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July 7, 2020

Aspen revels “excellent” June figures

Aspen Bridging has reported June 2020 to be one of its best months on record, approving £294m of deals across 382 cases.

The figures are up from £107m across 219 cases in May 2020, representing a 175% and 74% increase respectively, while the business also achieved even greater growth of 301% in new lending month-on-month.

The average deal size rose to £770k from £488k, the increase being trackable to when Aspen increased its top loan amount to £3m net at the end of May.

Aspen says its performance is down to a number of further factors including an increase in its maximum LTV to 75%, the reintroduction of its medium refurbishment and commercial product ranges and a 0.59% per month interest rate.

It has also cited its decision to lend and adapt throughout the Covid-19 crisis as a key contributory factor in creating broker trust, as many other lenders funded by mainstream and private-equity lines withdrew from the market or minimised their product offering.

Jack Coombs, director at Aspen said: “Clearly this is an excellent increase in approvals, enquiries and new lending, supported by the attractiveness of the new product range and by the increase in appetite from investors and property professionals to take on new projects as lockdown eases.

“Furthermore the major improvement in conversion and completion ratios shown in the much higher new lending figures, up 301%, just demonstrates both the increased willingness of borrowers to really progress deals and the strong appetite Aspen has for new business.

“Lenders who are low geared or equity funded like us will continue to reliably operate and offer brokers and customers a credible lending service, and by continuing to lend when others vacated the market we have substantially strengthened our reputation and market share.”

Aspen’s rate card has a maximum LTV to 75%, which can be realised through both physical and desktop valuations, and a top loan amount of £3m net.

The lender’s flat and stepped rate products include residential and light refurbishment, residential and medium refurbishment, HMOs, prime semi-commercial and prime commercial property.

The equity-funded lender further streamlined their processes during Covid-19, with full remote capacity and same day pay-out facilities.

July 7, 2020

Government has limited scope to reduce VAT, says accountants Kreston Reeves

The government is reportedly considering a reduction to the rate of VAT to encourage people to spend more. But, says accountants and business advisers Kreston Reeves, EU regulations will limit the Chancellor’s hand.

Rupert Moyle, a partner and head of VAT at Kreston Reeves explains:

“As we all know, the standard rate of VAT is 20% on most items. What many may not realise is that the UK is still bound by EU regulations on VAT as part of the transitional arrangements currently in place.

“And EU regulations do not allow a standard rate of VAT to fall below 15%. In 2008, following the financial crash, the government cut VAT to 15% to boost the economy, increasing it to 17.5% in 2010 and to 20% in 2011.

“The government does, however, have scope for a lower rate in certain industry sectors under derogated rules. These are used, for example, in the construction industry where VAT is charged at 5% on certain services, and on the high street with books zero-rated.

“The government could reduce the VAT rate to just 5% such as on hotel accommodation, holiday lets and campsites, meals at restaurants although not drinks, and admissions to sporting events. The government’s hand is limited.

“A reduction in the rate of VAT will, however, only have an impact on consumers if the cut is passed on to consumers in full, and that is not guaranteed. Studies on the impact of VAT rate changes following the 2008 financial crash suggest that not all suppliers chose to pass on the effects of a cut to consumers. And government cannot force them to do so.”

July 7, 2020

Leading firms collaborate with Mastercard to further secure Open Banking ecosystem

Mastercard announces three key financial firms as the latest companies to start using Mastercard Open Banking Protect, safeguarding organisations who manage customer accounts against compromised or unauthorised third-party providers (TPPs).

Aion, DiPocket and Modulr have all signed agreements to use the Protect solution, which is a key component of Mastercard’s Open Banking Solutions™ portfolio of market-leading applications and services to underpin, enable and safeguard the open banking ecosystem across Europe.

PSD2 legislation in Europe allows TPPs to access bank accounts, with a customer’s consent, to provide new products and services; however, the account holding institutions remain liable for the funds. It is therefore important for financial institutions quickly to verify open banking requests from TPPs, with whom they may have no prior relationship, and that robust systems are in place to detect warning signs of potential fraud early on.

Mastercard Open Banking Protect is designed to improve the ability to combat fraud in open banking and increase the confidence of financial institutions when approving third-party requests. It offers two key services:

  • Licence and certificate validations – swift verification of TPP certification and registration status against all relevant directories.
  • Fraud Monitoring – uses network-level data on a given TPP to spot trends and changes to regular activities through behaviour monitoring in order to stop potentially fraudulent requests.

The partners announced today include a wide range of use cases – from a digital bank powered by AI (Aion), to a wearable pre-paid tech provider (DiPocket), and the leading payments as a service alternative to wholesale and commercial transaction banking for businesses (Modulr).

All of these companies are collaborating with Mastercard through Open Banking Protect to enhance their ability to identify fraud in a new ecosystem and better protect their business and their customers against unauthorised third-party providers.

Jim Wadsworth, SVP, Open Banking, Mastercard comments: “While there is strong momentum in the open banking ecosystem, financial institutions, TPPs and users continue to be concerned about the potential for fraud and security breaches. Mastercard Open Banking Solutions™ draws upon our considerable expertise in operating and supporting global banking and payments systems to help ensure the open banking ecosystem works seamlessly with security at its core. We designed Protect to offer enhanced safety and security features for financial institutions and TPPs using open banking, including TPP verification and market-leading fraud monitoring.

“Collaboration is key to building a resilient open banking market, and we are delighted that Aion, DiPocket, and Modulr are the latest in a series of partnerships for Mastercard as we work to create an even safer system for all participants. This is a significant milestone for the wider ecosystem and opens the door to even greater adoption of open banking across Europe.”

Cyrus Wadia, payments strategy director, Modulr comments: “In our bid to eliminate the hidden inefficiencies that have traditionally proved costly to UK businesses, we are pleased to work with Mastercard to supercharge our efficient, secure and accessible payment service, so our customers can make the most of open banking.”

Fedele Di Maggio, CEO, DiPocket comments: “Investing in fraud prevention now is incredibly important to ensure that we are safeguarding the open banking ecosystem for the benefit of our customers. Through Open Banking Protect, we are doing just that by providing a service that is not only low cost and transparent, but also secure and protected.”

Recent Mastercard research amongst European financial institutions confirmed that their number one concern is fraud risk and loss in the backdrop of a complicated marketplace where numerous regulators, 31 National Competent Authorities and up to 90 QTSPs are make verifying third parties a significant challenge for financial institutions.

July 7, 2020

Research predicts dramatic increase in volume and value of fines

Between now and 2025, 37% of people in work expect the number and value of fines faced by employers for data breaches to increase – with 6% anticipating a dramatic rise. Just 3% anticipate a fall.

The findings, which are from DSA Connect, an IT asset disposal company that specialises in the permanent deletion and destruction of electronic data, also reveal that when it comes to fines for employers linked to the inadequate deletion and destruction of data, the corresponding figures are 32%, 4% and 2% respectively.

One of the main reasons for this trend is that employees now have access to much more data than ever before. Over the past 12 months, 30% of people say they are working with more data at work, with 7% saying the level has fallen and 57% claiming there has been no change.

Overall, 76% of people believe their employers have ‘good’ or ‘excellent’ processes for storing data safely, and just 5% think they are poor, with the remaining 20% saying they don’t know.

However, a clear failing of their policies is revealed by the fact that when asked if their employer had a data sanitisation policy, 38% of people said yes, 14% said no and 47% said they didn’t know.

Harry Benham, chairman of DSA Connect said: “With developments such as the Internet of Things (IoT) employers are dealing with more data than ever. They also have to contend with a rise in the number of cyber-attacks and ever more stringent legislation around protecting client data and how they use it.

“Employers need to invest more time and resources in enhancing their strategies against this.”

DSA Connect is an IT asset disposal specialist. It specialises in the erasure and destruction of electronic data using tools certified by CESG and approved by the UK National Cyber Security Centre (NCSC). It ensures that all data storage media and equipment is removed from a client’s premises and transported to its secure facility in unmarked, tracked vehicles.

The company was established in 2011 to partner the Ministry of Defence in developing the MoD’s asset disposal service.

July 7, 2020

UK cloud-based fintech eyes the Middle East as competition to attract digital-ready customers grows

UK cloud-based payment processor, Paymentology announces the expansion of its Middle East operation to meet the projected growth of digital banking in the region.

With the appointment of Ashkay Patel as General Manager for the Middle East, and additions to the current teams based at the Dubai office and 24/7 contact centre in Pakistan, Paymentology is positioned for rapid growth, particularly with Wirecard’s potential exit from the market.

In the UAE, with more than 17 out of 20 adults unbanked, the opportunities for a quality payment processor capable of bringing market-leading technology to existing and new digital banks to serve the region is sizeable.

Paymentology has a track record not only of platform integrations that deliver best-in-class fraud prevention systems, and virtually instantaneous transaction approvals, but also have a proven ability to integrate into an existing platform in as little as 14 days, making them a natural choice to partner with as banks compete to address the potential market opportunity.

Chief executive of Paymentology, Shane O’Hara, commented, “The Middle East is a market that is ripe for growth. We have accelerated our plans to expand in the region, and our new appointments both evidence our commitment to support the local banks, as well as positioning us strongly to ensure we can deliver quickly and efficiently for new contracts.”

Ashkay Patel added, “I am delighted to take on the role as general manager for the Middle East, to build on our existing presence in Dubai and Pakistan. The current demographics point to the need for an established and flexible payment processing platform and I believe that Paymentology is now perfectly placed to seize this opportunity.”

July 7, 2020

RSM welcomes new member firm in Denmark

RSM, the leading global audit, tax and consulting network focused on the middle market, has announced the appointment of its new member firm in Denmark, bolstering its presence in the Nordic region.

BRANDT, which is due to become the new RSM Denmark, joins RSM, boasting 11 offices across the country, including in Copenhagen, Aarhus and Esbjerg, and has a full service audit and tax offering that spans sectors including agriculture, energy, real estate, fishing industries, education and transportation.

Founded in 1955, the new firm in Denmark has built foundations on quality and brings a dynamic, growth strategy, with ambition to match. In alignment with RSM, BRANDT also has an innovative approach and ethos, which is dedicated to providing exceptional personal service through a blend of local, national and international expertise. Currently, the firm comprises 200 people and maintains an audit and assurance, tax, financial accounting, and outsourcing focus.

Future plans include strengthening the firm’s presence in the nation’s capital through acquisitions as well as organic growth, and it has sights on a potential office expansion into various locations throughout the country.

Jean Stephens, Global CEO of RSM International said:

“RSM has a keen eye for identifying teams whose culture and values are well-aligned with our own, in parallel with a robust dedication to delivering quality and the highest levels of client experience to middle market business leaders. We are delighted to welcome the entire RSM Denmark team on board.”

“Denmark is an important market for us as it is home to many internationally focused businesses with a variety of cross-border needs. From a more local expertise perspective, it is pleasing to welcome aboard such an ambitious and highly efficient Nordic firm that will enable us to continue to meet and exceed the expectations of our clients in the region.”

Jens Kristian Yde, managing partner of RSM Denmark added:

“As a member of RSM, we will have incomparable support, along with the opportunity to benefit from RSM’s global capabilities in delivering to our international clients, as well as continuing to support and add value to our local client base. Our core values are in perfect harmony with that of RSM and we look forward to further developing strong client relationships, to provide genuine value as trusted advisers.

“We are certain that becoming part of the RSM family is the right move for us and we are eager to get to know our new colleagues, share our expertise and knowledge across borders and combine resources, in order to further strengthen our service offering.”

July 7, 2020

Stagecoach Performing Arts thriving through lockdown

Stagecoach Performing Arts, the children’s performing arts franchise with a global presence in eight countries, has continued to adapt and thrive throughout the ongoing Covid-19 lockdown period. Stagecoach are one of nine companies owned by the Trafalgar Entertainment Group, who recently acquired the rights to operate one of Australia’s oldest theatres, the Theatre Royal in Sydney.

With a focus on expansion in Australia across the whole Trafalgar Entertainment Group, Sydney forms a major part of the Stagecoach international business development teams plans for growth. Since first launching on Australian shores, the internationally renowned franchisor has firmly established itself as one of the world’s leading brands offering performing arts education.

Sir Howard Panter and Dame Rosemary Squire, co-founders of Trafalgar, took over operations of Sydney’s 1,110 seat Theatre Royal in May, during which time both the UK and Australia were in varying stages of lockdown. With plans to reopen the completely renovated theatre by August 2021, a new Stagecoach school will be established close by, welcoming students aged four-18 to take part in workshops and performances at the prestigious location.

“That’s going to be a truly special experience for our students,” explained Andrew Walters, director of International Business Development at Stagecoach Performing Arts. “Sydney is a real hub for performance talent, so to be able to nurture the skills of the next generation of Australian performers in such a historical venue is very exciting for us and our Australian franchisees. The last few months have been undeniably challenging for our international network, but this is a significant step towards the regeneration of the performing arts and franchising sectors. We’re looking for talented and passionate business owners to support us, as Stagecoach expands into Sydney, alongside looking into growth opportunities in other key regions across Australia.”

Across the other side of the world, Stagecoach has recently become the proud recipient of two awards from the 2020 Canadian Franchise Association – taking Silver in the Non-Traditional Franchises, 6-15 Franchisees category, and receiving the 2020 Franchisees’ Choice Designation for the second year running. The latter is an award given to franchisors who put the satisfaction of their franchise network at the heart of the business.

With plans for international expansion into new markets and an ongoing strategy for continuing the success of their franchisees’ existing schools, recent months have proven Stagecoach to be a truly innovative and proactive franchisor.

“We pride ourselves on upholding our market-leading status, so to receive recognition from the CFA is a testament to this commitment. Like many other franchisors, the last three months has seen us pivot and adapt our services for the benefit of our network. Whilst we’ve had incredible feedback from our franchisees in Canada, Europe, the UK, Australia, and South Africa, accreditation from a governing body proves we’re maintaining our values as a responsible and ethical franchisor. We’re very proud of what we’ve achieved so far this year and look forward to getting back to business as usual as soon as it is safe to do so,” said Andrew.

July 7, 2020

Big costs and plummeting share prices ahead for companies

Companies hit hardest by social distancing will face high premiums and shares falling, according to new research by Christian Wagner and Josef Zechner from the Vienna University of Economics and Business (WU) and their co-author Marco Pagano from the University of Naples Federico II.

The study found that in the viewpoint of investors, companies that feel the effects of social distancing the most, are seen as less resilient in a crisis, therefore premiums rose whilst at the same time share prices fell.
This was particularly the case in companies with a strong connection to tourism, whereas, companies in the tech and communications sectors, were found to be hardly affected and will return to pre-Covid levels by early next year.

At the beginning of April 2020, the expected returns of stocks with low pandemic resilience, such as Royal Caribbean Cruises and United Airlines are 40-60% lower than those stocks with high resilience, like Apple and Microsoft where the expected returns were between 3-4% lower.

“Sectors like tourism, which are more strongly influenced by social distancing, lost around 10% more value in the investigation period from February 24 to March 20 2020 than companies that were affected less,” says Professor Wagner.

The authors also analysed if investors were aware of the risks of a pandemic before the current crisis, therefore in addition to the first quarter of 2020, the authors included the years 2014 to 2019 in their analysis.

“In the period between 2014 and 2019, the cumulative differences in returns between more and less pandemic-resilient companies were about the same as during the outbreak, i.e. between late February and early April 2020. We assume that investors were aware of the potential threat of pandemics long before COVID-19 broke out,” says Professor Zechner.

The researchers say that it cannot be ruled out that the most alert investors may have started taking into account such concerns in their portfolio choices well in advance of the current pandemic, shying away from the stocks of companies that would be less resilient.

The study looked at 3,600 US listed companies.

July 7, 2020

Manufacturing industry optimistic for recovery from Covid-19

A new survey from SteelScout has found that more than 60% of professionals in the manufacturing industry expect the sector to recover from Covid-19 and return to business as usual by mid-2021. However, they highlighted issues in the wider supply chain which might impact the recovery, with almost 30% unable to access the materials they need and 36% adding that it is taking longer just to receive a ‘winning quote’.

One key driver behind the confidence in recovery is that 62% of respondents reported having orders waiting to be fulfilled once lockdown rules have eased. The orders on hold within SteelScout’s survey base of 100 people exceeded £17m in value.

In order to fully understand the impact of lockdown on manufacturers and their supply chains, SteelScout – a multi-supplier procurement platform that connects buyers with a UK network of suppliers – sought the opinions of more than 100 manufacturing professionals to gain insight into the current state of affairs.

The survey demonstrated that it has been a tough few months for the sector, with more than half of respondents reporting that they have been working at a reduced capacity or with some staff furloughed. More than 10% of respondents reported whole companies being mothballed and all staff furloughed.

Almost 80% of those surveyed reported that they have adopted new working practices to deal with rules and guidelines around lockdown in the UK. The most common change was remote working, which was used by 49% of those surveyed. Video conferencing, flexible hours and instant messaging have also helped to navigate the impact of Covid-19. To address supply concerns, almost a third had also increased their use of digital platforms in order to secure the materials they need. 22% of businesses pivoted to produce items from masks and screens to medical device parts to help the national effort. Around half of those companies added that they intend to incorporate the products and services into their offer on a long-term basis.

To solve the identified supply issues, greater visibility and more alternatives in the supplier network were the most called for improvements, whilst having an easier method to collect and compare quotes was also selected by many in an effort to reduce basic admin costs and save time.

Matt Yeates, managing director of SteelScout, said: “The innovation and determination shown by the manufacturing industry to continue operating through lockdown also reveals a clear shift towards the adoption of new technology to enable that continuity.”

“Many businesses may never return to the previous way of working & I believe a key part of the recovery will come from locking in lessons learned during the pandemic. Eradicating inefficiency sounds simple but often trying new approaches requires a bold step to really understand what you can achieve. Our platforms continue to offer a smarter way to quickly source the best deal for many manufacturers using steel and other metals.”

July 7, 2020

Klarna & BigCommerce research highlights shopper journey fragility

Four in ten UK shoppers (38%) abandon a purchase at least once a week, with a fifth (21%) claiming to do so more regularly. That’s according to new research by Klarna and BigCommerce, published today with a call for retailers to prioritise shoppers’ most fundamental needs for the sake of their bottom line as the UK heads towards a recession.

The research reveals a lack of fast and affordable delivery options as the number one reason behind cart abandonment, with over half of UK consumers (54%) admitting they have abandoned their online shopping cart due to delivery frustrations. The burden of needing to create an account and frustrations with the functionality of a mobile website came second, cited by 32% and 33% respectively as reasons to drop out.

Meanwhile, 27% of consumers have abandoned a purchase because they couldn’t remember their log in details for an existing account, whilst more than a quarter of UK shoppers (26%) admitted they have left a purchase halfway through because they ‘couldn’t be bothered’ to prepare their card details.

The findings, which highlight the fragility of the shopper journey, form part of a new report — Navigating Needs: the path to profit in eCommerce — published by global payment provider Klarna and leading SaaS ecommerce platform provider BigCommerce, in partnership with retail expert Andrew Busby.

Inspired by Maslow’s well-known hierarchy of needs theory, the report considers the shopper needs retailers must satisfy in their quest to gain and retain customers.

  • Functionality makes up the foundation of the pyramid as the need that must be met first and foremost, with 37% of respondents saying the ease of using a retailer’s website has the biggest influence over their purchase decisions. Almost a quarter (23%) said they’d also be influenced by the speed of the checkout process, while 22% are encouraged by flexible payment options.
  • Safety comes next, with three quarters (75%) of consumers saying they would be likely to abandon their shopping cart if they did not trust a website’s security. In the current context, this also means the safety of deliveries, with many retailers now offering essential non-contact delivery options to minimise the risk of cross-contamination.
  • Moving further up the pyramid, the research reveals the importance of engagement, with 39% of consumers saying good customer service would encourage them to shop again with an online retailer. An additional 27% said poor customer service would deter them.
  • An intrinsic need to be recognised and valued – esteem – comes next, with a third (33%) of consumers noting that personalised offers or discounts would encourage them to shop with an online brand, and a fifth (19%) being swayed by a personalised checkout experience. In fact, a fifth (19%) even said they would be likely to abandon a purchase if they weren’t treated to a personalised offer.
  • And, with all other needs met, many consumers are looking for entertainment and inspiration — enriching experiences — to capture their attention, with over a third (35%) of UK shoppers saying they are more likely to shop with a retailer that is associated with fun content and experiences.

Commenting on the research, Laurel Wolfe, VP marketing at Klarna, said: “Consumer behaviour might feel particularly unpredictable right now, but fundamental needs remain the same. Just like Maslow’s theory, this means starting with the basics and working up. Customers won’t feel comfortable if a website feels insecure, whilst a fast, smooth checkout process is likely to encourage loyalty. From flexible payment options and shopper security, to relevant content and referral traffic, we’re proud to help retailers improve the shopping experience at every stage of the journey, enabling them to create closer connections with customers.”

Andrew Busby, top 20 global retail influencer, CEO of Retail Reflections and IBM Futurist, commented: “Even before Covid-19 struck, retail was undergoing a seismic shift – and now its transformation is almost inevitable. Innovation is key, and retailers are right to consider new ways of reaching customers and bringing the same enriching experiences to them in this strange new world. But, in a matter of months, functionality and safety have shot to unprecedented levels of importance. Physical stores may never look the same again – and, from the ability to try before you buy to the need for secure spending and rapid returns, online retailers are under peak pressure to make the shopping experience as safe and seamless as possible.

Jim Herbert, EMEA general manager at BigCommerce added: “Shopping should always be easy and enjoyable. Consumers want ecommerce to be as quick and flexible as possible, and as this research shows, anything less than a seamless experience will result in abandoned baskets. As stress levels rise and purse strings tighten, shoppers will buy more from those merchants that match their needs. Every abandonment represents a dent in the retailers’ revenues and potentially a sale lost to a competitor, making it incredibly important to consider every aspect of the shopping experience – from security and website speed to the power of personalisation – across all channels where customers engage.”

You can download a copy of Navigating Needs: the path to profit in eCommerce here.

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