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MASTER OR SERVANT? WHY THE EXPLOSION IN DATA DEMANDS A FRESH APPROACH IN ORDER TO CREATE TRUE COMMERCIAL ADVANTAGE

MASTER OR SERVANT? WHY THE EXPLOSION IN DATA DEMANDS A FRESH APPROACH IN ORDER TO CREATE TRUE COMMERCIAL ADVANTAGE

Michael Upchurch, COO, Fuzzy Logix.

The financial industry has always relied on data – from the earliest moneylenders mentally calculating interest rates on their loans, through to today’s traders moving vast sums around electronically, supported by complex algorithms.  But we’re at a tipping point.  A point at which the modern throughput and consumption of financial data is happening at a speed that far outstrips the rate at which humans can reasonably interact with it.   Machines 1, humans 0?

Michael Upchurch

Michael Upchurch

If we assume the data explosion trend isn’t going to reverse any time soon (and I think we’d all agree that the world is only going to create more data rather than less!) what steps can be taken to ensure that we manage the vast throughput of data and enjoy the appropriate commercial benefits as a result?

If we look at the challenge, we know that consumer and corporate financial transactions happen on a global basis across complex interconnected networks through which data must pass, driven by defined rules and processes.  This activity is supported by some basic modern banking technology fundamental parameters, which include:

  • Real-time competencies
  • Transactional throughput capabilities
  • Deep analytics intelligence
  • Effective data workload management control
  • An intuitive user interface and dashboard presentation layer

The problem is that conventional approaches to even the most contemporary banking frameworks and their architectural development fail to engineer-in the need for analytics velocity from the outset.  The specific location and operational approach to data itself has failed to provide a platform for analytics at the speed and accuracy needed.

For the financial sector and its use of big data analytics, real time data analytics is subject to complex parameters due to global exchange rates, privacy factors and the increasing use of time series data tracking.  But, here’s the rub, if we can manage these complexities in situ and work closer to the coalface of data where it is stored, then we can start to engineer time and cost savings that would never have been achievable and make previously impossible tasks possible. The complexities themselves have developed as a result of year after year of silo-centric IT programmes being pushed forward with little appreciation for the future and the possibility of real time processing and analytics.

Now that we have the opportunity to architect our approach to data with more finely grained and more powerful control mechanisms, banks and all varieties of financial institutions will be able to make informed commercial decisions quicker than their competitors. As a consequence, they will then be able to seize market opportunities faster and meet the demand of their customers quicker.  Equally importantly, these same institutions will be able to hone their analytics to help identify and reduce theft, corruption, security breaches and all manner of malicious activity common to wherever money is located.

The time has come then for a new approach to data analytics that can deliver results not from a different perspective, but from a different point of applied data processing and application logic. This technology inflexion point is created by the presence of in-database analytics, which can allow us to leverage analytics insight on demand, the second the data is available   How is this possible?  Because in-database analytics run directly inside your database using the full power of the platform.  Unlike traditional analytics products that require you to move data from the data warehouse to another environment for processing, in-database analytics will let you process the data without moving it.  This has many benefits.  First, as data gets bigger, the price paid to move it also gets bigger.   Up to 80% of the processing time for analytics solutions can be consumed by just moving data.  Second modern data warehouses provide a very powerful engine for performing analytics; if the models are built to optimize performance.  Research shows that coding models to take advantage of data and process parallelism can result in models that run 10X to 100X times faster than non-optimized models.

In-database analytics are also easy to use.  It takes about an hour to install over 700 datamining, machine learning and financial models into your database.  No additional hardware or storage is needed and the models inherit the security layer already in place, so there’s no user setup to manage.  Once installed, the models become part of the database and appear as native functions.   You run them using SQL; the most popular data language on earth.

Let’s take the example of calculating VaR (Value at Risk).  Using a traditional approach, users move data from their database to another analytics environment and run all the calculation included in VaR modelling.  This can typically take 2-6 hours depending on the environment.  We used in-database analytics and performed 10,000 simulations for a portfolio of 500 stocks over 252 days which created 1.26 billion simulations.  We then calculated P&L for 30,000 positions with discrete intervals (1..5 days, 1..4 weeks, 1..3 months, etc.) with 10,000 simulations which involved 1.5 billion P&L calculations.  Finally, we performed aggregation and VaR calculations for each discrete interval.  In total, 12.6 billion simulations were performed in less than 2 minutes and the entire VaR and P&L process can be performed in less than 5 minutes.

Other use cases for exploiting the power of in-database analytics are numerous and significant; from cleaning up money laundering and driving better customer service through to minimising the need for ALLL (Allowance for Loans and Lease Losses) and to reducing the burden of CCAR (Comprehensive Capital Analysis & Review).  The rise of in-database analytics has really evolved in direct response to the need for data analytics techniques that can be applied to these kind of use cases.  For ultimate scalability and performance, why move the data to the analytics if you can move the analytics to the data.

It is clear that the opportunity for banks and financial institutions to bring in-database analytics and a completely new approach to data mining into their operational strategies is significant.  The move to using in-database analytics is an evolutionary step and the level of competitive advantage gained is commensurate with the level of adoption. So, consider the ways in which in-database analytics can help you take back real control of your data and start reaping the benefits immediately.

Michael’s biog is as follows:

Michael is responsible for operations and healthcare and financial services business units. Before Fuzzy Logix he worked at Bank of America to develop the strategy and operations for telephone-based mortgage lending that grew sales from $11B to $22B in 4 years.

He also worked in the Consumer Innovation Team in the Global Corporate and Investment Bank where he developed financial products for consumers that leveraged capital market instruments. Earlier, Michael worked at The Hunter Group implementing ERP systems for Global Fortune 500 companies. After multiple engagements, Michael joined the management team and developed the company’s market offerings across 9 lines of business, spanning 12 countries and leveraging the strengths of 13 companies acquired during a 3 year period.

Business

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

From furlough to returning to work - employees are feeling insecure in their future 1

New data looking into 6,273 employees, commissioned by Perkbox, the employee experience platform, has revealed the considerable impacts of the furlough scheme and the prospect of returning to work to wellbeing.

The research revealed that despite being a job retention scheme, furlough has led to a huge 61% of workers on the scheme with concerns over their future job security, and a further 42% have concerns about the future of their company due to their employer’s participation in the scheme. This is despite almost half (45%) enjoying the time off and break from working that this time provided. 

Furthermore, it’s not just those a part of the scheme that are feeling the impacts. Almost 1 in 5 (19%) who weren’t furloughed by their employers (but their companies did utilise the scheme) felt more secure in their job by not being chosen to be a part of it. 

The scheme hasn’t just led to insecurities, it’s also led to potential rifts between colleagues. 29% of those on furlough felt guilty about not working, while over 1 in 5 (21%) felt guilty for extra work that colleagues had to take on in their absence. Those who remained working over this period had to work harder (19%), experience more stress due to taking on extra responsibilities (18%), which ultimately impacted emotional wellbeing (16%). Resulting in 1 in 10 feeling resentful for their furloughed colleagues’ time off. 

As insecurity levels are high, employees expect company leaders to take personal action before considering redundancies. A huge 65% stated that they believe senior leadership should take a pay cut first, before considering options for staff – just 14% responded that they wouldn’t expect this from their leaders.

Moreover, as the furlough scheme changes, many are returning to work by encouragement of the Government. Despite this encouragement, less than half of employees (47%) feel safe in regard to returning to work (equal between office and non-office based workers), with almost a quarter (24%) feeling ‘unsafe’ about this transition.

Looking at what companies have done to prepare for a return to work, it comes as no surprise as to why employees may be apprehensive. Just 15% of businesses have set a fixed date for returning to work, a further 22% of employees have received no clear guidance on how to return to work. Furthermore, less than a third (31%) reported that their employer had implemented all of the necessary safety equipment to return to work, with just 30% establishing a clear back to work plan. 

Just 4% state that their company is planning to switch to completely working from home – begging the question of when companies are planning to communicate back to work plans. 

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Business

Return to work: Flexibility, preparation and communication are key

Return to work: Flexibility, preparation and communication are key 2

By Matt Weston, Managing Director, Robert Half UK

As lockdown restrictions ease for the foreseeable future, conversations across the business world are starting to turn to how employers can safely and seamlessly prepare for their workforce to return to the office.

Research from Robert Half has found that over half (54%) of employees are worried about working in close proximity to their colleagues, while a similar proportion are eager to return to the office due to loneliness working from home (45%) or concerns about missing out on career opportunities (30%).

Unsurprisingly, after everything companies and their employees have done to successfully adapt their operations and working practices to social distancing rules over the last few months, immediately returning to the old ways of working will likely neither be sensible or practical. With safety being the key priority for the ‘new normal’ of office life – communication, flexibility and preparation should be the main focus areas for employers.

With this in mind, what are the challenges and opportunities that employees anticipate as they prepare for the return to work, beyond government and industry supplied health and safety best practice? Furthermore, how can employers best support their staff during this period?

Keep people at the heart of change

It is important to recognise that your workforce has been working through an intense period of uncertainty and change for months, which can be incredibly unsettling. On top of this, working for weeks in isolation without the usual physical interactions with team members could be potentially detrimental to employee engagement and mental wellbeing.

Having adjusted to keep staff connected with one another from a distance with virtual team building exercises, video calls and daily check-ins, as teams begin working in hybrid models with some in the office and others remote, staff engagement will need to adapt again.

Managing people with greater sensitivity and maintaining positivity throughout will be crucial. To help instil a sense of normality and engagement, encourage maximum collaboration between individuals (in accordance with social distancing rules), and make sure teams feel part of company goals and opportunities through regular meetings and communication – no matter their location.

Continuing to invest in technology and offering flexibility will also be important to ensuring that people can continue to work remotely or on-site, either in accordance with their own wishes or as part of your staggered return-to-office plan.

Communicate, communicate, communicate (and listen)

Reassuring staff that they are able to safely return to the office will require continuous communication. From expectations of the physical office, to expectations of how to operate within hybrid teams, these new expectations and new workplace requirements should be communicated to all staff clearly to avoid confusion.

Regular email updates, updates on the company’s intranet and social media channels, as well as frequent town hall meetings (either online or in a smaller setting) could be key elements of an effective communications approach.

Also, consider a feedback channel to allow staff within the team to offer thoughts on their experience of returning to the office and any suggestions on improving the process. Whether on a company-wide basis or a team-by-team approach, schedule regular check-ins to engage with employees’ questions and concerns.

Maintaining open communication channels with your team will be essential for keeping up employee morale and ensuring clarity. For example, if some employees aren’t comfortable with coming to the office every day, then they should have plenty of opportunities to voice their concerns and have them dealt with promptly, respectfully and fairly.

Staggered return-to-office planning

Depending on the size of business and density of office space, maintaining home working arrangements across teams on an alternating basis could make it easier to implement safe social distancing. This involves select teams working remotely while others work on-site on any given day.

An alternating approach to remote working might also reduce the risk of staff feeling pressured or overwhelmed by an immediate return to the office five-days-a-week. After all, some families might be juggling temporary disruptions to childcare arrangements and public transport systems will likely become crowded again. So, a transitionary period will help everyone adjust to post-lockdown office working.

Finally, if you have developed your technology infrastructure to facilitate remote working, you would do well to continue to leverage these new capabilities as in all probability, a mixture of remote and at-office work will be needed for some time.

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Business

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

Contis enters RBS Capability and Innovation Fund bid seeking £35 million for disruptive SME growth strategy   3

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

Unlike most applicants who will deploy funds through a single brand, Contis is taking a completely different approach. The funding will be used to drive fintech innovation in the UK by developing an off the shelf, B2B electronic and card payment technology platform for SMEs. With Contis’ powerful tech stack and regulated status, this will empower hundreds of fintechs to support the SME market with groundbreaking technologies, payments and lending capabilities. Contis today services over 800,000 consumer accounts, 14,500 business accounts and processes £4bn in transactions per year, demonstrating a proven track record.   

UK businesses are facing a challenging economic environment with the impacts of Covid-19 and Brexit. As large corporations and entire sectors are affected, SMEs will play a vital role in the recovery. Contis’ approach is completely disruptive, offering three channels to maximise support for SMEs and sole traders, through three unique brands, all powered by APIs from Contis’ modular and configurable engine. 

1.       Canvas for Business 

Contis is a super-vendor in the world of fintech, offering payments through proven banking rails and card scheme capabilities including issuing pre-paid, debit and virtual cards. They’re linked to digital delivery like Apple Pay and Google Pay, and a trusted tech stack that boasts 99.99% uptime.  

With funding from the Capability and Innovation Fund (CIF), Contis’ technology and regulated services will be made available to the whole fintech community, enabling them to provide dedicated SME accounts with the latest leading-edge capabilities delivered via Contis’ wholly owned, secure, cloud-based technology and apps. Contis’ solution has a firm eye on the need for SMEs to compete internationally, particularly after Brexit, and offers FX integration as standard.  

Canvas for Business will increase competition by providing fintechs serving the SME market with technology that outstrips the big banks. Contis will also provide credit referencing capabilities and empower fintechs to lend to their SME client base through Contis’ own credit licence. Without the constraints of legacy systems, it will enable simple connectivity to accounting and payments solutions, as well as to unlimited future innovations.  

2.       Engage for Business 

Over 150 Credit Unions currently use Contis’ Engage service and technology, and hold an estimated £400 million in undeployed cash reserves. Developed with CIF funding, Engage for Business will enable Credit Unions to launch business accounts and payments products for the first time, and allow excess funds to be redeployed in the SME sector through business support loans. This will revolutionise access to funding for sole traders and small businesses. 

3.       Freedom for Business 

With CIF funding, Contis will also offer large scale SMEs a direct-to-market solution where Contis holds the relationship and provides a bespoke offer to meet the business’ exact needs. 

Contis’ application to the Capability and Innovation Fund is focused on creating the widest possible impact for UK SMEs by fulfilling their accounts & payments needs and driving innovation in SME financial services. 

Through the grant, Contis will empower over 200 fintechs and Credit Unions to provide credit, simplify payments integration into everyday business needs, offer digital credit referencing, provide budgeting tools to SMEs, enable automated payments, give predictive insight on cash flow, provide rewards to SMEs on spending, and much more. 

Peter Cox, Founder and Executive Chairman of Contis said: “Our mission is to democratise payments and financial services for all SMEs, so they’re spoilt for choice with innovative and affordable solutions that meet their exact needs. Our approach, based upon proven technologies, will broaden and disrupt the services available to SMEs far beyond the capabilities of existing providers such as the big banks.  

“By driving competition and innovation, while improving the availability of funding, our approach will increase the services on offer to SMEs and make them more affordable, therefore becoming easier for every entrepreneurial person with vision to run their own businesses.” 

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