With that sort of apology out of the way, in my next article, I would like to explore some of the more interesting banking trends that I believe will come to pass in 2019. I hope that this is as exciting for me as it is for you.

The Rise of Blockchain

With the hype and eventual fall of Bitcoin and other cryptocurrency over the last year, we have also been hearing a lot about the technology that is powering it – the blockchain. In a nutshell, blockchain technology allows digital information to be distributed, but not copied.

Information on a blockchain is shared across thousands or millions of devices and is continuously being reconciled to ensure their accuracy. This means that there is no single database for a hacker to attack and corrupt. This also means that information on a blockchain is not controlled by a single entity. More importantly, there is no single point of failure.

As more banks become more comfortable with the concept of the blockchain technology, we will start seeing its adoption in all sorts of areas such as contracts.

Robots & Automation

Robots are taking over the world. There is no question about that. And now it seems that they are taking over banking as well.

In some forward-thinking banks such as DBS Singapore, robots are already being used in customer-facing roles. This is done via a technology called ‘Robot Process Automation’ and initial results seem to indicate that it will be the future of customer service in banks.

Rise of DevOps

Banks and other fintech companies need to move from ideation to implementation at a lightning pace to keep up with their competitors in the current market climate. This led to a new class of professionals, called DevOps, and their job is to connect the development arm of a company to the operational functions to ensure that new features and products are quickly shipped.

These professionals are relatively rare and sought-after right now, but I expect them to be more commonplace in the next few years as banks begin to realise the importance of coordination.

Increased Investment in Digital Marketing

Digital banking is a huge growth area in banks right now and I see that banks are spending more and more in tactics such as search engine optimisation, artificial intelligence, paid search marketing and so on. They have to, as without these digital marketing tactics, they will be essentially invisible online and their competitors can easily become better than them.

Moving to a Cashless Country

The promise of a cahsless society has been bandied about constantly over the last few years. While there have been initiatives in that direction, I believe that 2019 is the year we see widespread adoption of cashless systems of payments.

As more consumers experience the benefits of a cashless system, more outlets will start offering and promoting it to start drawing people in. The millennials seem to have taken a great liking to it as well. In as recent survey, around 68% of them believe that their smartphone will take over their physical wallets.

Other Trends in Banking in 2019

These are my big bets on what will be the major trends in banking next year in 2019. I’m sure that there are many more that I have missed, but I believe that these are the most important ones. What are the more important trends that you think I missed? Let me know in the comments below!

The post Essential Trends in Digital Banking appeared first on Grow Your Savings by Leveraging Tech & Financial Wisdom | SPRON.

Increased Search Engine Visibility

For the uninitiated, search engine optimization, or SEO for short, refers to the practice of improving your website structure and overall presence to increase your rankings in the search engines such as Google, Yandex, Yahoo or Bing. These search engines run thousands of tests a year to refine their algorithm, so it is not a static industry.

The whole idea is that if someone Googles ‘savings bank in Iceland’ or ‘best bank interest rates in Reykjavik’, then your website will appear at the top of the search results.

There are several ways a bank or insurance company can increase its search engine visibility. These include fixing their on-page factors, creating great content that is valued by their customers and building backlinks from authoritative and relevant sources.

On-page optimization refers to fixing things on your own website to facilitate search engine bot crawling and increase your website relevance with regards to any particular search query. This may include basic things such as improving your meta tags, including image alt text, using the proper hierarchy for heading tags and so on. At the more advanced levels on on-page SEO, you may decide to increase your site speed, prepare for mobile visitors by implementing responsive web design and using Schema.org markups to help Google create entities.

You also need to start creating high quality content to be published on your website. Google really loves websites that publish in-depth articles that answers a person’s search queries.

Off-page optimization refers to the number of links that are pointing back to your website. Links are like votes of confidence to a website – the more you have, the more authoritative Google or other search engine thinks you are. But it’s not quantity that counts – you need high quality links from respectable websites. This can be done through a variety of ways including guest posting or manual outreach. However, for all SEO activities you should try to keep to Google’s Webmaster Guidelines so that you do not get hit by what is called the Google Penguin Penalty.

Build a Community on Social Media

Another great way that banks can try to improve their online visibility is by building a community on social media. Most people are already on at least one social media network such as Facebook, Instagram, LinkedIn or Twitter. It’s a good chance that your target audience is there as well.

If you’re just starting out, you may need to invest in Facebook Ads to build your community. But as time goes by, what you want to do is to encourage your fans and followers to engage with each other and help each other. Not only will this help you increase goodwill, but also lowers your customer service costs.

Targeted Online Advertising

One of the fastest and most popular ways to increase a bank’s online visibility is to invest in online advertising channels such as Google Ads or remarketing. These can be based on either pay-per-click (PPC) or pay per impression (CPM). The great thing about these online advertising channels is that they can give you results fast, unlike SEO. However, they tend to be much more expensive.

Banks should also be careful when it comes to PPC because it is not always easy for them to hit a required return-on-investment. Less experienced performance marketers have found it difficult to manage the pace of media buying in the financial industry. You need to have your figures on hand to ensure that you are spending money correctly.

Create Valuable Content

Consumers now have an insatiable desire to consume high quality content. Your bank or insurance company should invest in creating these assets as much as possible. Content marketing is also part of inbound marketing – a marketing discipline where you attract customers to come to you rather than pushing them to you using interruption advertising.

Creating content is in itself, not cheap. At the same time, many brands forget that it is not enough to simply create the content and leave it lying around in their website. They need to spend the time and money to promote this content across their owned, earned and paid media channels to achieve the best mileage.

Better Analytics Across Channels

Omni-channel measurement is becoming more important in banks and other financial institutions. Once upon a time, CMOs could get away with vague generalizations on how well their marketing campaigns did. These days, with digital channels so prominent and measurable, they find that they are accountable to the board for the ROI of their campaigns. One of the best ways to show results is to create connections between their various online assets and measure the impact these have on their revenue goals.

Increase Conversation Rates on Sites

Conversion rate optimization is the process by which marketers create hypotheses and conduct experiments to determine how well they can ‘convert’ customers on their website. ‘Convert’ can mean download an ebook, watch a video or even make a sale. They do this through various strategies such as multi-variate testing to determine which variation or offer might work best for which types of customers.

According to CloudRock and other digital companies like Ahrefs, we are sure that we have barely touched the surface when it comes to the types of digital marketing that banks and other financial institutions can implement to improve their online visibility. Do you have any other suggestions that you think might work? What digital marketing tactics are the big boys such as Standard Chartered, UOB or JPMorgan Chase using for their online marketing?

The post How Financial Institutions Can Increase Online Visibility Through Digital Marketing appeared first on Grow Your Savings by Leveraging Tech & Financial Wisdom | SPRON.

At the rate of inflation, you will also find that retirees need to save more and work for longer in order to enjoy their golden years. Preparing for retirement starts now, and you be telling yourself that everything that you sacrifice now will be important later in the future.

Keep Yourself Healthy

Sure, we have Medicare, but that doesn’t mean that you can ignore your health. Medisave can help you pay for most of your medical bills, but you still have to come up with a certain amount from your own pocket and those expenses can add up really fast. And we all know that as we get older, the more frequent those trips to the doctor get.

Most of the health problems that you are going to face when you’re older is a result of the choices you make when you were much younger. Unhealthy habits such as smoking, drinking too much, lack of exercise and eating unhealthy food will catch up with you as you get older.

While you’re still working and, hopefully, strong, you should try to maintain your health through regular exercise and diet so that you will enjoy a better quality of life as you get older.

Maximize Your Tax Advantages

I’m sure that none of us enjoy paying our taxes. We can’t avoid it, but there are ways you could minimise your tax burden. Legal ways, of course. The average layperson may not be able to properly understand the tax code, so I would advise you to hire a professional tax accountant to help you in your filings. This is especially true after every major event of your life so that you can see if you are eligible for tax breaks.

Live Within Your Means

With always-on online shopping and easy access to purchases, we are living in a time where gratification can come fast and frequently. But that does not mean that you should give in to every impulse that you have. As a marketer in a financial institution previously, I am fully aware of the tricks that brand marketers use to encourage you to make a purchase. Coupled with how easy it is to get a credit card, many people find themselves in a mountain of debt.

Do not be one of those people. Start saving your money for your retirement instead. You can do this by completely foregoing some unnecessary expenses such as buying that new handbag or having dinner at an expensive restaurant. Others, you can just try to defer to a later time when you have more spare cash.

Your Tips to Preparing for Retirement

What are some of your tips to improve your savings for retirement? Share with me in the comments below and I would love to add it to one of my articles.

The post Tips to Prepare for Retirement appeared first on Grow Your Savings by Leveraging Tech & Financial Wisdom | SPRON.

Liquidity Ratios

Other than profitability ratios, liquidity ratios are the most popular types of fundamental analysis that investors will use. Liquidity ratios help measure how well a company will be able to meet any of its obligations in the near term. You can see why this is important for creditors.

Current ratio

As you probably already know, a company’s current assets refers to items such as the cash in its bank accounts, accounts receivables, inventory and others. The current ratio measures how well the company can pay off its short term liabilities if it had to liquidate its current assets (turn its current assets into cash).

If the current ratio is too low, it is an indication that the company may not be able to pay its current debts and that you should look further into it. For example, if a company has a current ratio of 0.88x, it means that if it were to liquidate all of its assets at its book value, then it would only be able to cover 88% of its current liabilities.

A company with a higher ratio means that it would have no problem paying its immediate debts. However, it could also mean that the company is carrying way too much inventory. Or, that their accounts receivables is too much and that they are not following up on payments quickly enough. It all depends, and you need to dig deeper.

Cash ratio

Cash ratio examines the most liquid assets that a firm has such as cash and short-term marketable securities. You divide these by current liabilities. Use this if you want to be even more conservative.

Quick ratio

For something tougher than the current ratio, use the quick ratio. This ratio will help you compare the company’s short-term securities, accounts receivables and cash to its current liabilities. Those who prefer calculating this argue that the quick ratio is the most accurate way to determine how liquid a company is.

One of the major differences between the quick ratio and the current ratio is that the current ratio does not include inventory. The argument is that in times of difficulty, a company is going to have a tough time selling its inventory anyway.

Solvency Ratios

Where liquidity ratios measure a firm’s ability to meet its short term liabilities, solvency ratios examine how well a company will meet its longer-term obligations. It looks at the firm’s capital structure and how well it is using financial leveraging.

Debt-to-assets ratio

This is the easiest ratio to understand – just a measurement of the percentage of a firm’s total assets that is financed by borrowings. If you see a larger number, then that means that the firm is using a lot of debt to buy assets, which in turn puts it at risk with regards to interest payments.

Debt-to-capital ratio

A company’s debt to capital ratio measures a company’s total capital that is powered by its debt, both short and long. Sure, more debt means that there is a higher risk with regards to fixed interest payments. On the other hand, it also means that there is less dilution of ownership and that you may earn more per share.

These are some of the more popular financial ratios that myself and many of my friends use when considering whether to invest in a company or not. Did we miss anything out? How would you judge the financial health of a company? Let us know in the comments below:

The post Understanding Financial Ratios Part 2 appeared first on Grow Your Savings by Leveraging Tech & Financial Wisdom | SPRON.

Creating Quality Content

Regardless of the industry you are in, people expect content. This is no different in the financial industry where consumers are showing an insatiable appetite for high quality content. But quality content does not come easy or cheap. Writers will be much sought after by banks, insurance companies and other financial institutions so that they can keep up with the ever-growing demand for quality content. These writers need to not only understand the financial industry, but also be able to create content for multiple platforms and social networks.

Multi-Channel Analytics & Emphasis on Returns-on-Investment

One of the most difficult questions for chief marketing officers to answer is also the most important – what is the return-on-investment on all of our marketing initiatives? It may seem simple on the surface, but trust me, for major enterprises such as  banks, that is a very difficult question to answer.

John Wanamaker famously said:

I know that I waste half my budget on advertising. I just don’t know which half

Marketing at that level is not easy nor cheap. Buying billboards, TV advertisements, radio spots and ad space in major newspapers and magazines come with a hefty price tag.

But where traditional marketing channels struggle, digital marketing excels. Ever since digital marketing became popular, CEOs and CFOs have started asked even more pointed questions about returns, making their marketing counterparts more accountable.

For modern marketing professionals, they need to be able to recreate what is known as the ‘customer journey’. This measures and tracks the entire process a customer has from being a stranger to a customer. When you know this, you can know which piece of marketing works best and what to invest in to bring in even better results.

Increasing Use of Chatbots & AI

Ever since they were launched a few years ago, chatbots and artificial intelligence have become increasingly popular. For banks looking to engage millennials, chatbot technology is a must have. As AI becomes more complex and are able to gather data from disparate sources to present a complete picture, chatbots will become increasingly complex and useful. It won’t be long before you won’t know whether you’re chatting with a bot or with a human customer service officer. The important thing to realise is that bank customers just want excellent customer service – they don’t care if it is given by a bot or by a human being as long as their needs are met.

Towards the Digitisation of Banks

All the trends point towards further digitisation of banks. What do you think will be the more interesting trends affecting the financial sector coming into 2019? Share with me in the comments below!

The post Marketing Trends in Banking 2019 appeared first on Grow Your Savings by Leveraging Tech & Financial Wisdom | SPRON.

I skipped some of my ratios lectures in college and over the years I learned to regret it somewhat. Ratio analysis is an approach that some investors and analysts use to compare the strengths and weaknesses of various companies. It is one of the most widely-used fundamental analysis techniques.

Ratio Analysis

Just with any technique, you do need to understand how to properly use ratio analysis and not treat it as if it is a magic bullet. For example, you should not be comparing different types of companies from different sectors and industries.

There are many types of financial ratios. To make things less confusing, we have created these categories – activity ratios, liquidity ratios, solvency ratios, and profitability ratios.

Activity Ratios

When you talk about activity ratios, you are examining how well a company uses its assets. For you, the intrepid invester, you get to gauge the overall operational performance of the organisation. This includes finding out how many times a year inventory is replenished or how quickly receivables are collected.

Asset turnover

This measures how well the firm will use all of its assets to generate its incomes. You just divide the net revenues by the average total assets to get the asset turnover. If the company has a ration of 0.1x, then it means that it generates $0.10 for every $1 of assets it owns.

Payables turnover

This measures how quickly the company pays its suppliers. You get this number by dividing purchases by average payables.

Inventory turnover

A higher inventory turnover as compared to the industry average means that the company’s inventory is being sold much faster, which in turn could mean that it is managing its inventory very well. This number is calculated by dividing the cost of goods sold by average inventory.

Receivables turnover

This measures how fast a company is able to collect on its outstanding bills. Obviously, this is important as it is a gauge of the health of the company’s cashflow. You can get this financial ration by dividing the company’s net revenue by average receivables.

Profitability Ratios

This is probably the most popular financial ratios. If you have ever dabbled in business, you would understand the ratios that include gross, operating and net profit margins. You use these ratios to understand how well the company earns an good return on its income. Compare them to others in the same industry or to their closest competitors.

Gross profit margin

You calculate gross profit margin by diving gross income by net revenue. This number will help you understand the company’s judgement when it comes to pricing factors and product costs. If the gross margin is 30%, it means that 30% of the revenues of the company are needed to pay for the costs of the goods sold.

A higher gross profit margin may mean that the company has a competitive advantage. This is because for matured industries, the more competitors enter the market the worse the gross margin is. If the company is a first mover though, do be wary if competitors start entering the market.

Operating profit margin

Operating expenses such as administrative overheads, rental and others than cannot be attributed to single product units can take a big toll on a company’s profitability. The operating profit margin provides investors with an insight of the relationship between sales and the costs that can be controlled by management. This is derived by dividing the company’s operating income (gross minus operating expenses) by the net revenue.  If it has an operating margin of 28%, this means that for every $1 of revenue, $0.28 is left after you minus off the COGS and operational expenses.

Net profit margin

When you divide a company’s net income by its net revenue, you are measuring it’s net profit margin. This will determine how well the company is able to turn the sales it generates into dividends that it can pay its shareholders. If you’re going to invest in shares, then you as a shareholder would want to find companies that can provide you with good returns. If a company has a net profit margin of 1.1%, it means that for every $1 revenue created, it will provide $0.011 value to its shareholders.

We will look at liquidity and solvency ratios in my next article.

The post Understanding Basic Financial Ratios Part One appeared first on Grow Your Savings by Leveraging Tech & Financial Wisdom | SPRON.

That said, it did take me some time to go from ‘I should write about financial stuff’ to actually writing about it. The progress is sometimes… slow. And that can take the wind out of the most optimistic fellow. So what I have done is to take a step back and reevaluate some of my main priorities.

Grow my rainy day fund

We all have some money set aside just in case of emergencies. I’m not sure about you, but in the past this emergency fund is the difference between having a roof over our heads or not. It’s next to impossible to know when an emergency might occur that might completely knock us down, so an emergency fund is critical. Also, it’s important that we replenish this fund whenever we need to dive into it. For the next life-changing emergency.

Get all necessary insurance

The one major expense that can completely change your life is healthcare. If you’re the main provider, it’s absolutely critical that you have some sort of insurance coverage. You need to be covered not only for any healthcare / surgeries you might need, but preferable your insurance can compensate you for any of your lost income.

Make sure my family is comfortable

Family comes first. I need to make sure that all of our needs and wants are well-met in the next year. When it comes to my family, this usually means food. We eat, we eat a lot! And our bills reflect this.

However, food is our main indulgence and we tend not to splurge on any other purchases. Sure, we subscribe to things that make our lives much more bearable, such as Netflix and high speed Internet. But thankfully, we know how to be happy without having to spend a ton of money on ‘stuff we don’t need’.

Have enough set aside to grow new projects

I can’t stay still. Being stagnant has never been part of my character and I have always had the need to completely change things around. New projects for me are invariable those that can either help grow our income or to reduce our spending. I hardly have any other interests except for those two.

My projects take up cash, and there’s no guarantee of a return-on-investment (ROI) so I try my best to start a new project only when we have cash to spare. But then again, if I don’t continuously spend on new projects, then in the future the cash might dry up. So most of the time, this is a judgement call.

So, those are my priorities over the next year. Why don’t you share some of yours with me and let’s see how similar / different our financial goals are.

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