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How much does YouTube Pay?

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How much does YouTube Pay?

Ryan Kaji is a 7-year-old boy who stays in California. He (with the help of his family) runs a YouTube channel called Ryan ToysReview. He posts videos on YouTube, mainly focusing on reviews of toys. His videos have been viewed by more than 30 billion people online and his channel is subscribed by 19.9 million internet users. Can you guess how much he earned in 2018 from his YouTube channel? $22 million! Yes, a 7-year kid earned 22 million in a year just by posting videos. He now even has his own product line on Walmart.

Daniel Middleton from Wellingborough in England runs a YouTube channel called DanTDM. He is well-known for posting videos of him playing online games. More than 21 million internet users subscribe to his videos to watch him play games. For doing this, he earned $18.5 million in 2018. Ryan and Daniel are just two examples from the world of YouTube. There are many more like them who make videos for YouTube and rake in millions. They have shown that you can make money from YouTube by posting your own videos.

Sounds interesting? Making moneyby posting videos sounds like an interesting and lucrative idea. It is possible for anyone to earn money from YouTube. All that is needed is quality content. Anyone can make videos, but the videos must be such that they are interesting and attract users to them. If you can do that, then making money is not an issue. Let’s take a look at how much YouTube pays and how you can make money from YouTube.

How to make money from YouTube?

YouTube is one of the most popular websites in the world and is classified as a social media site. It is a website where you can post videos, share them, comment on videos posted by others, and interact with other users. It is the second most popular social media site (afterFacebook) and has more than 1.9 billion users visiting the site every month – that’s 1/3rd of all internet users. Everyday people who visit YouTube watch more than a billion hours of video. YouTube supports 80 languages and has customized versions in more than 90 countries. Every minute users across the world upload 400 hours of video.

More than 50% of those who watch YouTube videos say that they do it to understand how to do things they have not done before. All these astounding numbers show that YouTube is an extremely popular site that is not just entertaining and informative but can help you make money. The primary source of earning from YouTube is through ads. There are other ways also of making money that we will look at. YouTube is a part of Google and uses AdSense and AdWords programs to earn money from advertisements.

Earning from advertisements

You can earn money from two types of ads:

  • CPC: This is Cost per click, wherein advertisements are displayed on your YouTube channel. Whenever a user clicks on the advertisement, you can earn money.
  • CPV: This is Cost per view. Here, you can be paid if a user watches the advertisement displayed on your channel either for 30 seconds or for half the duration of the ad.

68% of what Google earns from advertisements is paid out to those who host the advertisements. Trends show that for every 100 people visiting your video, you can expect 15 of them to view ads (for at least 30 seconds). On average, you can expect to earn $0.18 per view. So, for every 1000 views of an ad, you can earn $18. Let us assume you have a million loyal viewers of your channel. You can expect to earn $18,000 from one video through ads. The more the number of videos you upload and more the number of subscribers you have, the higher is your potential to earn.

The amount you earn is not the same for all types of ads. It all depends on the keyword or the phrase linked to the ad. Certain keywords will pay you more money than others will. You can filter out ads displayed on your channel to ensure you have more high paying ads. For example, the keyword ‘insurance’ pays out $58 per click. You don’t have to make a video about insurance to get these ads. Anyone who has searched for insurance on their laptop/mobile will see more insurance ads, even if they visit a video channel on cooking.

A point to note here is you need to earn a minimum of $100 before Google starts paying out. Theoretically, it is easy earning money through ads. The key here is to get regular viewers or subscribers to your channel. Once they visit your video, they need to view the ads. The 15 per 1000 quoted is a general statistic, there is no guarantee you will get this kind of views every time. Therefore, you need to increase the number of subscribers to your channel to be able to earn more from advertisements.

Becoming a YouTube partner

YouTube invites you to become a partner. This may not help you earn money directly, but it opens up many opportunities to earn money. The YouTube partner scheme is available in 20 countries and is available for channels who have at least 10,000 views overall. YouTube allows you to monetize your videos and start earning from it, once you become a partner. You must note that you cannot be a part of the YouTube partner program if your videos have hate content or sexually explicit content. You can use the following video ads:

  1. Overlay in-view video: These ads would be run in a banner over your video when it is playing.
  2. True view in-stream video: These ads would be run before your video is played. This ensures viewers have to see the ad (entirely or a part) before they watch your video.

If you are a partner of YouTube, you will hold the copyright on your videos. If you are not a partner, the copyright may not belong to you. Also, whenever you reach a particular subscriber milestone, you can get a special play button included in your videos (eg: Gold play button for 1 million subscribers). YouTube does not restrict its partners to use only their platform. Apart from YouTube, you can use other sites also for uploading video content.

Product placements to earn money

An interesting option that allows you to earn money is through product placements. These are not advertisements but are a part of your video. You would promote products of a brand through your video. This is a part of what is known as influencer marketing. When you run a successful video channel with many subscribers, you are now an influencer. Through your video, you are able to influence others. So, when you promote a product in your videos it can influence those who watch your videos to buy the products. Brands would, therefore, be willing to work with you to promote their products.

You can make an agreement with a company to work out the details. You may be paid a commission on products sold as a result of your effort. You can also demand a fixed fee for promoting the product on your channel. The way you promote the product could vary. You can just allow it to be seen in your video, or you can wear a T-shirt with the product ad. Alternately, you can directly promote the product and recommend your viewers to buy it. This is a lucrative option, allowing you to make money from your YouTube videos.

Collect fees from subscribers

YouTube is essentially a free site. Anyone can visit any YouTube channel and watch the videos for free. Considering the free nature of the site, asking someone to pay seems to be a surprising option. However, there are many paid YouTube channels and surprisingly they work well for the channel owner. If you offer top quality content that provide value for subscribers, they would not hesitate to pay and watch. For example, you could have made a short film that has an interesting plot. After watching the trailer, users may be attracted to it and decide to pay and watch.

You could be a training provider and offer training on hot topics that are relevant. In such a case, users would be interested to pay to watch your content. In general, if you have made a name for yourself as a provider of valuable content, subscribers will not hesitate to pay a small fee to watch your content. YouTube channels can offer a pay-per-month subscription and this is a good option to monetize your channel and earn a steady income from it.

Sponsorships

A strategy similar to product placement is sponsorship. This is whereabrand/corporate entity would sponsor your channel and offer you a fee. If the brand feels that your content is good and those who view your videos could be their potential customers, they would offer a sponsorship deal. Depending on how many subscribers you have, you can get a good sponsorship deal. You would have to reveal who your sponsor is to be ethical. There is a company called Grapevine whose job is to connect sponsors and YouTube channel owners.

Sell your Merchandise and related products

Once you establish your reputation and win the trust of subscribers, you can start selling merchandise through your YouTube channel. You can sell T-shirts, caps, mugs, and other such products carrying your YouTube channel name. If you have loyal fans of your channel, they would be willing to buy your products. Depending on the type of channel you run, you can offer ancillary products. For instance, if you are running a cookery channel, you can sell cookery books online. You can even sell food products made by you through your channel.

If you review video games, you can sell your own game products. You can even use your YouTube channel to attract visitors to your website. You may be offering online courses on your website. You can use the YouTube channel to offers a few modules for free. If subscribers like your content, you can invite them to your website to register and take up the full course. The leading YouTube channel, in terms of subscriber strength is PewDiePie, which has 50 million subscribers. PewDiePie earned an income of almost $9 million in 2016 only from merchandising. This shows the potential of merchandising in earning money.

Crowd funding to earn money

Crowd funding is a business model where you can earn money from the public (crowd) through various fora. This is popularly used by startups to generate capital. It is being used by YouTube channel owners to earn money. There is a crowd funding platform called Patreon that allows YouTube channel owners to earn money from their fans. A user would pay this voluntary contribution to you in return for the quality content you provide. This can also be useful to generate funds to manage your channel.

For instance, to continue to provide quality content you need quality equipment, video editing facility and so on. You can generate funds for this through crowd funding platforms. If your subscribers like your content, they would be willing to support you, by visiting a website like Patreon and contributing money. You can thank those who are paying you by creating exclusive videos for them. This is a good business model to earn money for your channel.

You can start earning

Having seen the different ways in which you can make money from your YouTube channel, you would probably be interested to be a part of this. All you need is a niche area where you can provide quality video content. It can be a cookery show, a product review, a training course, a ‘how to’ video, or anything you are proficient in. If you deliver quality content and are able to attract users, you can also make a lot of money and look forward to becoming a social media influencer.

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Business recovery from COVID-19 lies in implementing the practice of Open Book Management

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Business recovery from COVID-19 lies in implementing the practice of Open Book Management 1

By Suranga Herath is CEO of English Tea Shop, the leading independent speciality and organic tea company.

Over the course of the last few months, most businesses have been forced to adapt their strategy against the backdrop of the pandemic. For many companies, business growth and development slowed and certain key goals and innovations fell to the wayside in order to prioritise ‘survival’.

For my business – a speciality tea company – we place great emphasis on exporting across the globe and bringing people together to enjoy a cup of tea as part of a wider community. Neither of those things have been possible amidst the pandemic. Whilst this was initially difficult for us, we are now steadily transforming our business to function in the new world order and our business model of Creating Shared Value is instrumental in making this happen. This has not only brought us closer with our suppliers and customers during this challenging time, but also through the practice of Open Book Management (OBM) we have been able to navigate this time united and focussed. OBM fosters a unique culture of employee and stakeholder transparency, empowerment, and satisfaction; in turn leading to incredible results, loyalty and increased productivity across the board.

So as we start adjusting to the new normal, I wanted to share a couple of reflections that I believe has made a fundamental difference during this challenging time. My firm belief is that whilst the road to recovery will be a long process for any business, it is through implementing initiatives like the Open Book Management that businesses from all sectors can put their best foot forward as we enter the new normal.

Open Book Management – a definition

Open-book management (OBM) is the business practice of creating transparency through sharing financial information with employees across the company. The power of its implementation lies beyond just the practical means, as the philosophy and theory carry profound ripple effect across the entire organisation and culture. Whilst for many leaders the idea of sharing financial information with employees beyond the senior management team seems alien, the benefits reaped are worth the effort.

Open Book Management (OBM) is a system that incorporates this financial transparency alongside providing teaching, KPIs and bonus systems for employees, as well as Employee Share Ownership Program (ESOP) which gives staff a percentage of the company shares. The idea behind this is that when employees gain a better understanding of how the organisation is run, they become empowered by this knowledge and become more committed to the company and its results.

This is not necessarily limited to employees, and is often extended to stakeholders; in fact, at English Tea Shop we have been equally transparent with our community of organic farmers, reaching out to them during Covid to be transparent around our cash flow and assure them in their role as suppliers.

Road to Recovery

Regardless of industry, size or previous growth, any business leader will admit that the recovery from prolonged socio and economic disruption like the COVID-19 pandemic is a long and challenging process. Businesses that choose to shake up their traditional business models and embrace a more disruptive and progressive approach will experience a first mover advantage and put themselves in a good position for the long and hard battle ahead. In my view, initiatives like OBM and the Great Game of Business are the perfect starting point for any business that is looking to motivate its workforce through fostering a strong community and igniting entrepreneurial spirit.

Our Story

Since inception, my goal for English Tea Shop has always been to build a business of dedicated people with sustainability as our guiding force. Our model of Creating Shared Value is focused on creating win-win situations whilst finding opportunities for growth in sustainable development. All whilst looking after our Prajava (Sri Lankan word for community).

Over the last couple of years we’ve grown substantially, whilst keeping a happy and motivated workforce. This has resulted in numerous awards wins. But perhaps the biggest measurable achievement to date is the 31% improvement of productivity across our factories in just under 12 months. This came about organically without any further investment towards new technology or systems during that period.

From a business perspective, this meant we had increased capacity to do more, and reach a wider audience. It also helped us win a host of prestigious awards for Sustainability, such as the Queen’s Award, National Business Award, Gold awards at Sri Lanka’s National Productivity Awards and many others. Just this month, we were awarded the “The Great Game of Business All-Star” for our commitment to generating results through integrating Open Book Management within the Creating Shared Value business model.

Even during the most difficult years, such as Brexit, we were able to keep our head high and remain profitable despite the numerous external challenges, and this was because everyone worked towards a commonly shared goal and had a high level of accountability in terms of their individual actions; no matter how little they believe them to affect the bigger picture. This is the magic of OBM.

While for my business and many alike financials have been strong, the most profound impact of OBM lies on the level of understanding it fosters greater understanding of business. When everyone started thinking and acting like commercially-minded business people they understood challenges better, and they applied their knowledge and skills much better. Hence, we are confident of a long-term approach that will make us a uniquely sustainable business.

Why now?

From my perspective, there is nothing more powerful than a business driven by entrepreneurially minded employees, that understand how their role plays a part in the bigger picture and strategy of the business. This is exactly the type of mindset and culture that OBM fosters, and embedded across the entire organisation, and if our results are anything to go by the potential is endless.

I urge other businesses to take stock of their current operations and means of growth, and look beyond the traditional strategies as it is through progressive approaches like OBM that the combination of business growth and employee satisfaction can be achieved.

And with more uncertainty heading our way, now is the time to start.

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The Impact of Covid-19 on Planning

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The Impact of Covid-19 on Planning 2

By Nilly Essaides, Sherri Liao and Gilles Bonelli, The Hackett Group

The economic consequences of the coronavirus outbreak vary by country and company, but one common factor is that most financial planning and analysis (FP&A) teams have had to go back to the drawing board to revise their forecasting process and update scenario plans. The unprecedented level of disruption in business conditions compels FP&A to abandon their traditional, tedious, bottom-up forecasting processes to produce forward-looking insights faster and more frequently. To accomplish this, FP&A should deploy high-level, cross-functional teams that, by working with a small number of KPIs, can assess how different scenarios are playing out in the market and recalibrate the business outlook.

Forecasting at the speed of change

The human and economic devastation caused by the rapid spread of Covid-19 upended budgets and rendered performance targets obsolete. At most companies, even worst-case scenarios did not account for an event of this magnitude – and for some, their very survival is on the line.

Under normal conditions, forecasting and scenario planning are distinct activities. Forecasting is about understanding where the business is landing compared to expectations (monthly, quarterly or on a rolling basis); scenario planning considers what could happen to the organization given one or more material changes in the business environment. At present, the line between the two is blurring as circumstances can change so fast that it is no longer possible to create a forecast based on past data. In addition, scenario plans must be reviewed frequently to ascertain which are becoming more likely.

Consequently, FP&A teams must exchange their traditional bottom-up, granular approach with a top-down, high-level methodology and conduct the forecast more frequently – but few are set up to accommodate this new process. More often, forecasting involves an all-consuming effort to collect data from business units and functions. To enable a more rapid response, FP&A should assemble a senior-level, cross-functional “SWAT” team with the mandate to review a limited number of KPIs (five to six, at most) in order to build a forecast that can be altered quickly as trigger events validate or disprove scenario plans.

This small team of experts can triage activities effectively while assigning specific areas of responsibility to more junior staff, such as forecasting working capital or discretionary spending. These specialists should work with a set of more granular KPIs. So, while the SWAT team may use a single cash metric, the working-capital team would dive deeper into DSO, DPO and inventory levels.

The first step is to alter the forecasting process, and the next is to adjust the feedback loop created through the management review meeting. Typically, these meetings focus mostly on BU-by-BU, actual-to-forecast and actual-to-budget variance analysis, using historical data. However, for many organizations – particularly those that have experienced a major reset of market demand and ongoing operations – spending time looking back at low-level comparative narratives is unproductive.

Instead, management should spend the bulk of its time reviewing the company’s best-case, minimum-viability and worst-case scenarios to determine which one seems to be playing out. To make sure planners target the right activities, management must ask the right questions: not how the company performed versus budget, but how conditions have changed and how that affects the forecast for emerging supply and demand scenarios.

A revised approach to identifying scenarios

For planning purposes, most companies develop three scenarios: base, best and worst. Given the nature of the Covid-19 crisis, a revised set of scenarios is needed:

  1. Best-case scenario: The best-case scenario should be anchored within tested hypotheses and initially focus on an assessment of demand conditions and capacity constraints. Current data may be mostly qualitative, but it should include insights gleaned from other countries and regions, particularly those exhibiting early signs of recovery.
  2. Minimum-viability scenario: This is the “new” base for companies hard-hit by the crisis or the scenario with minimum acceptable results to key stakeholders while remaining in business. This scenario must include a set of potential cost-reduction options in case conditions deteriorate rapidly. For instance, a minimum-viability scenario may include an X% reduction in workforce based on demand and supply projections.
  3. Worst-case scenario: The coronavirus pandemic may pose an existential risk to some organizations, so FP&A teams must also develop a scenario based on the worst possible conditions, including circumstances that may put the company out of business. In this case, FP&A should identify and monitor indicators that pose the greatest threat to the company’s status as a going concern.

Digging deeper into each scenario

Each key market or country or region should be categorized according to a variety of possible GDP growth scenarios.

A U-shaped recovery assumes the fastest rebound in key countries where GDP quickly reaches or nears pre-Covid-19 levels. These will be geographies where evidence of fast, effective control of the virus’s spread is combined with a strong policy response to prevent structural damage to the area’s economy.

Gilles Bonelli, Associate Principal, The Hackett Group

Gilles Bonelli, Associate Principal, The Hackett Group

A W-shaped recovery assumes a quick, partial recovery followed by a second wave decline in GDP in key countries or regions. These will be cases where evidence of fast, effective control of the virus’s spread is not accompanied by a strong policy response to prevent structural damage to the national economy.

An L-shaped recovery assumes that there will be no rebound in GDP. These will be countries or regions where there is no evidence of effective control of the virus’s spread.

The team should identify specific actions to be taken under each scenario so that management can act as economic conditions unfold. Additionally, FP&A must determine how changes in the environment may affect the company’s commercial and SG&A functions. Further, the trajectory of GDP will vary, driven by the public health and economic response of each country or region. Both inputs will be critical as companies determine how to proceed.

Due to the interdependence of different markets, it is important to consider elements of each in the entire strategic portfolio’s value chain. If a component of the value chain in any strategic portfolio is reliant on activities taking place in countries where a U-shape recovery is expected, then this component should attract more investment compared to those in countries where a slower recovery is likely.

If a component of the value chain in any strategic portfolio is reliant on activities taking place in countries where a W-shape recovery is expected, then investment in this component should be maintained. Accordingly, if a component of the value chain is directed to markets in countries where an L-shape recovery is expected, consider gradually divesting from the portfolio and phasing out related activities.

A catalyst for change

Covid-19 has underscored the discrepancy in planning and analytics capability between top-performing and typical peer-group FP&A organizations. The Hackett Group’s 2018 EPM Performance Study revealed that top-performing FP&A organizations have invested more in technology, which has enabled them to run more analysis and deliver reporting faster and more efficiently. Of top performers, 67% have implemented a primary financial planning and forecasting system to consolidate corporate and country, region or BU information.

Consequently, top-performing teams complete the forecast 3.5 times faster than the peer group and are twice as accurate. These capabilities are essential, as FP&A must provide information more quickly to help make operational decisions. Further, top performers have automated more of their data collection processes and use a standard set of data definitions across categories 92% of the time. This means their staff spend 44% more time analyzing data than collecting it, meaning that the team can redirect capacity to focus on Covid-19-driven demands for information and analysis.

While adoption of rolling forecasts remains generally low, top performers are 55% more likely to have done so than the peer group. Consequently, they can transition more easily from a fixed budget to planning based on a dynamic forecast. Additionally, one-third of forecasts among this group already rely on cross-functional collaboration, almost double the rate of the peer group.

Planning in the age of Covid-19

The coronavirus pandemic’s immediate and long-term repercussions will have a lasting effect on the way organizations plan and forecast, as well as how they approach scenario analysis. Early in the crisis, most FP&A teams had to scramble to adjust forecasting cadence, redraw scenarios, identify new KPIs and establish cross-functional emergency action teams. In contrast, FP&A top performers were able to adjust their existing processes relatively easily.

As companies start to shift from crisis mode to operationalizing changes required by the pandemic, post-crisis scenarios are starting to take shape. Expectations are for a prolonged period of uncertainty and a second wave of infections this fall, however, which makes it imperative that FP&A organizations update their approach to scenario planning immediately.

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

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Covid-19 can reboot belt and road initiative towards a sustainable future 3
  • A new CMS report reveals that Covid-19 has boosted Chinese enthusiasm for adopting the principles of BRI 2.0, leading to an increased focus on sustainable and environmentally friendly projects such as smart cities and renewables & hydro
  • The appetite for an improved ‘Health Silk Road’ has significantly increased among the majority of both international and Chinese senior executives involved in BRI
  • Meanwhile, the research uncovers a clear mismatch in sentiment between Chinese and non-Chinese towards BRI and the success of projects

As global economies strive to build back better and greener from the global pandemic, global law firm CMS’s 2020 Belt and Road Initiative report reveals that the pandemic has boosted Chinese enthusiasm for adopting the principles of BRI 2.0, which will pivot it towards an environmentally friendly future.

BRI 2.0 is a new phase of BRI intended to encourage international involvement, which was announced in April 2019 by President Xi Jinping at the second Belt and Road Forum for International Cooperation in Beijing.

The study was conducted in partnership with global research firm Acuris and TianTong Law Firm and included a major survey of 500 senior executives from both Chinese and international participants in BRI projects. Their views were sought on a range of issues around BRI, including likely future involvement and obstacles they have encountered to date.

Increased enthusiasm for sustainable projects

The research found that nearly two-thirds of both Chinese (63%) and international (62%) executives agree that it is important that their BRI projects should be sustainable and environmentally friendly. Furthermore, the majority (84%) of Chinese respondents believe that sustainability and environmental considerations will be given greater importance when planning and completing BRI 2.0 projects.

Enthusiasm remains for traditional sectors like logistics, roads and rail, and now, particularly among Chinese executives, there is growing interest in relatively new sectors like energy networks and power grids, smart cities and renewables & hydro. For international respondents, the emphasis on sustainable projects is also increasing, with only a handful (13%) previously involved in renewables and hydro but nearly three times as many (34%) planning to target the sector for future opportunities.

Importantly, CMS’s research reveals that Covid-19 has given a boost to the ‘Health Silk Road’, which aims to increase medical infrastructure and public health in BRI countries. Nearly all the international executives (93%) and 85% of Chinese respondents see Covid-19 as a major catalyst for it.

Munir Hassan, Head of CMS Energy Group, said: “It’s clear that interest in more ‘modern’ and sustainable sectors, such as smart cities, healthcare and renewables has increased in significance. Renewables projects typically require less capital commitment, are quicker to complete and are likely to be judged at lower risk, which will be attractive to international and Chinese participants. As efforts to limit climate change intensify, there will be a major role for BRI investments to play.”Covid-19 can reboot belt and road initiative towards a sustainable future 4

Mismatch between Chinese and non-Chinese views

The research reveals that general sentiment towards BRI has declined in the last 12 months and one reason for this is geopolitical uncertainty, particularly among international participants. The survey has also uncovered a clear mismatch between views of Chinese and international executives that are involved in BRI projects.

Over two-thirds (69%) of international respondents said they found the process of participating in BRI related projects more challenging than they had expected, compared to just 40% of Chinese respondents. Likewise, only 37% of international participants said they were satisfied with the process and outcome of their involvement, compared to the majority (75%) of Chinese equivalents.

International participants have experienced difficulty with transparency, information flow and equality in partnerships and for many, this had impacted their view of BRI. But there are signs that more projects are now being structured to accommodate these concerns providing attractive opportunities for those international participants still keen on BRI involvement.

Regarding future partnerships / JVs, Chinese respondents are more enthusiastic than non-Chinese, with 77% likely to consider them, compared to just under half of non-Chinese (48%).

Munir Hassan added: “A key area of growth is likely to lie in projects that meet the trends of the future. Affordable projects, embracing modern technologies and methods, as well as the “open, green and clean” approach of BRI 2.0, will be those that stand the greatest chance of success.”

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