Snow Software Acquires Embotics

Snow fortifies its ability to deliver complete technology intelligence with Embotics’ award-winning hybrid cloud management platform

UK – Dec. 4, 2019 – Snow Software, the global leader in technology intelligence solutions, today announced it has acquired Embotics, a hybrid cloud management company. This acquisition brings together two market leaders, enabling CIOs to understand and manage their full technology stack from software and hardware to infrastructure and applications, regardless of whether they live on-premises, in the cloud or in a hybrid environment.

Embotics offers a platform-neutral cloud management solution with one of the quickest time-to-value in the industry. It provides a fast and easy way to automate provisioning, reduce costs and ensure governance across private, public, hybrid and multicloud environments. Leading enterprises such as Nordstrom, NASA and HBO, and service providers like LG CNS and NTT Data, use Embotics to drive their digital transformation.

“The rapid adoption of hybrid cloud by the enterprise has created new challenges for technology and business leaders who must maximise the efficacy and efficiency of technology without sacrificing innovation, productivity or security,”said Vishal Rao, President and CEO of Snow. “Technology intelligence is the future of asset and cloud management, moving beyond the silos created by point tools to provide the insight and manageability organisations need to gain a competitive edge. Embotics is a highly strategic addition to Snow’s portfolio. We are thrilled to welcome the team to Snow and deliver even greater value to our customers and partners.”

“We built Embotics to provide enterprises and service providers with an easier, faster, platform-neutral and fully integrated solution for managing the hybrid cloud and beyond”said Jay Litkey, Founder and President of Embotics. “Today, these organisations are strategically blending on-premises, private, public and multicloud architectures, and that requires a flexible and multi-faceted approach to gain agility through automation while controlling costs and risks. By joining forces with Snow, Embotics will continue to address these issues and answer the next generation of challenges with integrated capabilities at a global scale. Both organisations have a customer-centric DNA and commitment to innovation that will help us achieve our shared vision of technology intelligence.”

Together, Snow and Embotics will offer the first platform that delivers CIOs an integrated perspective across their entire technology stack, empowering them to tackle use cases that require insight into both on-premises and cloud services, such as cloud migration planning, Bring-Your-Own-License (BYOL) optimisation and hybrid cloud cost management. The process of integrating Embotics into the Snow platform will begin immediately, and the companies will have a single go-to-market strategy starting in 2020. The combined business will be optimally positioned for strong growth with an expanded market presence as well as the field and operational resources needed to deliver cloud management at a global scale.

“As IT organisations work to balance transformation initiatives with day-to-day operations, hybrid and multicloud strategies are essential for today’s enterprise,” said William Fellows, Founder and Research Vice President at 451 Research. “Workloads now span public cloud, private cloud and legacy on-premises environments, and that mix is constantly changing to address the needs of the business. With Snow’s acquisition of Embotics, the market will benefit from the combination of their respective strengths on-prem and in the cloud, most notably when it comes to solving the unique challenges of hybrid environments.”

For more information on the acquisition and Snow’s platform, visit www.snowsoftware.com.

About Snow Software

Snow Software is the global leader in technology intelligence solutions, ensuring the trillions spent on all forms of technology is optimized to drive maximum value. More than 4,000 organizations around the world rely on Snow’s platform to provide complete visibility, optimize usage and spend and minimize regulatory risk. Headquartered in Stockholm, Snow has more local offices and regional support centers than any other software asset and cloud management provider, delivering unparalleled results to our customers and partners. To find out more about Snow Software, visit http://www.snowsoftware.com/ and follow Snow on Twitter @snowsoftware.

NDB Board of Directors meets in Shanghai, approves three projects with loans aggregating to USD 937 million

On December 2, 2019, the 22nd Meeting of the Board of Directors of the New Development Bank (NDB) was held in Shanghai, China.

The Board approved three projects with loans aggregating to approximately USD 937 million, bringing the NDB’s portfolio to 49 projects with loans aggregating to USD 13.7 billion.

Hubei Huangshi Modern Tram Project

The NDB will provide a loan of RMB 2.76 billion (approx. USD 400 million) to the People’s Republic of China for Huangshi Modern Tram Project. It will address urban transport connectivity problems in Huangshi, a municipality in the southeastern part of Hubei Province, through the construction of a modern tram network with a total length of 27.33 km. The components of the Project include: i) laying of tracks, construction of stations and installation of associated facilities for the tram network; ii) procurement of rolling stock; and (iii) consultancy support for commissioning, preparation of operations and maintenance plan, capacity building and project management.

Manipur Water Supply Project

The NDB will provide a loan of USD 312 million to the Republic of India for Manipur Water Supply Project. It will address serious challenges in clean drinking water supply in Manipur, a small mountainous state in the northeastern region of India, through construction and upgrade of drinking water supply infrastructure. The components of the Project include construction and upgrade of drinking water supply systems in: i) Imphal Planning Area, the capital city of Manipur; ii) additional 25 towns; and iii) 1,731 rural habitations.

Indore Metro Rail Project

The NDB will provide a loan of USD 225 million to the Republic of India for Indore Metro Rail Project. The Project is to implement a metro line of approximately 31 km in the city of Indore. The Project will provide mass rapid transit capacity for the city’s major mobility corridors, thereby contributing to local economic development and an improved urban environment by reducing traffic congestion and pollution.

The Board also approved technical assistance totaling to USD 0.7 million for two projects from India and Russia.

Mizoram Tuirini Small Hydro Project

The NDB will provide technical assistance of USD 300,000 to the Republic of India for Mizoram Tuirini Small Hydro Project. The NDB’s technical assistance will provide consulting services aimed at preparing the Mizoram Tuirini Small Hydro Project. The project envisages construction of a small hydropower plant with an installed capacity of 24 MW in the state of Mizoram, to increase installed power generation capacity of Mizoram.

Krasnodar Cable Car Project

The Bank will provide technical assistance of USD 400,000 to the Russian Federation for Krasnodar Cable Car Project. The NDB’s technical assistance will provide consulting services aimed at preparing the Krasnodar Cable Car Project up to the stage when it can be considered by external financiers to seek approval for its financing. The project envisages the construction of a cable car network to be used as an alternative public transportation modality in Krasnodar city, Russia to relieve traffic congestion.

It is the first time that the NDB Board of Directors approved the provision of technical assistance through the Bank’s Project Preparation Fund (PPF), a multi-donor fund open to contributions by all the Bank’s members. The PPF’s objective is to support preparation of bankable projects to facilitate borrowing member countries to raise funds for such projects from the NDB or other multilateral development banks.

During the Meeting, an update on the NDB project pipeline and status of approved projects was provided to the Board. The Board also discussed matters pertaining to equity investments, funding programme, treasury related matters, membership expansion, review of NDB’s General Strategy: 2017-2021 and development impact of the Bank’s operations.

On December 2, 2019, the 13th Meeting of the Audit, Risk and Compliance Committee (ARC) of the New Development Bank was held in Shanghai. The ARC reviewed Quarterly Audited Financial Statements for the New Development Bank and the Project Preparation Fund of the NDB for the period ended September 30, 2019. The ARC also discussed matters pertaining to risk, internal audit and compliance.

The 8th Meeting of the Budget, Human Resources and Compensation Committee (BHRC) of the New Development Bank was held on December 2, 2019.  The Committee considered the Budget Utilisation Report for CY2019 and the Proposed budget for CY2020 as well as the three Year Budget for 2020-2022. The Committee also discussed matter pertaining to recruitment and diversity.

Background Information

The NDB was established by Brazil, Russia, India, China and South Africa to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, complementing the existing efforts of multilateral and regional financial institutions for global growth and development. To fulfill its purpose, the NDB will support public or private projects through loans, guarantees, equity participation and other financial instruments. According to the NDB’s General Strategy, sustainable infrastructure development is at the core of the Bank’s operational strategy for 2017-2021. The NDB received AA+ long-term issuer credit ratings from S&P and Fitch and AAA foreign currency long-term issuer rating from Japan Credit Rating Agency (JCR).

High net worth millennials need professional advice. Here’s what those in finance need to know

Deloitte currently estimates that by 2020, millennials’ total net worth worldwide will be more than double what it was in 2015. There are several reasons that account for this trend, some of which include rising wages and the improving quality of life in developing countries.  

However, there is another driving force: one of the largest intergenerational transfers of wealth in history.

Baby boomers, the children of the late 40s, 50s and early 60s, were able to buy property at a low-cost relative to income. Their homes, over the ensuing decades, have hugely increased in value; in the UK the average price of a house has doubled since 1996––even after accounting for inflation.

For millennials, this has had two implications. Firstly, many are reliant on their parents if they want to purchase a house. Secondly, they could be set to collectively inherit a huge amount of wealth. Research from EY suggests that those born between 1981 and 1996 in the US will receive $30 trillion from their parents in the next 20 years[1].

Consider the fact that the global economy is valued at $80 trillion, and the scale of this wealth transfer begins to become apparent. For those who already have property, along with high net worth (HNW) and ultra-HNW individuals, investing their new wealth in stocks and shares will be the order of the day, resulting in a changing client base for financial advisers.

Some things will be consistent with what has come before, according to research from Deloitte[2]; 82% of millennials still want to discuss their financial situation face-to-face with an adviser, meaning a wholesale switch to digital communication is unlikely. Furthermore, the ultimate aim for millennial investors will still be healthy and sustainable returns.

What could change is the kind of assets new investors are interested in. The growth of “impact investing”, also known as environmental, social and governance (ESG) investing, is particularly popular among millennials––EY predicts that almost a fifth of investments now under management worldwide are in sustainable financial products[3]. What’s more, two thirds of young people feel “obliged” to change the world for the better, meaning this is likely to inform their future investment decisions[4].

There are many examples of ESG investments providing good returns. The Cordes Foundation, headed by 29-year-old Steph Stephenson, has 100% of its $230 million in impact investments––and achieved an average yearly return of 8%[5].

The rise of millennial HNW individuals has one major implication for financial advisers: they need to be entirely up to speed with ESG financial products and the options available to millennial investors. With the importance of ESG products to the financial sector only likely to increase in markets around the globe, this is an important task that must be prioritised.

Alpa Bhakta is the CEO of Butterfield Mortgages Limited. Part of the Butterfield Group and a subsidiary of The Bank of N.T. Butterfield & Son Limited. Butterfield Mortgages Limited is a London-based prime property mortgage provider with a particular focus on the needs of UK and international HNW individuals.


[1] EY (2017), Sustainable Investing: The millennial investor

[2] Deloitte (2015), Millennials and wealth management

[3] EY (2017), Sustainable Investing: The millennial investor

[4] Deloitte (2015), Millennials and wealth management

[5] Sarah Murray (2019), Rich millennials push to put family wealth into impact investments

SMEs in cashflow black hole as they wait for £24bn in late payments

Late payments up more than £10bn in a year

15% of British freelancers spend 4 hours and above a week chasing invoices

CEO of ETZ Payments, Nick Woodward, provides commentary on how late and inconsistent payments are hurting businesses and freelancers alike

Today, new research showed that Small and medium-sized companies are waiting to receive £23.4billion, up from £13billion in 2018. More than half of businesses are chasing money owed, with the bill for trying to collect it hitting £4.4billion, says retail payment authority Pay UK. This comes as ETZ Payments reveals startling national representative research that shows that nearly a sixth of freelance and contract workers spend over 10% of their working week chasing invoices and payments. The new research from PayUK showed that the average amount owed to each firm had risen from £17,000 last year to £25,000 today. This demonstrates that across the board, self-employed contractors, freelancers, and small businesses are under strain. As we near the general election and with almost guaranteed further Brexit uncertainty, SMEs and workers are going through one of the most turbulent periods of their existence.

Nick Woodward, CEO of ETZ Payments, a back-office solution provider for the recruitment sector, offers the following commentary:

“This year and next year will undoubtedly be a turbulent period for small businesses and workers alike with myriad political and economic issues and an increasing amount of late payments. This issue is seriously harming cash flow, investment and growth across the UK economy. There are over 2 million freelancers and 5.7 million SMEs today, and with financial constraints such as chasing invoices, this will harm productivity and profit, and more needs to be done by the next government to ensure that these entrepreneurs, business owners, managers and workers, are paid justly and on time to keep the economy moving.”

Atos and Fintech Circeo develop innovative loan management solution for major worldwide retailer

A solution to help run Loan Management from a hybrid cloud leveraging Google Cloud Platform

November 20, 2019 Atos, a global leader in digital transformation, and Circeo, a leading Fintech in developing next-generation retail loans software, today announce the development of an innovative loan management solution built with Google Cloud Platform. Developed initially for the bank subsidiary of a major worldwide retailer, Atos and Circeo will soon begin bringing the solution to market for other customers.

This offering is based on a hybrid cloud solution which combines Google Cloud Platform (GCP) together with Atos’ expertise in end-to-end cloud orchestration and management, and infrastructure services and support. It enables users to benefit from the advantages of a fully-managed and secure cloud service which is seamlessly integrated with Google Cloud Platform (GCP).

With this joint solution, clients can run Fintech software built on Oracle technologies on hybrid cloud infrastructures, and thereby benefit from elasticity, resilience, innovation and pay-per-use models – without the need to redevelop their existing systems. The Google Cloud Atos partnership ensures that the client benefits from direct, secure and high-performance network connectivity, for faster and optimised access to Google Cloud resources.

This new solution from Atos and Circeo will help the end-customer manage peaks of activity in Loans, particularly during sales and specific events such as black Friday thanks to the elasticity and resilience of GCP.

Circeo is an innovative Fintech delivering a next generation flexible digital lending platform, based in the Cloud, which enables tailor-made financial products to be made within just a few days. It is part of Atos’ FinTech Partner Program and one of Atos’ most dynamic Fintech partners.

“This solution demonstrates the unique value we deliver to our customers thanks to our ambitious Fintech Engagement program which aims to bridge the gap between banks and Fintech.” says Wim Los, SVP, global Head of Atos and Google Cloud enhanced Alliance at Atos. “Developed by Atos and Circeo, it is a framework which will be replicated for other clients, on other markets”.

“We are glad for this unique opportunity leverage our global partnership with Atos to promote and implement the Atos-Circeo Retail Lending Factory platform” says Laurent Clerc, Founder and CEO at Circeo“By delivering unique value with Atos, we expand existing client portfolios and onboard new clients into production.”

We’re delighted that Atos and Circeo chose to develop this solution with Google Cloud Platform,” said Rayn Veerubhotla, Director, Partnerships at Google Cloud. “With this solution, customers can modernise their existing infrastructure and begin to take advantage of the core capabilities of Google Cloud.”

Atos was recently recognised as ‘Global breakthrough partner of the year’ by Google Cloud.

About Atos

Atos is a global leader in digital transformation with over 110,000 employees in 73 countries and annual revenue of over € 11 billion. European number one in Cloud, Cybersecurity and High-Performance Computing, the Group provides end-to-end Orchestrated Hybrid Cloud, Big Data, Business Applications and Digital Workplace solutions. The group is the Worldwide Information Technology Partner for the Olympic & Paralympic Games and operates under the brands Atos, Atos Syntel, and Unify. Atos is a SE (Societas Europaea), listed on the CAC40 Paris stock index.

The purpose of Atos is to help design the future of the information technology space. Its expertise and services support the development of knowledge, education as well as multicultural and pluralistic approaches to research that contribute to scientific and technological excellence. Across the world, the group enables its customers, employees and collaborators, and members of societies at large to live, work and develop sustainably and confidently in the information technology space.

Could this be the SME election? Small businesses employ 16million – over a third of the electorate

SME experts – IW Capital and the UKBAA – discuss the importance of SME success to the next Government

Today will see the three main party leaders set out their plans to secure the support of the UK’s business leaders at the CBI conference. Boris Johnson is set to make the case for getting Brexit done, while Jo Swinson is to claim that the Lib Dems are the “natural party of business”. Labour is to focus on apprenticeships and training for the business community.

When setting out their stall in business policy, one area that is set to have a huge impact is the support promised for small and medium enterprises across the UK. The SME community employs 16.6million of the roughly 45million eligible voters in the UK and contributes £2.2trillion (52%) to the economy. If the next Government can make it clear that they are the party to help this sector of business to grow and thrive they could see significant support from one of the biggest sections of voters to exist in the UK.

Luke Davis – CEO of SME investment house IW Capital says:

“The importance of the SME sector is hard to overstate, and in the context of the upcoming election will be hugely important to the future economy. With over a third of the electorate employed by small businesses this could really be a swing vote of society – if this section of the workforce feels more confident in their job security and business growth with one party, it will almost undoubtedly affect voting decisions.

“For SMEs to feel confident in their capacity to grow, employ more people and expand they need to trust that the incoming Government is going to look after them and deliver security. The range of innovative and agile firms in the space currently is reflective of the entrepreneurial spirit of the UK which if fostered correctly could kick-start the wider economy into a period of growth.”

Jenny Tooth, CEO of the UK Business Angels Association, has commented:

“Not only is it the employees of SMEs that are keeping a keen eye on this election, but also the investors involved within the SME arena. With Britain’s impending exit from the European Union, the loss of the Jeremie fund and Horizon 2020 are bound to leave regional SMEs proactively seeking private investment more fervently. However, the mindset of investors could change post-Brexit. Investors will be looking for greater longevity when assessing the potential of a business, and will now look to how scalable businesses are in terms of their international reach. The forthcoming election and the pledges that the parties sell to businesses needs to reassure investors that the environment they delve into is a sustainable one.”

The Dutch Fund for Climate and Development open for business

The Hague, November 15, 2019 – The Dutch Fund for Climate and Development (DFCD) has officially been launched in the presence of government officials, NGOs, investors, politicians and other interested parties. In May of this year, the DFCD was awarded to the consortium of Dutch development bank FMO, SNV Netherlands Development Organisation (SNV), World Wide Fund for Nature (WWF-NL) and Climate Fund Managers (CFM). “Today’s launch means that the DFCD is officially open for business,” said Linda Broekhuizen, Chief Investment Officer at FMO. “The consortium is keen to connect with innovative entrepreneurs with climate-related businesses and with private investors keen to mobilize much-needed funding from the private sector to join us in our mission to create a more climate-resilient world.”

Climate change is one of the biggest challenges we face today. It is already affecting people and nature across the globe, with developing countries being most impacted. “The poorest communities are the most vulnerable to climate change. Poor farmers and others at the bottom of the pyramid suffer and lose their livelihoods even with small changes in rainfall patterns or temperature”, as Meike van Ginneken, Chief Executive Officer at SNV explained.

There is an urgent need for investment to enable vulnerable communities and ecosystems to adapt to climate change. Carola van Rijnsoever, Director of Inclusive Green Growth, and Ambassador for Sustainable Development, Dutch Ministry of Foreign Affairs, said: „The challenge we face to help communities adapt to and mitigate the effects of climate change is enormous, and the case for action is incredibly clear. We cannot do this with governments alone. We need all stakeholders to be strong enough to confront this challenge. The set-up of this consortium in which finance and NGOs come together, is unique and uniquely positioned to do this.“ The government of The Netherlands has committed to addressing this need through the DFCD, making EUR 160 million available in the period 2019-2022 for climate adaptation and mitigation, of which at least 50% is earmarked for climate adaptation projects.

DFCD is a direct response to the increasing demand for climate adaptation projects that have to date suffered from a lack of funding compared with mitigation efforts. Linda Broekhuizen adds: “In 2018, USD 612 billion was invested in climate mitigation which is important and much needed. In contrast however, only 5%, USD 30 billion, was invested in adaptation. Adaptation may have to be USD 180 billion a year if the 2030 goal is to reach the USD 1.7 trillion as required according to the most recent report of the Global Commission on Adaptation.”

To help bridge this funding gap the DFCD aims to mobilize upwards of EUR 500 million from private sector investors. Andrew Johnstone, Chief Executive Officer of Climate Fund Managers adds: “The opportunities are there. Take water for example: 80% of the world’s wastewater enters rivers and oceans untreated and by 2025, half of the world’s population will be living in water stressed areas. Neither the private nor the public sector is doing enough, but together the investment potential is enormous, as is the impact to be delivered.”

This partnership of NGOs and financiers seeks to develop and finance sustainable private sector solutions to enhance resilience to the effects of climate change. These projects will boost the health of freshwater, forest, agricultural and ocean ecosystems, and improve water management.

“The consortium takes a landscape approach through investing in projects which are planned in an inclusive manner, and build on a solid understanding of the landscape, ecosystems and communities. In this way these projects will contribute to healthier ecosystems,” said Kirsten Schuijt, Chief Executive Officer of WWF-NL. “New and incredibly exciting in this consortium is that there is early-stage funding available to convert adaptation opportunities into bankable projects.” 

WWF and SNV take on the key role of developing climate-relevant projects from an early-stage idea to a bankable business case. Climate Fund Managers and FMO provide investment capital, delivering projects to full operations. This combination of early-stage involvement with full life-cycle funding will ensure lasting, long-term impact that contributes to the Paris Agreement and the United Nation’s Sustainable Development Goals (SDGs).

Interested parties can contact the DFCD through: www.thedfcd.com.

The Dutch Fund for Climate and Development open for business
In picture from left to right the DFCD partners at the official launch event in The Hague: Andrew Johnstone, CEO of Climate Fund Managers, Kirsten Schuijt, CEO of WWF-NL, Linda Broekhuizen, CIO of FMO, Albert Bokkestijn, project manger DFCD at SNV, Carola van Rijnsoever, Director of Inclusive Green Growth, and Ambassador for Sustainable Development, Dutch Ministry of Foreign Affairs.

In picture from left to right the DFCD partners at the official launch event in The Hague: Andrew Johnstone, CEO of Climate Fund Managers, Kirsten Schuijt, CEO of WWF-NL, Linda Broekhuizen, CIO of FMO, Albert Bokkestijn, project manger DFCD at SNV, Carola van Rijnsoever, Director Inclusive Green Growth, and Ambassador Sustainable Development, Dutch Ministry of Foreign Affairs.

Onguard’s new machine learning function enables companies to predict customer payment behaviour

London, 14 November 2019 – Onguard, the fintech company that streamlines the entire order-to-cash process, has announced that in collaboration with Altares Dun & Bradstreet and Quantforce, machine learning will feature in its platform to enable businesses to predict the payment behaviour of debtors and act accordingly. 

Available from early 2020, the platform brings together historical data from Onguard’s software, external debtor information from business data expert Altares Dun & Bradstreet and the relevant invoice and payment history of the customer via machine learning on a scorecard generated by Quantforce. The resultant score ranks the debtors in order of the risk of non-payment which enables organisations to estimate and anticipate the payment behaviour of customers at an early stage.

Adjusting workflows based on debtor information
Once the customer’s risk profile is known, it becomes possible to adjust workflows directly to payment risk with the help of artificial intelligence. When it is predicted that a customer will not pay or pay too late, it is possible to immediately take the necessary actions. This saves the organisation time and limits exposure and unnecessary tasks, such as sending reminders or transferring it to collection agencies. Similarly, this avoids those customers who are shown to regularly pay on time being bothered unnecessarily. 

“There is an enormous amount of data available both within and outside organisations, which is currently not being used,” says Daniel van den Hoven, VP Alliances & Partners at Onguard. “With all available data, organisations can better understand customers.  In addition, credit managers see at a glance which customer needs extra attention and can easily prioritise. The advantage for the organisation is that there is more focus on high-risk customers and that the processing time for invoices becomes shorter.”

Thanks to the collaboration between Quantforce, Altares Dun & Bradstreet and Onguard, it is possible for businesses to predict in advance whether and when customers will pay. This is beneficial for both the organisation and the customer because immediate action can be taken to find a solution when a payment fails. In this way, credit management is organised more proactively and efficiently

Rob Berting, Managing Director of Quantforce adds: “The collaboration between these three parties from the same market is logical. All three have our own expertise and because we have joined forces, we can offer even more value to the customer. Quantforce assigns the scores on the basis of proven algorithms and also applies machine learning. This makes it possible to automatically adjust workflows on the Onguard platform to the debtor risk. In this way Onguard can optimally support the customer and their debtors in the order-to-cash process.”

Adriaan Kom, Director Partnerships at Altares Dun & Bradstreet: “We place great value on the customer relationship and thanks to this collaboration we can add even more value to the customer.  The combination of data gives organisations an insight into how a debtor will behave in the near and distant future. In this way a company gains a more in-depth understanding of the customer which will elevate the business to a higher level.”

About Onguard

Over the past 25 years, Onguard has grown from a specialist in credit management software to a market leader in innovative solutions in the field of order to cash. The integrated platform ensures that all processes in the order-to-cash chain are optimally linked and that critical data can be shared. Intelligent tools which interface seamlessly combine to provide an overview and control of the payment process and help build lasting customer relationships. Users in over 50 countries worldwide work with the Onguard platform on a daily basis to achieve successful management and tangible results in Order to Cash and Credit Management. Read more at http://onguard.com/.

SMEs hoarding record levels of cash amid Brexit turmoil – and it’s costing them billions a year

  • SMEs now hold an estimated £333 billion in cash deposits – a record high
  • But SMEs are set to miss out on £3.7 billion in interest this year because their money is languishing in low-paying savings accounts
  • This may also be damaging to the UK economy as it relies heavily on the performance of SMEs, says Flagstone

UK small and medium-sized businesses are holding record levels of cash as uncertainty surrounding Brexit persists – and it is costing them billions of pounds a year, new analysis reveals.

In the last 12 months, SME’s cash reserves have increased by more than 3% to £333 billion – the highest level on record – according to analysis of UK Finance figures by the Centre for Economic and Business Research (CEBR) on behalf of Flagstone, the UK’s largest cash deposit platform.

Much of this growth has been from deposits into instant-access accounts. Indeed, nearly 58% of all SME cash reserves are now being held in instant-access accounts, suggesting that firms want quick access to their money.

However, by doing this firms are missing out on billions of pounds of interest as these accounts typically pay the lowest interest rates.

With SMEs currently holding £191 billion in instant-access accounts and receiving an average rate of 0.41 % [1], they are on track to earn £566 million in interest in the coming year, CEBR’s analysis found. However, if they were to switch to a market leading instant-access rate of 1.40% [2], they would earn £2.7 billion in total in the next year – £2.1 billion more than they are currently expected to earn.

Further, UK SMEs currently hold £141 billion in fixed-rate deposit accounts earning on average 0.86%, meaning they are expected to earn £1.2 billion in the next 12 months. But if SMEs instead switched to the market-leading 1.95% one-year fixed rate, they would collectively earn £2.8 billion in interest in the coming 12 months – £1.6 billion more than they would have otherwise.

It means, in total, firms are expected to miss out on £3.7 billion in interest in the next year because their money is languishing in low-rate savings accounts.

That extra £3.7 billion would be enough to fund for a year the salaries of more than 123,360 additional workers on the UK average annual salary of £29,588[3].

Separate research conducted by YouGov on behalf of Flagstone reveals why SMEs are reluctant to shop around for a better rate for their cash.

Almost four in ten (39%) of the 500 firms surveyed said the hassle of opening an account is the greatest barrier stopping them from moving their money followed by 34% of firms who said the perceived risks of depositing money with a challenger or non-high street bank was the biggest deterrent.

Andrew Thatcher, Co-Founder and Co-Managing Partner of Flagstone, said: “It’s clear that firms are worried about what effect Brexit will have on their business and are hording cash in case the waters become choppy. However, whilst this may be a sensible move, our study reveals that firms aren’t choosing the best home for their cash. Often, firms are getting sub-optimal rates of interest when they could be getting much higher returns on their cash by shopping around.

“The research shows that savings apathy doesn’t just affect individual savers, but also the nation’s businesses too. Each year SMEs are missing out on billions of pounds of interest because they’re failing to shop around for a better deposit rate for their cash reserves. Firms that forego this extra cash could be missing out on the chance to grow their business by hiring extra staff or investing in productivity improvements.”

“The solution a platform like Flagstone provides is that it not only consistently keeps business owners and financial directors in the path of the best rates, but it also removes the barriers to switching, providing a simple way to increase income and reduce risk. If you are an SME or charity with excess cash at bank it makes no sense not to at least consider a service such as Flagstone and choose from one of hundreds of deposit products at the touch of a button to earn more money.”

[1] All figures on current SME cash holdings and average interest rates are Bank of England data, analysed by the Cebr

[2] Correct as at 4 November 2019

[3] Employee earnings in the UK: 2018, released by ONS on 25 October 2018. Annual figure calculated by multiplying median full-time gross weekly earnings (£569) by 52

Flagstone

Flagstone is an FCA authorised and regulated fintech company (FCA reference numbers 676754 and 605504) located in London and founded in 2013. Flagstone’s online cash deposit platform enables companies, charities and individuals to earn more interest and reduce risk through diversification. Completion of a single application gives the client access to over 550 deposit accounts from 38 different banks and enables them to research and open accounts in just a matter of keystrokes. The platform puts clients in control of their cash, giving them access to market-leading and exclusive rates from a growing panel of UK banks, consolidated reporting and regular new rate alerts to ensure that their cash is working as hard as possible for them 24/7. For more information, see www.flagstoneim.com or watch a short film explaining what we do and how it benefits clients by clicking here.  

All of the UK banks on the Flagstone platform are authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA) and the PRA. Deposits placed with any of these banks via the Flagstone platform are afforded exactly the same Financial Services Compensation Scheme protection (i.e. £85,000 per individual depositor per authorised institution) as if the client placed the deposit directly with the bank.

Financial Sector Turning Backs On Younger Workers As Employers Prefer ‘Loyal’ Older Generations

November 2019

More than a third of business owners in the finance sector would choose to recruit an older worker than a younger candidate with exactly the same skills and experience, according to new research.

In a national survey, more than a third (36%) of 1,000 SME business owners across a range of sectors including education, healthcare, IT, manufacturing, hospitality and tourism said that they would sooner recruit a 55-year-old than a 24-year-old, with 35% of business owners in the finance sector saying the same. Just a quarter (25%) of finance business owners preferred a 24-year-old with the same CV. Issues raised by business leaders about so-called ‘snowflake’ and ‘Millennial’ employees included ‘lower productivity’, ‘higher absence rates’ and ‘a poorer grasp of the English language’, instead preferring ‘loyal’ older workers, according to data gathered by the UK’s most trusted business healthcare provider, Benenden Health.

The study, which also surveyed 1,000 employees, found that nationally more than half (56%) of Generation Z employees (aged 16-23) felt they have been overlooked for roles due to their age compared to 47% of Millennials (aged 24-38), 29% of Generation X (aged 39-54) and a third (34%) of Baby Boomers (aged 55-72). More than a third of employees surveyed in the finance sector felt they had been overlooked for a job due to their age.

However, when it comes to attracting and retaining a workforce, the findings have shown a major discrepancy between what employers and employees see as a priority, with 56% of employees in the financial sector stating that a strong health and wellbeing scheme would increase their likelihood to stay with a business.

Health and wellbeing packages are starting to command increasing importance for employees, with nearly half of all respondents in the finance sector (48%) saying a strong health and wellbeing benefit would increase their likelihood to join or stay with a business. Nationally, Generation Z employees (aged 16-23) revealed they would be willing to sacrifice a whopping third of their salary to receive a healthcare package that fits their personal needs.

Yet, despite this, nearly two thirds (64%) of SMEs surveyed in the finance sector reported that they don’t have a healthcare package in place for employees above statutory allowances, with 57% of those without one claiming they don’t believe it is necessary and nearly half (46%) saying they don’t believe or weren’t sure a strong health and wellbeing package is valuable in recruiting and retaining employees.

In addition, more than a quarter of financial businesses (26%) revealed that they have never consulted workers on what they would value in a healthcare package, despite employees having different priorities depending on their age. Nationally, younger workers revealed that they place value on mental health support, counselling sessions and life skill lessons, whereas older generations said regular medical checks and flexible working were top of their list of potential healthcare benefits.

Helen Smith, Chief Commercial Officer of Benenden Health, commented: “Our research has highlighted some interesting statistics on the attitudes of employers towards a multigenerational workforce. The finance sector appears to be one of the more progressive industries in regard to hiring younger workers, but there is still a preference for older workers, even those with the same skills and experience as younger candidates. Unlocking the potential of a multigenerational workforce is the key to harnessing skills and talents of different generations.

“Our research found that healthcare is becoming increasingly valued by financial workers with nearly half (47%) of employees in the sector willing to sacrifice over 30% of their salary – indicating that businesses should be offering tailored health and wellbeing plans to meet the varied needs of a modern workforce and attract a talent multigenerational workforce

“Younger generations told us that mental health support is of great importance to them, but these priorities change over time. Generation X workers often have the dual commitment of looking after children and parents so flexible working is valued by them, and with employees working longer than ever, ensuring your older workers are catered for as well – through regular eyesight and hearing tests, and ergonomic offices, for example – is vital to maintaining a strong modern workforce.

“At Benenden Health we firmly believe that a healthy workforce is a productive and motivated workforce and having these open conversations with employees and tailoring a healthcare approach to suit will put businesses in prime position for recruiting, retaining and maximising talent.”

Benenden Health is a not-for-profit society with a UK-wide membership of over 815,000, founded in 1905 to bring people together to help pay for medical care when they might need it. Today, it has a mission to support businesses by providing affordable healthcare that helps keep employees healthy and valued and businesses thriving.

To download Benenden Health’s guide to managing the needs of a multigenerational workforce, go to: https://www.benenden.co.uk/health-through-your-life
 

Top five sectors least likely to hire younger generations:

Out of 1,000 SME employers, it was found that these five sectors are the least likely to hire a 24-year-old over a 55-year-old

  1. Manufacturing (11% preferred a 24 year old to a 55 year old with the same CV)
  2. Education (15%)
  3. Tourism and Leisure (19%)
  4. Retail, Hospitality and Catering (19%)
  5. Healthcare (24%)