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Why the Players That Focus on Both Sides Will Win the B2B Payments Market

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Archives, Banking, Global Trade Daily

Why the Players That Focus on Both Sides Will Win the B2B Payments Market

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Remote work initiatives have created a strong tailwind for digitizing business payments, with companies rushing to move away from checks and onto card and ACH payments. This huge market–roughly 10 times the size of the consumer payment market–is ripe for change. Over the past decade, a decent amount of investment has gone into this area. Everyone is getting into the game: banks, card providers, and fintech providers, for example. It’s very early days, with paper checks still the predominant form of payment in the US. Who will win the market? Ultimately, it will be the players that can best address the needs of both buyers and suppliers.

I’ve spent time on both sides. Before coming to Nvoicepay, which helps automate the payment process on the accounts payable side, I was with Billtrust, which automates accounts receivable. Their founder and CEO, Flint Lane, was a big believer in the need to solve for both sides of the equation. That was my first introduction to the concept. Now, having sold into both accounts receivable and accounts payable, I’m a firm believer as well.

Two Sides of the Coin

There are two sides to every payment—creation and receipt. When it comes to consumer payments, both sides are straightforward, especially with today’s technology. But in the world of business payments, process complexity adds friction between them. Accounts payable’s goal is to manage cash flow by hanging on to money as long as possible. That puts them at odds with accounts receivable, who wants to get paid as quickly as possible. Digitizing transactions doesn’t efficiently address the complexity or friction between the sender’s and receiver’s processes. And the lack of consideration can worsen the issue.

For example, funds sent by accounts payable may hit their vendor’s bank faster with card or ACH payments, but a complicated payment application process can lose the receivable department precious time anyway. Without a way to streamline the process from beginning to end, simply switching to electronic means in a few places may not offer the time savings that businesses hope to achieve.

What’s the Solution?

Portals work well for larger companies that can dictate the terms of doing business to their smaller customers. But their customers may not be happy having their own interests dictated to them. And if you don’t have that kind of authority, chances are your portal will go unused because you’ve created a one-off process for your customers, making life harder for their accounts receivable people.

Electronic means can help accounts payable make payments at the last minute, and they’d prefer paying by card over ACH because they can make money on card rebates. But convincing suppliers to accept card is often a challenge because the accompanying fees can get expensive very quickly. Meanwhile, enabling suppliers for ACH translates to AP managing large amounts of sensitive bank account data.

Many organizations end up “dabbling” in electronic payments because of these enablement challenges. That leaves them managing four different payment workflows–card, ACH, wire, and a whole lot of checks. This is the problem that payment automation providers solve by taking on the supplier enablement process, maximizing card rebates, and simplifying AP workflows.

As much as both sides might agree that digital payments are the future, they’re stuck between a rock and a hard place without automation.

Paving the Way

Fintech businesses like Nvoicepay and Billtrust are bringing automation to payables and receivables separately, and that’s a big step forward. I believe the next generation of solutions will bring both worlds together on a flexible, dynamic platform where both parties to a transaction can choose from a range of options that best meet their needs at any given time.

From an accounts receivable perspective, funds need to be accompanied by enhanced digital remittance information. They could offer buyers incentives in dynamic discounts in exchange for speedy payment and a streamlined cash application process through the platform.

On the buying side, easy access to supply chain financing could allow them to take advantage of such discounts while at the same time extending payment terms. The buying organization takes its two percent discount and gives half a percent to the financing organization, paying the invoice within the discount window. Then the buying organization pays the financing organization in 30 days. Payables manages cash, gets part of the discount and a rebate if they pay by card.

Bringing it All Together

The key to creating these win-win outcomes is including the presence of a technology platform that uses data to offer convenience and choice, allowing organizations to meet whatever their needs happen to be at any given time. For example, if your cash position is good, you may not offer discounts or offer them more selectively. If you work with many small suppliers with tight margins, consider taking the card option off the table.

These are not new ideas, but they haven’t yet been addressed effectively with technology. Historically we’ve tried to do this through EDI (Electronic Data Interchange), a computer-to-computer communication standard developed in the 1960s. It’s always been very clunky, and it is unwieldy for the volume and velocity of data in the supply chain today. However, a majority of organizations still use it for lack of anything better.

Nacha and the Real-Time Payments Network add remittance data to ACH payments, but that’s not a complete answer. There still needs to be some technology put in place to incorporate the data into payment workflows.

Suppose you look at fintech innovation in the consumer payments market as a leading indicator. In that case, it’s been less about new payment products and more about using technology to send and receive money seamlessly, regardless of which electronic network is used.

In B2B payments, fintechs changed the game by thinking about payments as a business process rather than a collection of products, and built software solutions to automate those workflows. With remote work providing an additional incentive, many more organizations are adoping electronic forms of payment. That, in turn, makes data more available to continue developing digital platforms. Whoever gets there first has a good chance of becoming the leading player, but you won’t get there at all if you don’t build for both sides of the equation.

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Derek Halpern is Senior Vice President of Sales for Nvoicepay, a FLEETCOR Company. He has over 20 years of technology sales and leadership experience, including 16 years in the fintech and payments space. 

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Archives, Banking, Global Trade Daily, International Trade

Is Saudi Arabia Leading the Race for FinTech Financial Inclusion?

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It can be hard to keep up with Fintech. Just as the sector appears to be settling into some form of pattern in the UK and USA, where the next notable round of innovation is widely expected to be the automation that is changing the industry, new markets and new centers are emerging. 

One of these – and one that was thought to be rather unlikely until fairly recently – is Saudi Arabia. Though the Middle East has long had a promising fintech sector, this has largely been confined to Saudi’s smaller neighbor, UAE. 

Now, a range of Saudi startups have raised large sums in seed capital, and seem poised to make a major impact on the industry. In this article, we’ll look at these recent success stories, and explore when they mean for Saudi’s nascent fintech sector. 

Saudi Arabia: A New Frontier?

First, let’s take a look at those recent headlines. Back in April, a promising but relatively small Saudi fintech startup, Tamara, announced that it had raised $110 million for its Series A funding. This came as a real shock to industry, and with good reasons – not only was this the largest level of Series A funding ever raised by a Saudi startup, but it was the largest Series A ever raised by a middle eastern startup.

Perhaps the news shouldn’t have come as much of a surprise, though. Observant investors noted that the Saudi fintech sector has been growing steadily over the past few years – from just 10 startups registered under the Fintech Saudi initiative in 2018, to a total of 155 in 2020. And with extra companies comes extra funding – from January to May this year, fintech startups based in Saudi Arabia raised almost $130 million, a whopping jump compared to the $23 million raised by the sector from 2015-2020.

This growth is also likely to continue in the medium term. This level of investment is proving to be an incentive for Western fintech startups, as well, who are now looking to the Middle East as a potential new market for their services. Whether they will be able to take advantage of the size of the market in the region will, however, depend on a number of factors.

As we will see, the biggest problem standing in the way of creating a dynamic Fintech sector in Saudi is not the demand for innovative banking services – that is certainly strong enough. Rather, it is a somewhat traditional banking sector that may be reluctant to open up to technology companies.

Growth Across the Region

Saudi certainly has some well-established models to follow when it comes to catalyzing fintech growth. Bahrain, for instance, is widely regarded as having some of the most fintech-friendly banking regulations in the world, and the sector in that company is growing rapidly. Similarly, Egypt is seen as a real growth market for the sector, given the country’s huge population and a government that seems to be supportive of novel approaches to small business finance.

In both of these countries, government support has been key to encouraging the fintech sector, and Saudi Arabia appears to have recognized this. The Fintech Saudi initiative is the flag bearer for this support, and was launched back in 2018 by the Saudi Central Bank. The bank partnered with the Capital Markets Authority (CMA) in the kingdom, which has played a pivotal role in providing investment funding for fintech startups. 

The goals of these investments are certainly ambitious. The mission statement of the CMA states that it is tasked with “transforming Saudi Arabia into an innovative fintech hub with a thriving and responsible fintech ecosystem”. As part of this wide mandate, Fintech Saudi facilitates the licensing process for startups, connects entrepreneurs with investors, service providers, and banks, and has an accelerator program run by Flat6Labs.

This government support is, in turn, part of a broader change across the region, in which governments who were previously averse to change are embracing new ways of doing business. Just as the oil industry is changing, and becoming more transparent, so is the financial sector. And that will have impacts far beyond investors and bank staff because fintech might just be able to make banking truly inclusive.

Open Banking and Inclusion

If, as seems likely, Saudi Arabia becomes a leader in the fintech space, it will act not just as a catalyst for the development of fintech solutions across the region. It will also be the biggest test run yet of one of the central promises of fintech – that this technology can open up banking in a way never seen before.

On the one hand, Saudi Arabia seems like an unlikely place to be at the forefront of inclusive banking. The country is still very conservative and has some of the most secretive banking practices in the world. However, there are signs that the kingdom is open to change – both socially and in regard to the way it does business.

This has been overtly stated by Fintech Saudi, which is developing an open baking framework for the kingdom. Their aim, they say, is to force Saudi banks to be more open, and to share data about their activities more widely. This, in turn, will likely make it easier for under-represented groups in the country – women, most of all – to access banking services. 

At the moment, many guest workers and women in the country are under-served by financial institutions, and by allowing them to open accounts it is hoped that the country can become more open generally. In addition, fintech can help these workers to make international payments more easily, sending money back home and sharing the benefits of the strident Saudi economy.

The Challenges

Of course, changing the way in which a conservative country runs its banking system is not going to be easy. The Fintech sector in the country, while attracting a lot of funding, will have to overcome some real challenges if it is going to succeed.

One of these is a skills gap. A recent report from Fintech Saudi, for instance, shows that hiring qualified talent was the primary challenge for 40% of startups in the fintech space. Without qualified workers to power the work of startups, it’s likely that these will either stall or be forced to move their activities (and their profits) elsewhere.

Secondly, there is the issue of cybersecurity. Saudi has been a major target of cyberattacks in recent years, many of which appear to have originated in Iran. While the average fintech startup might not be a target of global cyber-weapons, the sheer number of common cybersecurity risks that the average Saudi company experiences every year could be enough to deter some startups and investors from working in the country.

The Bottom Line

That’s not to say that these challenges don’t have solutions, of course.  Open banking has progressed in two ways around the globe in recent years, either via regulators forcing traditional banks to embrace it and work with fintech startups (as is the case in the European Union) or (as we see in the US) incumbent banks opting to partner with open banking providers to keep pace with innovation.

If Saudi Arabia can do the same, while also recognizing that both talent acquisition and customer service are key to success in Fintech, there is no reason why it cannot emulate the success of its neighbors, and become the next global fintech hub.

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Why Credit Cards Could Be the Next Big Opportunity in B2B Payments

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With the advent of widespread remote work, businesses have made impressive leaps in eliminating checks and adopting electronic supplier payments. These changes primarily translated to increasing the number of ACH or Direct Deposit payments made. According to Nacha—the governing body for the ACH network—business-to-business payments for supply chains, supplier payments, bills, and other transfers increased by almost 11% in 2020. But as organizations adopt electronic payment processes, there’s another strategic opportunity for AP to consider: electronic credit card.

Most companies’ payments flow through AP, yet few AP departments today are making significant use of credit cards to their fullest potential. Historically, companies use credit cards as a decentralized way to manage expenses. In order to do their jobs, employees need to spend efficiently, without going through a bureaucratic process. Traditional commercial programs have been focused on companies giving their employees purchasing cards (p-cards) or travel and entertainment cards (T&E cards) which they could use for supplies, meals, or departmental expenses such as software subscriptions, and marketing expenses—items that would be classified as indirect spending. However, while the benefits of these programs are clear, even in a depressed travel environment, it falls short of the full potential of complete credit card utilization.

Old vs. New

Companies can establish guardrails for spending on these cards. They can add controls to limit employee spending or only allow them to spend in certain places. There are also mechanisms in place to do post-transaction reviews and allow for remediation for inappropriate spending. Due to the combination of convenience and control, finance departments often think about cards as tools for employee productivity, with customizable spending controls.

This only touches on one aspect of company spending, however. Companies spend far more of their budget through traditional purchase orders and invoices for direct expenses like materials, components, freight, and labor. The idea that AP could utilize a card for direct expenses has still not been widely accepted.

Cards provide easy access to working capital and offer rewards like cash back or points. Many companies appreciate that cards are a better electronic payment option due to these benefits. The question then becomes: how do you build a successful card program in accounts payable? Generally, businesses have to make card processes work within their pre-existing AP infrastructure, which usually includes a supplier interaction component and a technical component that traditional players (banking institutions) in this space are not fully equipped to handle.

For example, banks primarily look at credit cards as another form of lending. They offer credit lines, which their customers spend against and pay back. Paying supplier by card usually enables businesses to reach their top 10 or 20 suppliers. That’s usually considered a successful lending program, but to interact with more suppliers, integrate with an ERP, or offer enhanced reconciliation data, banks don’t usually have the technical resources, because it’s beyond their traditional lending model.

Incorporating the New

Bank business models usually focus on building and maintaining a vast merchant acceptance network. You can walk into tens of millions of locations worldwide and if they have the Mastercard or Visa logo, you can use your credit card there, no questions asked. But when it comes to payments for suppliers, the acceptance network is inconsistent. Some suppliers don’t accept payment by card, or only accept them from certain customers depending on speed of payment, the margins, and the type of product that they’re selling. Due to these factors, paying by bank-issued card requires the vendor engagement process to include finding suppliers that already accept specific card types, ensure they accept that payment type from other customers, and locate new card-accepting suppliers.

That’s where fintechs really shine, because their business models are built to incorporate a supplier engagement process aimed at getting more spend on cards. Where banks generally looking for the top 10 to 20 suppliers, which might account for 70 percent of your total spend, fintechs go after the tail—that 30 percent of spend that probably accounts for more than 60 percent of your suppliers and takes more work to get on board. Essentially, they build out a B2B acceptance network inside the credit card acceptance network.

Scaling the Mountain Towards Change

Operationalized re-engagement models are a particularly important component of this business model because most companies churn 10 to 20 percent of their suppliers each year. Within two years, business’ supplier pools are different by 20 percent from when they began, so they must reach out constantly to maintain certain payment acceptances. While banks don’t always have the capacity to offer supplier acceptance maintenance, fintechs thrive when they include those services in their business model.

There are multiple benefits of capturing tail spend on cards. For example, doing so opens the door to paying more suppliers electronically, earning businesses more working capital and a higher potential for rebates. Virtual cards come with security and controls that plastic cards do not usually possess, including single-use numbers that are tied to unique suppliers and payment amounts. Tag on reconciliation data options, and the system becomes something that benefits accounts receivable as much as accounts payable. This opens more suppliers up to the idea of accepting electronic forms of payment.

Fintechs—technology-focused by nature—build their systems with a holistic viewpoint in mind, preferring to create software that doesn’t sacrifice one business’ operations for another’s. By enhancing the system end-to-end, previously reluctant accounts receivable teams, who felt strong-armed into giving up outdated payment processes, often become more willing and interested to learn about electronic alternatives.

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Rick Fletcher is the Comdata President of Corporate Payments, where he specializes in sales, marketing and product strategy, operations, and customer service.

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SentiLink Shares What Businesses Should Know About Synthetic Fraud in Exclusive Q&A

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In the following Q&A, we learn all things synthetic fraud, from risk mitigation to what businesses can do now to effectively combat this new challenge for global businesses.

What is synthetic fraud and how does it differ from fraud?

Synthetic fraud is a type of fraud where a falsified or manipulated identity is used to open consumer and business financial services accounts. It’s very different from ID theft because there’s no victim that comes forward to claim their identity has been stolen. As a result, synthetic identities go undetected for years. So, not only does synthetic fraud cost banks and lenders billions of dollars a year in losses, but these identities facilitate all sorts of criminal activities.

How is Sentilink revealing the risks of synthetic fraud (Through a report, through research, through other means)?

SentiLink offers several solutions that credit unions prevent synthetic fraud.

Synthetic Scores: SentiLink’s Synthetic Scores product indicates the likelihood that an identity is synthetic. Synthetic Scores are made available to clients via API or a user-friendly Dashboard.

Manifest – Manifest is the identity data leveraged by the machine learning algorithm that generates SentiLink’s Synthetic Scores. This dataset includes information from the credit bureau, utility records, the death master file, as well as phone and email data.  SentiLink enriches this identity data and makes it available in the Manifest product via API and the Dashboard. Clients can incorporate Manifest in their proprietary models or utilize the data to investigate individual cases via the Dashboard.

eCBSV – For the first time ever, it’s possible to validate Social Security numbers with the Social Security Administration’s database of SSNs in real-time using eCBSV. With applicant consent, financial institutions can send their applicants’ names, dates of birth, and SSNs to SentiLink via API and receive a match or no-match response within milliseconds. This service enables lenders who have historically required SSA-89 forms, such as mortgage lenders, to shave days off the loan origination process.

Why is synthetic fraud more of a risk to credit unions rather than to other establishments? 

To be clear, synthetic fraud is a risk to all financial institutions. But, some credit unions may think that the membership requirements to join are a deterrent to synthetic fraud. But, we’ve seen that fraudsters are able to become members and get loans from credit unions.

What could credit unions be doing that would help them lessen the risk of synthetic fraud?

There are several things credit unions can do:

Education is the first step. The Federal Reserve wrote 3 white papers on synthetic fraud that are very informative.

Pay special attention to the Social Security number of applicants applying. If the SSN was issued in a state where the applicant doesn’t have address history, this is a potential red flag. If the SSN was issued in a year that’s different than the date of birth, this is a potential red flag. It doesn’t necessarily mean a synthetic identity is being used to apply, but these are scenarios that potentially warrant additional verification. Validating the SSN using an SSA-89 form or eCBSV is a smart approach.

Labeling losses according to the type of fraud is also important. Knowing whether a loss was due to ID theft, synthetic fraud, and other types of fraud will enable a credit union to measure losses due to each type of fraud and learn how to recognize similar identities when they apply.

What are the 7 synthetic identities and how does it work/identify?

Perhaps I should clarify the statement, “1 in 7 synthetic identities has a credit line from a credit union.” SentiLink has tagged over 100,000 synthetic identities. We have a subset of these identities where we can see what financial institutions gave these fake consumers a loan. Our analysis showed that 1 in 7 of these synthetic identities had a loan from a credit union. The point we were trying to make is that credit unions are at risk for synthetic fraud just like other banks, fintechs, and lenders.

What do you mean by “tradeline from a credit union with balances 2/5X higher?

We looked at the loan size that credit unions issued to these synthetic identities and compared them to the loan size that they gave to non-synthetic identities and found that the balances issued to synthetic identities were significantly higher. So, the credit unions lost a lot more money when issuing loans to synthetic identities. This is another reason why credit unions should work to identify synthetic identities before they become members, so they don’t experience these losses.

What are the risks to a credit union in regard to synthetic fraud?

The risks are losses and compliance. As mentioned above, synthetic identities cause significant losses to financial institutions. But, there is also the regulatory requirement to Know Your Customer. KYC solutions can’t detect synthetic identities, and as regulators become more aware of this issue, their expectations around what constitutes appropriate KYC measures is likely to change. If credit unions are issuing loans to synthetic identities, they aren’t conducting appropriate due diligence to know their customer. Their ability to comply with KYC requirements will suffer if they don’t address synthetic fraud.

What are the warning signs that credit unions should pay attention to?

Certainly, upticks in losses can be a sign of increased synthetic fraud. But, also things like the same address being used frequently to apply for loans can be a sign that a group of fraudsters is attacking a credit union.

What do you see as the future of credit unions in relation to this type of fraud?

Synthetic fraud is going to be an issue for credit unions for the foreseeable future. Unlike id theft where fraudsters steal an identity and have to quickly take out a loan, take the money and move on, synthetic identities can be used over and over again for a very long period of time. And, synthetic identities are easy to create so it’s something credit unions are going to have to learn about in order to detect and stop them from impacting their business.

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Sarah Hoisington is head of Marketing at SentiLink, a fraud protection tech firm helping financial institutions and government agencies.

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Archives, Banking, Global Trade Daily

Digital Technology for your Financial Reconciliation

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Businesses today have a clear need for a financial reconciliation management system that is fast, streamlined, and audit ready. Volatility and disruptions are the order of the day at the markets and the 2020 pandemic has added to the mix, resulting in a state of confusion.

In most businesses, the financial reconciliation process is a manual and a recurring task – a series of interconnected and complex processes that require the reconciliation process to be managed across general ledgers, sub-ledgers, and bank accounts. Limited resources, siloed data, and error-prone spreadsheets add to the complexity that compromise accuracy, control, and transparency – making the financial close process highly inefficient.

Today businesses need to:

Close faster

Eliminate unnecessary status update meetings to manually review account balances before closing the accounting cycle.

Streamline and centralize the close process

Get rid of error-prone spreadsheets and track reconciliation progress in real-time while identifying bottlenecks in the close process.

Be audit-ready

Achieve an accurate reconciliation that is fast, reduces risks and costs, and ensures regulatory compliance with a clear audit trail.

Improving agility and accuracy of financial processes requires better use of data and automation. There are significant tangible benefits to implementing modern technology that helps increase speed and agility, while ensuring accuracy and freeing up time for strategic and transformation efforts.

It is a known fact in the industry that companies spend too much time reconciling reports that are output by different systems. Furthermore, the reports need to be reconciled across all functions, including accounting, trades, stocks, commissions, and more.

To meet the existing challenge, there is a clear requirement for a solution that collects, blends, and analyzes data from disparate systems automatically. All manual reconciliation activities need to be replaced with a simple and seamless solution that will identify and avoid fraudulent activities as well as eliminate manual/system integration errors in journals.

This is why there are significant and tangible benefits to implementing modern technology that helps increase speed and agility while ensuring accuracy and freeing up time for strategic and transformation efforts.

What needs to be done?

If we are to analyze the problems at the root of it all and suggest a simple and direct solution, that would be automation. By automating repetitive tasks across broker, invoice, and stock reconciliations, users can continuously perform data reconciliation eliminating the risk of manual errors. Businesses need to connect all their disjointed systems and bring data to one place, ensuring that the users have complete access to this data in real-time, on-demand, whenever they need it.

Identify deviations and isolate root causes

Businesses need to streamline and centralize the close process by getting rid of error-prone spreadsheets and track reconciliation progress in real-time while identifying bottlenecks in the close process. They also need to be audit-ready by achieving an accurate reconciliation that is fast, reduces risks and costs, and ensures regulatory compliance with a clear audit trail.

Close faster with automation

As simple as automation sounds, financial reconciliation is inherently complex and layered, and businesses need to close faster by eliminating unnecessary status update meetings to manually review account balances before closing the accounting cycle. This includes:

-Broker reconciliation: Helps match trades from transaction or ledger systems with broker statements as well as identify breaks and differences between systems, modules, and reports. with ease. Replacing manual reconciliation activities reduces end-of-day/month time pressure.

-Invoice and stock reconciliation: The process includes streamlining reconciliations and increasing control by matching payments, adjustments, receipts, contracts, stocks, and commissions. Avoiding errors, monitoring breaks and breaches across entities while automating complex grouping and calculations to reconcile trades, stocks, commissions, across disparate systems

Ensure transparency through a foundation of connected data

It’s common for traders, risk managers, finance specialists, and supply chain managers to spend inordinate amounts of time reconciling reports that are output by different systems. The time they spend manually reconciling reports could be better spent analyzing data to help make better decisions.

Despite having multiple tools and systems, organizations, both large and small across multiple industries, still struggle with a very manual, time-consuming, and tedious process of a day end and a month-end close. An automated solution could save huge amounts of resource power, reduce manual errors, and bring in tremendous process efficiencies.

Way forward

The faster pace in the industry today means that the businesses need to gain a more comprehensive and accurate view of the business. A single source of truth, greater visibility, and control over operations and risks essentially allow the business to gain from improved collaboration, data accuracy, and consistency throughout the organization. How fast can you move to automated and continuous financial reconciliation? In days? minutes? This is the question that needs to be answered.

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Learn how a leading sugar company reduced monthly reconciliation time from 15 days to a few minutes

For more details reach out to an Eka expert by writing to info@eka1.com

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Archives, Banking, Global Trade Daily

Financial Transformation Breakthrough: Are You Starting Too Big?

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In their article on the a16z blog, “The CFO in Crisis Mode: Modern Times Call for New Tools,” Seema Amble and Angela Strange call for a new round of financial technology (fintech) innovation aimed at the corporate finance function. They envision a future in which fintechs deliver intelligent solutions that rely on data capture across the enterprise. They also recommend ways that companies can make better financial decisions. It sounds like a worthy effort. As they point out, today’s CFO is expected to be highly strategic. But does that always have to mean undertaking Transformation with a capital “T?” Right now, it might be better to focus on opportunities for incremental change.

A recent survey of 225 CFOs at global companies found that nearly half have not completed any digital transformations. There are still significant efforts devoted to manual transactions in most finance departments—such as sending payments. Only a relatively small effort is going towards strategy, as Amble and Strange perfectly illustrate with the above image.

It’s not for lack of budget. According to the survey, the two greatest challenges to digital transformation are a lack of technological skills and internal resistance to change. Budget issues were the lowest-rated challenge.

To overcome those challenges, companies create titles like Director of Finance Transformation, Global Finance Digital Transformation, and Senior Program Manager for Finance Transformation. The people in these roles specialize in upgrading their businesses as simply and non-invasively as possible.

The Meaning of Transformation

If you look up synonyms for the word’ transformation,’ they include ‘metamorphosis,’ ‘revolution,’ and ‘radical change.’ The problem is that when people think about introducing new technology to finance this way, they tend to think about solving big problems at the top of the pyramid—for example, their ERP solution. When they’ve exploited that as much as they can, they move down the pyramid. They’re primed for Transformation (with a capital ‘T’) to be massive and arduous and disruptive, that they’ve missed the smaller, transformative opportunities that aren’t nearly as disruptive. I have yet to see a title like Senior Director of Incremental Change on LinkedIn, but maybe there should be. Incremental change is a lot easier, and it can have an outsized impact.

Those opportunities are found at the bottom of the pyramid, where people are mired in small, tedious problems that add up—especially as a company grows and adds headcount. Opportunities here tend not to attract the attention of the Transformation crowd because of their size. They’re not viewed as strategic. Automating payments is one such opportunity at this level, and fintechs are already on it.

There’s a huge amount of manual effort that goes into making payments. It’s not just the writing of checks; it’s enabling suppliers, making supplier data changes, reconciling, and resolving payment errors. Taking advantage of the right fintech software can reduce the effort it takes to maintain these projects—and with just a few hours of IT time.

There’s little or no integration required—all you need is a payment file from your ERP or accounting system to map to. The right fintech partner will do that mapping, as well as most of the project’s heavy lifting.

By adopting this technology, companies go a long way toward shrinking the heavy foundation at the bottom of the pyramid and redirecting that effort toward more strategic initiatives.

Regaining Control

It’s not just about reducing or eliminating manual transactions. It’s also about visibility and control.

Every finance leader is hyper-focused on cash management. Cloud-based payment automation shows you where your liabilities are and simplifies the payment process—one that only requires a few clicks of the mouse. You have full visibility into the entire payment flow, regardless of payment type, at all times. Payment data is consolidated into an electronic format, so it’s easier to present the information to company leadership, FP&A, and auditors.

It’s time to think smaller and start at the bottom of the pyramid. We don’t have to wait for the next wave of fintech innovation. Companies can cut the time and cost of making payments by about 70 percent by chipping away at the pyramid’s lower sections. There are also opportunities to relieve your team from the worry of payment fraud while turning accounts payable into a revenue generator.

Understanding What’s Available

Very few people know about fintech payment automation or really understand what it does for their back-office operations. Market penetration is still in the single digits, and most companies make payments the old-fashioned way—by sending payments directly through their banks.

It’s hard to believe change can be so easy. Perhaps it’s because we associate change with a need for a seven-figure budget, an army and consultants, and a year of dedicated time. But that’s not necessarily the case anymore. If I could sidle up to these Directors of Finance Transformation, I’d ask them: “Are you looking for ways to increase throughput and reduce risk without upending everyone’s current processes? Have I got a project for you.”

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Lynn Bancroft is a Relationship Manager with Nvoicepay and is dedicated to building strong relationships with enterprise customers.

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Why is the Supplier Experience Important in Payment Automation?

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It’s a difficult time to be a supplier. As companies conserve cash amid difficult economic conditions, suppliers are often the ones who feel the financial strain. Payment terms get extended. Buyers seek to renegotiate contracts to optimize their processes and adapt to new solutions. But then their suppliers are left out of the discussion until they’re presented with their marching orders.

Even though a company’s first responsibility is to its bottom line, it cannot afford to forget that suppliers are ultimately responsible for their ability to deliver revenue. It’s especially important right now that companies take care of their suppliers for the supplier’s benefit as well as their own.

Nightmare Scenarios

If suppliers don’t get paid in a way that works well in their processes and systems, it causes many nightmares for their accounts receivable team. Those nightmares can spread throughout the organization, causing stress and frustration. That frustration sometimes manifests as a conflict between buyers and suppliers. In my prior finance roles, I saw my fair share of suppliers who went to great lengths to make their dissatisfaction known, from verbally assaulting my unsuspecting colleagues to threatening lawsuits.

When suppliers go to these lengths, it’s because they’re desperate for action on the buyer’s part. In today’s environment, their distress is twofold. Payment amounts that seem negligible to buyers make a significant difference to suppliers. The constant flow of payments from AP to AR teams has slowed as companies conserve their funds as long as possible. The ebb and flow of this process has always been present—it’s how many companies do business. But this year, suppliers are feeling the strain more than usual.

Increased Collection Pressure

In 2001 and during the Great Recession, we saw that when the economy struggles, finance departments add aggressive collections specialists to their accounts receivable teams to collect overdue money from their customers, relationships aside.

In my experience, AP people are helpful, conscientious, and tough. They have to be, as the liaison between their company and its suppliers. Right now, they’re on the front lines, battling to conserve cash. If past downturns are any indication, they’re currently bogged down with calls, and morale is dipping as the number of irate callers spikes. What’s worse, that stress and emotional exhaustion can cause high turnover rates, which in turn leaves companies in a constant state of training new-hires—a drain on already-limited resources.

From a strategic standpoint, if you’re not getting payments to suppliers in a way that’s conducive to their operations, they could go out of business. They might also choose to stop working with your company altogether. To them, not all customers are ideal, and as more of them abuse the “customer is always right” notion, suppliers have to withhold the benefit of the doubt and act in self-preservation.

I’ve experienced both positive and negative aspects of the financial battle. On the one hand, I’ve negotiated with large retailers who ground businesses down to the thinnest margins. Smaller companies who rely on their enterprise customers to stay afloat are often forced to accommodate them, knowing that they are expendable and replaceable. Conversely, I’ve worked with a global manufacturer that valued its supplier relationships and would only offer early payment discounts and supply chain financing if they knew it would benefit the supplier. This company holds stress-free, decades-long relationships.

When suppliers don’t get paid on time, they may decide to deprioritize the offending customers. By becoming a nuisance in their process, your supply chain could feel the impact. Ultimately, this translates to your inability to generate revenue.

Buyers Care

Fortunately, more companies seem to value their supplier relationships than not. I recently participated in a third-party study to understand what potential payment automation buyers value the most about adopting such a solution. Supplier experience took the third spot after efficiency and fraud protection.

Supplier experience appears in our buyer persona research too. When I meet with customers, they want to ensure that we treat their suppliers well. It’s not only part of the company culture they wish to instill in all of their relationships, but they also worry about the impact on their AP team and the supply chain if something goes wrong. They understand any economic impact on their suppliers ultimately translates to higher prices.

Supplier Experience Now

Supplier experience has always been a crucial part of our value proposition as a payment automation solution, and why we continue to focus on building upon the improvements we have already implemented.

We have a dedicated team that supports suppliers on behalf of each customer. Because many customers share the same suppliers, we act as the main point of contact for all of them, which reduces the number of touchpoints a supplier must make to resolve payment issues or update contact or financial information. At the same time, we’re flexible. Some of our customers have invested deeply in their supplier relationships, and they still prefer to be involved in communications. In those cases, we don’t have to be the single point of contact. Suppliers can contact us or their customer’s AP team—whichever suits them.

For suppliers with hundreds of customers in our network—which is common in verticals such as automotive, construction, and technology—we even offer consolidated payments. For example, we combine all their incoming payments into one deposit and supply a data-rich file for easy reconciliation, right down to the customer and invoice level. This data is delivered either through our payment portal or by email.

Creating a Satisfying Experience

At Nvoicepay, we’re always looking at new methods for supporting customers and suppliers alike. It’s our goal to offer better payment products, faster payments, and more real-time data. Our most valuable report cards take supplier opinions into account, and we are proud to consistently receive satisfaction ratings above 98% from the suppliers who interact with us.

Buyers have immense power over suppliers, and sometimes they press that advantage hard. As a payment automation provider, we advocate for and support our customers—the buyers. However, we have found that supplier advocacy results in measurable success for all parties involved.

___________________________________________________________________

Josh Cyphers is the President of Nvoicepay, a FLEETCOR Company. For the past 20 years, Josh has managed successful growth for a variety of companies, from start-ups to Fortune 100 companies. Prior to Nvoicepay, Josh held leadership roles at Microsoft, Nike, Fiserv, and several growth-stage technology companies. Josh is a lapsed CPA, and has a BS in Economics from Eastern Oregon University.

Cryptocurrency
Archives, Banking, Global Trade Daily

2020 Global Challenges for Cryptocurrency

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Blockchain, Bitcoin, and Cryptocurrency are some of the terms that you must have heard at some point in your life. Especially in the past decade or so, cryptocurrency became the talk of the global economic forums. As many authorities began to question the future of monetary assets, money, and similar resources, cryptocurrency was among the more controversial topics.

In 2019, right before Blockchain could have seen a public acceptance phase, the revolution came to an abrupt halt. According to the Gartner Group, it was called ‘Blockchain fatigue.’ Other experts also jumped on the bandwagon that the fire of Blockchain technology and virtual currency, in general, has fizzled out. People thought maybe it was a phase after all that overstayed its welcome.

Pragmatically, the perspective is incorrect. According to recent statistics, the crypto market has an estimated total market capitalization of over $155 billion as of 15th March 2020. Considering these numbers and based on many financial institutions, powers might tend to disapprove of cryptocurrency, but they are in favor of Blockchain technology. The disruptive nature of decentralized currencies such as Bitcoin and others has led to a corresponding halt to its progress.

Let’s find out what more challenges do cryptocurrency has to face as the year 2020 goes by.

Challenges Hindering Cryptocurrency Growth and Acceptance Worldwide

The following are the challenges hindering cryptocurrency growth and acceptance on a global scale.

1.  Boom Phase for Blockchain

There is no doubt about the fact that where cryptocurrency is facing the challenge of surviving and being accepted by the masses, Blockchain technology has already surpassed it. The masses have widely accepted it, and big names of global trade specialists are now moving towards Blockchain.

The likes of Trade Lens by IBM and Maersk’s joint Blockchain investment in the shipping industry have welcomed the first-ever initiative taken. Many such mind-blowing initiatives are underway that involve Blockchain apart from the cryptocurrency domain. The challenge for crypto-enthusiasts here is that once the Blockchain technology takes off without crypto, it will be the end to it.

2.  Bad Imagery

Cryptocurrency, even after having gone through a boom phase, still has a PR problem. The terms associated are enough to conjure up images of cringe advertisements, low-quality campaigns, bad actors, get rich quick schemes, and criminals alike. For many people, cryptocurrency spells out new technology for age-old scams and frauds, which they don’t want any.

It may seem like a petty issue, given the magnitude that is a cryptocurrency and the Blockchain industry. However, this issue has hindered crypto for years since its inception and will continue to do so if no knowledgeable individuals came forward in favor of it.

3.  Blockchain vs. Authorities and Officials

US constitution is known worldwide for its protection right given to the democratic entity that the country is. Freedom of speech, access to information, and the right to form an opinion is protected by the officials to be open. However, on the flip side, when it comes to assets and financial resources, our system laws, governments, and authorities are designed to keep it limited amongst the powerful.

It is evident why crypto and Blockchain has taken over a decade to adjust in an economy where it had to tackle issue arising from the core of how our economy and society operates.

a. Lack Of Legislation

Digital currencies are decentralized virtual entities. They are purely digital products, and our authorities are not geared to handle this advanced technology. That is why the lack of legislation regulating these digital currencies and providing any sort of user protection has become a huge challenge.

The essential step that needs to be taken to reduce the risk involves educating and informing people about keeping their personal data safe. There is still a gaping void where insurance and dedicated legislation needs to be placed. But until that happens, awareness to safely exercise crypto is crucial.

b. Legal Obstacles

In addition to lack of legislation, the other big obstacle that stands in the way of cryptocurrency holders like Bitcoin traders and users is the challenge to spend their holdings. The untraceable nature of Bitcoin and its bad imagery as a mode of finance for mega criminal activities like terrorist attacks and the drug trade has made it quite scandalous in some countries.

Cryptocurrency is going through a period of abrupt halt where nothing much seems to be happening around the technology. Therefore, one can’t say for sure that what the future holds unless wide acceptability affects these legal obstacles standing in the way of crypto-trading.

4.  The Technology Is Still Immature

Cryptocurrency faces implementation obstacles beyond the lack of regulation and inactive obligations. The technology is an emerging one and is still immature in a system where other options are widely scalable and accepted over it.

One might think how a technology that has been out there for over a decade now can be new and emerging. The reason is that not much has been done to expand it.

a. Interoperability

Interoperability or the ability of computer system software to exchange and utilize information is a challenge faced by Blockchain. The technology has been divided to make multiple uses of it in different industrial domains, separate form cryptocurrency.

The technology needs to be made interoperable for the internet dedicated to Blockchain and crypto exchange. Until then, as long as people continue to go by illegal and wrong means of mining it, the technology is a threat to the economic system that opens its gates to accept virtual currencies.

b. Usability

This point cannot be emphasized enough how difficult it is to buy and sell crypto. We are way in the year 2020, and it is still as difficult as it was back in the day when Bitcoin was first launched. The mere participation in the crypto world requires a nerve-wracking validation that general people find unappealing.

The security procedures are so complex that they have become hurdles in crypto adoption as a mode of exchange. Most students look for personal statement help UK who have a high interest in cryptocurrency markets but unable to compose a compelling profile.

It is still a significant challenge for the industry to create user-friendly processes for buying, selling, storing, and using cryptocurrency securely without being called out for it.

c. Scalability

The generally acceptable country-wise currency exchange and even the banking transactions in different currencies have been made scalable and adaptable to the different rates. Cryptocurrency has years of effort to go until it finally reaches a scalability level that Dollar, Yen, Pounds, or Rupee have gotten to.

While interoperability may be a huge step forward to achieve that, that itself is a challenge to mitigate first, the system is so slow, and many dominant platforms for smart contractual applications are still under development. The processes face numerous delays and would require many scalable solutions to counter this issue of exchange.

d. Data Rights

Data has reached a level of becoming a digital asset at this point. Digital mafia considers data the real deal and a key to all things penetrable for the immense value it can hold for individuals and organizations. That is why one of the biggest lose loop in cryptocurrency is and will always be data rights and privacy.

The solution here is not just government protection of privacy and data for cryptocurrency traders. A dedicated system is required where such identities can capture and control their own data. And where there is a long way to go for an efficient framework, many initiatives have been taken and underway.

e. Security

Blockchain might be immature, but it is so far advanced that it is more secure than a traditional computer system.

However, many financial breaches, data leaks, and huge losses due to the system vulnerabilities have made it challenging for people to be satisfied with their transactions. At one point in time, $250 million were lost in a single transaction through QuadrigaCX exchange due to its deadly centralized business model.

In addition to it being not secure enough, these pieces of news make rounds globally. People have lost faith in cryptocurrency over time.

2.  Difficulties Of Bitcoin Transactions

In 2013, a crypto-enthusiast made a luxury car dealership in Costa Mesa, CA, for a Tesla Model S and paid for it in Bitcoin. Just under 92 bitcoins that were worth over $100,000 at that time, the deal was sealed and legally conceived. Considering this transaction and comparing it with the real-time value of crypto right now, the setback and skepticism surrounding Bitcoin have not done much harm to the growing estimation of it.

However, one cannot move past the real-time losses that have occurred given the Bitcoin transactions over the years. Spending Bitcoin is still a huge deal than hoarding it.

a. Countries Banning Bitcoin

Countries like Vietnam, Bangladesh, Bolivia, and Ecuador have prohibited crypto transactions. The state bank has outlawed it and declared cryptocurrency an illegal form of payment with a heavy fine due to violators. And even where it is legal, there are countless logistical issues.

Even in the United States, the Securities and Exchange Commission is having an ongoing debate if it prefers new regulations for the cryptocurrency market. If major countries with relevant economic forums stand against Bitcoin, it will become increasingly difficult for the crypto-type to gain acceptance from the masses as people continue to engage in it illegally.

b. Conversion Issues

Conversion remains a huge hurdle for Bitcoin vendors. As Bitcoin is not a fiat currency and is only limited to monetary value when converted to a cash equivalent, not many vendors go for its conversions for other cryptocurrency types. They are more willing to look for a payment method that delivers in Dollars or any other local currency. So that any exchange made for goods and products is made on consumer rates.

Such an implementation system is difficult even if bigger brands are willing to make it possible. No matter if a business sells cars or academic writing services, there is a lack of appropriate regulations to facilitate this type of exchange.

c. People Losing Money

Though Bitcoin regulatory protocol was not affected and not a single Bitcoin disappeared or got lost, people lost loads of money. The downfall and cases of transactional breakdowns are the major reason why cryptocurrency came to an unannounced halt in the first place.

There is a serious need to regulate and change the trading and mining protocols in Bitcoin and other cryptocurrencies. Only then can I expect the general public to safely indulge in Bitcoin mining and trading without feeling it to be illegal or a complete daredevil gambling moves on their part.

d. Volatility Of Prices

The volatility of prices also hangs in the balance of the potential of Bitcoin and cryptocurrency in general. Even though Bitcoin has gained significant community following over the years, there have been disputes among the community member for deciding the path it should take.

The compact user base has made the currency increasingly volatile. The stability expected concerning a centralized authority system to regulate it will increase once people start to accept it. The doubts about Bitcoin’s usage and the resistance by major countries to integrate the system and legalize it will continue to deteriorate the prices further.

Conclusion – The Stakes Are High

All in all, the results of no action being taken by major industrial giants, businesses, and government authorities have never been so altering ever since all these years of crypto trading and mining as it is now. The year 2020 is going to shape the cryptocurrency industry either for better or for worse.

Crypto networks like Bitcoin, corporations like Facebook, and nations like China implementing digital currency by the end of this year will be taking a step towards stumping Dollar as the record currency. It will, in turn, lead to the US Federal Reserve pushing ahead of the digital counterpart.

There is no denying that the stakes are high, and just like everything else, the future is unpredictable for cryptocurrency too.

____________________________________________________________________

Claudia Jeffrey is currently working as a Junior Finance advisor at Crowd Writer, an excellent platform to get assignment help UK. She is a self-proclaimed crypto-influencer. She has gained significant expertise and knowledge in this regard over the years and likes to share it with an interested audience.

invoice automation
Archives, Banking, Global Trade Daily

3 Reasons You’re Still Manually Entering Invoices (Even with Invoice Automation)

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The Accounts Payable process continues to require too much manual handling, even after decades of automation efforts. Even the best invoice automation efforts range from 70-90% data extraction accuracy, which leaves overstretched AP teams with a lot of manual data entry.

Why is this the case? There are a few limitations of invoice ingestion technology that inhibit its ability to extract information. Below are a few reasons why you still need to manually enter invoices.

Reason #1 – Invoices need to be in a structured format to be read accurately

Invoice automation can ingest 70-90% of invoices if they come in a standard layout, or are already digitized. However, according to Levvel Research, enterprises on average still receive 22% of their invoices in paper format, which can arrive folded, wrinkled, or get warped when manually scanned, making them difficult for invoice automation systems to read.

Even if the invoices are already digitized, they may not be in a consistent, structured layout that is suitable for general-purpose OCR – particularly invoices from smaller contractors such as catering services, janitorial services, or small businesses. Most AP teams will need to double-check these invoices after ingestion, or manually enter them into their system.

Reason #2 – Invoice automation uses general-purpose OCR technology

Most invoice automation uses general-purpose Optical Character Recognition (OCR) tools to read PDFs and images. These tools are designed to read text in any situation – a novel, a letter of complaint, or a newspaper article.

Just like people who are jacks of all trades but masters of none, technologies intended for general use face trade-offs compared to purpose-built tools. For example, because general-purpose OCRs aren’t trained to specifically read and understand financial documents, it often misreads a British pound symbol (£) with the number 6, or a dollar sign ($) with an S.

It also can’t factor contextual clues into its work. If an invoice is scanned upside-down, general-purpose OCR cannot understand or extract any information because it’s only familiar with a certain layout. Similarly, it would have trouble with wrinkled, creased, or unevenly lit documents. And just as a student can easily recognize an unfamiliar street address from another country, so too can context help a contextually-aware system identify the important attributes of an invoice it’s never seen before, like supplier and recipient, prices, quantities, descriptions, and so on.

OCR technologies specifically tailored and trained on finance use cases, paired with context-aware AI will offer much higher accuracy rates, making it possible to dramatically reduce the fraction of invoices that can’t be automatically read and entered.

Reason #3 – There’s still a lot of manual data entry

Although reducing manual invoice entry from 100 to 30%, 20%, or even 10% is fantastic, for an AP team with a high volume of invoices, 10-30% manual processing is still a large amount of work that drives up processing costs and time.

Depending on the form of the invoice, there can be dozens of different data points that need to be input into the accounting system. This doesn’t just cost the time and resource of the manual entry itself. It also introduces a lot of room for typos, errors, or missing information that slow downstream processing. Maybe someone mistypes an invoice number using the letter “O” instead of a “0” – but with this simple mistake, a unique invoice is created in the system, and now won’t be flagged as a duplicate. This risk is multiplied when there are several people involved in the process, increasing the processing time and delaying vendor payments – even with the most capable and efficient accounts payable teams.

This can increase the time it takes for invoices to be paid out, straining existing vendor relationships. According to a 2019 benchmarking study by IOFM, even many companies with significant invoice automation struggle with this: 53% of them paid at least 10% of their invoices late – very likely the very invoices that required manual processing.

The future of invoice automation

If the invoice process was fully automated, AP teams could drastically shorten their payment cycles and take advantage of early payment discounts for even better ROI. For a large enterprise, this would result in enormous savings. For example, imagine a company that processes $250M in invoices annually, of which 3% is eligible for a 2% early payment discount. Early payment would result in $2.2M annual savings.

Notwithstanding decades of progress and widespread adoption of automation technologies, it’s clear that invoice ingestion still has significant potential for improvement that can deliver huge business value from the automation itself and from unlocking benefits of a faster processing time.

____________________________________________________________________

Josephine McCann is a Product Marketing Manager at AppZen, the leading AI-driven platform for modern finance teams. 

financial
Archives, Banking, Global Trade Daily

Financial Technology Industry Poised for Growth ‘Now Now’ in Africa

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MS: Let’s face it – The financial market in Nigeria is frenetic and the country’s banking regulations have a reputation for being tough to navigate; what must companies such as NowNow do in order to be successful in a system that is quickly growing, but facing new challenges every day?

Sahir Berry, Founder and CEO, NowNow: It is true that the Nigerian market is dynamic, and it exudes varying degrees of energies depending on the prevailing market forces. The regulating institutions which are saddled with the responsibility of stabilizing the market and its players are doing as much as they can. However, a lot more can be done in areas of policy formulation, implementation, monitoring and evaluation.

NowNow as a company has been able to navigate its way amidst these challenges by strictly complying with Nigeria’s laws and seeking to engage with law-abiding organizations in strategic alliances towards the common goal of providing sound financial solutions for the populous. NowNow has heavily invested in research and the close monitoring of market trends and their evolution to allow for swift adaptation to what the market is offering at any given period.

Companies such as NowNow should continue to invest heavily in research that would provide quality information aimed at making sound business decisions.

MS: The National Information Technology Development Agency (NITDA) of Nigeria has basically said that the Information and Communications Technology (ICT) sector must be developed domestically from local manufacturing, through the use of Nigerian-made software, hardware and telecommunication products. Has this autonomously-led regulation helped or hindered your ability to keep up with market demand and industry growth, both inside and outside of Nigeria?

Sahir Berry: No. This regulation has not impeded NowNow’s ability to keep up with market demand and industry growth. Rather, what the regulations have done is to avail more of a level playing ground for institutions like NowNow to seek out talents in our various locations and coagulate them to build a super product that will serve consumers, irrespective of their locations.

As NowNow’s tech team is based in Nigeria and India – a good number of our products are developed locally, with an indigenous advantage and local acceptability. This brings about a sense of inclusion to all parties involved in the production process.

MS: How do you make sure that your agents have enough cash to dispense to physical Naira to NowNow users and how do you regulate and monitor their dealings?

Sahir Berry: Our processes are very strategically handpicked, standardized and monitored after thorough KYC compliance. There is a reasonable daily limit to all transactions made by either the agents or consumers. Agents are allowed to hold a daily imprest up to the limited daily amount for the day’s transaction. In some cases, the agents are conversant with the transaction trends in their area and they are able to project a new limit not exceeding the company’s limit for themselves. This is put in place to control the movement of funds from one party to another, and also to forestall money laundering and other financial vices.

MS: How has mobile banking changed the fortunes of not only Nigerians, but Africans across the continent?

Sahir Berry: Mobile banking has assumed a lead position in the banking space. The ease with which people transfer funds from one end of the country to the other can not be overemphasized. This has helped to create a new micro-economy and an ecosystem that has afforded many of the unbanked the access to cross the financial and market inclusion divide.

According to a report undertaken by our team of researchers in-country, it was discovered that financial inclusion in the area of payments and pension rose significantly in less than a decade. An appreciable growth was recorded, with digital payments moving from 22% in 2010 to about 40% in 2018, while pension rose sparingly, from about 4.9% in 2010 to 8% in 2018.

Despite the fact that the financial inclusion goal of 70% by the year 2020 via digital payment has yet to be achieved, tremendous improvement has been made, with over $90 billion worth of transactions executed in over 9 million deals across all fintech platforms by the end of 2018 in Nigeria.

The Nigerian electronic market grew by 19.30% and was worth $174 billion in 2018 alone and as of 2019, we have about 25% growth, worth some $225 billion. These developments have created more jobs via tech startups and also aided financial inclusion in all of its tenets (e.g. equal opportunity and community empowerment). Talented Nigerians are employed by these startups to help create more solutions that will benefit a target of reducing financial exclusion to 20% by the end of 2020.

MS: What do you believe sets NowNow apart from the competition? How is your mobile banking app different from the others that are featuring in Nigeria?

Sahir Berry: NowNow has risen above the stratosphere of mediocrity in the fintech space. We have strived very hard to distinguish ourselves from the rest, by providing the value proposition of being service-focused and customer-centric, and also proving a flexible solution to a myriad of financial challenges, subject to varying levels of market-testing and simulations, our goal well before embarking on production.

We painstakingly evaluate our end-users and potential end-users alike and work with what works for them. At NowNow, the focus is strictly centered on value creation.

Our model is tailored to the agent-consumer-merchant ‘tripod’, such that we have a model that suits all businesses. Our mobile app is a ‘super-app’ model that helps with airtime recharge, utility payment, insurance, health, entertainment, sports and many more.

We chose the brand name NowNow because we live the reality of the name. Everything can be done on our app, our ecosystem, at the snap of one’s fingers.

MS: Considering the ICT sector is entirely domestic, how does NowNow manage data protection for its clients?

Sahir Berry: NowNow has software components that are deployed on an AWS Cloud Platform, which ensures that inherent security is added to our payment platform.

We follow strict data policy procedures in order to keep our consumer information safe from unauthorized access, by making sure our IT systems are given access based on ‘Roles and Permissions’. NowNow as a licensed mobile money operator by the Apex bank in Nigeria. We went through a thorough audit from both internal and external auditors (CBN and the Bill & Melinda Gates Foundation). Adhering to industry best practices is a source of pride for us. We do not intend to relent on our efforts to lead, as even more stringent measures are being put in place to forestall data leak from any source.

MS: How will NowNow help its customers during the COVID-19 (coronavirus) crisis?

Sahir Berry: These are turbulent times for all. We have chosen to intensify our efforts in aiding smooth and seamless transactions, even in the face of varying degrees of economic ‘shut-down’ across the globe.

We have ensured that our staff works remotely to provide technical assistance around the clock for all of our agents and consumers. We are aware times like these mean many lean heavily on mobile money transfers and ‘cash-out’ transactions, as people are observing social distancing and trying to reduce physical contact in all facets.

We are abreast of the prevailing circumstances and we have evolved in various ways to meet these challenges. Also, we have lent our voice in the campaign on staying safe and staying indoors to help curb the spread of COVID-19.

MS: How will NowNow remain resilient through a period in which the coronavirus has sent global markets into chaos?

Sahir Berry: We know tough times never last, but tough businesses do.

We are resolute with our vision and we are going to keep devising ways to adjust to the pandemic’s ramifications towards recovery. Presently, we have adopted the remote working style, and we keep track of this and all other events on our platform electronically. This will be intensified, and more security measures will be put in place to guide against possible system compromise.