As SMEs look at how they will finance their businesses this year, new research from Nucleus Commercial Finance finds that nearly four in 10 (39%) of SMEs plan on investing over a third (35%) of their cash reserves into their business. 

The majority (91%) of SMEs have cash reserves, with the average SME holding £39,723 which they have set aside to finance their business for a time of crisis or cash shortage. However, the size of cash reserves is dependent on the size of the business, rising to £61,202 among medium-sized businesses (50-249 employees) and dropping to £9,646 among sole traders.

According to the research, cash reserves is the leading way SMEs will finance their businesses this year, despite the various financing options available. Other financing options SMEs are using include:

• A cash loan from the bank - 22%

• Personal savings - 21%

• Cash flow finance products - 19%

• Property backed loan - 16%

When it comes to financing their businesses, SMEs like to plan ahead with almost half (46%) having started preparing for 2022 in 2021, and one in five (22%) are already planning now for the year ahead. However, 13% report that they do not plan ahead as their business is run on a month-by-month basis, and 5% make no future plans at all. 

Chirag Shah, CEO of Nucleus Commercial Finance, comments: “It is encouraging to see that on the whole businesses have significant cash reserves to invest for their futures. Despite the ongoing challenges of the pandemic and ongoing supply chains, it is positive to be planning ahead.  However, there is still a way to go in understanding the number of funding options available. Governments and industries need to work together to highlight what options are available and the benefits of using external finance can help businesses invest for the future.

• Investment: NayaPay secures $13m in one of the largest seed rounds in South Asia to spearhead the fintech revolution in Pakistan
• Action: NayaPay aims to address the needs of underbanked citizens and SMBs, enabling them to create accounts and start transacting within a few minutes
• Ambition: NayaPay to scale and serve 5m consumers and businesses across Pakistan as it builds its two-sided platform comparable to Square Cash/Square, WeChat Pay, AliPay and Venmo in their native markets.

NayaPay, a Pakistan-based fintech platform, has raised $13 million in one of the largest seed rounds in South Asia. Bringing together a diverse mix of leading global institutional and angel investors, the round was led by Zayn Capital, global fund manager MSA Novo and early-stage VC Graph Ventures from Silicon Valley. Singapore-based Saison Capital, Waleed Saigol’s Maple Leaf Capital and Warren Hogarth, CEO Empower Finance, also participated in the round, alongside a major investment from the sponsors of the Lakson Group – a Pakistani conglomerate with interests in media, telecom, industrials, financial services as well as controlling stake in Colgate-Palmolive Pakistan and McDonalds Pakistan. 

NayaPay is the first fintech of its kind in Pakistan having recently secured the first E-Money Institution license from the central bank, State Bank of Pakistan. It is on a mission to make financial services simpler and accessible to millions of Pakistani users. NayaPay aims to be at the forefront in the digitization of Pakistan with its two-sided platform for the underbanked.

Pakistan presents a significant market opportunity for NayaPay, where over 50 million adults are unbanked and only 33% of women have a bank account. With 70% of the population under 35 years old, there is a significant mobile-first generation. Almost $4tn payments are made each year but only 1% of these are made digitally currently. On the merchant side, the majority of SMBs in Pakistan are unregistered, have traditionally dealt primarily in cash, and have very limited access to business banking. 

The fintech has launched its chat-led super app targeted primarily at students and freelancers; and is building a SaaS based platform called NayaPay Arc offering universal payment acceptance and financial management tools for SMBs. NayaPay’s platform strategy will harness the network effects between consumers and merchants, as seen in platforms such as Square Cash/Square, WeChat Pay, AliPay and Venmo in their native markets.. 

NayaPay CEO and Founder Danish A. Lakhani commented: “NayaPay is empowering young Pakistani adults starting their financial journey, from students stepping into adulthood to freelancers and entrepreneurs taking an active role in managing their finances. In many senses, it’s a coming-of-age moment for many and our goal is to continue to innovate and build functionality to become a part of their daily lives, for the rest of their lives.”

Danish A. Lakhani added “Micro, small and medium businesses make up 90% of the merchant-base in Pakistan and yet they are underserved when it comes to access to basic financial services. NayaPay Arc will provide universal payments acceptance and a range of business financial management tools to empower entrepreneurs and small business owners. The tools are intended to give business owners the visibility of their cash flows, pay suppliers and grow sales.  Our goal is to enable them to focus on growth while we take care of the rest. By helping small businesses harness the power of technology, we believe we can transform the Pakistani economy.”

Faisal Aftab, Managing Partner and Co-Founder at Zayn Capital Fronteir, said: “We are very bullish on fintech in Pakistan. While just beginning to emerge, Pakistani fintechs have the advantage of learning from peers and placing better informed strategic bets. We were impressed by the completeness of the vision of the founding team at NayaPay, and their differentiated platform-based strategy-- first focused on servicing the needs of underbanked consumers and SMBs with specific use cases and building out from there. With a proven ability to execute on the ground, the founder has an impressive track record of building and scaling businesses in Pakistan, including the country’s largest fiber broadband service (StormFiber).”

Omar Siddiqui, General Partner at Graph Ventures, added, “We are excited to partner with Danish and the NayaPay team as they scale their leading digital payments platform for consumers and merchants in Pakistan.  We have been early-stage investors in 300+ companies over the past decade in the United States, Southeast Asia, and Latin America, and we are excited to see the mobile and fintech technology trends that have empowered consumers in these markets also emerge in Pakistan.  NayaPay already offers the most robust solution for consumers to access next-generation financial conveniences in Pakistan, and we look forward to working with the team as they roll out new products and grow their consumer base." 

Danish A. Lakhani concluded:  “Customer trust is a key pillar of any platform’s success. At NayaPay, we are consumed by our obsession to simplify the lives of both consumers and merchants with our app and NayaPay Arc while supporting our customers with robust and scalable technology and fanatic customer service. We are also partnering with leading banks to provide additional value and convenience to our mutual customers, eventually leading to a full digital banking experience.”

Quick, accurate salary forecasting to transform finance departments’ relationship with complex pay arrangements

MHR International, the HR, payroll and Finance experts, has launched a landmark  solution to help organisations simplify and securely model, plan and forecast their complex pay arrangements. iTrent Salary Modelling creates and updates staffing budgets, generates forecasts and tests the impact of proposed pay changes, all in one place.

Drawing on MHR’s finance and HR data expertise, and powered by IBM Planning Analytics, the iTrent Salary Modelling application removes manual processes and human error from forecasting and scenario-building, saving significant amounts of time through automation. Finance professionals can create a collaborative approach to planning, budgeting and forecasting workforce and salary costs, enabling them to share data and insights securely with HR, finance and other departments in full compliance with GDPR and Data Protection.

Meeting the forecasting needs of public and private sector organisations, iTrent Salary Modelling empowers workforce planning up to twenty years in advance, even with the most complicated pay structures. By eliminating the need for time-consuming data collection and analysis, or the use of multiple spreadsheets for planning and reporting, iTrent Salary Modelling provides a one-stop-shop for accurate forecasting.

The solution offers industry-leading, user-friendly, what-if analysis capabilities, allowing organisations to compare and contrast the potential implications of financial decisions. This helps avoid costly mistakes and encourages evidence-based decision-making that leads to better outcomes.

“Accurate salary forecasting is a complex challenge, made difficult by factors such as pension entitlements, parental leave and discretionary allowances. Organisations therefore need a helping hand when it comes to medium and long-term budget-setting for employees. iTrent Salary Modelling is an important development to our People Analytics portfolio, making compensation planning easier than ever and giving our customers a single source of truth,” said Mark Jenkins, Chief Finance Officer, MHR.

One of the fastest growing fintechs partners with leading BaaS provider

to bridge the gap between traditional and crypto currencies.

hi, the crypto exchange upstart and mobile banking platform, has today announced a strategic agreement with Contis, a leading Banking-as-a-Service (BaaS) provider in Europe. The partnership with Contis - who count Visa and MasterCard amongst their network of partners - means that later this year, eligible hi members will be able to seamlessly spend their digital assets at over 60 million merchants, using a hi Debit Card.

Supporting hi’s mission to build the world’s most user-friendly and functional crypto and fiat platform, this partnership will not only enable hi’s 3 million strong community to use cryptocurrencies to make payments using the hi Debit Card, but also provide eligible members with their personal IBAN accounts for a seamless on/off-ramp. 

Contis, Europe’s most comprehensive banking-as-a-service platform, already partners with some of the world’s largest cryptocurrency and blockchain companies. With unique technology provided by Contis, hi not only removes the need to liquidate assets before spending and allows for any digital assets in a hi account to be converted automatically to fiat at point-of-sale, but will also come with Buy Now, Pay Later (BNPL) functionality that allows members to decide on exactly when their digital assets get converted.

Sean Rach, co-founder of hi, commented: “Our goal is to overcome one of the most significant challenges in the market today - making it simple and seamless for people to spend crypto. Thanks to Contis, we are delighted to be at the forefront of innovation in payments and look forward to rolling our cards out to eligible hi members, starting with Europe later this year.”

Contis Managing Director Lee Johnstone said: “As the mainstream adoption of cryptocurrency pushes forward, we are constantly seeking new ways to make payments more convenient to more people. We are delighted to be partnering with hi to deliver their customers a new debit card service. hi are quickly proving themselves to be a leading global player in the crypto and blockchain space with a unique proposition that is making the utility of crypto frictionless.”

In support of hi’s ambition to provide a simple and exceptional user experience regarding both fiat on and off ramps, this announcement follows the recent introduction of exchange and asset conversion functionalities on the hi platform, as well as deposit by bank transfer. Furthermore, the hi app has been downloaded by over 1.5 million users across the Apple App Store and Google Play, less than three months after launch.

   Hiring for risk and compliance specialists in banks up 98.9% year-on-year

●      Overall banking jobs in UK hit all-time monthly record in January 2022

●      Credit analyst (560%) and KYC compliance (193%) roles in fastest growth

●      Nationwide and NatWest experience rapid growth in R&C jobs

Banks are publishing record numbers of risk and compliance jobs in the UK following an unprecedented year of regulatory initiatives and a flurry of upcoming changes expected in 2022, a new report says.

According to research by global recruiters Morgan McKinley and data analysts Vacancysoft, banks sought 8,750 risk and compliance (R&C) specialists in 2021, representing a 98.9% year-on-year increase and up 67.3% on pre-pandemic levels.

Jobs rose further in 2022 with banks publishing 850 R&C vacancies published in January, 87.6% more than the same month in 2019. Overall banking vacancies, meanwhile, hit an all-time monthly high of 2,990 new jobs — breaking the previous record, set in October 2021, by 3.1%.

Ben Harris, Associate Director, Head of Governance, Compliance, IA and Risk Management, Morgan McKinley, said:

"The start of 2022 saw a dramatic improvement in risk, compliance and financial crime recruitment. Hiring for permanent risk and compliance professionals was busy at the end of 2021 and showed no signs of slowing down — to the backdrop of what people called “The Great Resignation” and the post-pandemic bounce-back predicted for financial services.

“With the easing of coronavirus measures banks, having made significant cuts to their staff, needed talent to join their teams again. The recruitment market is candidate-led, with job-seekers in 2022 being offered multiple options. In addition, the onset of bonus season will flood the market with talent that wasn’t previously looking, requiring institutions to move quickly on offering roles."

Credit analyst and KYC compliance roles experience the fastest growth

Out of specialist roles within R&C, functions focusing solely on compliance have made up the bulk of all hiring since at least 2019, totalling nearly 1,800 jobs in 2021. This accounts for 29.1% of all R&C roles — and an uptick of 57.4% year-on-year.

The most notable surges in recruitment, however, were for KYC compliance and credit analysts, with hiring levels up 192.7% and 560% year-on-year, respectively. Vacancies for KYC specialists were the most resilient in 2020 — the first year of the pandemic — with numbers up 21.7% year-on-year while hiring for other R&C functions floundered.

Citi publishes most R&C jobs; Nationwide & NatWest with fastest growth in hiring

Citi finished 2021 as the dominant hirer of R&C specialists in the UK, publishing nearly 920 vacancies, a rise of 84.7% year-on-year and 470.2% higher than pre-pandemic levels. Jobs at Santander were up 185.8% year-on-year (82.3% up on 2019). JPMorgan, second in 2021, recorded nearly 500 new R&C jobs.

Top 20 companies, professional R&C vacancies in banking, UK, 2019-2022*

Vacancies at Nationwide saw the biggest year-on-year surge out of the top 20 banks, with R&C hiring levels up 608.7% year-on-year and 81.1% in relation to 2019. The smallest rise was at Deutsche Bank, where recruitment grew by only 12.8% year-on-year.

Ben continued: "There has been a general increase in salaries across risk disciplines as demand for specific skill sets increases, leading to average pay increases of 20-25%, and even higher in some cases. We have also noted some very aggressive counteroffers, as firms do all they can to hang onto key talent. We expect this trend to certainly continue well into the second half of 2022."

A new B2B payments solution brings together instant payments, free transactions and flexible financing to address cash flow problems for both buyers and suppliers

In an Industry View piece published on Business Reporter, online fintech company iwoca explains how embedded finance products can solve a number of problems SMBs and their customers typically face. 80 per cent of B2B businesses still rely on slow and cumbersome bank transfers, while most of the remaining 20 per cent is settled with inflexible and costly card payments. Due to the lack of immediacy in these payment methods, as well as the unavailability of finance offerings embedded into them, SMBs are owed £10,000 on average at any given time. 

A new B2B payment solution that brings together the best of open banking and embedded finance, however, can spare suppliers from the cashflow burden that outstanding payments impose on them.

Suppliers have traditionally had to choose between either easy payments or flexible terms; they haven’t been able to get both. Using this new payment method – buyers get a frictionless and streamlined payment process and flexible payment terms, whilst suppliers can unlock money tied up in their invoices. Funds from the supplier’s sales appear immediately in their account, and buyers can spread the cost over 90 days, which they can schedule in a way that fits their cashflow the best. The key to this innovative solution is that digital finance provider iwoca provides the majority of its finance and payments products through its embedded partners, for example accounting software platforms, neo-banks or online marketplaces. This means they’re readily available for businesses to access in the services they use day-to-day. With this approach, applications can get approved within minutes, and the likelihood of declines diminishes considerably. 

This smooth payment experience and accessibility to finance will be key in supporting SMBs post-Covid.  

• Squirro Risk Insights solution delivers contextual insights and recommendations to support supervisors in assessing bank risks
• Squirro also continues global expansion with acquisition of US AI firm open.exchange, and growth equity round

Squirro, the Augmented Intelligence solutions provider, has announced a major project with the European Central Bank (ECB), in which Squirro will supply its Insight Engine and Risk Insights solution to the central bank of the 19 European Union countries that have adopted the euro. The ECB contract was awarded in Q4 2021.

Squirro already works with central banks such as the Bank of England and the German Bundesbank. The Squirro Insight Engine improves access to information by connecting all data sources and applying natural language processing and machine learning to deliver the right information to users at the right time.

This is augmented by the Squirro Risk Insights solution which monitors and contextualises all relevant risk factors. Teams are provided with insights and next-best-action recommendations to help actively assess and mitigate ongoing risk levels.

Thanks to its flexibility and scalability, Squirro is able to shorten the time to value. Depending on the project, the time between contract signing and go-live can be reduced to two weeks. 

“We work with some of the world’s biggest and best-known banks and regulatory institutions, confirming our position as a visionary and trusted Augmented Intelligence company,” said Dr. Dorian Selz, CEO and Co-Founder of Squirro. “Our Insight Engine overhauls enterprise access to information, providing relevant and context-based results to improve the efficiency of business processes. In addition, our Risk Insights solution provides more effective risk mitigation, supporting the digital transformation processes in financial services institutions.”

Squirro is also announcing the acquisition of US startup deal sourcing platform open.exchange, expanding Squirro’s reach in the US and enhancing its technology offering. Open.exchange will integrate with Squirro’s existing applications to form an even more rounded offering and will further enhance Squirro’s existing technology to increase the speed and flexibility of the platform.

“Our growth curve continues to rise sharply, and this acquisition puts us firmly on the map in the US," continued Dr. Dorian Selz, Squirro. "Open.exchange has a highly complementary proposition to Squirro's and allows us to expand our technology footprint in an important territory. We have already established a strong US presence, and the acquisition will greatly expand our market reach as demand for AI-derived insights increases

Squirro acquired open.exchange from BuildGroup, the capital investment firm founded by former Rackspace CEO Lanham Napier. As part of the acquisition, BuildGroup has made an investment in Squirro, marking the start of a long-term partnership, according to Lanham Napier:

“Squirro is a company that has been demonstrating fantastic potential for growth over the past few years, meeting the increasing demand for insights taken from unstructured data sources,” he said. “Open.exchange is in excellent hands with Dorian and his team, and I am delighted that BuildGroup will play a role in working with Squirro over the coming years.”

“This is a landmark day for Squirro," concluded Dr. Dorian Selz. "To see the organisation I co-founded in a position to make a major US acquisition like this, and win a landmark client such as the ECB, fills me with pride and optimism for our future. We are now better positioned than ever to capitalise on the trend of organisations becoming insights-driven businesses, and we are excited to welcome open.exchange to the Squirro family.”