Category: Finance

Business

The growing movement of people fuels demand for international tax advice

Author ByCFI.co Blogger

4 November 2019

The increasing global movement of people and businesses is driving the significant growing demand for international tax advice. 

The observations come from deVere Tax Consultancy, part of deVere Group, one of the world’s largest independent financial advisory organisations, which operates in more than 100 countries.

The world is currently experiencing the highest levels of movement on record.  

According to the International Organization of Migration, the leading inter-governmental agency in the field, approximately 258 million people – or one in every 30 – were living outside their country of origin in 2017.

That is both a record high – and a number that has beaten all expectations. Indeed, a 2003 projection anticipated that by 2050, there would be around 230 million based outside their birth nation. But the latest projection has been dramatically revised upwards – there will be more than 405 million living away from their country of birth by 2050.

James Green, divisional manager at deVere Group, observes: “We’ve noted a year-on-year increase in international tax advice enquiries of more than a third.  

“This can be attributed, we believe, to three key factors.

“First, is the increasing movement of people. Whether driven by geopolitical, work or lifestyle reasons, more and more individuals are on the move around the world.  

“In addition – and despite the rhetoric of some populist politicians – globalisation in the world of trade and commerce is here to stay and is, if anything, gaining momentum as it encourages economic growth, creates jobs, makes firms more competitive, and lowers prices for consumers.

“Second, since the global financial crisis both individuals and companies have become more financially literate and aware of the importance of specialist financial advice, especially when it comes to cross-border affairs.

“And third, the reporting and tax filing requirements are increasing in most jurisdictions.  For instance – and this is just one example – in the U.S. where the Foreign Account Tax Compliance Act, or FATCA, is almost universally recognised as being burdensome, onerous and complex.”

Director of deVere Tax Consultancy, Mitch Young, notes: “The enquiries are coming from both internationally-mobile individuals and firms who are seeking advice on compliant and up-to-date tax filing, residency issues, inheritance tax, self-assessment, property tax structuring and disclosures, national insurance contributions, trusts and wills.

“Due to this considerable surge in demand for our services we have recruited more senior tax consultants, account managers and in-house barrister intermediaries.

“We have also launched our first tax apprenticeship scheme to find and train the top tax talent of the future.  In addition, we’re in the process of building an international tax network to meet the needs and expectations of our clients.” 

James Green concludes: “The demand for international tax advice is set to grow further still as the world becomes increasingly globalised and as the cross-border regulatory landscapes continue to evolve – and at a faster pace.”

Corporate Finance

Desentum will run a clinical trial on its allergy vaccine this winter supported by 4 M€ of new investments

Author ByCFI.co Blogger

Finnish biopharmaceutical company Desentum is about to initiate a first-in-human clinical trial with its birch pollen hypoallergen designed to improve immunotherapeutic treatment of birch pollen allergy. In a funding round arranged by Springvest Oy, the company raised 4 million euros that it intends to use for funding clinical trials, developing new hypoallergens and advancing business goals.

Desentum develops novel type of immunotherapeutic hypoallergens, so called allergy vaccines. The hypoallergens are biotechnologically produced, modified allergen proteins aimed for improving the efficiency of allergen immunotherapy while also reducing the time required for treatment. The lead product candidate, birch pollen hypoallergen DM-101 (Bet v 1 dm), has produced good results in preclinical tests assessing allergenicity and immunogenicity, and is now advancing to clinical phase.

In clinical trials, the safety and efficacy of a new medicinal product is demonstrated in volunteer study subjects. The primary objective of Desentum’s first clinical trial is to confirm the safety of DM-101, but information about the immunological response generated by the hypoallergen is also collected.

“For the past couple of years, we have worked together with international allergen immunotherapy experts to prepare for the clinical studies. The first study plan was submitted for regulatory and ethics evaluation in the summer of 2019. The study will be performed in Finland and the dosing is scheduled to be completed before 2020 birch pollen season”, explains Pekka Mattila, CEO of Desentum.

To strengthen the company’s financial position, Desentum initiated a funding round in September. It was carried out by a Finnish investment service company Springvest Oy. The public offering was fully subscribed, which translates to approximately 4 million euros of collected capital. Desentum plans on using the majority of the proceeds for funding early-stage clinical trials. The remaining funds will be used for the research and development of new hypoallergens as well as for partnering activities to support late-stage clinical trials and market access.

“We are very happy with the results of the public offering. The collected capital enables us to focus on our primary goal, which is testing the novel immunotherapeutic allergy treatment and bringing it to the market. Today, allergy affects a huge number of people, and I believe that in addition to the expectation of financial return, many investors also hope that our technology could solve a health problem that impacts the life of their family or friends”, says Mattila and continues: “This is our target as well. We have started by looking at birch pollen allergy, but our platform can be used for producing hypoallergens from other allergens, too. We are already developing similar products to address peanut, grass pollen, dog and horse allergies.”

Immunotherapy in allergy treatment

Allergy is one of the most common chronic conditions in Europe. Today, more than 150 million Europeans suffer from allergic diseases. For one in five patients the condition is severe enough to create a constant threat of a severe allergic reaction or an asthma attack. European Academy of Allergy and Clinical immunology (EAACI) predicts that by 2025 allergy will affect half the population in Europe. Allergies cause social and economic burden such as health care costs, missed school and work days and impact on the daily lives of the patients.

Allergies are generally managed by medication that alleviates the symptoms. The most common medications are antihistamines and corticosteroids. Immunotherapy is the only treatment currently known that affects the mechanism of allergy. It re-educates the immune system to tolerate the allergen, decreasing the need for medication. Immunotherapy can be administered as injections or sublingual tablets or drops, and the treatment usually takes a few years. The novel immunotherapeutic products that are under development aim for speeding up the treatment as well as improving the safety, efficacy and convenience.

About Desentum Oy: Desentum is a biopharmaceutical company based in Espoo, Finland. It is specialized in developing a novel type of allergen immunotherapy based on switching the immune system’s response to allergens from hypersensitivity to tolerance by utilizing modified hypoallergens. Desentum, founded in 2011, is a spin-off company from VTT Technical Research Centre of Finland Ltd. In 2013 VTT received an EARTO (European Association of Research and Technology Organisations) Innovation Prize for the work behind the immunotherapeutic products. In 2018, Desentum was awarded a 1,9 M€ grant from the highly competitive Horizon 2020 SME instrument for the first-in-human clinical trial and business development.

Contact:

Pekka Mattila, CEO
Desentum Oy
Tel. +358-500-512934
info@desentum.fi
www.desentum.com

Banking

Overview of the Controversial Modern Monetary Theory

Author ByCFI.co Blogger

Few theories have caused so many discussions as the Modern monetary theory (or MMT), which has been popularized by the leftmost sector of the Democratic Party, US, when it recurred to it to defend the huge expenses of the federal government on an attempt to detoxify the country from the fossil fuels and to finance a Medicare coverage for all.  

The re-birth of the Modern Monetary Theory  

MMT was created in the 1970s by the American economist Warren Mosler and shows similarities with older schools like Chartalism and Functional Finance. It was congresswoman and activist Alexandria Ocasio-Cortez who brought the debate to the table. In January 2019, she claimed that the government should implement Modern Monetary Theory to finance the Green New-Deal, applying political measures similar to those of the 1930s to augment the expenses but for ecologic reasons. In a public interview, she expressed that MMT should “be a larger part of the conversation.”

The approach

Despite the complexity and debate around MMT, there are some basic concepts shared by most of its adepts. The fundamental idea is that since the abandonment of the gold standard, a sovereign estate can print as much money as needed to finance public expenses and inject money into the economy, which they later withdraw in taxes.  They sustain that governments cannot go broke, as they can always create more money to pay off debts.

According to MMT theorists, we have been misled to think that substantial government debt is followed by financial collapse. Moreover, they state that if the spending creates deficit, it isn’t a real problem, as the national deficit is, in fact, the private sector’s surplus.

Modern Monetary Theory and inflation

Mainstream economists argue that it is ridiculous to think that central banks can finance massive spending without causing high inflation or even hyperinflation. Modern Monetary Theory, on the other side, reckons that there is a direct relationship between the circulation quantity of money and the level of prices. Yet, although they recognize the risk of inflation, they see it as a constraint that will keep decision-makers honest. Inflation is perceived as a result of real resource limits, and the Congress should set the spending, tax, and industry policies to keep inflation under control.

Restrictions on Modern monetary theory

Modern Monetary Theory advocates state that governments don´t have a budget constraint, and the only limit they have is the availability of real resources, like supplies and workers. If government spending is excessive in relation to the available resources, inflation could occur; therefore, the importance of proper policies.

It´s undeniable that Modern Monetary Theory keeps gaining attention and adepts, especially in the progressive political sectors. However, they haven´t provided a convincing response to the inherent problem of inflation yet.

Few theories have caused so many discussions as the Modern monetary theory (or MMT), which has been popularized by the leftmost sector of the Democratic Party

Is Modern Monetary Theory the panacea that will solve the world´s woes? Or is MMT just a new buzzword that keeps rising popularity? Implementing it would be a bold, risky experiment with no point of return or the miracle-solution we all crave for?

Could cryptocurrency and blockchain technology be the saviour?

Banking

Understanding Blockchain Technology

Author ByCFI.co Blogger

Blockchain technology finds its origin in the digital coin named Bitcoin. It was invented primarily to sustain it. Although blockchain is tightly associated with Bitcoin and other cryptocurrencies, these are just the top of the iceberg.

Blockchain technology finds its origin in the digital coin named Bitcoin. It was invented primarily to sustain it

Currently, blockchain technology is being used in other commercial applications, and annual growth of 51% is expected for 2022 in several markets, including financial institutions and Internet of Things (IoT).

What is blockchain technology, and what makes it secure?

A blockchain is a list of digital records or blocks of data that are stored in a linear chain that is constantly growing. It´s a kind of digital general ledger than can be shared with many users and that keeps record of every transaction. Each block contains encrypted data, for instance of a Bitcoin transaction, and is linked to the specific user that made it. There´s no way to alter the data in them since they are time-stamped and connected to the previous block.

The security of blockchain relies on the fact that it can be updated only with the agreement of all the participants and the system itself. 

The information of the whole chain is kept in each node, so each participant has an exact copy of the entire chain. If someone wanted to attack the service, he should overturn or nullify every node in the net given that just one operative node is enough for all the information to be available. 

As new records are created, these are verified and validated by the nodes and added to a new block that is linked to the chain. Once added, this block becomes unalterable. For a transaction to be accepted and added, some specific digital signatures or requirements must be met. For example, people that use the crypto-currency Ethereum, must meet several conditions to demonstrate that they have that crypto-currency and can operate with it. 

Why is blockchain useful for?

As it is a peer-to-peer network, where transactions are time-stamped, and that enables managing all the information exchange among the users in an autonomous way, without the need for an administrator, it is an excellent tool for all types of businesses. Any information that needs to be kept intact and available can be safely stored in a blockchain. 

Many industries, such as transport, fintech, and sanitary services, to mention just a few, are taking advantage of this technology that streamlines processes, improving productivity. 

Challenges organizations or companies could face with blockchain

Thanks to blockchain, the operative models and business-making models of the companies and organizations could undergo a total transformation with the adoption of blockchain technology. Many organizations are using blockchain technology for their transactions. Still, if it were massively adopted, one of the challenges that governments of extremely controlled sectors will have to solve is the lack of regulation.

Blockchain is complex, and it takes a longer time to process any transaction. It can take hours to complete a transaction. And the more it grows, the slower it gets. This could be an obstacle for specific industries.

Despite the above, the biggest challenge that blockchain technology faces is the reluctance of private and public sectors, along with the skepticism of the potential users who, as with each new technology, need time to learn, get used, and trust.  

See also about Modern Monetary Theory and Internet of People – IoP

Accounting

Financial Reporting – A sketch of a Firm’s status | Ways and Uses of Report

Author ByCFI.co Blogger

Financial reporting refers to the exposure of the company’s finance to the stakeholders. These stakeholders are creditors, investors, the public, etc. The company’s finance report shows taxes, costs, and profits after a definite period. For this reason, you come to know the health of a firm. It does not offer more insight, though, but it is vital for a company’s success.

The main parts of a financial report are:

  • The final statements
  • Notes to financial statements
  • Quarterly and Annual Reports (listed company)
  • Prospectus
  • Management Discussion and Analysis (Public Company)
Financial reporting refers to the exposure of the company's finance to the stakeholders. These stakeholders are creditors, investors, the public, etc.

Ways of Financial Reporting

There are three ways to make financial reports:

The GAAP: GAAP is the set of book-keeping rules, and in the USA, SEC follows it. This system makes sure that the report is clear.

The IFRS: More than 110 countries use this system. The countries include Canada, China, and many others.

This system gives a global voice to business matters. Therefore they become easy to read internationally.

The GDPR: This system has a new set of rules and started on May 25, 2018. The new rules give safety to a person’s private matters.

Also, it assures that financial reports must compliant when they got sensitive data.

Financial reporting refers to the exposure of the company's finance to the stakeholders. These stakeholders are creditors, investors, the public, etc.

Uses of Financial Reporting

Financial Reporting is the need for every firm, and the stakeholders want it for many reasons. Let us see the benefits of financial reports:

Decision Making: Financial reports are a great tool to make decisions. They show all the changes that can affect the cash flow. So, you get to know how the firm collects the cash. You can make better decisions by analyzing the condition by the report.

Credit: Every business needs to lend money at any stage. So, with the help of the report, the creditor knows how much money you owe already. In short, financial reporting shows an actual image of a firm.

For Customers: It keeps the clients updated about the firm’s growth. Hence, it helps to build the client’s trust level.

Track Weakness: You can track any financial activity with the report. Thus, it helps you to tackle all potential defects by just a look. As a result, you can upgrade the health of your firm.

For Management: Financial reporting is helpful for management, as well. It can analyze the report and make better decisions for the company.

For Investors: As a report depicts the performance of a firm, the investors can make rational investment, credit, etc.

Company’s status: It helps to find where the company stands after a certain period. Hence, you find details about an increase in sales, market share, and profit.

Legal Demands: A company has to file a report to agencies like ROC, state, etc. So, financial reporting is useful in this respect.

Use of Resources: By report, the company manages the use of resources in the best way.

Verdict

In short, financial Reporting has all the reliable data about the firm. As a result, stakeholders can use the data for many plans. Also, financial reporting aids capital inflows and brings good competition.

See also: Financial Risks

Business

Business Risks – Threats that nullify the company’s ability to meet its financial goals

Author ByCFI.co Blogger

The company has always exposed to uncertainties that are called business risks. They may affect a firm’s aim to gain its goals. The danger of loss is in the form of machinery breakdown, strikes, change of trends, etc.

Business risks refer to the threat to the company's ability to meet its financial goals. It indicates the risk of uncertainty or loss in profit and the risk of some eventuality in the future, which can make a business fail.

Factors Causing Business Risks

Business risks result in less profit or even loss. The factors that lead to risks can be Internal or External.

  1. Internal Business Risks: risks that arise due to some event happening within a firm are internal risks. However, the firm can control them. Internal risks occur by:
  • Technological factors
  • Human factors
  • Physical factors
  • Operational factors

Examples: New technology, fire, cost-cutting, etc.

  1. External Business Risks: External risks occur by any event happening outside the firm. However, the firm’s management cannot control them. The factors that lead to external risks are:
  • Natural factors
  • Economic factors
  • Political factors

Examples: Floods, price pressure, riots, etc.

Types of Business Risks

Risks have divided into five kinds:

  1. Strategic Risk: The risks associated with business operations are strategic risks. They arise when the business plans fail. Poor business decisions lead to failure, e.g., marketing risk, project risk, competitive risk, etc.
  2. Financial Risks: These risks related to business events and finance. It adds to shareholders by debt financing, along with equity.

For example, there can be losses by movement in stock prices, interest rates, etc.

  1. Operational Risks: These risks linked with official procedures of a business. There is a failure to connect to internal policies.

For example, some events like frauds, computer hacking, etc. affect a company’s daily activities

  1. Compliance Risks: Such risks occur by state rules and commands. When the company fails to follow laws, it has to face legal penalties. These risks ensure that the firm runs justly.

For example, corrupt practices, social responsibility, etc.

  1. Reputation Risks: The negative publicity of a firm/product leads to this risk. There is a chance that a company’s name can damage.

For example, a mobile company issues a phone that breaks easily. But then it markets a new and better model.

Business risks refer to the threat to the company's ability to meet its financial goals. It indicates the risk of uncertainty or loss in profit and the risk of some eventuality in the future, which can make a business fail.

Ways to Manage Business Risks

You can plan to manage the exposure of risks.

  • Mitigate the risk: You need to keep a contingency plan. In case if the risk materializes, you must have a second plan to follow.
  • Avoid the risk: It’s better to avoid than to bear a loss. Sometimes the launch of a product leads to affect the company financially. You can postpone it until your company stabilizes.
  • Transfer the risk: You can pass financial risks to someone else. For instance, fire insurance is the best example of it.
  • Accept the risk: If the risks are likely to happen, you can opt for small damage. So, examine the other option and make the right decision to accept the risk.

Business risks lead to uncertainties, but a good businessman takes them as a challenge. Risks lead to new clients and more sales. You can, however, manage to minimize the worst to happen.

See also about Financial Riska Management

Banking

Global Lending Automation Platform Trade Ledger Announces £1.5m Funding Round Led by Hambro Perks

Author ByCFI.co Blogger

The world’s first open banking business Lending-as-a-Service platform has completed a £1.5m funding round led by Hambro Perks, the leading UK early-stage venture firm.

Martin-McCann-CEO-Trade-Ledger
Martin McCann CEO Trade Ledger

London, 30 October 2019 – Trade Ledger, the ground-breaking business lending platform, which automates commercial lending processes for global banks and alternative finance providers, today announces strategic investment in a £1.5M round led by Hambro Perks, to further accelerate revenue growth.

Established in 2016 and now operating on three continents, Trade Ledger’s unique lend-tech platform automates all types of digital business finance, helping bank and non-bank business lending organisations alike to fast-track economic growth through process automation and scaling of business credit operations. Trade Ledger uses financial data APIs (often referred to as Open Banking), Machine Learning, Artificial Intelligence and Robotic Process Automation technologies to enhance or replace old and costly legacy bank systems for origination, credit decisioning, take on and loan management, enabling new cutting-edge working capital solutions for business customers. The resulting new lending solutions can reduce the time-to-cash from 90 days which is the industry average to 4 minutes and are better tailored to the working capital needs of modern high-growth businesses. 

Trade Ledger’s co-founder, Martin McCann, and his team believe that transforming business lending operations through the Trade Ledger Lending Platform is the single biggest area of opportunity for commercial banks and financial services organisations to benefit from Open Banking in the near future. “There is a £1.2 trillion gap in credit that businesses need to optimise growth which is why we created this lend-tech”, explained McCann. “We believe that only by reimagining new types of credit services only possible with this lend-tech, can banks solve this massive business problem profitably and at scale globally. By leveraging open trade data via APIs alongside other enterprise-grade enabling technologies, financial institutions can drive significant operational efficiencies and product innovation within their internal operations and dramatically increase market share.”

“My co-founder Matt and I launched Trade Ledger in 2016 to improve the business customer’s experience in their financial supply chain, by helping banks re-imagine the entire process”, continued Martin McCann. “With the increasing threat of big technology firms like Google, Amazon and Alibaba bridging the gap between traditional financial services and the supply-chain eco-system, incumbent banks and lenders must start thinking about how they remain relevant. Trade Ledger is currently the only true platform in the world that can help them do this at a global scale in the business lending sector.”

George Davies, Partner at Hambro Perks added: “We are delighted to be backing Trade Ledger as Martin, Matt and the Trade Ledger team continue to develop market-leading tech that benefits businesses around the world. Hambro Perks is committed to supporting brilliant founders and teams that are building global businesses, and we believe that Trade Ledger has enormous global potential. We are very excited about Trade Ledger’s rapid growth and to support Martin and Matt as they tackle the barriers that have created such a vast undersupply of working capital for businesses across the globe.”

The Trade Ledger Platform provides a complete innovation layer that masks the clunky traditional corporate business banking environment and delivers an excellent consumer-like experience. Trade Ledger supports compliance with new regulatory requirements through aggregation and normalisation of better credit risk data whilst underpinning the wider commercialisation of open data and adoption of new banking business models to generate new revenue streams. The platform orchestrates value in the lending ecosystem by moving organisations from process-led engagement to an automated data-driven lending model.

About Trade Ledger

Trade Ledger (www.tradeledger.io) is the world’s first open banking lending platform that gives banks the ability to assess business lending risk in real-time. This will enable banks to address the £1.2 trillion of undersupply in trade finance lending globally while providing high-growth companies with the working capital needed to sustain growth.

About Hambro Perks

Hambro Perks (www.hambroperks.com)  is a London based venture firm that backs and builds leading technology companies. Founded by Dominic Perks and Rupert Hambro CBE, Hambro Perks invests at an early stage and helps companies to scale with capital and strategic support. The firm invests from both its permanent capital and Co-Investment EIS Fund that is open to high net worth investors and is soon to launch other funds. Hambro Perks has backed more than 40 businesses such as the digital pharmacy Echo, the geocoding system What3Words, and the Muslim matchmaking app Muzmatch.

Business

Election 2019: Expect the pound and UK financial assets to be increasingly volatile

Author ByCFI.co Blogger

The pound and UK financial assets will be volatile in the run-up to Britain’s first December general election since 1923 – and will remain so in the event of another hung parliament.

This is the warning from Nigel Green, CEO and founder of deVere Group, one of the world’s largest independent financial advisory organisations, as Labour announces it is now backing the government’s bill for a December election, regardless of the date.

Mr Green comments: “This is a critical stage in the slow-moving, damaging, torturous Brexit saga.

“Expect the pound and UK financial assets to be increasingly volatile in the run-up to the general election, given the wide-ranging set of outcomes.

“The most detrimental of these outcomes for sterling, UK financial assets and the wider British economy, include another hung parliament or a victory for Jeremy Corbyn’s Labour party.”

He continues: “Boris Johnson’s intention to secure a majority within the House of Commons is by no means guaranteed.  

“The Brexit Party will use the fact that Mr Johnson did not deliver Brexit by October 31 – something on which he staked his whole premiership. 

“The Remain vote could also be split between Labour, the Lib Dems, the Greens and the SNP. 

“Political fragmentation on this scale has never happened before in the UK.

“Therefore, a hung parliament looks like an alarming possibility, meaning there could be no majority to quickly and smoothly resolve the Brexit chaos.

“Should grinding deadlock continue, the UK economy would still haemorrhage investment and confidence. The fallout of Brexit has cost the UK three and a half years of lost opportunity and many, many tens of billions of pounds. This would only intensify with another hung parliament.”

He adds: “Meanwhile Jeremy Corbyn’s Labour party will campaign on the most radical, left-wing manifesto in more than a generation.

“Should he win this election, his anti free-market policies – such as the re-nationalisation of industries from utilities to railways to postal services, and the forcing of companies to give 10% of their shares to staff – plus his high-tax policies, including a possible wealth tax, will spook the financial markets, hit long-term sustainable growth of the British economy, put more pressure on UK financial assets, and lead to a significant sell-off of the pound.

Mr Green concludes: “The general election is set to be the most contentious and uncertain in generations. Investors now need to protect and build their wealth and assets by ensuring they are properly diversified across asset classes, sectors, currencies and regions.”

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement

Finance

Are Brits losing the art of conversation?

Author ByCFI.co Blogger

●     One in eight share bad news with family and friends via text message

●     Brits find money matters the most uncomfortable conversation topic

New research has revealed just how reluctant Brits are to have face-to-face conversations, with many choosing to deliver bad news via technology.

The study, conducted by savings and mortgage provider The Nottingham, asked over 2,000 Brits about the conversations they find most difficult and the methods they use to avoid face-to-face interaction.

It found that almost one in eight (13%) Brits share bad news with friends and family via text or instant message. Women are more likely than men to choose such technology for these conversations (14% vs 10%), but nearly half (45%) of the nation don’t deliver bad news in person.

Age is also a factor, with the younger generations finding face-to-face conversations more uncomfortable than older groups. Three in five of those aged between 25-34 (60%) use technology to share bad news, compared to just a third (33%) of over 55s

The conversations Brits find most difficult tend to be around finances. Respondents were asked to rank a series of conversations on their level of discomfort and the topic of saving was rated the most taboo, closely followed by mortgages.

In fact, Brits feel more comfortable telling friends and family members about health problems and relationship issues than they do about their financial situation.

The conversations Brits find most uncomfortable involve:

  1. Savings
  2. Mortgages
  3. Relationships
  4. Career progression
  5. Health

But it’s not just awkward topics that the nation is shirking, but face-to-face conversations in general. The research found that around half of Brits (49%) have a conversation in person with their best friend on a weekly basis, while more than one in six (17%) speak to their siblings face-to-face less than once a month.

While this reluctance to talk in person, especially about finances, is found across the nation, it is more common in some UK cities than others. The people of Bristol find money talk the most challenging, with its residents finding the subjects of mortgages and savings more difficult to discuss than those in any other city.

At the other end of the scale, the people of Norwich are the most comfortable with financial conversations with friends and family.

The top five cities which find financial conversations with friends and family the most and least comfortable are:

Discussing ‘Money Matters’ across the UK
  Most Comfortable Cities Least Comfortable Cities
1 Norwich Bristol
2 Sheffield Edinburgh
3 Southampton Belfast
4 Cardiff Glasgow
5 Birmingham Liverpool

The study found when Brits discuss finances; they feel happiest doing so with their partners. However, while friends and parents were tied in second place in terms of preferred listeners, young Brits (aged 25-34) would rather talk about money with their mates.

Tina Hayton Banks, Director of Member Services at The Nottingham, said: “It can be really difficult to discuss finances with loved ones and our research has highlighted just how uncomfortable Brits find such conversations, especially face-to-face. Through their reluctance to talk in person, younger generations risk falling through ‘the advice gap’. Particularly when it comes to finances, there’s only so much you can find out online  before you need to talk to an expert around your specific circumstances and goals.”

“At The Nottingham, we value the art of conversation and pride ourselves on talking to our members about their finances whether in person at one of our branches or using technology, such as speaking to a mortgage adviser face-to-face over video. These conversations can be really valuable to customers, sometimes helping them understand certain products better or saving them money by getting them a better interest rate or mortgage deal. So when it comes to money matters, it really does pay to talk.”

About The Nottingham

The Nottingham is a top-ten building society and estate agency operating online and via a network of over 60 branches across 10 counties. The Nottingham offers a broad range of building society services such as mortgages and savings, as well as whole-of-market mortgage advice provided by Nottingham Mortgage Services. Founded in 1849, The Nottingham is a mutual building society owned by its members with a long and proud history of doing the right thing and helping communities in its heartland prosper.

[1] Survey of 2,006 UK adults conducted by The Leadership Factor in October 2019 on behalf of Nottingham Building Society.

Finance

Financial Risk Management – Impact and Execution

Author ByCFI.co Blogger

No matter what linked to money moving in and out of business is a financial risk. Financial risk management is a way of knowing and handling financial risks. These are the risks your company may face now or in the future. The key to any financial risk management policy is the business plan. A plan that will show workers what they can and cannot do. Also, choices need to escalate, and who will bear the overall duty for any risk that may arise.

Financial risk is linked with the money that enters and leaves a business. In the business world, financial risk management is the process of identifying, analyzing and making or mitigating risks in financing decisions.

Financial Risk Management and its Importance in an Organization

Risks may come from external and internal sources. External threats are those that are not under the direct control of executives. These risks include interest rates, market rates, state issues, and so on. Internal risks include breach of data or non-compliance, among many others.

Risk management is vital in business as, without it, a company cannot set goals for the future. If a firm sets goals without taking risks into account, they will likely lose track as any of these risks reaches their place.
Many groups have added risk control units to their team. The team aims to identify risks and develop plans to protect against these risks. They are also bound to move all members of the company to join in these strategies. The same, the risk control team is liable for valuing all risks while fixing the ones that are critical for the business. Risk control ensures that the firm allows only those risks that will aid it in giving its primary objectives. It is likely if they keep all other risks under control.

Financial risk is linked with the money that enters and leaves a business. In the business world, financial risk management is the process of identifying, analyzing and making or mitigating risks in financing decisions.

Financial Risk Management – How to Implement

Companies manage financial risk in many ways. It is a process that depends on the company doing and on the level of risk it takes. The company managers must know and assess the risks. Also, they should decide how they will manage it.

Some steps in the financial risk management process are:

  • Identify exposure of risks: Risk control begins with the recognition of business risks and their sources. A high point to start is the company’s budget. It gives insight into the liquidity, debt, interest rate risk, and currency risk. It also grants info about weak stock prices faced by the company.
  • Exposure analysis: The next step is to identify or set numerical value for the known risks. Analysts tend to use regression and standard deviation methods. These are ways to measure a company’s exposure to various risk factors. These tools cover how diverse data points differ from average or mean.
  • Make a “smart” choice: After analyzing the risk’s roots, decide how to move with this report. This decision-making rule depends on many factors. E.g., company goals, market context, risk appetite, and if the cost of mitigation favors the risk drop.

Financial risk management terms business on how to deal with risks if they arise. It helps to learn many ways and means for managing these risks. It also gives the company the courage to execute and form a useful control plan to prevent or reduce losses.

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