HRH, The Duke of York, visits Akoni’s new home at Accenture’s fintech lab, the Trampery Republic!

The Trampery is a new shared workspace for creative and tech start-ups, which Akoni has the pleasure to be part of due to being selected amongst Accenture’s top 5 in the Retail banking stream for the Innovation Lab. Akoni is an innovative platform for ensuring SMEs are making the most of their cash, in an easy and simple manner, and was selected as a technology driver to improve financial returns for businesses.

As patron of the Trampery, HRH The Duke of York, came to meet some of the young businesses that are now based there. Among these are the various creative sectors as well as participants from Accenture’s largest fin tech innovation lab yet, including Akoni.

HRH was very impressed and said: “it’s fantastic to see fin tech alongside Art-Tech and so many other things. The number of skills melted in an organisation like this is hugely beneficial not just to the companies who are inside the building but to those outside too.”

Akoni is excited to be part of this project and we are maximising our time working with other innovative entrepreneurial start-ups as well as the incredible professional lab team.

See the full article in The Warf http://bit.ly/2kScHPg

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Fintech Comes of Age

Significant milestones in the financial technology industry have been reached recently, marking a new era in financial growth and technological expansion: “FinTech” has officially come of age.

This also marks a shift in the financial habits of the average startup or SME owner across the board, and the world. Technology has opened up innovative and cost effective ways of managing business, and startups are embracing the range of FinTech tools available. The cloud has become more vital to SMEs, having thrown the doors wide open to new ways of financial management and access to funding options.

In the UK Business to Business sector, the latest findings show that increasing numbers of small- and medium-sized businesses are taking their financial management and investments online. Researching the data indicates that there are significant increases and steady growth in subscriptions to cloud-based accounting products, startup finance and digital procurement tools.

The UK has become a hub for innovative FinTech startups in recent years, as highlighted in the recently presented report by Ernst&Young. In 2014, the company were commissioned by Harriet Baldwin, the then Economic Secretary to the Treasury, to research benchmarking in the UK and compare it to other selected international FinTech ecosystems.

The findings were that the UK is a global capital for “FinTech”- the report estimating that in the UK FinTech sector had generated £6,6bn in revenue in 2015 – and it had also attracted £524 milllion in investment. It also employs 61,000-plus people.

The main reason behind this is that the UK’s world-leading FinTech policy has been forward thinking and most beneficial to the sector – it includes supportive regulatory initiatives, tax incentives and government programmes. The report interestingly goes on to say that the UK was second in the world to the US in terms of its availability of technology, financial services and entrepreneurial spirit – and first when it came to access to financial expertise.

Here are some examples of real milestones reached in the last few months in the UK B2B FinTech industry:

Five years after being founded TradeRiver, a leading online lending platform announced that it had reached a significant milestone – it had now lent over £100 million to high growth SME businesses in the UK.

Richard Fossett TradeRiver
TradeRiver Finance’s CEO Richard Fosset plus.google.com

In five years, TradeRiver has funded over 1,600 transactions – and many of these were purchases from suppliers overseas. TradeRiver has also funded goods or services in 26 countries around the world.

Another impressive UK-grown small business loan player is Funding Circle, which as facilitated more that £1,25bn of loans to 16,000 UK based businesses since it started in 2010. The company has diversified significantly – now lending to institutions, national governments and international bodies – and of course individuals. A report by the Centre for Economics and Business Research, found that 72% of small businesses found Funding Circle’s process faster than competitors. Since conception, Funding Circle had helped start up 15,000 new businesses, and this mean about 40,000 jobs have been created.

Globally the service sector of financial technology is booming:

QuickBooks have now got 1.5 million subscribers linked into QuickBooks Online, according to Intuit. Small Businesses that are new to the Intuit franchise make up than 80 percent of QuickBooks Online customers. This, said Executive Vice President of Intuit’s Small Business Group Sasan Goodarzi, reflects the company’s commitment to small businesses, and pointed to analysis that predicts that 78 percent of small businesses across the globe will be part of the cloud by 2020.The company has been providing it’s innovative service for just over twenty years.

Here are a few financial technology tools that are enjoying their well-deserved popularity:

Xero, main competitor to QuickBooks, is hugely popular and for good reason, it having a simpler, easier approach to small business accounting. Started ten years ago in Wellington New Zealand, it has grown to a massive 700,000 subscribers and employs 1400 people

Freshbooks, which was started in Toronto in 2003, claims that it has been used by 10 million people who have processed billions of dollars through it’s simple and easy-to-use business management tools.

More traditional but the market leader, Sage, formerly Sage Group plc is the largest supplier to small businesses, and has 6.1 million customers worldwide. It currently has offices in 24 countries. Sage has 6.1 million customers and 13,400 employees across the world. They have increased their products to include integration with payroll and pensions auto-enrolment. The new challenges faced by SMEs are particular to regulation and compliance, and the company has been working to incorporate multiple requirements across the various spheres of business regulation.

All proof that the digital age is upon us and there are no limits to technological innovation. This is a brave new world to be a part of indeed, and a daunting one if you are a business owner looking out over the myriad of financial management tools and startup funding options available. SMEs have never been so close to solutions for their every need.

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British SMEs: Beating the Brexit Blues

SMEs were the focus of much attention from both sides of the Brexit campaigns, and there is no surprise why. These businesses are the bedrock – the wheels and cogs – that keep our economy going.

According to government figures, SMEs accounted for 99.3% of all private sector businesses at the start of 2015 and 99.9% were small or medium-sized businesses. SMEs employed 15.6 million – 60% – of all private sector employment in the UK, making their contribution to the economy enormous. Did you know that the combined annual turnover of SMEs was £1.8 trillion or 47% of all private sector turnover in the UK? Rather impressive stats.

As a previous SME owner myself, I must confess that I was absolutely gutted when the Brexit referendum results were revealed, and wondered how many of my fellow SME business owners would be affected by the predictions of a full-on recession.

But what is heartening news is that there have recently been some surprisingly upbeat post-Brexit surveys and barometer results published – it seems that SME owners are rallying against the forecast economic doom and gloom:

According to the September 2016 Owner Managed Business (OMB) Barometer from Bank of Cyprus UK, over half (51%) of business owners and small businesses expect revenues to increase in the next 12 months, with a mere 15% disagreeing.

Commenting on the research findings, Nick Fahy, Chief Executive of Bank of Cyprus UK said that despite the general post-Brexit blues, the UK’s business owners and small businesses remain optimistic about their prospects. There was an immediate reaction to the Brexit news, but that the nation’s vital bedrock of businesses – the shopkeepers, family-owned businesses, the small and medium business owners and the independent traders have remained stable. It was vital that the UK government kept the SMEs in mind when negotiating the best deal with the EU, as to fail to do so would let down the British people.

What was quite noteworthy in the survey, was that 55% of small business owners did not think that the UK’s Brexit trade negotiations would necessarily boost key activities – sales, export, commercial opportunities, customer base and talent pool – for their businesses. It seems that many businesses are UK based and UK focused, while others may be trading/ or planning to expand their business to with non-EU customers.

One could say that the massive fintech revolution that has taken place in the UK could be spurring these statistics on. New York, Singapore, Hong Kong , Australia are the fintech hubs outside the UK, and may be making trade with the EU less vital in that sector.

If the UK government emphasized the positive advantages of trading with the UK, creating incentives such as an attractive tax regime, and geared-to-growth regulations, this would certainly drive this industry forward and set the UK up as a more competitive option than Europe to international traders and investors.

Another huge bonus was that, according to the same survey, a large portion of SME owners (45%) believed that the UK economy was in good shape, with a 28% saying they didn’t agree.So much for the doom merchants and nay-sayers. The overwhelming feeling is that British SME owners are doing what they are best at, and simply carrying on regardless, making the best of the situation.

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So far, so good. Brexit is not having quite the negative effect we thought it would on SMEs. Google Images

In another recent survey  conducted by CitySprint, that over half the SME businesses that thought that their businesses would suffer post Brexit have now changed their minds, and believe in a more positive outcome. Two-thirds of the respondents reckoned they were in a better place than they were this time last year.

The fall in the pound may have resulted in better exporting deals for SME that trade internationally. This has encouraged overseas buyers to snap up British-made goods, because they are available at a lower price.

City AM also recently reported that two large banks – JP Morgan and Morgan Stanley – had adjusted their outlook to a more positive one, following news that the services purchasing managers’ index (PMI) soared from 47.4 to 52.9 in August. Results below 50 indicate economic contraction – and two consecutive contractions indicate a technical recession. This recent result was an unexpected outcome – and one that showed that the economy is much more resilient than expected.

The two Morgans have now revised their expectations for the UK economy, Morgan Stanley saying that it can now predict that the UK will avoid a technical recession, to grow by 1.9 per cent this year. The bank had previously foreseen the economy shrinking by  0,4% in the third quarter, but it now foresees growth of 0.3 per cent. Which is a very positive result after all Britain has been through.

With more than half a million new businesses being created every year on this little island, we are right up there with the best nations in the world in terms of resilience, innovation and enterprise. As the Brexit blues clear, the doom-mongers are being pushed to the sidelines. Backed by more-positive-than-expected predictions from the financial sector, SMEs have every right to feel buoyant and bullish about the future British economy.

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Inspiring Women in Tech Series #2: Gemma Godfrey

Gemma Godfrey is a woman who has it all. She’s got fans across the world who hang on her every word across various media platforms for the latest investment advice; great smile, great hair (which has it’s own Twitter account); a husband who is a film producer and a beautiful son, who is a regular star feature in her Instagram posts. Now she also has a FinTech startup called Moo.la, which was (no surprise here) recently named as one of the top ten FinTech companies to watch this year.

Godfrey started out at Goldman Sachs as an intern, worked her way up through the corporate world, working for GAM as a Fund Manager, as Chairman of the Investment Committee at Credo Capital and Head of Investment Strategy for Brooks Macdonald – all the while contributing on Sky Business News, CNBC, the BBC and writing for Huffington Post, The Telegraph and The Times and various other publications. She was also Founder and Editor for The Investment Insight, giving online insight into the how’s, who’s, when’s and why’s of investing for five years. She is Board Advisor to Templars and CLU School of Management.

Godfrey was named among the “savviest” on Wall Street by the Wall Street Journal, the City of London’s “Commentator of the Year”, and most popular Business Influencer on social media in the New York Shorty Awards in 2014.

You can see why she’s popular – just take the topic of her December 2013 TEDxWallStreet talk, entitled How to Kiss. “Today I’m going to teach you to kiss. At work. On TV. In life or death situations. I’m going to show you how. And then when we go our separate ways you’re going to kiss with other people more than you’ve ever done before!”

It was a business talk, of course. Kiss stood for Kiss was Keep It Simple Stupid, by the way.

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Gemma Godfrey speaking at TEDxWallStreet, 13 December, 2013: “How To Kiss”

Watch here : Gemma Godfrey – TEDxWallStreet, 13 Dec 2013

Her advice for tomorrow’s leaders? In an article by Marisa Nadolny in her article, Godfrey’s Law of Success: Follow your Passion, the answer is,“Follow your passion, and success will come more naturally… People try to funnel themselves into what they think is an appropriate place,” she explains, “but it’s better to follow what they’re good at. A lot of people will force themselves to do something they think they should do, with little success.”

One of last week’s StrongJones blogs Inspiring Women in Tech Series #1: Lady Judge buys into Tech Startup featured British and American boardroom lioness, Lady Barbara Judge, CBE, who said that she regretted not having studied maths or science at University, as she felt that she had been playing catchup her whole life. Lucky for Godfrey, her passion was science. “Having a scientific background, you’re used to taking the complicated and complex and presenting it in an accessible way,” says Godfrey. Possibly one of her most valuable skills throughout her career.

Godfrey says it was a “pure love of the subject” that fuelled her interest in physics at a young age. She credits her father with cultivating her scientific curiosity – she holds a degree in Quantum Physics from the University of Leeds.

Selected by the BBC as one of the world’s Top 100 Women, the unstoppable Godfrey was profiled by the Sunday Times on the ascent of women in the boardroom – something that is under the spotlight right now, in the British banking and finance industries.

Jayne-Anne Gadhia, CEO of Virgin Money, was asked by the then Economic Secretary to the Treasury, Harriett Baldwin, to lead a Review focussing on the representation of women in senior managerial roles in the Financial Services industry. When the Review was released in March this year, it showed that in the UK, “New Financial’s sample of 200 firms active in UK Financial Services showed an average of 23% female representation on Boards, but only 14% on Executive Committees. Only 50% of women, compared to 70% of men believe they have an equal opportunity to advance regardless of their personal characteristics or circumstances.” Pretty appalling stuff.

Courageous women like Gemma Godfrey are pure gold. We couldn’t have a more inspiring person – who literally seems to fizz with eneregy and passion – to shakeup things, and spur on the aspiring FinTech women out there.

“The big thing that motivates me, is this feeling that you want to have an impact, you want to make a difference,” says Gemma, “I’ve always felt like that, wanting to work in smaller teams and be able to actually shape something. … I’ve realised I’ve spent the last few years waiting for somebody else to do this, and I thought I would join them! But there aren’t really that many people out there who’re doing this. This is a great opportunity to do it myself.” @gcgodfrey

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How SMEs are using FinTech and cloud tools for growth and profitability

There is much talk about the disruption of FinTech innovation, and not much in terms of understanding the business impact. In particular, small and medium-size enterprises, who can benefit in terms of financial leverage, use various online tools to increase productivity, streamline processes, improve reporting and the business balance sheet. In the age of digital innovation, FinTech is providing solutions that can benefit small enterprises as much as it does the retail market. We aim to present a few pragmatic options for you to explore.

Business Loans

First and foremost, following the banking crisis there was a major contraction in credit, hitting small and mid-size enterprises.  There is a new paradigm shift in Small Business Finance, including a few examples below:

  • FundingCircle provide a 30 second eligibility check, with no impact on your credit rating, and has a £60million facility via the government-back British Business Bank.
  • Ratesetter is a peer-to-peer lender offering business loans, which are supported by the government’s British Business Bank. Business loans vary from £25,000 to £1m and it says it can make cash available within 48 hours. The duration is six months to five years and can be cancelled within 14 days without penalties being incurred.
  • Kabbage provides small same-day loans of £1,000 to £40,000 and provides greater real-time business analysis by linking your PayPal and eBay store account as part of their credit analysis.

Some business owners are also concerned with providing a personal guarantee, one of the requirements of most lenders. A new type of insurance can offer protection for this, called PGI Cover.  Should your Personal Guarantee be called upon by the lender, the Insurance will be in place to pay out the indemnified amount which may clear your liability in full.

The British Business Bank (BBB) has also issued a “Business Finance Guide” – from Startup to Growth, providing insight into the process of raising funds. The Bank is aiming to increase SME growth through leveraging traditional and alternative lending options. SMEs are critical to the economy, with 65% of net job creation, and research has found that if the government with institutions such as BBB fail to increase awareness of alternative sources of credit to fuel growth, this could impact the economy to the tune of £20 billion as traditional lenders continue to withdraw from the market.

Payments

Receiving payments for goods or services rendered should be a simple process, however in many cases the set-up and implementation are confusing and time-consuming. There are various solutions which aim to deal directly with this issue relating to SME challenges. Businesses can produce invoices by digital accounting and these can be directly linked to automated payments platforms, like the popular PayPal, and tracked and updated accordingly. Other examples specific to business:

  • Ixaris offers payment solutions for a variety of sectors, including financial services and travel. The firm offers “white labelling” options for financial services firms, with their own branding using Ixaris technology. Ixaris facilitates payments to suppliers around the world, and has a “plug and play” API option. It allows firms to receive card payments from Visa and MasterCard.  There are also multiple opportunities for rebates for firms that meet a quota due to the high level of transactions they complete.
  • Another full-service provider is Wirecard – a check-out package for an online shop, credit card acceptance and processing for merchants, as well as SEPA direct debit processing. For those without a debit or credit card, Wirecard offers the facility to make payments directly through a bank account, increasing the amount of people who can purchase your products using Wirecard facilities.

Other companies include Square, a U.S based company who recently IPO’ed, has a range of payments offerings and IZettle, both of which have downloadable software and also offer hardware devices for card payments. Both companies are currently offering free card readers with certain conditions attached.  The software is free to download and provides  the point of sale that takes care of digital receipts, inventory, and sales reports and provides valuable analytics and feedback.

International Payments

Banks currently regard the SME market as niche and don’t properly understand their business needs. International payments are especially difficult and complex for SMEs with hidden fees, poor rates and cumbersome processes. SMEs should definitely consider alternative global money transfer companies instead of using their bank as it is an area of significant cost savings. While the sites are secure and protected, some business owners prefer not to disclose any financial information online – in this case, it is recommended to approach a private FX broker. Always compare rates and fees to your bank, in most, if not all cases, the average business will benefit from significant savings.

  • MoneyMover provides a free international payment review as part of their business assessment, and manages a platform with reporting and analytics and transparent pricing, tailored to your business.
  • The most newsworthy platform, Transferwise, also offers business services. The company manages to offer its services so cheaply by matching up payments with those going the opposite direction using sophisticated software. Transferwise has a simple to use platform and have a devoted fan base in the retail market.

Accounting

Most SMEs do not have full-time accounting functions, and keeping accounts up-to-date can be time-consuming and often take valuable resources from taking care of the business. There are a few alternatives which provide easy to use, intuitive and reasonably priced digital solutions, which integrate and auto-update from bank statements.

Xero Xero’s popularity is based on having a simpler, easier approach to small business accounting.  Instead of forcing you to use complex accounting functions if you don’t need them, Xero streamlines things

  • Xero’s popularity is based on a simpler, easier approach to small business accounting and streamlining processes. SME businesses have a significant advantage using cloud based platforms due to the ability to easily migrate and scale up.  Xero provides functionality for different stages of business growth and integrates with various other systems including payroll; and streamlines processes if you work with an accountant.
  • Freshbooks provide bookkeeping services, including invoicing, expensing, tracking and reporting and is available on a trial basis. Additional functionality includes automated payment reminders to follow up with late payers, another key component to keep cash flow fluid.

The traditional players in the market are also constantly improving their offerings and these include:

  • QuickBooks aims to simplify business life for consumers, small businesses and accountants with products that are easy-to-use and intuitive. These products focus on helping small businesses manage their money, pay their employees and get paid faster.
  • The market leader, Sage, has increased their offering to deal with the various pain points of businesses, including integration with payroll and pensions auto-enrolment. The new challenges faced by SMEs are particular to regulation and compliance, and the company has been working to incorporate multiple requirements across the various spheres of business regulation.

With the U.K government’s introduction of the Enterprise Bill, the government aims to reduce SME costs by $10 million per year, hastening payments with cash as the key commercial component.  This support is in the event of payment disputes and early intervention to enable faster insurance claims payments. The Prompt Payment Code (PPC) sets standards for payment practices and best practice and has been updated and strengthened to provide an improvement in the payment culture.

What are your experiences using new FinTech products? We would love to hear from you, please post your comments or or get in touch.

Next in the series:

  • The new Challenger Banks and improving working with SMEs
  • Big Data – what does it mean for the Small Business
  • Can Small and Medium business benefit by purchasing insurance coverage online?

I am passionate about technology and innovations in financial services adding value to Small and Mid-size business in a practical way.  I work as a co-founder at StrongJones, aiming to bring innovation to the key asset within all enterprises – cash. Follow me on @Feliciatedx

Akoni helps businesses make the most of their cash. Register for free at AkoniHub.com

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