Category: Banking

By Paul Jones, Head of Technology, SAS UK & Ireland

Fintechs are turning up the heat in retail and corporate banking. As smaller, more agile providers have entered the banking market, customers are getting used to a higher level of service – a personalised, digital experience that guides them to make quicker, smarter decisions about their finances. For traditional banks to compete, they need to transform the way they operate. On the retail banking side, that means digitising customer-facing services. No queuing in branches, no paperwork. And when customers apply for a credit card or loan, they get a decision in seconds.

Meanwhile, on the corporate side, the aim of transformation is often to enable an everything as a service (XaaS) strategy, building smart packaged offerings such as treasury as a service or risk management as a service, which the bank can both consume in-house and provide to enterprise clients.

Data-driven digital transformation

To foster this type of digital business transformation, banks need to redesign both internal and customer-facing processes to embed data-driven decision making. By integrating intelligent automation and decisioning capabilities into their operations, banks can eliminate paperwork and manual processing. This will greatly improve service levels to customers while keeping the cost-to-serve to a minimum.

The creation of these data-driven services depends on the ability to design, build, test and deploy processes that embed predictive models using both well-established statistical methods and new artificial intelligence and machine learning (AI/ML) techniques. The development life cycle for these models is inherently experimental. It’s vital to try different approaches, test the results, and iterate on the candidates that offer the greatest potential. To remain relevant in the digital age, organisations must deliver such experiments with agility and speed.

The obstacle of legacy infrastructure

The problem is that banks’ traditional IT architectures – built around legacy on-premises systems – are a uniquely bad environment for developing these models. Due to the experimental nature of the models, it’s very difficult to forecast what type of infrastructure banks will need for upcoming projects. For example, different machine learning algorithms run best on hardware that has been optimised for that category of model building. If you invest in a cluster of servers with a particular configuration of memory and processors, it may only be suitable for a small subset of the work you actually need to do. And every time you need to change your approach, you’ll face high fixed costs and a long lead time to get the right infrastructure in place.

Instead, you need an IT architecture that allows you to set up experiments quickly and manage them flexibly. When an idea doesn’t work out, you should have the ability to fail fast and cut your losses. And when an idea succeeds, you need to get it into production rapidly and roll it out for enterprise-scale deployment.

The promise of cloud-based analytics

The cloud is the perfect environment for these exploratory projects. It gives you the freedom to spin up almost any type of infrastructure within minutes, and either scale it or shut it down instantly depending on the results.

Cloud environments also free you from dependencies on departmental silos and the quirks of your internal network. They give you a green-field site where cross-functional teams can collaborate freely, enabling you to build models that combine domain knowledge from different areas of the bank and create opportunities for XaaS offerings that would never have been possible in the past.

Regulatory hurdles

While most of the major public cloud providers now offer a range of analytics-specific infrastructure services, they come at a price. Once your data and models live in a particular proprietary cloud repository, they can be difficult to get out again. You’re locked into their infrastructure for the foreseeable future.

Besides the commercial implications, this lock-in poses a major regulatory problem for banks. According to the latest consultation paper on outsourcing and third-party risk management from the Prudential Regulatory Authority (PRA), regulators expect banks to be able to port any outsourced services over to another provider or bring them back in house without any risk to business continuity.

The right tool for the job

I’ve had conversations about moving to the cloud with CIOs at banks of various sizes, and this issue of portability has been a recurring theme. They are looking for analytics solutions that work with any vendor and run on any cloud platform – or move between platforms – without significant disruption. In fact, since many banking use cases involve analysing data that is too sensitive to store outside the internal network, one of the most-requested offerings is a hybrid cloud/on-premises solution. Banks could then perform experimental projects with anonymised data in the cloud and then bring the successful models back into their own data centre for deployment in production.

Finally, while there’s a lot of buzz around AI/ML techniques, it’s important to recognise that they are not always the best option. Traditional statistical methods can be equally powerful, cost less to maintain, and can be easier to explain and audit – an increasingly important capability, as a recent legal case in the Netherlands demonstrates. My advice is always that banks should look for a single platform that gives equal support to both statistical and AI/ML modelling techniques and provides easy-to-use visualisations that make models easier to interpret. This allows your data scientists to pick the best tool for the job. And makes it easier for you to ensure the safe and responsible use of your data.

We’re working with a number of leading banks to power their digital transformation initiatives and build towards the XaaS future in the cloud. Find out more about what’s possible with cloud computing.

Investment Banking

Is Now a Good Time to Invest? Buying Stock During a Pandemic

The global pandemic has lead to a lot of predictable anxiety, lockouts, and business closures in the last few weeks and months. It has raised many legitimate questions about global finances, with one very important one weighing on investors. “Is now a good time to invest?”

What are the more robust markets to invest in right now? Can anybody, even a freelancer, do well in the market? And what is the best approach to take to keep your money safe?

Join us today as we break down some of our favourite tips.

Don’t Be Reckless

It can be easy, in the midst of everything the world is going through, to feel like the world is your oyster. You can expect to see panicked sales going on in waves over the next few months. This may seem like a tempting opportunity to wade in and start buying up everything you can get your hands on.

Keep in mind, however, that discretion is never a bad idea. There will still be plenty of bad deals floating around, and COVID-19 will run its course. You could find yourself dealing with the repercussions of a bad investment sooner than you might expect, so be careful.

Don’t Invest Unless You Can Maintain It for Three Years, Minimum

Considering buying stocks in response to falling prices? Consider the stability of the investments you’re sizing up. To be responsible, you have to be able to hold your investments for a minimum of three years so they have the chance to recover.

This goes for investments at any time of the year but is especially true during quarantine times.

You may want to sell. You could have any number of reasons for this.

Maybe you’re scared by all the instability. Maybe your broker recommends it. Whatever your reasoning, you should not invest during a stock market crash if you’re not ready to hold your investments for at least three years.

Stocks have a high potential return rate, but we only see those returns when we hold down, consistently, during episodes of volatility. Three years is the recommended amount of time necessary to overcome short-term market losses.

You also cannot, under any circumstances, invest money you may need in an emergency into these stocks. If you invest emergency funds and then, later on, have an emergency, you’ll need to sell to get access to that money.

Don’t Spend It All on the Markets

Cash tends to retain its value, even during a stock market crash. What this means for you, as an investor, is an opportunity to keep a portion of your investing power liquid and ready in case the market drops.

You’ll be more ready to take advantage of these dips in activity if your funds aren’t already all wrapped up in equity. Compared to other investors, strapped for cash and weighing up their options, you’ll have a distinct advantage.

Regret: It’s to Be Expected

“The best-laid plans of mice and men often go awry.”

Nobody ever gets into the stock market intending to lose money. That said, losing money, at least in the short term, is an inevitability. It’s always easier to plan when the markets are behaving as they should be.

It’s no secret that investors get nervous when the stock market is erratic. They feel regret over not getting in earlier. They feel regret at not selling sooner.

You will probably feel the same way at some point in the future. It’s inevitable, and you will almost always be left something you wish had gone differently. The worst thing you could do is sell scared.

Expert investors with years of experience don’t have perfect days. If you’re trying to take advantage of the market during COVID-19, it’s important to remember not everything will go perfectly.

Stocks will fall, sometimes repeatedly. They have done so throughout history, and have always recovered. If you are bold enough to get into the stock market during a global pandemic and impending recession, you need to be bold enough to weather the storm.

A Note on What to Invest in Now

Investing in stocks and shares is about taking a smart approach to your investments. But it’s also about investing in stocks and shares you know will make a return. With all of that said, which sectors will be most likely to pull ahead during the COVID-19 outbreak?

Healthcare and Biotechnology

The biotech and healthcare fields are expected to remain entrenched during the outbreak due to their role in treating it. Look at Quidel Corporation (QDEL) and Masimo Corporation (MASI) for mid-to-large caps.

Teleconference

Because of its role in quarantines, teleconferencing software is also attracting purchases. It’s not a field that gets as much attention in a regular year, however, so expect some inconsistencies by way of growing pains. Citrix Systems, Inc. (CTXS) and Teledoc Health, Inc. (TDOC) have both shown promise.

Safe Shelters

The safe-haven has had its place throughout dozens of national and international disasters. They’ve seen consistent growth throughout COVID-19, with climbing dividends staving off lower prices. Campbell Soup Company (CPB) recently traded near a 52-week high, while American Water Works Company, Inc. (AWK) has come in with some great returns, as well.

Is Now a Good Time to Invest?

The world is in an interesting place, right now. One of the biggest global pandemics in recent history has sent literally everybody inside, from the man on the street to whole businesses. And, with stores, restaurants, and even some non-essential public utilities all shutting down, it can be easy to think this is a bad time to invest.

The truth is quite the opposite, though. With the market shifting to products and services relevant to the virus, we’re seeing new opportunities for investors.

It’s all about changing your perspective and learning to roll with the punches, and this is the perfect environment to do exactly that in. Some of the best long term investments come out of trying times. And COVID-19 is certainly trying.

Is now a good time to invest? It’s as good a time as it’s ever been, which means “absolutely,” provided you’re ready to put in the time and effort and invest wisely.

Looking for more choice investment insights? Check out some of our other expert blog content, today!

UBX mobile ATMs to expedite gov’t covid-19 subsidies via rural banks & coops in the Philippines

UBX, the fintech company of Union Bank of the Philippines (UnionBank), recently started deploying a rapid and remote mobile-enabled ATM solution in response to COVID-19, as part of its i2i platform. With i2i Mobile ATM, rural banks and financial cooperatives across the Philippines are enabled to pay-out a wide range of government subsidies direct to beneficiaries in the historically underserved countryside. This will help address the growing need to access cash, as a result of the extended enhanced community quarantine (ECQ) in Luzon, the largest and most populous island in the country.

i2i’s Mobile ATM technology works just like a standard ATM and allows rural banks, financial cooperatives, their agents and associated merchants to offer cash out and balance inquiry transactions for all locally issued debit/ATM cards. Financial institutions that avail of i2i Mobile ATM receive i2i Mobile ATM devices within days of signing up. They are enabled to pay-out government subsidies and positioned to participate in the emergency subsidy program under the Philippine government’s Bayanihan to Heal as One Act.

UBX developed this state-of-the-art mobile ATM in partnership with leading Irish Financial Services Group, Fexco. Fexco currently employs more than 2,400 people across the globe, focused on delivering technology enabled financial services to a wide range of banking and fintech partners, and this initiative with UBX will build on the existing partnership in the Philippines.

Cathal Brendan Foley, CEO of Fexco Philippines, said: “We are very pleased to be partnering with UBX to assist Filipinos in this time of need. This partnership will allow us to rapidly deliver crucial financial services to consumers across the UBX and UBP banking partner network. Fexco and UBX are both dedicated to enhancing financial inclusion for both the businesses and the people of the Philippines.”

UBX’s i2i Network is the fastest-growing and largest network of financial institutions including rural banks, thrift banks, savings banks, cooperatives and other non-banking financial institutions. Since launching its technology platform in April 2019, the i2i Network is over 110 members strong with nearly 1,000 branches between them.

John Januszczak, CEO of UBX Philippines, said: “By digitally connecting community-based financial institutions best positioned to serve the financially excluded, the i2i Network and i2i Mobile ATM are extremely well poised to support our government’s effort to contain the pandemic while enabling the provision of much needed relief to those affected.”

Is a SIPP (Self-Invested Personal Pension) a Good Idea for Freelancers

A quarter of British adults have nothing in savings. Meanwhile, one in 10 Brits admits they tend to spend more than they earn. As a freelancer, you can’t get caught without a good nest egg awaiting you during retirement. By setting up a self-invested personal pension (SIPP), you can prepare yourself for the year to come. A SIPP will help you save for retirement without worry you’ll spend your savings.

What is a SIPP pension exactly, and how does it work?

Keep reading to find out everything you need to know about SIPP investments as a freelancer!

What is a SIPP?

First, what exactly is a self-invested personal pension?

A SIPP is a pension that holds all of your investments until you retire and begin drawing a retirement income. This form of personal pension works similarly to a standard personal pension. The main difference, however, is that a SIPP offers more flexibility with the investments you choose.

Once you have your SIPP set up, you can add regular contributions to your nest egg. You can also make ad hoc payments into your self-employment pension. Then, your pension provider will claim tax relief and add it to your savings.

How Does It Work?

How does a SIPP work and help you save for retirement?

With a standard personal pension, all of your investments are managed for you. They’re controlled within the pooled fund you selected. With SIPPS, however, you have the freedom to select and manage your own investments instead.

You can also pay an experienced, authorised investment manager to make the decisions for you.

SIPPs are best for people who want to manage their own funds. By giving you control, your self-invested personal pension also allows you to switch investments as you’d like. That way, you have the peace of mind that you’re making investments with your own best interests in mind.

Why Is It Important as a Freelancer?

The majority of Brits between the ages of 22 and 29 have no more than £1,000 tucked away in savings. If your self-employed, it’s up to you to start a pension on your own.

Unfortunately, many self-employed people struggle to make ends meet as they grow older. By planning for SIPP investments now, you can prepare yourself for any rocky roads ahead.

There are a few benefits to choosing a SIPP, including:

You can receive pension tax relief from the government
A strong pension plan will give you low-cost access to professional investment managers
The right investment manager can help you invest your money in a range of assets
Choosing the right assets can help you manage risk in a sensible way
If you die before you turn 75, your pension will pass on to your beneficiaries as a lump sum
New pension freedom rules allow you to decide what to do with your pension savings when you reach retirement

As a freelancer, having the freedom to choose what you do with your self-employed pension is essential. Many full-time employees are already paying into a pension. In fact, employers are now obligated to automatically enrol employees into a workplace pensions scheme.

Other Options

If you’re currently self-employed and want to set up a private pension, start by finding any old workplace and personal pensions established in the past. Then, combine them into your new pension. Completing this process will make your new self-employment pension easier to manage in the long-run.

Working with a financial advisor can make this process easier, too. They can help move your pensions over into their system. Then, they’ll combine and transfer your pensions into your new SIPP pension plan.

Otherwise, might need to contact your previous pension providers to get your pension balances on your own.

In addition to a SIPP pension plan, you might decide on other options, including a personal pension or stakeholder pension. Self-employed individuals can also utilise the government scheme National Employment Savings Trust (NEST), too. However, there’s no “best” pension for self-employed workers.

It really depends on your own specific circumstances.

Ideally, try to find a provider who lets you make contributions when you want. As someone who is self-employed, your income might not end up as predictable as you’d like. Having control over the details of your self-employed pension can make it easier to manage.

Investments

Now that you know a little more about how SIPP investments work, let’s review the assets you can choose from. A few include:

Unit trusts
Some National Savings and Investment productions
Commercial property (shops, offices, factories)
Investment trusts
Government securities
Individual stocks and shares (quotes on the recognised UK or overseas stock exchange)
Insurance company funds
Traded endowment policies
Deposit accounts with banks and building societies

However, this is only a shortlist. Speaking with an expert can help you explore your options. There are also different SIPP providers who have different investment options available for you to choose from.

You can’t hold residential property directly within a SIPP with tax advantages that usually accompany pension investments.

However, you can hold residential property in a SIPP through certain types of collection investments. For example, a real estate investment trust would allow you to include the property in a SIPP without you losing tax advantages.

These investments are often subject to restrictions. It’s also important to note that not all SIPP providers will accept this type of investment.

In addition to your self-invested personal pension, make sure to take the time to develop an overall investment strategy. Planning now will help you in the future.

You can access and use your SIPP more flexibly now. According to new rules, you can now access the money in your SIPP at the age of 55.

Take a SIPP: Understanding Your Self-Invested Personal Pension as a Freelancer

Prepare for the future and make the most of your money. By understanding the importance of creating a self-invested personal pension, you can save away money as a freelancer. Then, you’ll have what you need to prepare for the day you retire!

Searching for more helpful investment tips? Explore our latest Investment Management guides today.

Nigerian bank DLM on the move delivers at all levels – with exciting plans in the pipeline

DLM Capital Group – a developmental investment bank that supports economic and social infrastructure projects with the aim of driving GDP growth and improving lives.

Founding chairman and group CEO of investment firm DLM Capital Group , Sonnie Ayere — Founding chairman and group CEO of investment firm DLM Capital Group, Sonnie Ayere

DLM Advisory Partners (DLMAP), formerly Dunn Loren Merrifield Advisory Partners, is the advisory and capital-raising arm of DLM Capital group. The principal services provided by DLMAP include financial advisory, debt capital-raising, equity capital raising, mergers and acquisitions, and company set-up advisory.

DLMAP has played a leading role in structured finance and securitisation within Nigeria. “We have acted as sole arranger to more than 80 percent of structured finance transactions in Nigeria, and 100 percent of all securitisation transactions in the market,” says CEO Sonnie Ayere.

Most Innovative Transaction of 2019

In 2019, DLM executed the first Bus Rapid Transit (BRT) securitisation in Nigeria, working with the sponsor, Primero Transport Services Limited (PTSL). The system caters to residents of the country’s most densely populated city, Lagos. DLM raised ₦16.50bn ($45.8m) through the securitisation of the company’s BRT tickets receivables. The sponsor is licensed to operate the longest BRT route in West Africa, 35.3km, with its 434-bus fleet.

DLM Capital Group

A feasibility study conducted put the daily passenger carriage at about 226,300 passengers per day. Due to working capital pressures, the company was only able to serve an average of 135,000 daily passengers before the securitisation transaction in 2019.

The ₦16.5bn 17 percent Series 1 Fixed Rate Bonds issued were primarily used to refinance all pre-existing commercial banking loan facilities on the books of the sponsor. The transaction provided the company with savings in interest, shaving the cost of funds from 27 percent per annum to 17 percent. At the same time, it extended the tenor of the company’s debt from three years to seven.

With this transaction, DLM was able to provide the company with up to 10 percent savings in interest, reducing the cash required to service debt and improving the company’s working capital. DLM also advised on the restructuring of the company’s balance sheet by moving the operating assets into a new vehicle and eliminated the strain of depreciation charges.

Focus for 2020

DLM is in discussions with industry stakeholders and umbrella bodies to establish proprietary funding conduits across key sectors of the Nigerian economy. It intends to include microfinance, agriculture, education, health care and a continuation of other funding programmes for the mortgage, real estate and transportation sectors.

Working with a DFI partner, the company recently concluded the design of an aggregation vehicle aimed at providing local currency, wholesale funding solutions to micro-lenders in Nigeria by way of loan book securitisation.

A similar platform to provide financing to primary users of agriculture commodities is currently being developed.

The Ultimate Guide to British Taxes

The United Kingdom has a long list of tax codes, so it might seem confusing. However, British taxes are relatively simple for many people.

Unless you have a slew of properties and investments, you don’t have to know a lot to pay your taxes. All you need to know is how you earn money and how much, and you can determine what taxes you need to pay.

Basics of British Taxes

If you live in the United Kingdom, you should have a basic understanding of British taxes. Whether you grew up in the UK or an ex-pat living abroad, you need to know what taxes to pay and how to pay them.

In the UK, there is a long list of tax codes, so it can be complicated. However, you don’t need to understand everything, only what applies to you and your situation.

You don’t need to be a UK citizen to pay taxes, but you will need a national insurance number. You’ll typically get a number when you work in the UK, and this gives you access to certain benefits.

Residency and British Taxes

Whether you’re a citizen or not, you may still have to pay British taxes. If you live in the country during a tax year, you’ll have to pay taxes on the income you earn there.

Only UK citizens have to pay British taxes on income from other countries. Citizens of other countries may be eligible for a tax allowance, which prevents you from paying taxes on income to two different countries.

There are a few factors you can use to determine your residency status.

If you stay in the UK for 183 days out of the year, you will count as a UK resident.
You can also count as a resident if you buy a home and live in it for at least 91 days, as long as 30 of those days are within the tax year.
Another way to be considered a resident is to work in the UK for 356 days with no long breaks from work.

Determining your residency can help you figure out what taxes you need to pay and whether you qualify for certain allowances. However, you have to consider the UK tax year when calculating dates of work or residency.

The UK Tax Year

In the UK, the tax year starts on 6 April. The UK tax year ends on 5 April of the following year.

While it can be easy to consider the calendar year, it can be a problem. If you fit the qualifications for residency, you need to make sure you base that off the tax year.

The same is true if you don’t want to qualify as a UK resident. In that case, you would need to make sure you’re out of the country for the proper length of time.

What Taxes Do You Have to Pay?

When learning about British taxes, you should understand the basic types of taxes. Like other countries, you will probably have to pay income taxes.

However, depending on your situation, you may have a few other types of taxes to consider.

Income Taxes

Income taxes are the easiest type of tax to think about. The amount of income you earn determines how much you owe in taxes.

Your income taxes include money you make from a traditional job. However, it can also include income from other sources:

Self-employment income
Certain state benefits
Benefits from a job
Pensions
Interest on savings accounts
Rental income
Income from a trust

You will typically get some sort of tax allowance, which means you won’t have to pay taxes on some of your income. The Personal Allowance covers income you earn up to £12,500.

If you have freelance income or income from a rental property, you won’t have to pay taxes on the first £1,000 you earn. The tax rates for income tax vary from 0 to 45 percent.

Property Taxes

If you own any property in the UK, you will need to pay taxes on that property. When you buy a home worth more than £125,000, you’ll need to pay a Stamp Duty Land Tax (SDLT).

However, you won’t have to pay SDLT on your first home unless it’s worth more than £300,000.

SDLT has different tiers, and that can determine the amount you’ll pay in property taxes. If you have to pay taxes, you will need to figure out the value of your home.

For houses up to £125,000, you won’t ever pay any taxes.
Between £125,000 and £250,000, you’ll pay 2 percent.
The tax rate from £250,000 to £925,000 is 5 percent.
If your home is up to £1.5 million, you will pay 10 percent on the value over £925,000.
Finally, any value over £1.5 million will have a tax of 12 percent.

While you may not need to pay proper taxes at first, you may need to in the future.

Capital Gains Taxes

Another type of tax you should know about in the UK is the capital gains tax. You’ll only need to pay this type of tax when you dispose of an asset, especially when you make a profit.

You can expect to pay this tax if you sell property, give it as a gift, or exchange it. The tax applies to possessions worth more than £6,000, except for your car.

It also includes property that isn’t your main home, business assets, and some investment shares.

Inheritance Taxes

Inheritance taxes are not too common, but you should know about them if you have family in the UK. When you inherit an estate, you may need to pay a UK inheritance tax.

If the value of the estate is less than £325,000, you won’t have to pay anything. You can also avoid the tax if you leave the value over that threshold to your spouse, children, or a qualifying organization.

VAT

A more common type of tax to pay in the UK is VAT, or Value Added Tax. The tax rate varies based on the type of goods or services you purchase.

It can be as low as 0 percent or as high as 20 percent. Twenty percent is the standard rate, while food and children’s clothes can qualify for no VAT.

Other goods and services might have a reduced rate of five percent. Don’t forget to budget for VAT when making purchases.

Tax Facts

Whether you’ve lived in the UK your whole life or just moved there, you should understand how British taxes work. Not only should you consider the tax rates, but you should also consider the types of taxes.

If you know you have certain investments or properties, you’ll know you need to pay taxes on them. However, if you don’t have any of that, you will primarily have to worry about income taxes.

Do you want to learn more about finances in the UK, check out our recent blog posts!

Finance

What’s the secret to trading on the financial markets?

Giles Coghlan, chief currency analyst at HYCM

There are countless books claiming to elucidate exactingly how to invest over the long-term. However, ask any seasoned trader what the secret is to an effective investment strategy and you’ll quickly find there is no one tactic or panacea for consistent growth.

Instead, what most traders rely on is an informed and reactive understanding of both current affairs and unfolding market trends to help inform their investment decisions. By letting this understanding dynamically inform one’s portfolio, they are able to confidently react to sudden market shocks.

Investors must therefore have one eye on the present and one eye on the future, and understand how different social, political, geographical and economic events could impact their portfolio. This understanding must be informed by an awareness of how past events have affected the prices of different assets. Thankfully, there are plenty of useful ways that investors can prep for the future.

Markets are all about cause and effect

The fundamental operation of the financial market is one of cause and effect; one event or price movement will inevitably affect the prices of other assets. Whilst this is a simple enough concept, big political and social events often trigger a multiplicity of effects, which can in turn impact on one another.

For example, the recent outbreak of coronavirus is having a major impact on global supply chains; China’s productivity has been negatively affected, which has had a flow-on effect on major businesses that rely on China as part of its supply chain.

In terms of market volatility, there is a huge amount of historical evidence which shows how the coronavirus could impact asset prices. One central theme is likely to be the increase of value in ‘hard commodities’ — physical investments like gold, steel and oil. That is because these so-called safe haven assets are perceived as having global appeal and consistent demand, and therefore offer greater resilience in times of volatile trading conditions.

Never overlook the advantages of an informed strategy

I doubt you could find many long-term traders who have not woken up one morning to see that there has been a dip in the value of their investments as a result of an unforeseen geopolitical event. For those who find themselves in this situation, it can be easy to panic and make uninformed decisions. This is the entirely wrong approach to take.

By its very nature, finance is an unpredictable sphere of work, and unexpected shocks are par for the course. That’s why the strongest financial plans tend to include or account for the unforeseen. When prices dip or there is a sudden market shock, it has been for the most past accounted for and leaves little room for sudden trades that are informed by the heart, not the mind.

Remember to diversify (within limit)

Another way of managing market volatility is ensuring your portfolio is diverse, with investments spread across multiple markets. Doing so reduces your portfolio’s risk of suffering significant loses should one particular market or sector be adversely affected by an unexpected event. However, the key to diversification is not to cast your net too wide.

The broad points that need internalising here can be surmised very briefly: knowledge is power.

Mastering the complex nature of different financial markets is not simply about watching the fluctuating prices of assets. It’s also about understanding the historical performance of different markets, analysing previous trends and using all this as a guide to manage your investments during sudden political and economic shocks.

What’s more, any investment decision or trade needs to be part of a bigger strategy with goals, returns and risk exposure all clearly defined. Doing this ensures that investors and traders are in the position to stay on top of their financial portfolio.

High Risk Investment Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. For more information please refer to HYCM’s Risk Disclosure.

Giles Coghlan is Chief Currency Analyst at HYCM – an online provider of forex and Contracts for Difference (CFDs) trading services for both retail and institutional traders. HYCM is regulated by the internationally recognized financial regulator FCA. HYCM is backed by the Henyep Capital Markets Group established in 1977 with investments in property, financial services, charity, and education. The Group via its relevant subsidiaries have representations in Hong Kong, United Kingdom, Dubai, and Cyprus.

Should You Open a Joint Bank Account with a Business Partner?

When you first start your business, having one bank account may have been enough to handle your financial needs. Now that you’ve grown, you’re wondering if it’s time to consider a joint bank account for your business.

Opening a joint bank account could make it much easier to handle your business’ financial needs.

Have you never had a joint bank account? Are you curious about the benefits and disadvantages of having one?

We’re going to give you a quick rundown on what you need to know about having a joint account.

What Is a Joint Bank Account?

The concept of a joint bank account isn’t difficult to understand. Essentially, a joint bank account can allow different account holders to deposit and withdraw money.

In terms of function, there isn’t much difference between having a joint bank account and a regular bank account for your business.

Each account holder will have their own chequebook and debit card that can allow them to make purchases or take out money at ATMs.

They’ll be able to access their account online and have all of the regular functions associated with a normal account.

Most joint bank accounts only have two account holders like spouses or two business partners, but you don’t have to stop at giving only two people access. You can open a joint bank account with three people, five people, or as many as you desire.

Joint Bank Account Pros

Opening a joint bank account with your business partner can have a lot of benefits.

If you’ve been on the fence about whether or not opening one is the right thing to do, take some time to learn about all of the different ways having a joint account can help you and your business partner.

Transparency

Does it occasionally feel like you and your partner are on completely different pages when it comes to finance? Opening a joint bank account can give you some much-needed insight into your spending and cash flow.

It’s easy to say that you’ll always let someone know when you make a big withdrawal or deposit, but emergencies and last-minute purchases do happen.

Juggling multiple bank accounts for one business can start to be a little tricky. Eventually, you’ll start to lose track of what’s in each account.

When you have a joint account, you and your business partner can handle making all of your purchases and manage all of your business expenses out of one account. It’ll make paying bills and managing finances a lot easier.

Having two sets of eyes on the same account can also be helpful when you’re balancing the books and making purchasing decisions.

You may think that you’re able to make a purchase, but your partner can double-check your numbers to be completely sure.

Speed

You’ve found the perfect office space for your growing team and the realtor you’re talking to wants you to make an offer fast. Unfortunately, your partner has your bank account information, and they’re on vacation for the next 10 days.

Working out of a single bank account can seriously slow down some of the work and decisions you want to make.

When you have a joint account, you won’t have to worry about delaying any important purchasing decisions. As long as you have your account information, you can make purchases whenever you want.

Extra Insurance

You’d like to think that every deposit you make is foolproof, but you never know what can go wrong.

The person that wrote you a cheque may have miscalculated how much they have in their account. It’s even possible that the bank itself could have problems with clearing deposits.

You may not know this, but both the FDIC and NCUA provide $250,000 of federally backed insurance coverage for each depositor. This is done in case of bank failure.

If you open a joint account with your business partner, that $250,000 will turn into $500,000. This can give you some extra much-needed protection in case anything goes wrong.

Joint Bank Account Cons

So far it may seem like opening a joint account could be the best thing you do for your business, but it isn’t for everyone.

There are plenty of benefits that come with having a joint account, but there are downsides too. Before you decide on opening your joint account, make sure you keep these potential downsides in mind.

No Individual Protection

Depending on how you set up your account, creditors could have the ability to claim funds in your shared account.

If your partner is going through financial trouble or a legal matter like a divorce or lawsuit, the money you have in your joint account could be used to settle legal matters.

You may have deposited the vast majority of the money into the account, but since the account will be in both of your names, you could lose money if creditors come after your partner.

Security Concerns

If you give more than one person access to your secure bank account, you’ll leave yourself open to potential problems with security.

Your business partner may accidentally lose their wallet or have it stolen. Someone getting a hold of their debit card could be enough to drain the money you have.

Physical things don’t have to be stolen for your account to be compromised. Logging in to your bank account of a public device and forgetting to log out could be enough to put your business finances at risk.

Choose Wisley

Ultimately, you should only open a joint bank account with your business partner if you truly trust them.

You won’t want to share a joint account with someone that has a history of making bad money decisions, isn’t responsible, or could have serious legal trouble on the horizon.

Do you have more questions about baking for your business? We have a lot of helpful content that can help business owners make the best decisions possible around their banking needs.

Be sure to browse all of the content in our banking tagged posts so you can learn everything you need to know about banking when you own a business.

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