Increasing Rates and the CASS 7 Opportunity for Asset Management and Investment Management

Client money and CASS 7 with FCA rule and the Continuous Game Changing of Basel III

The FCA released its consultation paper regarding the loosening of restrictions on client monies in unbreakable deposits. This comes after ongoing lobbying from the asset management and banking industry to come to a commercial resolution that works for the industry as well as for clients of the asset management industry.

The result of the consultation, which extends investment in unbreakable deposits and money market products from 30 days to 95 days, provides a significant opportunity for the asset management and investment management industries, as well banks and funds, to benefit from these managers’ investment.

The industry lobbied for this change to address the stalemate that the 30-day investment limit in unbreakable deposits had inadvertently created.

Regulators require banks to have a liquidity coverage ratio (LCR) of 100% by either acquiring high quality liquid assets (HQLA) to cover at least a 30-day market stress or to reduce their intake of deposits from SMEs and investment firms.

However, investment firms were restricted to a maximum deposit of 30 days, which directly impacted on the bank’s LCR. The extension to 95 days should hopefully increase the banks’ appetite for cash from the asset and investment managers. Compounded with an increasing rates environment, asset and investment managers will hopefully benefit from actively managing cash, ensuring capital preservation through strongly rated banks’ deposits, as well as for immediate liquidity needs triple A money market fund compliance with CASS7 compliant.

However, to really take advantage of this extension, asset and investment managers must gain full access to specialised professional firms to provide appropriate advice and guidance.  Akoni is well positioned to assist these clients as our platform provides portfolio management for cash that complies with cash management, including both money market and deposits. Akoni has strong financial institution relations, and vast experience in governance and operating with FIs/ regulated entities, including a board with over 150 years’ experience in financial services. Our Chairman Duncan Goldie-Morrison was previously Chairman of Newedge, Head of BoA Global Markets, Director Icap and in the Risk Hall of fame; our Deputy Chairman Yann Gindre was previously CEO of Natixis London and NYC and our CEO Felicia Meyerowitz is an FCA approved person. We are also working with a leading law firm should clients require assistance in the set-up of the omnibus account relating to specific legalities.

FCA Link –

Akoni helps businesses make the most of their cash. Register free at and follow us on Twitter

Turning inventory into cash: Tips for SMEs struggling with late payments

Small businesses are the foundations for every economy – but they are also the most precarious of enterprises.  And it all boils down to money.

A great service, an iron will, and great customer loyalty are not enough to keep things moving if there’s a cash flow problem. This major issue is what determines whether an SME is on the brink of success, ready to scale or nearly bust.

Getting cash flow positive doesn’t happen overnight. Any investment made in products or workers takes time to transform into liquidity. Unfortunately – that’s one thing most SMEs simply don’t have – time to wait for payment.

Add to the mix the need to also pay for employee wages and other overhead costs and suddenly an SME without a decent cash flow runway is borrowing money to cover costs at high interest rates, which hinders the ultimate goal for any business – maximum profitability.

On average, SMEs have a 30-day cash reserve to cover cash flow problems. If payment takes 60 days or more, businesses can start to falter because they need twice the amount of reserves to cover costs and the next round of inventory – whether it’s physical or professional services. The slower the cash-to-cash cycle the more expensive it gets to run a business.

The culture of late payment is getting worse for SMEs and undermining the stability of economies. According to research conducted by MarketInvoice, over 60% of invoices issued by UK SMEs in 2017 – worth over 21 billion- were paid late – up 62% from the previous year.

An economy can’t thrive if SMEs cannot resolve this critical issue – they are worth too much to national growth and to the cohesiveness of communities. In the UK, SMEs account for 47% of all private sector turnover – a sum too big to ignore.

So, what are some of the ways to avoid such a scenario?

Do SMEs have any power over the speed in which they manage cash flow? Or is the act of chasing invoices part and parcel of what it means to run a small business?

While there’s no panacea to cure the late payment scourge, there are several ways to help minimize the cash-to-cash cycle without having to borrow finance or call in the lawyers.

  1. Don’t tolerate late payments

Extending terms to your customers to delay payment will give them permission to make late payments – a something you need to avoid from the very start of a client relationship. Offering discounts for early payments can also work well, and incorporating a late payment policy can dissuade payment delays.

2. Itemise and split invoice fees to encourage faster payment

Billing for fees or expenses can bloat a final invoice – so why wait until the very end to settle the total if the service has already been delivered? Itemise and bill separately for spending you’ve made for your client to complete the job the moment it’s done. This gives the client enough time to review and go through the charges- and enough time for you to resolve any disputes that can delay reimbursement.

3. Optimise supply and demand performance

Keep track of the demand of your inventory – don’t order too much or too little – and work closely with marketing teams to know when promotions and new campaigns will launch and potentially spike interest in your goods or services. This can help you prepare for demand and get the right amount of stock in place ahead of time. Planning and forecasting schedules for sales and operation planning goes a long way to managing cash-flow cycles. You would also be wise to consider investment in customer relationship platforms that keep track of their spending habits and preferences – as well as the performance of your competitors.

4. Trim overheads

Lean companies have the agility to deliver goods quickly and to achieve faster turnaround for payment. Take control of your end-to-end processes, and fill any gaping holes that are making it more expensive to run your operations and partner with any suppliers to integrate process and enhance your performance. Running a tight ship is important – but keep an eye on stock calculations to guard against your customer service and company brand.

5. Optimise order-to-cash process

Examine every step of the invoice process, and eliminate anything that is slowing down the payment cycle. Investing in digital invoicing, financing and payment platforms are other good ways to reduce time in order-to-cash processes as well.

The persistent and growing trend in late payments remains a critical issue for most SMEs, so preparing for the likelihood of slow cash-to-cash cycles is important – not only for the small businesses but for the overall economy as well, which relies on the billions that small companies generate each year to fuel its growth and prosperity.

6. Manage cash effectively

When holding cash, ensure that it is always deposited in accounts that will create the optimal returns for your cash flow circumstances. Managed porting of your cash holdings will leave you with cash available when you need it, but also generate returns from an asset that otherwise wouldn’t be working for you. For more information on how to manage cash portability effectively, contact Akoni.

Akoni helps businesses make the most of their cash. Register free at and follow us on Twitter


Can charities look at other areas of their organisation to generate more income?

I’ve spent the best part of the last twenty years working in charities. Most of this time, except for the last three years where I’ve been CEO of a charity (and still am part time), has been focused on fundraising – bringing in money so that each of the charities could further their mission.

I have first-hand experience of how difficult it is to generate income year after year. How challenging it is to think of the next fundraising idea… I still love this challenge. In the past month I’ve started a new job which has opened my eyes to new areas of potential income for charities.

I’ve just started to work at Akoni Hub – this blog post is on the Akoni Hub site so you might have guessed that. Akoni is a fintech business founded by one of the Trustees of the charity where I am also CEO. When I first heard about Akoni’s offering I immediately recognised the huge benefits it could have for the nonprofit sector.

Using Akoni’s innovative, digital cash management platform, charities, and in fact all businesses, can find the best interest rates for their risk and term requirements and spend the extra earnings on things that matter. All at the click of a button – without having to set up multiple bank accounts.

This video sums up the simplicity and the effectiveness of the platform.

So I guess this is fundraising. But it’s a different kind of fundraising – it’s hassle free. It can be planned to your requirements. It utilises resources (cash in bank) which are not bringing in income. It’s guaranteed. Making your cash (think of those reserves in the bank!) work harder for you could be the easiest fundraising in your portfolio.

I’ll be updating this blog regularly over the coming months with news, views and insights. Please feel free to get in touch with me at if you’d like to find out how Akoni Hub can help your nonprofit to maximise your cash.

Akoni helps businesses make the most of their cash. Register free at and follow us on Twitter


Open Banking Levels the Playing Field for SMEs and Brings Hope of a Better Future for financial services

It’s been a long time coming but we are entering an era of greater access and better financial services that will finally put the needs of customers first.

The catalyst of achieving this much needed and long overdue result is the culmination of big debate, endless lobbying and necessary government legislation. All this hard work will bear fruit on January 13th when the law of Open Banking comes into force.

For years banks have sat on the most valuable asset to any business: the infinite transactional and financial data of customers that essentially define individual’s tastes, preferences, budgets and – crucially – their requirements for building and planning their lives.

High street banks – reluctant to share their oligarchy of power, held on tightly to this data – unwilling to share it with others – or use it to enrich their consumer experience and put them at the heart of their business model.

With open banking, this power will be wrestled from the big incumbents and data will be available to third parties, SMEs and new digital players. This will lead to a better future for financial services, one that increases competition and creates a greater consumer experience.  More businesses will finally have a shot at delivering services that are tailored and relevant to individual customers.

Open Banking will also strengthen the role and influence of FinTech companies that have the agility and open APIs to make data sharing possible and to disrupt the status quo. We have already seen new banks like Starling Bank taking the lead, by creating partnerships with other FinTechs to create a customer rich ‘Amazon of Banking’ experience.

Together with multiple significant other sources of data being made available with consent and through API format, this will finally deliver financial products in a simple and meaningful manner, with automated prompts as companies or market products change, resulting in data innovation and improved financial outcomes, as well as removing the hassle for enterprises, saving time and money.

Key to this is delivering analytics in an easily understandable form without overwhelming businesses – leveraging the rapidly advancing data science technologies, machine learning and AI, as well as outstanding design and user experience is part of the market change we are moving towards.  While the UK and EU lead the way, there are early sprigs of global growth for international solutions.

Incumbents are not resting on their laurels. Many banks and financial institutions that make up the global sector are making impressive strides to capitalise on open banking, while also exploring valuable collaborations with new innovators that can help them harness the immense value of their data.

A great example is BBVA, which has embraced the digital movement and has set itself apart from other global offerings and is putting the client front and centre. The Spanish bank has nurtured the development of impressive FinTech firms – such as the digital ID startup Covault- while also making some canny acquisitions to keep it at the forefront of innovation that resonates with a new generation of consumers and keeps them agile and technology focused.  This includes the purchase of digital bank Simple.

Open banking also presents some challenges. Exposing large quantities of personal consumer data could increase the risk of cyber-attacks, hacking and identify-theft. The possible reluctance of customers to share their personal data could also derail the initiative. Educating consumers and gaining their trust around data sharing will therefore be crucial to the success of this initiative. So too the need for businesses to share information within a secure platform and for online payment providers to be scrutinised by the rigorous laws in place.

If all goes well, the developments of open banking – and the opportunities they bring to consumers– cannot be overstated. Banks will get another chance at creating better value-added services, while SMEs will finally have the access they need to deliver what their customers truly want and ultimately transform their consumer experience.  Additionally, corporates are also now included in the scope of Open banking, increasing pressure on banks to deliver improved services to the neglected business market.

We only hope that customers will see the value of it all to willingly share their data and banks will leverage their relationships of trust to deliver solutions of value to their commercial client base. With their consent, the blueprint for a better future for finance can be mapped out for generations to come.

Akoni helps businesses make the most of their cash. Contact us at for further insights and questions. Register free at and follow us on Twitter

WHAT is MiFID II and How Will It Impact SMEs

MiFID II (Markets in Financial Instruments Directives II) is a law that comes into force today – and it’s going to radically transform the way assets are traded and how money is managed for investors.

For those that don’t have the time to read the 7,000-page document, here’s a quick summary of the new law– and why it could – inadvertently – make it harder for small and medium businesses (SMEs) to grow.

MiFID II is the EU ‘s second big initiative to regulate markets and to create new rules on how information is shared, prices are set, and how brokers pay one another.

The regulation serves a noble purpose – to democratise financial markets and to make it fairer and more stable.

The legislation is broad and far-reaching, and extends to any institution trading European securities – no matter where they are based in the world.

This regulation is a follow up to the first MiFID law, which came in 2007 and served to harmonise rules for stock trading. The financial crisis hit a year later and threatened the future outlook of the sector. Anxious policy makers worried about another financial meltdown, decided that more protection was needed to safeguard investors and to help create a more sustainable financial services model.

This concern led to the birth of MiFID II, which extends the harmonisation of rules beyond cash equity markets to include commodities, bonds and so much more. The law not only makes markets more transparent, but also regulates trading behaviour and lifts the curtain on the actual cost of trading and investing in stocks for those that are buying them.

At present, many securities are still traded in broker-to-broker deals, which is opaque and investors can’t determine whether they are getting the best deals. MiFID II will change this scenario while also ushering in a new era of open and regulated platforms. Automated trading currently makes up more than half of all trades and several major flash crashes have been blamed on these computer algorithms. To protect investors, the platforms must be registered with regulators and to include circuit breakers to shut them down.

It’s not just automated trading platforms that will be impacted by regulation. Research once provided for free by financial institutions, analysts and paid for by trading commissions will need to be paid for by fund managers and other third parties, to avoid conflict of interest.

This has sparked some concerns for SMEs, as MiFID II will indirectly impact the smaller end of the market as research could focus on the bigger sectors and companies. Brokers will probably avoid covering small-cap SMEs, impacting those firms’ ability to access investors.  At the same time investors will be reluctant to invest into SMEs with low level of research available or reduced quality. Long term, this could undermine the ability for these businesses – the bread and butter of every economy- to scale and grow.

While MiFID II has been created with the best of intentions to stabilise the markets and offer greater protection for investors, more needs to be done to support the SMEs that could potentially be shut out from the benefits that MiFID II aims to create.

Akoni helps businesses make the most of their cash. Register free at and follow us on Twitter