In 2017, Aldi announced they were planning on becoming a major competitor in the US grocery store market, investing a mind-blowing $3.4 billion into current and future American endeavors. If you don't have an Aldi near you now, one might be popping up soon. So, what can you expect? Here's the fascinating history behind this up-and-coming US chain…

A recent report form PwC concludes that UK investment in InsurTech in the second quarter of 2017 surpassed that of the previous three quarters, increasing to $290 million (£218m) in the first half of 2017, compared to $9.7 million (£7.3m) the year before.

Global investment in InsurTech by global insurance firms, reinsurance firms and venture capital companies surged 247% to $985 million.

Mark Boulton, Insurance Sector Lead at Fujitsu UK & Ireland has this to say to Finance Monthly:

“This year has been phenomenal for the insurtech industry in the UK, and these latest figures reflect it. Increasingly, we see the market gaining momentum, and the amalgam of data made available is reshaping the industry in an unparalleled fashion. Investors are coming to much better understand the values that lie within a connected world, from more dynamic customer relationships to personalisation and need for tailor-made solutions.

“Fujitsu’s recent research looking into the UK’s digital landscape showed that nearly 40% of people want the UK to make faster digital progress. As such, insurers need to keep up with the rapidly changing dynamics and unlock the power of technologies.

“Although many insurance companies have digital on their radar, it is important for this industry to take advantage of digital innovation by not only creating savvy online apps and improving the digital elements on the consumer-facing side, but by also implementing digital throughout the business. This will help insurers not only save more, but also become more integrated and process efficient. The amount of deals and investment in the past year are a vote of confidence and now is time UK claims its role as a global insurtech hub.”

While many younger drivers have been using so-called black box car insurance, telematics has yet to become mainstream. The FT's Oliver Ralph test drives a telematics system to see how it affects his driving, and whether it could be the future of car insurance.

Sopra Banking Software uncover why it is that men still dominate senior positions in Tech and why men are out-earning women, even in equal positions.

The UK gender pay gap won’t close until 2069 unless measures are taken to combat it now. That’s another 53 years that women will continue to pay a higher price for being female.

A study by McKinsey Global Institute found that in an ideal scenario, where female roles are identical to those of men, “as much as $28 trillion, or 26%, could be added to the global annual GDP by 2025.”

Gender Disparity in the Workplace

Laura Parsons, Senior Manager at Deloitte, shares these findings: Last year, girls outperformed boys in every science, technology, engineering and mathematics subject, and even though innumerable top-paid jobs demand capabilities in STEM subjects - 70% of women in the UK with a STEM qualification aren’t working in compatible fields.

What is it that pushes women out of these industries, and how do we secure them from entry level to senior positions, and offer support in pursuit of entrepreneurial ventures?

Unsurprisingly, McKinsey Global Institute found that 38% of women in the technology field feel that gender discrimination staggers growth and chances for progressing their career in the future. 60% of these women attribute not wanting to be a top executive to excessive stress and pressure. Of all the fields researched, these figures were among the highest.

Melissa North, head of human resources at Sopra Banking, shares: “Businesses are not taking adequate measures to ensure women feel they have the reassurance to pursue a work-life balance, including starting a family - and therefore women don’t succeed long term. Feeling like they must compromise having a family to have a career is one of the leading reasons women don’t stick around to get moved into leadership roles.”

Pip Wilson, entrepreneur, investor, and co-founder of amicableapps, adds: “Ultimately, the thing that will completely level the playing field is an even split between men and women in childcare.”

As a parent, Pip Wilson shared the domestic workload with her husband to be able to focus on the success of her business ventures. This often meant her husband would stay home while she worked, and vice versa.

Something as simple as employers providing or supporting childcare initiatives for employees could prove to be one of the most important incentives for females in the workplace.

Tech: A Growing Sector for Women

Entrepreneurs and business women, such as Melinda Gates, wife of businessman and philanthropist Bill, see the value of using tech to their advantage: “To me, the tech industry is one of the best places to work right now. If I was working again, I would work in biological science or tech or a combination of both. Every company needs technology, and yet we’re graduating fewer women technologists. That is not good for society. We have to change it”.

Women should view this as the best time to enter the tech market: more people are graduating from tertiary levels than ever before, and women are outperforming men in STEM subjects.

As businesses become aware of what this lack of gender representation means for their overall success, the more women will become empowered to hold positions they didn’t before.

It’s tough to identify whether the gender bias is due to subconscious views during the recruitment process, or from the ongoing cycle that sees women receiving lower pay and fewer promotions, thus resulting in women keeping themselves placed below men through these continuous actions. The social constructs for gender roles will take time to be broken down.

There is good news for women, however. Studies show that those who ask for the same salary as men, in the same role, tend to get offers in line with what they are asking.

What Should the Workplace Look Like?

Take gaming for example: Women make up only 22% of game developers, yet represent 50% of the people who play video games.

As a business woman and consumer, Pip Wilson believes that people inside your company need to reflect the people you’re trying to serve.

Businesses need to recognise the responsibility they have to women and gender equality in the workplace, but also the possible benefits that come with hiring from a larger pool of talent, that includes women:

- Increased labour supply
- Higher incomes
- Productivity gains
- Reduced poverty in developing countries
- A unique angle and approach to problems, due to a different atmosphere cultivated by women

Once a culture of diversity has been adopted and is naturally functioning, there will be a good discrimination in place – one that filters and keeps only the best for the job, regardless of gender.

How Companies Can Address the Gender Disparity:

• Provide practical career insights to educators and policymakers
• Create more support for women returning to work
• Share detailed information on the gender pay gap with employees and the public

Melissa North, Head of HR at Sopra Banking Software adds that networking is important, “Having a belief and not doubting yourself is important as a woman climbing the business ladder as well as making yourself visible to other women in the industry and talking about your struggles. Not chasing your dreams of going into a new field because of commitments attached to gender shouldn’t hold you back.”

Tips for Women in Tech:

Talk to others: Fight the temptation to ‘do it yourself’, and get help and advice from wherever you can

Find mentors and those who have been in your shoes before: male or female

Use tech to your advantage: A study done by Accenture details how mobile tech has made it easier than ever to balance work and home life. Exploit the connectedness, making use of mobile apps and cloud services. A successful business no longer requires a 9-to-5 in an office

Have confidence and trusting your abilities: Many women tend to believe they fall short in the skills needed to thrive in business. A lack of confidence means avoiding intimidating tasks or new disciplines, more so than some men, who are more likely to try

At a time when the tech industry and business overall is dominated by males, women should take this opportunity to get a head start in whatever they want to achieve, using the various tools available in a changing world. Businesses should recognise this as an opportunity to empower women, and to attract the best new talent, regardless of gender – as it’s crucial to growth.

(Source: Sopra Banking)

Technology is often remarked as evolutionary ammo, and the statement stands just the same for the growth of businesses. Finance Monthly below hears from Frédéric Dupont-Aldiolan, VP Professional Services at Sidetrade on the latest and upcoming innovations that have hit 2017 hard.

Artificial intelligence, robotics, machine learning and the Internet of Things: 2016 stood out as a year marked by technological development and significant advances in several fields, not least that of connected, driverless cars. Against this backdrop, a clear trend is appearing: the growing influence of robotic technology in daily life.

In 2017, we have seen more promising innovations, here is my review of the top five things we are seeing:

5. IoT, the Internet of Things

Star of the Consumer Electronic Show (CES), which took place in Las Vegas in January, and Viva Technology, which took place in Paris, the Internet of Things was thrust into the spotlight in 2016 and continues to bring increasingly intelligent connectivity to our daily lives. Smart devices, equipped with bar codes, RFID chips, beacons or sensors, are taking the lead and enabling companies to gain greater visibility over their transactions, staff and assets.

In 2016, information and technology research and advisory company Gartner estimated that there were 6.4 billion connected devices globally, an increase of 30% on 2015. By 2020, this figure is likely to have grown to 20.8 billion.

4. The explosion of Big Data

Network multiplication brings with it a proliferation of data generation, whose analysis, use and governance have become a burning issue. According to estimates by IDC, an international provider of market intelligence for information technology, by 2020, every connected person will generate 1.7MB of new data per second.

The concept of ‘perishable data’ has lost validity. In 2017, companies now have the capability to use data before it becomes obsolete. Devices connected via the Internet of Things will rapidly speed up data decoding and processing for actionable insight.

3. The ramp up of artificial intelligence and automatisation

Artificial intelligence has been one of the main talking points in technology over the last year. Encompassing areas such as machine learning, robotic intelligence, neural networks and cognitive computing, it’s now in daily use in numerous forms including facial and voice recognition, endowing velocity, variety and volume.

This year, artificial intelligence has taken on an increasing number of repetitive and automatable tasks, beginning with wider use of ‘chatbots’ with the capacity to give coherent, easily formulated responses. IDC pinpoints robotics driven by artificial intelligence as one of the six innovation accelerators destined to play a major role in the digitalisation of society and the opening up of new income streams. Indeed, Amazon and DHL are already making use of warehouse handling robots.

2. Location technology, the Holy Grail of customer satisfaction

Location technology has taken great strides over the last year or so, to the marked benefit of customer satisfaction in the hotel, health and manufacturing sectors. Customers can now receive geo-targeted offers on their smartphones, for example for promotions or reductions, depending on their physical location.

In 2017, RFID chips enable yet more accurate tracking of customers and enhancement of their buying experiences.

1. Virtual reality makes way for augmented reality

One of the biggest innovations recently has been virtual reality, and with it came much media coverage too. From Facebook to Sony, Google to Microsoft, big brands grasped this new technology to offer an outstanding user experience, through the merging of virtual and real imagery.

In 2017, these virtual devices have acquired an awareness of their environment and give users a real sense of immersion of the digital environment from within their own homes. The potential of augmented reality for business will be harnessed too in the coming months. Some companies, among them BMQ and Boeing, are already employing it to increase their retention and productivity rates, or to provide training to their workforces across worldwide subsidiaries.

Over the next few months, as we gear up for another round of product launches, we should expect to see advancements in these key areas of technological innovation. Within business, this technology should help to improve customer service by streamlining production and processes, saving time and money, as well as providing new and exciting ways to reach and engage with customers, helping to retain existing clients as well as bring in many new ones.

Today, the 5^th July 2017, marks the ten year anniversary of the last time there was an interest rate rise in the UK.

On this date in 2007, the Monetary Policy Committee voted to increase rates to 5.75%, just as the wheels were about to come off the global economy. A decade on from the last interest rise, the Bank of England is once again mulling a rate hike, though the current level of consumer debt leaves the central bank facing a tightrope walk on interest rate policy.

• 8 million Britons haven’t seen an interest rate rise in their adult life
• £1,000 cash in the bank is now worth £878 after accounting for inflation
• This compares to £1,323 from £1,000 invested in the stock market
• Money in non-interest bearing accounts has risen almost eightfold to £179 billion
• UK consumer borrowing is higher than on the eve of the financial crisis… and rising
• The Bank of England bind
• Charts and tables

Laith Khalaf, Senior Analyst, Hargreaves Lansdown: “It’s been a decade since the last interest rate rise, so it’s little wonder that borrowers have got used to the idea of cheap money. Indeed around 8 million Britons haven’t witnessed an interest rate rise from the Bank of England in their adult lives.

Low interest rates undoubtedly helped to prop up the economy in the wake of the financial crisis, by lowering the cost of debt for UK consumers and companies. However the burden of loose monetary policy has very much fallen on those with cash in the bank, who have seen the interest they receive wither away to virtually nothing.

Meanwhile the UK consumer has even more borrowing now than ten years ago, thanks to weak wage growth and the addictive nature of low interest rates. Rising house prices and the increased cost of a university education mean that the current generation of young adults are particularly accustomed to eye-watering amounts of debt.

There has been a sharp rise in consumer borrowing over the last year, and current conditions of weak wage growth coupled with rising inflation are likely to exacerbate the use of credit to fund living expenses. Indeed the savings ratio has now fallen to a record low, highlighting the squeeze currently facing UK consumers.

The fragile debt dynamics of the UK economy put the Bank of England in a bind, because while a rate hike would help to curb consumer borrowing, it will also make the existing debt mountain less affordable. The central bank therefore faces a tightrope walk between keeping borrowing levels in check, without putting too big a dent in consumer activity, which would have a damaging effect on the UK economy.

The Monetary Policy Committee has turned more hawkish recently, and expectations of a rate rise have built up considerably in recent weeks. However the large amount of consumer debt means that even when the Bank of England does finally decide to wean the UK off low interest rates, it will be a very slow and steady process.”

The cost for cash savers

Those with cash in the bank have now seen a decade of falling returns. £1,000 stashed in a typical instant access account in July 2007 would now be worth £1,107. However after factoring in inflation, which has risen 26% over the period, the real value would today be £878. By comparison the same £1,000 investment in the UK stock market in July 2007 would now be worth £1,666, or £1,323 after adjusting for inflation. (Returns calculated with interest and dividends re-invested).

This is a pretty astonishing result, seeing as this investment would have been made just as the UK stock market was about to fall by almost 50% as a result of the financial crisis. These figures highlight the healing power of time on stock market returns, even if you happen to be unlucky enough to invest just as conditions take a turn for the worse. The figures also demonstrate the toll taken on cash in the bank by such an extended period of low interest rates.

Indeed, over the last ten years the amount of money held in non-interest bearing accounts has risen almost eightfold, from £23 billion in 2007 to £179 billion today. At the same time the average rate on the typical instant access account has fallen from 3.3% to 0.4%, and the average rate on non-instant access accounts (including cash ISAs) has fallen from 5% to 0.9%.

(Sources: Bank of England, Thomson Reuters Lipper, Moneyfacts)

The benefit for borrowers

While cash savers have undoubtedly felt the pinch from lower interest rates, there have been benefits for borrowers which have helped support the economy. The typical mortgage rate has fallen from 5.8% in July 2007 to 2.6% today, helping to support household incomes and the housing market in the wake of the financial crisis. Unsecured consumer borrowing rates have fallen too. The result is much lower levels of consumer loan defaults. UK lenders have written off £2.5 billion of bad consumer loans over the last year, this compares to £6.8 billion in 2007.

Borrowing costs have also fallen for UK companies. The typical borrowing cost for a large company with a good credit rating has fallen from 6.4% in July 2007 to 2.8% now. This has allowed companies to gain access to funds cheaply, thereby supporting them in making investments and profits, and providing employment.

Low interest rates have therefore helped the economy by reducing the burden on UK consumers and companies. However it seems consumers are now increasingly taking advantage of low interest rates to load up on debt, which is causing concern at the Bank of England. Only last week the ONS published data which showed that the UK savings ratio has fallen to a record level of 1.7%, which suggests the consumer squeeze is beginning to hit home.

(Sources: Bank of England, Markit iBoxx)

Consumer credit warning signs

The Bank of England recently warned that consumer credit and mortgage lending were a key risk to financial stability in the UK. This is because there has been a rapid increase in consumer credit of late, which rose 10% over the last year. As a result the central bank is bringing forward an assessment of the banking sector’s exposure to potential losses stemming from stressed conditions in the consumer credit market.

In absolute terms, levels of UK consumer debt are actually higher now than they were on the eve of the financial crisis, a point in history when it is widely recognised that the UK was living beyond its means. Consumer borrowing (including credit cards, overdrafts and loans) now stands at £199 billion, compared with £191 billion in July 2007, and a highest ever level of £209 billion recorded in September 2008. Mortgage borrowing now stands at £1.3 trillion, up from £1.1 trillion in July 2007.

The good news is household income has also risen over this period, which along with low interest rates make this debt more affordable. In 2007, the household debt to disposable income ratio peaked at 159.7%. This fell back in the years following the financial crisis as consumers tightened their belts and banks became more reluctant to lend. However it has recently started to head in the wrong direction again, rising from 139.9% in 2015 to 142.6% in 2016.

The Brexit-induced currency crunch facing consumers at the moment can be expected to put further upward pressure on this ratio. With wage growth weak and inflation rising, consumers are more likely to rely on debt, while their disposable household income is likely to come under pressure. Indeed in its latest forecasts the Office for Budget Responsibility predicts this ratio will hit 153% in 2022.

(Sources: Bank of England, ONS, Office for Budget Responsibility)

The Bank of England bind

This all underlines the very difficult situation the Bank of England finds itself in. Raising rates will help to wean investors off borrowing, however it will also make the large existing stock of debt more expensive, which will eat into monthly budgets, putting downward pressure on spending and weighing on economic growth.

This is perhaps why the bank has so far chosen to use more specialised tools to deal with the sharp rise in consumer credit, such as tightening up mortgage lending rules and increasing bank capital requirements to deal with any downturn in credit conditions, rather than wielding the sledgehammer of an interest rate rise.

However, more members of the monetary policy committee appear to be in favour of a rate rise, which may mean we could soon be in for the first hike since 2007.  Markets are now pricing in a 55% chance of a rate rise by the end of the year. However the fragile debt dynamics of the UK economy mean that even when the Bank does decide to raise rates, it’s going to tread very carefully indeed.

It’s also worth pointing out that this wouldn’t be the first time that expectations of a rate hike have risen only to be subsequently quashed. At the beginning of 2011, two years after rates had been cut to the emergency level of 0.5%, the market was expecting interest rates to be at 3% by 2014.

Charts and tables

The data behind these charts is available on request.

Here’s a summary of interest rate data:

The stock market fell sharply in 2007 and 2008, but has since staged a significant recovery, while cash has been left in the doldrums:

Consumer credit fell in the wake of the financial crisis, but has started to pick up again and is approaching a record level; weak wage growth and rising inflation are likely to stoke the borrowing binge further:

Low interest rates have helpd the economy in a number of ways, not least by making mortgage payments more affordable, which has helped to underpin the housing market:

Sources: Bank of England, Thomson Reuters Lipper, Nationwide, ONS

(Source: Hargreaves Lansdown)

Led by growth in Asia Pacific, the global insurance industry has been experiencing moderate growth in recent years. However, a slowdown in the industry is likely, though growth is going to remain steady.

While the life insurance sector remained the most profitable in 2015, the non-life insurance sector was not far behind, according to Global Insurance Industry - Forecast, Opportunities & Trends 2015-2020, a report recently released by Taiyou Research. The industry remains fragmented, thus increasing the level of rivalry within the market. Large, international companies have more or less entered most countries now and have either driven many smaller players out of business or have formed partnerships with them.

Online insurance is also a rapidly growing business, competing successfully with existing players. Apart from insurance market players, many financial service providers and banks are also entering into the global insurance business, thus creating even more competition for existing players.

Stringent regulations govern the insurance industry and it remains to be seen how this scenario plays out in the coming years.

(Source: Taiyou Research)

GTR spoke to insurers and brokers at the annual conference of the Association of Trade Finance in the Americas (ATFA) on how the insurance market has evolved in the US since the financial crisis.

Global middle market organizations, companies with annual revenues of USD 1 million -USD 3 billion, are showing no signs of slowing down in the face of geopolitical uncertainty. Over one-third (34%) of middle market companies plan to grow 6%-10% this year, far outpacing the latest World Bank global GDP growth forecasts of 2.7%, by more than 3%-7%.

The findings released today in the EY Growth Barometer, a first-of-its-kind survey of 2,340 middle market executives across 30 countries, reveal that in spite of geopolitical tensions, including Brexit, increasing populism, the rise of automation and artificial intelligence (AI) and skilled talent shortages, 89% of executives see today's uncertainty as grounds for growth opportunities. What's more, 14% of all companies surveyed have current year growth ambitions of more than 16%.

Annette Kimmitt, EY Global Growth Markets Leader, says: "The global economic backdrop is much stronger than what the prevailing narrative has been telling us. Despite geopolitical risks and uncertainties, businesses being disrupted through new technologies and globalization rewriting the rules of supply and demand, middle market leaders are not only attuned to uncertainty, but are seizing it to grow, disrupt other markets and drive their growth agendas."

Growth ambitions vary across geographies

Despite facing two years of Brexit negotiations, start-ups (companies under five years old) headquartered in the UK are displaying the highest levels of confidence of the countries surveyed. UK start-ups are the most positive on current year growth ambitions with 26% seeking to grow by 11-25% and a further 23% looking at year-on-year growth of more than 26%.

But when looking at the largest markets, there are significant differences between the world's largest economy, the US where slightly more than a third (35%) of all companies plan modest growth increases of under 5%, compared to the world's two tiger economies – China and India – where together 42% of companies are targeting growth rates of 6%-10%. Moreover, a quarter (25%) of companies in tiger economies have current year growth plans of 11%-15%.

Technology and talent top the agenda

Executives identified technology and talent not only as the top two challenges facing the middle market C-suite today, but they are also seen as the tools by which they will overcome challenges and remain agile. Talent (23%) is cited as the top priority ahead of improved operations (21%), cutting red tape (12%) and beneficial agreements (8%) in a ranking of what is critical to meeting current growth ambitions. A staggering 93% of executives see technology as a means of attracting the talent they need. New developments in artificial intelligence (AI) are improving the recruitment and selection process for innovative start-ups to find specialist talent.

To fuel the growth ambitions of their organizations, more than a quarter (27%) of middle market executives plan to increase their permanent headcount and a further 14% plan to increase the number of part-time staff. Reflecting the growing impact of the gig economy on work patterns and a move to a more contingent, skills-based workforce, almost one in five (18%) companies plan to use contractors to help power their high-growth plans and fill specific gaps or needs.

However, under these global results lie significant differences in hiring plans. A majority of US companies (55%) plan to keep current staffing levels flat, compared with 31% of all respondents. These plans are almost reversed among start-ups, 53% of which plan increases in full-time staff. Nearly a quarter (23%) of all start-ups are also the most likely of all organizations to plan to hire more contractors or freelancers.

Kimmitt says: "Middle market leaders are using technology to attract and retain talent, accelerate growth, improve productivity and increase profitability. Uncertainty has become the new normal, and while geopolitical risks and trade barriers are influential factors, middle market companies are moving ahead with hiring plans."

RPA does not spell RIP to talent

While only 6% of middle market organizations are already using robotic process automation (RPA) for some business processes, the dystopian vision of large-scale layoffs is not shared by these business leaders. Fifteen percent of all middle market executive respondents believe that adoption of RPA will result in headcount reductions of less than 10%. This illustrates that middle market leaders are planning on the selective adoption of RPA to bring efficiencies to some routine operations, but as an adjunct to human talent, not a replacement.

Macro risks to growth

Middle market leaders cited increasing competition (20%) as the number one external threat to their growth plans, followed by geopolitical instability (17%) and the cost and availability of credit (12%). These threats were considered far more significant than financial headwinds of rising interest rates (8%), foreign exchange variance (8%) or commodity price volatility (6%). Leaders were twice as likely to cite competition (20%) as a risk than slow global growth (10%).

High-growth entrepreneurs are even more optimistic

As part of the EY Growth Barometer, the survey also measured 220 alumni of EY's widely-acclaimed Entrepreneur Of The Year program. Active for more than 30 years, the network has programs in more than 60 countries and 145 cities worldwide supporting high-growth entrepreneurs.

High-growth entrepreneurs are planning significantly higher growth rates than overall middle market leaders, with one in five planning to grow by 6%-10%, a further 20% by 11%-15% and yet a further one in five by 16%-25%. Nearly one in four (22%) high-growth entrepreneurs are planning current year growth of more than 26%. Additionally, almost two-thirds (61%) of this group plan increases in full-time staff and 9% plan increases in the use of contingent or gig economy workers.

Kimmitt says: "Middle market companies are the engines for global growth, representing nearly 99% of all enterprise and contributing nearly 45% to global GDP. But high-growth entrepreneurs are not only more ambitious in setting growth targets, but prioritize differently from other mid-market leaders and businesses. High-growth entrepreneurs are not fazed by the kinds of seismic shocks that Brexit and other geopolitical upheavals present. They are developing agile and flexible strategies to work with uncertainty as the new normal."

(Source: EY)

You wouldn’t drink milk if it was five days past its sell-by date. You wouldn’t buy a computer in 2017 running Windows 98. Would you use data that you know is bad, incomplete or outdated? Rishi Dave, CMO at Dun & Bradstreet talks to Finance Monthly about the impact of using bad data, and what makes it bad.

Clearly, the answer here is a resounding no. Yet it seems this is common practice for many enterprises; in 2016, poor quality data alone cost the Unites States $3.1 trillion. Most companies know how important data is – managers, financial decision makers, data scientists and so many others use it every day at work. Due to the constraints of time, some employees simply have no choice but to accept the data they’re given and use it for financial contracts, supply chain management or prospecting new customers.

But this is risky business. A company can have all the data in the world at its fingertips, but realistically, how much of that data is accurate? And how is it being processed? Only by having the right tools and analytics can the consequences of bad data be avoided.

What’s the worst that could happen?

Bad data can mean many things; the data itself could be outdated, poorly formatted or inconsistent.

For sales and marketing teams, they rely heavily on the most-up-to-date, real-time data to allow them to effectively do their job properly. It’s no use calling up the MD of a company, only to find out they no longer work there or now have a different title. This can be incredibly timewasting and fundamentally limits a salesperson’s ability to sell; the average sales rep spends 64% of his or her time on non-selling activities. Wasted time leads to wasted revenue, which means bad data is directly impacting the company’s bottom line.

A vital ingredient to growth

Bad data isn’t just a timewaster, but a growth-stopper. For companies to grow, they need the right data for the right business function. Marketers need to ensure their contact database is up to date, or face stultified growth opportunities. Nowadays, businesses are demanding more intelligent, data-driven, real-time insights to realise higher return; 80% of marketers see data quality as critical to sales and marketing teams and more than half are investing to address persistent data challenges.

Incorrect names or job roles, outdated phone numbers and inconsistent & badly recycled data will actively prevent a company from reaching desired prospects. The Databerg report in 2015 found that medium sized companies were spending £435,000 on redundant, obsolete or trivial data. For SMEs, growth via data could certainly be the difference between black and red. And therefore making sure they have the right data is paramount. After all, if you water a plant with seawater, it won’t grow. Feed it with normal water and watch it flourish.

Data is an opportunity

Data has the power to transform businesses – but feed bad data in to a machine (or company), and you’ll only get bad results. From losing customers, a damaged reputation and decreased revenue, everything is at stake. Of course, no company is immune to human error. But what a company can control is its flow of data and how it uses it.

Most businesses know that they have to act to improve the quality of their data. But the way they do this is flawed; most batch cleanse, but they do this once a year at most. In the current age where data flow is constant and new information about customers, partners, suppliers and the economy is available all the time, data insight is only ever as accurate as the data feeding it.

What’s the answer?

What businesses really need to do with their data is to integrate, clean, link, and supplement it so they have an accurate database on which to build their algorithms. This starts with foundational master data.

Master data is the foundational information on customers, vendors and prospects that must be shared across all internal systems, applications, and processes in order for your commercial data, transactional reporting and business activity to be cleaned, linked, optimized and made accurate. It’s essentially the foundation of your enterprise and without it not only does your AI infrastructure breakdown, but so does your business.

Whether it’s a hospital, a financial institution or a marketing agency, ensuring you have the right quality data must be top of every agenda. Data is an opportunity; don’t waste it.

Utter the words ‘disruption’ and ‘financial services’ and your thoughts will be drawn to the bevy of technologies that were supposed to transform the sector. Artificial Intelligence (AI) and Blockchain are the most recent additions to the list, but this time around, they probably have the potential to drive real structural change. To explain their potential and differences, Grant Thomas, Head of Practices at BJSS talks to Finance Monthly about the impact of these technology disruptions.

Blockchain, which was originally developed to support Bitcoin and other cryptocurrencies, is being heralded by the Financial Services industry as the next big thing because it supports peer-to-peer mass collaboration which could make many of the traditional organisational forms redundant.

In theory, Blockchain will reduce transaction costs – Santander expects to achieve savings of around $20 billion a year – so while the industry is still largely unclear on how it should be applied, there is a race to productionise it. Heavy Research and Development investments are being made.

The problem with Blockchain in the Financial Services industry is that it is largely pie in the sky. Its development landscape is being driven by a handful of large multinational organisations, mostly working as consortia, because they’re the only players able to handle its scale and apply the multi-jurisdictional experience the project needs. Open Source projects such as Openchain and Hyperledger are not sufficiently developed to offer a credible alternative. There is also a shortage of skilled talent available to build applications, or subject matter experts available to develop and validate business use cases.

AI on the other hand is far more mainstream. Companies such as Facebook, Google, Viv, and Nuance already provide frameworks and turnkey solutions, and AI technology is already being used by many Financial Services providers to handle everything from detecting fraud, to market regulation and customer interaction. The Royal Bank of Scotland, for example, has recently completed a trial of a ‘Luvo’ AI customer service representative to support internal customer-facing staff.

AI is capable of processing data to make decisions far more efficiently and accurately than humans can. It does this through self-learning to solve cognitive tasks. The technology crunches historical data and teaches itself to act based on the decisions that have been previously taken by humans. It also learns from its mistakes - so every time AI completes a transaction, it becomes more accurate.

The ‘disruption’ from AI comes from the efficiency savings that Financial Services providers will achieve by automating the highly-transactional jobs that are usually handled by humans. This will improve customer service quality and consistency and will improve both regulatory compliance and risk management. When they deploy AI tools such as IBM Watson, Financial Services organisations have both cost-cutting and customer satisfaction in mind.

The barrier to entry for AI is far lower than it is for Blockchain. There is ready access to experience, talent, and a burgeoning ecosystem to sustain innovation. That said, Financial Services providers should consider these five steps to ensure that their AI deployments succeed:

1. It’s mostly about the data

Banks have large IT estates which generate a great deal of data – everything from customer demographics, to product adoption and market trends. There isn’t necessarily a requirement to collate data into a centralised data lake, but integration is important. Access to a self-service data model will allow, with minimum viable process, easy access to this data. Bear this in mind because providing as much data as possible is integral to the success of an AI deployment.

2. Begin at the end

Look at the ideal scenario. Consider the outcomes that are to be achieved and reflect on the experience the user should have. Develop personas to keep users in mind, build models to ensure that business outcomes are being achieved. And only then, start to build the AI.

3. It’s an elephant. Eat it slowly.

AI is huge. With an array of use cases as diverse as risk and fraud detection, customer relationship management, business development and cost reduction, AI is becoming increasingly important for financial services firms to remain competitive.

Don’t be tempted to tackle everything at the same time. When deciding which use case to start with, choose the lowest hanging fruit, build the AI, deploy and learn from it, and then finally, tweak it. Once this cycle is complete, move on to the next use case, applying the lessons learnt.

4. Experiment in the Lab before moving to the outside world

Some organisations embrace the concept of Innovation Labs to generate new ideas for products and services. Others routinely use Labs as part of their project delivery objectives. Whichever way innovation is achieved, it is important to have a process, the right behaviours and lean thinking.

For AI, a lab provides a safe space for expose data, to apply simulations, to learn and to experiment with configuration tweaks.

5. It’s not a project, it’s a journey

The project doesn’t end when the AI is commissioned – it continues.

A key part of disruption is the feedback loop. With the technology evolving quickly, this feedback mechanism should result in minor corrections being deployed quickly, while improvements are continuously implemented.

Movinga recently completed a study which investigates the possible benefits of foreign human capital in Germany. In order to do this, research was conducted into each of the 16 federal states. The number of firms receiving venture capital, the number of patent applications, the unemployment rate, and the percentage of the state that were born in another country were all examined. The findings show that German states with a higher percentage of foreign-born citizens see higher levels of innovation. They also illustrate that attracting more people from other countries does not mean higher unemployment.

In order to analyse the possible benefits of foreign human capital, the diagrams compare the key indicators on innovation and economic prosperity (firms accepting venture capital, patent applications, unemployment) with the percentage of the population that are born in another country. All data used for this report was provided by The Organisation for Economic Co-operation and Development (OECD) and the German Federal Statistical Office (Destatis).

With 81.4 million citizens, Germany is Europe’s largest country by population. It is also the nation with the largest foreign-born population in Europe, with more than 7.8 million (9.6%) originating from another country. However, this diversity is not evenly spread across Germany’s 16 federal states: five states have more than 10% of citizens who are foreign-born compared, whereas five states have a foreign-born population of less than 3%. This disparity is illustrated in Figure 1.

Figure 2 shows that the city states such as Berlin and Hamburg that have a higher percentage of foreign-born citizens are also home to a higher number of firms receiving venture capital. Similarly, Figure 3 displays that the two federal states with the most patent applications (Bayern and Baden-Württemberg) are also diverse demographically, with around 10% of their populations being foreign-born. In contrast, Figures 1, 2 and 3 also convey that the federal states with fewer firms receiving venture capital and lower numbers of patent applications like Sachsen-Anhalt and Mecklenburg-Vorpommern have smaller foreign-born populations.

Figure 1- Distribution of foreign-born workers in Germany

Figure 2 - Number of firms receiving venture capital

These findings convey that people born in other countries are of great economic value, and that an attitude of openness to foreign-born citizens is important in order for support innovation, research, development and growth. The relative weakness of the federal states with fewer numbers of people born in other countries suggests that they could boost innovation and their general economic performance through attracting more talent born outside Germany.

Figure 3 shows Bayern and Baden-Württemberg also have some of Germany’s lowest unemployment rates, whereas Sachsen-Anhalt and Mecklenburg-Vorpommern have some of the highest unemployment rates. This shows that having a higher number of foreign-born citizens does not mean that fewer people will be able to find jobs. Unemployment is higher in the diverse states of Berlin and Hamburg compared to the national average, but this is more indicative of their unusual positions as city states rather than their economic weakness.

‘The impressive amount of firms accepting venture capital and the number of patent applications in the diverse regions of Berlin, Bayern and Baden-Württemberg suggests that foreign human capital helps support innovation and growth’ said Movinga's MD Finn Age Hänsel.

Figure 3