed, 47% provided training for employees at least on a quarterly basis, compared to just 32% of other businesses. Regular employee training was linked closely to success by the model.  

Despite this, many small businesses have neglected training and nearly half (46%) of the small businesses analysed only provide training for employees about once a year or less often. This included 15% that never provide employer-funded training. This discrepancy could represent a significant opportunity for small businesses to unlock the potential of their employees and thrive in the post-Covid economy. 

Rule 2: SMEs need to focus on innovation and technology 

Looking again to the best performing businesses, 76% were found to either continually (39%) or often (37%) be considering new opportunities for technology in their business. This is compared to only 51% for businesses considered to be outside of the top ranks, out of which only 27% admitted to continually looking for new technology opportunities. 

Rule 3: Small business must have a formal, long-term vision  

Nearly two thirds (66%) of the most successful businesses in the survey had a formal, long-term vision, compared to just 50% of businesses outside the top 100. Looking to the businesses that scored the lowest on the SME Performance index, only 37% claimed to have a formal, long-term vision. 

Rule 4: SMEs should broaden their customer reach and find new markets 

Of the top-performing businesses, 65% of these have overseas customers compared to just 40% of the worst performing businesses. Among the best performing SMEs, over a third (34%) identified international expansion as one of the top three drivers for their success. 

Rule 5: SMEs need to develop reinvestment plans 

22% of the best performing SMEs reinvested some of their profits into the business in the past three years with an average 9% of profits being redeployed. Tellingly, this is nearly double what other businesses admit to reinvesting in their business (5%). 

Rule 6: SMEs should engage with local business organisations and networks  

Of the top 100 SMEs, 30% had obtained external credit to expand over the past three years (compared to 24% of other businesses). Meanwhile, only 16% of all other SMEs had engaged with local enterprise partnerships or growth hubs in the past three years (compared to 23% of the top 100 SMEs). 

Chris Weller, Chief Commercial Officer, Allica Bank, said: 

“All small businesses are different, as are all small business owners, but one trait they share is an innovative resilience. Whilst the coming months and years will undoubtedly continue to present extreme challenges, there is no doubt that small and medium sized businesses across the UK will rise to meet them head on.  

“To give them the best chance to succeed, though, they need to be equipped with the right tools. There is certainly no silver bullet or panacea for every small business, but as this study has found, there are a number of common factors found in the most successful businesses that allow small enterprises to thrive and that they can consider individually for their business.  

“This research has identified common ‘rules for success’ that speak to every aspect of running a business, not just the financials. Once we saw these results, we wanted to use them to help small businesses begin to re-build and prosper, by outlining common factors and then examining how best they can be practically applied to businesses in all sectors of the economy.  

“Small business owners and their employees have been hit hard by the crisis, but they have the drive and resourcefulness to breathe new life into the economy and bring energy to post-Covid Britain. Our commitment at Allica Bank is to give them the support they need to do so, every step of the way.”

The full report contains a wealth of additional data and insight into each of these topics. As part of its mission to empower small businesses, Allica Bank is making the findings freely available and running a series of free online workshops with relevant partner organisations for businesses to attend.

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