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MONEY GAMES: IT’S ALL ABOUT THE COMPETITION

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MONEY GAMES: IT’S ALL ABOUT THE COMPETITION

By Sean Farrington, UK MD, RVP Northern Europe at Qlik

When it comes to having a competitive nature, the financial services industry is leading the way. Whether it’s banks competing against banks, insurance companies versus insurance companies or even colleagues against colleagues, this industry constantly strives to be the best. The good news is, when handled correctly, this competition can be great for customers – after all, the more financial services companies can compete with each other, the more they need to aim to provide the best services and rates to get more business.

So what can financial service and banking institutions do to make sure they are tapping into this competitiveness?  How can some institutions differentiate themselves from others and ensure they are leading their market? The key lies in their data and, most importantly, in taking steps to guarantee that it is being used in the most effective way possible.

While many financial services institutions globally are using some form of business intelligence or data analytics, many aren’t taking as much advantage of it as they could be. A lot of these companies have the technology in place to manage risk, meet regulatory compliance, spot growth opportunities and increase margins. However, it’s often the case that these data sets are hosted in silos, with each department only looking at its own data – and only certain people in each department having access to it. This data is also often found lurking in Excel spreadsheets, which can be great for working out equations and formulas, but are often stored in separate files, with little scope for cross reference or gaining a true picture of what’s going on.

By moving to agile data visualisation and analytics applications, organisations are able to reduce the time their employees spend on aggregating data and allow them to shift their focus on exploring the data and making better decisions. The organisations that do this not only save time, but also unlock new realisations and unlimited potential from their data.

Today’s winners in the financial services industry are finding ways to effectively leverage their data through data discovery, to make data interactive and therefore help users explore their data. With data discovery, it’s not just about finding new answers; it’s about finding new questions and new hypotheses. By eliminating wasteful, non-value added work such as time spent on aggregating reports, users can free themselves from data bottlenecks, and instead focus their efforts on analysis and decision making. As a result organisations become smarter and solve problems faster.

In addition, winning organisations are giving more employees access to data. Why limit access to only certain people, when you can be tapping into the competitive nature of the industry and giving everyone across the business access to information that’s relevant to them? While some sets of data will be sensitive in a bank, there’s a lot to be gained from opening up non-sensitive data across departments, so it can be cross-referenced and analysed by a number of employees. With open data on an easy-to-use platform, employees are free to explore information, making discoveries as they go. We often find that the best insights aren’t the ones employees set out to find, but rather those they stumble across while investigating the information at their fingertips.

With the financial services industry thriving on the art of competition, you can see how employees within the sector would relish the gamification trend that’s becoming prevalent in so many business systems. If employees are going to be naturally competitive, then financial institutions should make sure they are harnessing this and providing them with systems that fully embrace gamification and turn data exploration into a competition. This needn’t just be against other institutions – if they give employees software that can help them analyse data themselves and find the best insights first, then this is a way of supporting their competitive nature against their colleagues – challenging them to get the insight that will be of the best benefit to the business first. Ultimately, if employees are harnessing their competitive instinct to drill into data and get a view of market changes in a timely fashion, then they are putting their organisation in a great position ahead of their competitors. If your employees want to compete, encourage it. Don’t just have them battling out against other organisations – give them the tools to ‘play’ against each other internally and find the most helpful information first.

It’s natural for us to want to compete but, in the financial services industry, this competition is rife. If these organisations are able to facilitate better, faster decisions and arm employees with the correct platforms to turn this into a game, then they suddenly find themselves on route to success with data analysis, all in for the best insights before your competitors – internal or external – beat you to it.

Finance

Sunak warns of bill to be paid to tackle Britain’s ‘exposed’ finances – FT

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Sunak warns of bill to be paid to tackle Britain's 'exposed' finances - FT 1

(Reuters) – British finance minister Rishi Sunak will use the budget next week to level with the public over the “enormous strains” in the country’s finances, warning that a bill will have to be paid after further coronavirus support, according to an interview with the Financial Times.

Sunak told the newspaper there was an immediate need to spend more to protect jobs as the UK emerged from COVID-19, but warned that Britain’s finances were now “exposed.”

UK exposure to a rise of one percentage point across all interest rates was 25 billion pounds ($34.83 billion) a year to the government’s cost of servicing its debt, Sunak told FT.

“That (is) why I talk about leveling with people about the public finances (challenges) and our plans to address them,” he said.

The government has already spent more than 280 billion pounds in coronavirus relief and tax cuts this year, and his March 3 budget will likely include a new round of spending to prop up the economy during what he hopes will be the last phase of lockdown.

He is also expected to announce a new mortgage scheme targeted at people with small deposits, the UK’s Treasury announced late on Friday.

Additionally, the government will also announce a new 100 million pound task force to crack-down on COVID-19 fraudsters exploiting government support schemes, it said.

(Reporting by Bhargav Acharya in Bengaluru; Editing by Leslie Adler and Cynthia Osterman)

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G20 promises no let-up in stimulus, sees tax deal by summer

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G20 promises no let-up in stimulus, sees tax deal by summer 2

By Gavin Jones and Jan Strupczewski

ROME/BRUSSELS (Reuters) – The world’s financial leaders agreed on Friday to maintain expansionary policies to help economies survive the effects of COVID-19, and committed to a more multilateral approach to the twin coronavirus and economic crises.

The Italian presidency of the G20 group of the world’s top economies said the gathering of finance chiefs had pledged to work more closely to accelerate a still fragile and uneven recovery.

“We agreed that any premature withdrawal of fiscal and monetary support should be avoided,” Daniele Franco, Italy’s finance minister, told a news conference after the videolinked meeting held by the G20 finance ministers and central bankers.

The United States is readying $1.9 trillion in fiscal stimulus and the European Union has already put together more than 3 trillion euros ($3.63 trillion) to keep its economies through lockdowns.

But despite the large sums, problems with the global rollout of vaccines and the emergence of new coronavirus variants mean the future path of the recovery remains uncertain.

The G20 is “committed to scaling up international coordination to tackle current global challenges by adopting a stronger multilateral approach and focusing on a set of core priorities,” the Italian presidency said in a statement.

The meeting was the first since Joe Biden – who pledged to rebuild U.S. cooperation in international bodies – U.S. president, and significant progress appeared to have been made on the thorny issue of taxation of multinational companies, particularly web giants like Google, Amazon and Facebook.

U.S. Treasury Secretary Janet Yellen told the G20 Washington had dropped the Trump administration’s proposal to let some companies opt out of new global digital tax rules, raising hopes for an agreement by summer.

“GIANT STEP FORWARD”

The move was hailed as a major breakthrough by Germany’s Finance Minister Olaf Scholz and his French counterpart Bruno Le Maire.

Scholz said Yellen told the G20 officials that Washington also planned to reform U.S. minimum tax regulations in line with an OECD proposal for a global effective minimum tax.

“This is a giant step forward,” Scholz said.

Italy’s Franco said the new U.S. stance should pave the way to an overarching deal on taxation of multinationals at a G20 meeting of finance chiefs in Venice in July.

The G20 also discussed how to help the world’s poorest countries, whose economies are being disproportionately hit by the crisis.

On this front there was broad support for boosting the capital of the International Monetary Fund to help it provide more loans, but no concrete numbers were proposed.

To give itself more firepower, the Fund proposed last year to increase its war chest by $500 billion in the IMF’s own currency called the Special Drawing Rights (SDR), but the idea was blocked by Trump.

“There was no discussion on specific amounts of SDRs,” Franco said, adding that the issue would be looked at again on the basis of a proposal prepared by the IMF for April.

While the IMF sees the U.S. economy returning to pre-crisis levels at the end of this year, it may take Europe until the middle of 2022 to reach that point.

The recovery is fragile elsewhere too. Factory activity in China grew at the slowest pace in five months in January, and in Japan fourth quarter growth slowed from the previous quarter.

Some countries had expressed hopes the G20 may extend a suspension of debt servicing costs for the poorest countries beyond June, but no decision was taken.

The issue will be discussed at the next meeting, Franco said.

(Additional reporting by Andrea Shalal in Washington Michael Nienaber in Berlin and Crispian Balmer in Rome; editing by John Stonestreet)

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Bank of England’s Haldane says inflation “tiger” is prowling

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Bank of England's Haldane says inflation "tiger" is prowling 3

By Andy Bruce and David Milliken

LONDON (Reuters) – Bank of England Chief Economist Andy Haldane warned on Friday that an inflationary “tiger” had woken up and could prove difficult to tame as the economy recovers from the COVID-19 pandemic, potentially requiring the BoE to take action.

In a clear break from other members of the Monetary Policy Committee (MPC) who are more relaxed about the outlook for consumer prices, Haldane called inflation a “tiger (that) has been stirred by the extraordinary events and policy actions of the past 12 months”.

“People are right to caution about the risks of central banks acting too conservatively by tightening policy prematurely,” Haldane said in a speech published online. “But, for me, the greater risk at present is of central bank complacency allowing the inflationary (big) cat out of the bag.”

Haldane’s comments prompted British government bond prices to fall to their lowest level in almost a year and sterling to rise as he warned that investors may not be adequately positioned for the risk of higher inflation or BoE rates.

“There is a tangible risk inflation proves more difficult to tame, requiring monetary policymakers to act more assertively than is currently priced into financial markets,” Haldane said.

He pointed to the BoE’s latest estimate of slack in Britain’s economy, which was much smaller and likely to be less persistent than after the 2008 financial crisis, leaving less room for the economy to grow before generating price pressures.

Haldane also cited a glut of savings built by businesses and households during the pandemic that could be unleashed in the form of higher spending, as well as the government’s extensive fiscal response to the pandemic and other factors.

Disinflationary forces could return if risks from COVID-19 or other sources proved more persistent than expected, he said.

But in Haldane’s judgement, inflation risked overshooting the BoE’s 2% target for a sustained period – in contrast to its official forecasts published early this month that showed only a very small overshoot in 2022 and early 2023.

Haldane’s comments put him at the most hawkish end among the nine members of the MPC.

Deputy Governor Dave Ramsden on Friday said risks to UK inflation were broadly balanced.

“I see inflation expectations – whatever measure you look at – well anchored,” Ramsden said following a speech given online, echoing comments from fellow deputy governor Ben Broadbent on Wednesday.

(Editing by Larry King and John Stonestreet)

 

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