Q2 Summer 2016 • Canada’s Independent Magazine
Financial S Payables | Receivables | Collections | Data | P-Cards | ECM | Technology
DATA & DOCUMENTS A look at the fraud and security issues impacting the capture, collection, use and allocation of data and documents
Regulatory Report: Introducing the Canadian Lenders Association
Technology Report: Welcome to the blockchain revolution
Trend Report: Four ways Brexit might impact the payments industry PM40050803
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Contents
Q2 Summer 2016 Volume 3 Number 2
BRE 16
18
4 News
Features
21 Events
14 Technology Report
Data & Documents
16 Regulatory Update
Welcome to the blockchain revolution Introducing the Canadian Lenders Association
8 The complex road to IFRS 9 compliance
Adapting to this new standard offers rewards but it won’t be easy
10 Study finds 78 per cent of
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IT
18 Trend Report
Four ways Brexit might impact the payments industry
20 How to run an effective virtual
Canadian businesses still use spreadsheets as their primary source of analytics
meeting
22 Collection lemonade
Making the best of the challenge of collecting receivables Also Publishers of
Canadian Equipment Finance
Advertising Sales Mark Henry mark@financialoperations.ca Publisher and Editor-in-Chief Steve Lloyd steve@financialoperations.ca Managing Editor Sarah O’Connor sarah@financialoperations.ca Creative Direction / Production Jennifer O’Neill jennifer@financialoperations.ca Photographer Gary Tannyan
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NEWS Two of five Canadian consumers want automated recommendations from banks, Accenture survey finds More than two out of five Canadian bank customers (43 per cent) are open to using automated recommendations for banking services—computer-generated advice and services, independent of a human advisor— according to a new report on the banking industry by Accenture. Canadian consumers welcome roboadvice from banks to determine how to allocate their investments (77 per cent), determine the type of bank account to open (76 per cent) and plan for retirement (70 per cent). The report, titled “Banking on Value: Rewards, Robo-Advice and Relevance,” is based on a survey of more than 4,000 retail bank customers in North America, including 1,210 in Canada, and is the most recent report in Accenture’s multi-year research on consumer banking attitudes and behaviours. “Robo-advice is gaining significant traction in the wealth management industry in Canada, and our research shows that consumers are open to working with roboadvisors for their retail banking needs,” said Bob Vokes, managing director of Accenture’s Canadian financial services practice. “Consumers are excited about the potential savings and accuracy that robo-advice offers. We are now seeing leading financial services players starting to embrace intelligent automation and robotics to simplify and improve the customer experience.” This year’s survey found that speed and convenience (50 per cent for Canada versus 49 per cent for U.S.) and lower costs (33 per cent for Canada versus 27 per cent for U.S.) were cited by respondents as the primary benefits of robo-advice, with Millennials and mass-affluent consumers expressing the most interest in the service. For the purposes of the research, massaffluent consumers are defined as those earning over $100,000 in annual income.
Non-traditional banks continue to gain momentum The survey found that Canadian consumers
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are increasingly willing to bank with non-traditional players, closing the gap with those switching to national banks. Nine per cent of Canadian consumers broadened their banking relationship with a new financial services provider in the past year. Among those respondents who have broadened their banking relationship to other providers, 21 per cent joined a non-traditional provider (online-only bank, payments providers, retailer or insurer), versus 29 per cent who switched to a large regional or national bank. Of those Canadians who switched, 15 per cent of consumers ages 55+ joined an online-only bank, up from only five per cent who did the same last year. Millennial switchers increased the move to non-traditional providers from 24 per cent in 2015 to 27 per cent this year. Consumers ages 35–54 had a reverse trend; 30 per cent moved to non-traditional providers in 2015, down to 24 per cent in 2016. “Consumers no longer view using multiple financial service providers as a hassle, which now puts pressure on these firms to not only attract new customers, but also to find ways to retain existing customers,” continued Vokes. “According to our research, 77 per cent of Canadian consumers consider their relationship with their bank to be purely transactional—this is a missed opportunity for banks which now have access to technology that can help them provide more tailored offerings, particularly as more consumers are open to receiving value-added services from their bank. In fact, 41 per cent of Canadian consumers said the top reason they would stay loyal to their bank is if it offered discounts on purchases.” Among Canadians, 23 per cent would consider switching to a branchless bank, which is up eight percentage points from last year. Across North America, 26 per cent of Millennials would consider switching to a branchless bank (up three percentage points from last year) and 34 per cent of mass affluent consumers would do so, up 10 percentage points from 2015.
Financial Operations | Summer 2016 | www.financialoperations.ca
Online channel dominant, but branches still relevant Today, 21 per cent of Canadian survey respondents use the branch at least weekly, and it remains the second most preferred channel, after online. By a wide margin, Canadians who use the branch prefer “full service branches,” which include extended office hours and full sales support, over all other formats (64 per cent). However, 19 per cent of Millennials prefer “light branches”—highly automated with video conferencing access to remote specialists. According to the survey, the vast majority (87 per cent) of Canadian consumers say that they will use the branch in the future. Respondents said they anticipate using the branch two years from now because “I trust my bank more when speaking to someone in person” (50 per cent versus 48 per cent for U.S.), and “I receive more value from my bank when speaking to someone in person” (49 per cent versus 47 per cent). “Today’s consumers want it all, and those expectations are equally high when it comes to their bank,” Vokes concluded. “Online banking remains the most popular channel; however, Canadian consumers continue to see value in branches for services and they will continue to do so for the foreseeable future. Even as Canadian consumers indicate their interest in artificial intelligence for banking, they demand human interaction at the branch to handle their more complex banking needs. Consumers expect a seamless experience that can blend their digital and physical channels, and the banks that are able to deliver this experience will earn the loyalty of their customers.”
Despite security breaches, customers willing to share data Sixteen per cent of Canadian respondents have experienced at least one incident of their financial data being hacked online over the past two years. Consumers remain Continued on page 6
Are you responsible for your firm’s compliance requirements? Do you manage risk? Is your department responsible for ecommerce? Accounts payable?
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NEWS Continued from page 4
willing to share their data in order to receive better service from their bank. Nearly two-thirds (62 per cent) of Canadian respondents said they would give their banks direct access to personal information, such as mortgage, credit card and student loan data, so their bank can use it to present them with suitable products and services. Respondents want banks to use their data to provide access to lower prices, faster service (such as rapid loan approval), more relevant advice and personalized offers based on location.
For breaking news and in-depth features, visit our website at
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Marketing Association for Credit Unions votes to integrate their operations, events into CCUA
The Marketing Association for Credit Unions (MACU) voted to fold its organization into the Canadian Credit Union Association (CCUA)—the national industry leader for Canada’s credit unions. The vote took place during MACU’s Annual General Meeting, in Ottawa, Ontario on Tuesday, May 31, 2016. “MACU was founded in 1988 as a way to help marketing professionals exchange ideas and best practices, and learn from other marketing industry leaders,” explained MACU Executive Director Rachel Cleland. “The decision to merge our operations will lead to increased collaboration and integration within the industry, and more operational efficiencies.” This change will also help to increase professional development opportunities for marketers across the country through key events such as the CCUA annual, national conference for Canada’s credit union leaders. CCUA’s next national conference will be held in Halifax, Nova Scotia on May 6-10, 2017. MACU members, which make up approximately 33 per cent of the system, will continue to have access to the industry research, thought leaders and industry-related webinars that their membership already gives them. A key benefit of membership is MACU’s annual Achievement in Marketing Excellence (AIME) Awards program, developed to recognize the best and brightest achievements in credit union marketing. These awards will continue to be presented to Canada’s credit unions; however at this time it is unclear if they will be merged into CCUA’s annual National Credit Union Awards program, or if they will be held separately. “This decision will enable CCUA to focus on expanding and elevating the marketing conversation across the country in a new and accelerated fashion,” explained Jennifer McGill, vice president, communications and marketing, CCUA. “It will also will help us to implement at a higher level, best practices within the system and present opportunities to leverage the insights of our peers.”
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Financial Operations | Summer 2016 | www.financialoperations.ca
Canada’s CFOs and senior financial executives applaud modest CPP expansion Financial Executives International Canada (FEI Canada), the country’s leading association for senior financial executives, applauds the federal government’s proposal to expand the Canada Pension Plan by raising premiums moderately over time. “We are very pleased. We’re happy this will start soon—the sooner the better,” said Tony Hooper, who serves as co-chair of the Pension Committee of FEI Canada’s Policy Forum, along with Kevin Sorhaitz. Sorhaitz said: “This looks like really good news for mid-career and younger Canadians, especially those without access to a workplace DB pension plan.” Hooper said Canada’s CFOs support the proposed incremental increase of the current 4.95 per cent contribution limit by one percentage point and the increase in the contribution limit to $82,700 by 2025. He said this was preferable to the Ontario government’s proposed pension plan, which he said would have been a steep hit to small business in particular. “We’re glad they’re getting on with it and they’re doing a phased-in approach,” Hooper said of the federalprovincial agreement, which will be phased during a seven-year period. “While the ORPP seems to have helped the CPP expansion debate, it was wise to back off the Ontario go-it-alone approach.” The federal proposal would provide a lower payout than the ORPP, but will be portable, universal and tax-deductible. In the past, FEI Canada has publicly called for a modest expansion of Canada’s pension system, in its May, 2014 white paper entitled “CPP Expansion: A critical part of the solution” as well as other measures to help Canadians finance their retirement. “It is still important for Canadians to plan for retirement, as failure to do so will eventually put additional burden upon taxpayers through increased taxes in the future,” said Norm Ferguson, chair of FEI Canada’s Policy Forum. “FEI Canada supports the significant steps taken to reach this milestone in support of labour mobility, adequate income for retired Canadians and the gradual approach to minimize impacts on Canadian businesses.” “FEI Canada has long encouraged the government to help Canadians plan for retirement by developing a national framework on adequate retirement income,” said Michael Conway, FEI Canada’s CEO and national president. “This agreement would help ensure long term solvency of pension funds while maintaining stable contribution rates and preserving a fair standard of living for Canadians in their senior years,” he said.
NEWS FinTech study will examine innovation in the Canadian financial services sector The Competition Bureau has launched a market study into technology-led innovation in the Canadian financial services (FinTech) sector. FinTech companies are using technology to change the way that Canadians consume financial services, such as making payments or transfers, investing and borrowing funds. At the touch of a screen on your tablet or smartphone, FinTech innovation can reduce costs and facilitate direct transactions without the need for intermediaries. These innovations provide more choice by unbundling existing products and services and introducing new ones: they can result in more efficient services, lower fees and greater savings for Canadians. “The FinTech market study that I am launching today will provide guidance to the Bureau and regulators, to nurture an environment that allows Canada’s FinTech companies to innovate, grow and compete globally,” said John Pecman, commissioner of competition. The FinTech sector is evolving rapidly as new products and services are being unveiled and the number of start-ups entering the industry grows. FinTech has the potential to disrupt the financial services sector, spur innovation and generate benefits for individuals and companies across Canada. The Bureau’s market study will focus on how innovation is affecting the way consumers and businesses use financial products and services. The study will explore the competitive impact that FinTech is having on the industry, barriers to entry faced by companies, and whether there is a need for regulatory reform to promote greater competition while maintaining consumer confidence in the sector. Interested stakeholders are invited to make a submission to the Bureau.
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Quick facts • In 2014, the financial services sector accounted for approximately 10 per cent of Canada’s gross domestic product. The banking sector alone employs over 280,000 Canadians. • The study will examine peer-to-peer banking, e-wallets, mobile wallets, mobile payments, crowdfunding and online-based financial advisory services. • As part of its mandate, the Bureau participates in a wide range of activities to promote and advocate the benefits of a competitive marketplace. • Greater competition leads to innovation that can result in lower prices and increased choice for consumers.
To send press announcements, please direct them to Sarah O’Connor, Managing Editor at
sarah@financialoperations.ca
FOR INFORMATION CONTACT:
MARK HENRY Corporate Sales Manager 905-201-6600 x 223 mark@financialoperations.ca SARAH O’CONNOR Managing Editor 905-201-6600 x 227 sarah@financialoperations.ca
Visit us online at www.financialoperations.ca Financial Operations | Summer 2016 | www.financialoperations.ca
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Data and documents
The complex road to IFRS 9 compliance Adapting to this new standard offers upsides but it won’t be easy
By Darryl Ivan
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n January 1, 2018 the new international financial reporting standard, IFRS 9, created in response to the 2007–2008 financial crisis, comes into effect and must be implemented by organizations at the start of their fiscal year following that date. Given that the fiscal year end for Canadian D-SIBs ends October 31st, OSFI has mandated that Canada’s largest banks commence reporting under IFRS 9 November 1, 2017. As a result, the major Canadian banks have the dubious distinction of being the first to report under the new standard and the world will be watching. More complex than previous standards, IFRS 9 is not simply a set of deterministic rules—and is therefore a departure from what banks are used to. Instead, IFRS 9 is a principle-based regulation for which models will be built by the banks; executing these
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Financial Operations | Summer 2016 | www.financialoperations.ca
Data and documents models generates a result, which is then audited to ensure that the standard guidelines have been applied. This involves using stochastic models—which estimate probability distributions of potential outcomes by allowing for random variation in one or more inputs over time and including probable macroeconomic scenarios—and may lead to accounting teams feeling challenged. Unfortunately, many are underestimating the effort. IFRS 9 is a complex journey that is changing the way firms account for their provisioning activities, manage risk and their data. The new standard contains three critical components, including: 1. Classification & measurement: defines which valuation approach should be used for which balance sheet items; 2. Hedge accounting: redefines requirements that allow the use of hedge accounting; 3. Impairment calculations for credit losses: re-defines the expected credit loss (ECL) calculation used to determine the required allowance amount for qualified financial instruments. This final change is perhaps the most complex and most significant piece of work as it implies moving from incurred loss (IAS39) to expected credit loss (IFRS 9). The new standard requires entities to account for expected credit losses when financial instruments are first booked and to recognize lifetime expected losses on a timely basis where credit deterioration has been identified. IFRS noted that the delayed recognition of credit losses on loans and other financial instruments was identified as a weakness in then existing accounting standards. It was deemed significant enough that the IFRS created a transition resource group to assist institutions in the transition to the new requirements.
IFRS9 and the need for good data IFRS 9 puts more of a requirement on banks to have very good data. The standard is motivating banks to make sure that they have good data and systems to support that data. In a way it’s a great opportunity to not only improve the risk and finance integration process beyond stress testing and into BAU (Business as Usual). It is another process that banks can utilize to drive better discipline by facilitating better risk/return metrics and
IFRS 9 is a complex journey that is changing the way firms account for their provisioning activities, manage risk and their data. hence a truer cost of credit in pricing at origination. The IFRS 9 journey provides firms with an opportunity to modernize the risk infrastructure, break the silo between risk and finance and drive more transparency in the business. While the implementation is no doubt complex there is huge upside to improve other areas of the business—using sound data to drive better business outcomes across the entire bank.
Asking the important questions When developing an IFRS 9 approach to address these challenges we have found that the most advanced organizations have actively engaged key internal stakeholders and have thoroughly thought through understanding and planning for the following: 1. Will the solution be able to dynamically test the impact of changes to staging allocation rules as well as other important inputs related to the accounting standard? 2. Will the solution be robust enough to calculate expected credit loss down to the loan level with confidence? 3. Is the IFRS 9 platform or its components reusable in other critical areas such as stress testing, Basel model deployment or economic capital? 4. Will the solution have adequate controls and the ability to provide transparency/ audit trails that hold up against rigorous examination from regulators and auditors, while minimizing manual intervention in the workflow and in data aggregation and output? 5. How can IT accelerate speed to execution of IFRS 9 to allow the commencement of early testing/ parallel runs, preferably with existing infrastructure? 6. How can the organization manage all of the data challenges, including sourcing, quality, aggregation and traceability/ lineage of data? 7. What are the ongoing maintenance costs and operational risks beyond
the initial deployment of an IFRS 9 solution? Is it scalable; can it easily move from relatively simple models to more complex models, and from segment level analysis to loan level analysis? 8. How will the product be supported and what is the vendor roadmap for it? Do you have a partner or a relationship with an experienced vendor who can provide reasonably priced, deep support beyond the initial deployment of the IFRS 9 solution? The risk attached to getting these components wrong is significant. Not only will it cause regulatory consequences, a poor solution can be more expensive to operate and can cause increased volatility in earnings. However, with a good set of technology and processes, organizations will be in a better position to manage and stand up to scrutiny from regulators, auditors, investors and, since Canada will be first to implement IFRS 9, its peers around the world. The transition to IFRS 9 won’t be simple— it will have a substantial financial impact on banks and involve significant implementation challenges but with preparation and a knowledgeable partner it can be made less painful. To achieve this goal banks will need substantial support from technology. SAS’s white paper “Navigating the route to IFRS 9 compliance” enumerates best practices, and its IFRS 9 solution addresses the challenges including: data capture, tools for model development, risk engines for model deployment and execution, orchestration and process controls, functions for management and regulatory reporting and preparing accounting posting journals. Darryl Ivan is national lead risk management SAS Canada. In his role Darryl works with financial institutions to advise on financial and risk management solutions. With over 15 years of risk management experience, Darryl has extensive knowledge designing and implementing risk management capabilities in the financial services sector.
Financial Operations | Summer 2016 | www.financialoperations.ca
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Data and documents
Study finds 78 per cent of Canadian businesses still use spreadsheets as their primary source of analytics By The Canadian Financial Executives Research Foundation
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he vast majority of Canadian organizations still rely on spreadsheets as their primary tool of business analytics, which may be leaving them at a competitive disadvantage according to a new study by the Canadian Financial Executives Research Foundation (CFERF) and sponsored by SAP Canada Inc. The survey of 118 senior Canadian financial executives was carried out by the research foundation of Financial Executives International Canada (FEI Canada) to discover which data analysis tools Canadian organizations are using today, their level of satisfaction with those tools and the level of data integration within organizations. It found: • 79 per cent of executives feel their current financial reporting and analytics tools only somewhat meet their business’s needs. • 65 per cent of businesses do not use or have no access to real-time reporting tools. • Only four per cent of executives consider themselves industry leaders in financial reporting. • 29 per cent have plans to invest in financial reporting and analytics infrastructure this year.
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If only one aspect of financial reporting and analytics could be improved, 27 per cent of respondents want more advanced analytics (the highest ranked response). At some organizations, the use of spreadsheets remains pervasive, even among very large enterprises. Gerard McInnis, partner, valuations, at EY, observed that one client has one million active spreadsheets tracking different sources of information within the organization. “We’re seeing this is an issue with all of our clients, where they have to backstop their accounting and formal ERP systems with spreadsheets,” he said. “There’s a disproportionate amount of manual effort.”
Stuck on spreadsheets “Spreadsheets have become the norm,” said John Forester, CFO, DBG Canada, in Mississauga. “Every person in our organization has their own version of a spreadsheet. I don’t know if the spreadsheet is updated, who has looked at it last and whether the data is current. The question is can we move away from spreadsheets into something which is more disciplined, more defined, a tool that everybody understands and is used consistently, as opposed to having each person come in a room with their own
Financial Operations | Summer 2016 | www.financialoperations.ca
version of the truth?” Although spreadsheets are useful, there are risks associated with using them, said Craig Smith, CFO, McAsphalt Industries: “You face the challenge of people extracting incorrect or inconsistent information and arriving at the wrong conclusions,” he said. “We see that periodically, which is why standard reports extracted from the ERP database are preferred. These reports are tested and vetted and placed in a repository to be drawn on as required.” Another tool used by financial executives, beyond spreadsheets, is Structured Query Language (SQL), a language used to run queries in databases. “SQL reporting is virtually real time for us,” said Smith, adding user requests have created SQL queries to get more customized and useful information outside of their regular sources. Niall Cotter, CFO, Kingsdale Shareholder Services, agreed spreadsheets are static. “In a business intelligence report, I can almost flick over all the various areas that I want to see. If I want to view metrics by campaign, by person, by graph or whatever, I can do it without having to go to separate tabs; it’s all there, it’s in real time and I find that very powerful.” It should come as no surprise that the survey shows that financial executives are still
Data and documents
Are spreadsheets like Excel your organization’s primary source of Business Analytics?
married to spreadsheets. Finance departments have long used spreadsheets as their primary tool to plan, forecast and run scenarios, as spreadsheets offer the ability to quickly analyze a specific data set in a particular way. Many financial executives successfully use spreadsheets to make good business decisions that foster corporate growth and this isn’t likely to change soon. However, using separate sheets for budgeting, forecasting, reporting and analysis can result in disparate data sets from areas such as finance, operations, sales and human resources. The work is manual and can drain time and resources. It seems many organizations, including large, public enterprises with high revenues, continue to be
heavily dependent on these disparate data sets in spreadsheet format, perhaps unnecessarily, given the availability of the many data analytics platforms in existence. The demands of business are extensive and growing, and analytics can help with tasks such as forecasting performance, market research, profit margin analysis, risk assessment and management, operations and product pricing.
The CFO’s expanding role Given that CFOs are already masters of spreadsheets, as organizations move towards the integration of data with business intelligence and ERP systems it makes sense that the CFO would oversee this evolution. Further, the benefit to the CFO of taking
ownership of analytics is that it enhances the strategic role of financial executives in the organization’s growth, whether it’s with their board of directors, their CEO, fellow executives and staff or with their clients. For a data analytics program to be effective, however, financial executives surveyed cautioned that there must be a “single source of truth”—in other words, data must be defined and consistent across an organization. A major challenge identified around analytics was that segments don’t equal each other due to the lack of data integrity between disparate databases. It was also suggested that data analytics could offer more insight by integrating information from outside the organization, including industry benchmarks. By providing reliable, real-time information drawn from different areas of an organization, the financial executive using data analytics will become invaluable to other departments and a key driver of revenue. Rather than simply reporting on past results, the CFO and the finance team, with support from IT and other departments, can help answer immediate, pressing sales and operations questions on future pricing, inventory and supply chain decisions and even continue to enhance the role of the CFO as a strategic member of the c-suite. It should be emphasized that having outstanding IT tools such as predictive analytics and real-time reporting is only half the issue. Businesses require personnel capable of interpreting the data and leaders able to clearly define the data requirements and, again, this is where the senior financial
How would you describe your organization’s ability to:
Financial Operations | Summer 2016 | www.financialoperations.ca
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Data and documents
If you could improve only one aspect of financial reporting and analytics in your organization, what would it be?
executive can add value. One way the CFO can spark innovation in a company is by providing users in various areas of the organization—from operations to sales and marketing—reliable, consistent metrics offering insights that they can build on. “Reliance on spreadsheets is symptomatic of broken systems, characterized by offline processes, redundant data and wasted human effort in data entry and reconciliations,” said Arthur Gitajn, CFO, SAP Canada Inc. “Today, when terabytes of data can be analyzed in seconds and accessed in real time on tablets and smartphones, it makes little sense to rely on static spreadsheets as analytical tools. “The CFO is responsible for maintaining controls over the accuracy of financial information. In addition to providing live information, integrated Business Intelligence tools help to safeguard system data as the single source of financial truth,” he said.
spreadsheets today may be indicative of a lack of resources holding CFOs back from fully developing their data analytics capabilities,” said Michael Conway, president and CEO, FEI Canada. “Demands on businesses are extensive and growing, and real-time analytics can help with tasks such as forecasting performance, market research, profit margin analysis, risk assessment and management, operations and product pricing. “The problem with spreadsheets is that the information is often not timely or intrinsically
When do you anticipate your organization will invest in improving its financial reporting and analytics infrastructure?
Organization size matters Breaking down the statistics by company size, 91 per cent of small businesses (<100 employees) and 76 per cent of mediumsized businesses (101–500 employees) predominantly use spreadsheets for business analysis, however that number fell to 50 per cent for organizations with more than $1B in revenue. “This continued dependence on
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insightful enough. Larger companies are embracing live analysis and moving away from spreadsheets at a faster rate than smallto medium-sized businesses; however, it seems almost all businesses have yet to eradicate the problem of disparate and static data sets slowing down operations and adding to manual workloads.” Most organizations, according to survey respondents, are using a combination of tools, such as both spreadsheets and accounting software, or spreadsheets and BI software, in
Data and documents tandem, to meet a range of different needs and to act as a check or confirmation of data from other parts of an enterprise. When it came to deriving insights from large volumes of data, many organizations identified room for improvement. For instance: • 33 per cent described their organization as below average in deriving insights from large volumes of data. • Large companies (revenues over $1 billion) were more likely to see themselves as industry leaders (10 per cent) compared to overall (average of two per cent) When it came to deriving insights from realtime data, more than half of all organizations (52 per cent) felt they were below average, with higher results in the mid-sized company grouping (60 per cent). Interestingly, a higher proportion of smaller companies (revenue under $100 million) felt they didn’t need real-time data or this wasn’t applicable to them (10 per cent) when compared to the total group of respondents (six per cent overall).
Analytics already Financial executives have long used spreadsheets as their primary tool to plan, forecast and run scenarios, as spreadsheets
Does your organization leverage real-time reporting?
offer the ability to quickly analyze a specific data set in a particular way. Many financial executives successfully use spreadsheets to make good business decisions that foster corporate growth and this isn’t likely to change soon. That said, the research undertaken for this study indicates that many organizations, including large, public enterprises with high revenues, continue to be heavily dependent on disparate data sets in spreadsheet format, perhaps unnecessarily, given the availability of the many data
analytics platforms in existence. “Data analytics in Canada” was prepared by the Canadian Financial Executives Research Foundation (CFERF), the research arm of FEI Canada, and was sponsored by SAP Canada. This study comprises the results of an online survey of Canadian financial executives which took place between October 16th – November 20th, 2015. The report encompasses the insights and opinions of 118 respondents to the online survey as well as November 12th, 2015 executive research roundtable, which was attended through a video conference linkage that connected 19 senior finance executives in Toronto, Calgary and Montreal. Visit FEICanada.org to read the full FEI Canada research report titled “Data Analytics in Canada.”
Which statement best describes your organization’s ability to leverage real-time reporting?
Financial Operations | Summer 2016 | www.financialoperations.ca
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Data and documents
Welcome to the blockchain revolution New integrations offer glimpse of the future By Sarah O’Connor
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ecent product launches and integrations are bringing the blockchain and cryptocurrencies into the mainstream payments ecosystem. Financial Operations spoke to two companies on the leading edge of the charge—Decentral and CGI—to understand what these innovations mean today and what they may mean tomorrow. “When you think about back in the day what speech was when the printing press came about—people were so used to the government controlling how news was disseminated to the people,” says Anthony Di Iorio, president and founder of Decentral. “And then you had a printing press come out and totally change what people were used to in terms of control over speech. And now, what’s happening with value… “I think people in the future are going to look back and say, ‘really? You tried to control value between countries? You tried to stop it between borders? It’s just information!’ It will be freedom of value, it will be global. We need to starting thinking outside the box. In my opinion, it will be a big shift.” “I think we’re going to look back in a few years at ourselves and laugh for the way we’re looking at it,” concurs Michael O’Loughlin, CGI’s director of consulting. “We’re looking at it as though it’s the internet and the use case we’re all exploring right now is email when really there’s a large list of things we can really tap into. Payments is really one tip of the spear. Blockchain isn’t the only thing that’s innovative in the market right now; however, it is one that has maybe an unending list of opportunities.”
Decentral’s Jaxx blockchain wallet integrates ShapeShift Decentral has announced the new integration of the ShapeShift API with its Jaxx fleet of blockchain wallets. By working with ShapeShift—an industry leader in blockchain
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“I think people in the future are going to look back and say, ‘really? You tried to control value between countries? You tried to stop it between borders? It’s just information!’” asset conversions—Jaxx’s seamless cross-platform experience now offers the option to convert between bitcoin, ether and dao tokens, or any other tokens that Jaxx and ShapeShift integrate in future. This integration is part of Decentral’s long-term vision of Jaxx becoming the go-to wallet for all, including users of alternative blockchains. The ShapeShift API allows users to convert digital currency directly within Jaxx. ShapeShift Founder and CEO Erik Voorhees says “We built ShapeShift’s API for this very reason—to enable other services in this ecosystem to leverage it for the benefit of their users. Converting blockchain assets should be as easy as clicking a button and Jaxx’s integration of ShapeShift demonstrates this principle.” “The integration enables people to be able to switch, right now, between three different digital currencies,” explains Di Iorio. “I don’t like to use the word ‘currency’ because ether, which is one of the ones that we have integrated, isn’t really a currency, it’s a fuel that runs the platform and it’s a requirement for a product to
Financial Operations | Summer 2016 | www.financialoperations.ca
Anthony Di Iorio, president and founder of Decentral.
From top: Santino Failla, director, chief solutions architect; Michael O’Loughlin, director of consulting; and Cathy Pin, head of global payments solutions for CGI.
Data and documents operate. So in the space where we are trying to define what digital currencies are, it gets really tricky to even call some of these things currencies. They are basically digital units of value, is what they are. Basically they are information.” Jaxx offers unprecedented accessibility for the blockchain enthusiast, with interoperable versions currently available on nine major platforms. The unified Jaxx fleet of wallets enables cross-platform pairing, encompassing mobile, desktop and browser extensions. “The Jaxx-ShapeShift integration is one of many partnerships we anticipate with companies around the world,” says Di Iorio. “We believe our single code base and the ability to deploy in minutes across all platforms and devices gives us a huge advantage towards becoming the industry’s default blockchain wallet. “I think in the future when we talk about goods crossing borders and value being exchanged across border—all it really is is information. Since we’ve digitalized everything, it’s all turning into information. “You think about cash crossing the border—you can’t take over $10,000 in cash or it has to be claimed. Well, I can have a wallet in my head now that can literally contain millions of dollars in digital value. We need to think outside the box—its not about paper, its about digitizing value. “These things are really about changing one type of value into another type of value. So our integration is converting things from ether to bitcoin to doa, and its being done in our wallet, and its basically just saying, ok you have this token, we use an API that switches it from one token to another, and that’s the service that we are providing—being able to say I have bitcoin, I want to buy ether, and I can now send it, directly in the wallet, so that you send bitcoin into the API, the API converts it to ether and now your wallet has ether. But its really just value, its token, it’s information. This is where we are getting away from currency and really thinking about what we are dealing with in the future and its digitalized value.”
CGI payment solutions are now blockchain enabled CGI has integrated Ripple’s distributed financial technology into the CGI portfolio of payments solutions. CGI’s clients will realize the benefits of instant international settlements
such as greater cost efficiency, agility and speed to market. Specifically, financial services companies using CGI’s Ripple-enabled Intelligent Gateway can use their existing payments hub to access new protocols and services, and connect with multiple payment networks and clearing channels, including the Ripple network ecosystem. “It’s fundamentally a gateway,” explains Cathy Pin, head of global payments solutions for CGI, “and one of the functions that this gateway does is transforming message types. So if you’re sending a message in format A, our gateway will transform it into format B. Our engine can transform it into whatever existing payment types [a client bank has] within their existing payment ecosystem and the payments message can flow to the receiving Ripple bank. The key is that this integration allows banks to embrace this important technology without disrupting what is already working. “Bringing anything new into a bank is really difficult,” notes Pin. “Banks have been in the business and continue to be in the business of protecting people’s money and people’s identity and so our clients were saying, ‘what’s the use case? Show me the use case. What have others done?’ Well, its still so new it became a bit of a circular argument. “Our clients, banks, need to get into this new technology for competitive reasons, their lunch is going to be eaten if they don’t. They will become the Blockbuster to Netflix. There’s a business need to really understand the technology, and do it now. So we sat back and said, how can we help our clients get into this innovation space quickly, and in a way that doesn’t disrupt their payment ecosystem? Because those ecosystems have been built on years of processes.” CGI’s Intelligent Gateway is one of the first payments solutions in the industry to integrate Ripple’s distributed financial technology and provides a solution-agnostic, transformational wrapper around a client’s payment processing systems, allowing participants in the Ripple network to directly transact with each other without the need for a central counterparty or correspondent. This includes real-time payments of any value, in any currency, to anyone, at any time and from anywhere in the world. Benefits also include end-to-end visibility and certainty, increased cost effectiveness and real-time insight into liquidity positions.
“It was obvious from a product perspective that if we were going to provide value to the financial community and beyond, we need to provide a capability that made integration as seamless as possible,” says Santino Failla, CGI’s director, chief solutions architect. “Using our Intelligent Gateway, which isn’t a new product but is a new extension when we look at Ripple Connects and blockchain, was an obvious choice for several reasons. “First, in the payment space it’s a paymentsengine-agnostic gateway. So it doesn’t really matter which payments engine a customers has, we will connect to it. And we actually manage the gateway, so our Intelligent Gateway is a physical connection to multi networks at one time. We can connect into an existing message flow within a bank.” These benefits are easy to realize when a financial services company implements Intelligent Gateway in front of its existing payment hubs to bridge the transformation gap between disparate systems while still leveraging the existing payment ecosystem and formats. “Cross-border payments is an area where there are heavy costs being pushed back on to corporations and indeed their end users,” explains O’Loughlin. “For payments, it doesn’t necessarily make sense for me to walk into a bank and hand over X amount of cash and then not all that cash arrives in five working days or seven working days. Really it goes into black hole. What blockchain offers is an autonomic transaction, a real time transaction. “Naturally if we have our software embedded in banks throughout the globe, this is going to impact that software and our clients don’t just want us to be vendors, they want us to be partners. They want us to enhance our technology so they don’t have to rip out the beating heart of a bank, which is the payments engine, which is our primary product. Instead they’re asking us, how do you improve it? How do you do so in a methodically, safe, secure way? “We’ve really embraced this,” concludes O’Loughlin. “We’ve researched it, we continue to research it, we will continue to research it. We realize that talking about it and writing white papers about it isn’t enough. And that’s why we, in April, announced the launch of this new product, the Intelligent Gateway which, in essence, connects banks to distributed ledgers in a safe, secure, efficient and agile manner.”
Financial Operations | Summer 2016 | www.financialoperations.ca
15
Regulatory Update
Introducing the Canadian Lenders Association
A conversation with Founder & Chairman of the Board Karl Sigerist
By Sarah O’Connor
“I
’ve been in FinTech, as its now coined, for most of my career,” says Karl Sigerist, founder and chairman of the board of the newly minted Canadian Lenders Association. “I had the words ‘finance’ and ‘technology’ in my LinkedIn summary profile. I just never knew that if you shortened it to ‘FinTech’ the company would be worth more.”
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Sigerist is director, president and chief executive office of Crelogix Credit Group Inc., a provider of point of sale installment credit financing considered Canada’s largest FinTech company. “As an operator of various non-bank businesses over my career in various roles, the use of technology to enable a more frictionless, more effective customer experience and more efficient
Financial Operations | Summer 2016 | www.financialoperations.ca
internal processes is, I think, just at the root of any business leader, not even limited to just finance,” he observes. Earlier this year Sigerist read an article in the Financial Post by Barbara Shecter posted online on March 31 and titled “Debate over regulating FinTechs heats up in Canada and the U.S.” In the article Bharat Masrani, chief executive of Toronto-Dominion Bank, calls
Regulatory Update
for increased oversight of FinTech companies and is quoted as saying “the need has become even more evident. Security breaches— service interruptions—and solvency issues have plagued a number of FinTechs… That’s why I believe it would be appropriate for policy makers to consider a regulatory environment that ensures the safety of customer information and the integrity of our financial system.” That article and quotation “really was the impetus for me first reaching out to all my peers in the industry, forming a LinkedIn group and now forming what we are calling the Canadian Lenders Association,” says Sigerist. “My thesis is that Canadian technology lenders and organizations run the risk of being marginalized if we leave the advocacy for and the education of our business models to others. Crelogix is quietly in the background enabling its business partners to become more successful, and so are many of my peers who are busy either helping small businesses or consumers get the lifestyle they want and business to achieve their business goals by providing credit products to them. “Many other forms of financial market participants, whether Canadian banks or the Payments Association or payday loans or mortgages or automobile and equipment finance, all have associations that represent their collective voice as an interest. Now, there was, prior to the global financial crisis a trade association for the consumer lenders but that industry association went away when those lenders went away.” Sigerist explains that following the global financial crisis there was a great deal of consolidation that changed the landscape of the industry. “Our particular niche, the consumer and small business space, was very scattered so we joined together: Crelogix, GoEasy, Dealnet, Thinking Capital and Lendified as the founding members, together with a lot of help from Blakes, a major law firm in the finance space, and McMillan LLP to form the association. “I read once: if you don’t have a seat at the table you’re more than likely to be on the menu. The association is intended for professionals in the industry—for founders, executives and investors interested in the Canadian consumer/small business lending space.
“The members will include small business and consumer financiers, and that can also include public companies, private and cooperatively owned banks or finance companies. We have a number of common interests and we want to advocate, converse, collaborate and educate to move the small business and consumer lending industry forward in Canada.”
“If you don’t have a seat at the table you’re more than likely to be on the menu.” In response to the article that inspired the founding of the Canadian Lenders Association and the quote from Masrani of TD, Sigerist says: “We believe that regulation should be a collaborative process between both the regulators and the parties directly impacted by the proposed regulation. Both government, borrowers and the industry should work together to promote lending that helps borrowers meet their financial needs through affordable credit and the extension of credit must be affordable for both the lender and the borrower.” Sigerist attributes the speed from which the organization has gone from idea to reality to the very nature of the industry the association serves: “We’re entrepreneurs. Some of us have banking DNA in our blood when it comes to being prudential but we’re also entrepreneurs. We get things done. The response [from the industry] has been amazingly positive. “Credit is what attracts people to the Canadian dream in that we have a society that provides credit to you so that you can buy a car, you can buy a house. There are other countries where that’s not possible and its how we create an amazing society for all of us. “I think that our lawmakers don’t want to be the victim of unintended consequences. At the end of the day our lawmakers are elected by all of us and they want nothing more than the best opportunity for all their constituents. However, in the absence of information there’s a void and now you’re left to decision making based on opinion rather than evidence.”
Fast facts about the Canadian Lenders Association Website: www.cla-apc.org Mission statement: The mission of the Canadian Lenders Association is to promote safe, ethical lending to responsible, informed borrowers and to improve and protect consumers’ and small businesses’ access to credit. Officers: Chair Karl Sigerist of Crelogix, Vice-chair Kevin Clark of Lendified, Treasurer Steve Forte of Thinking Capital and Secretary Kip Daechsel of McMillian The president’s position is currently open. Board of directors: Steve Goertz of GoEasy, Michael Hilmer of Dealnet, Jeff Mitelman of Thinking Capital, Kevin Clark of Lendified, Gary Fearnall of OnDeck Capital, Kip Daechsel of McMillan, Michael Burke of Blakes and Karl Sigerist of Crelogix
Financial Operations | Summer 2016 | www.financialoperations.ca
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Trend Report
BRE
IT
Four ways Brexit might impact the payments industry By Tomas Likar
I
n the immediate aftermath of the United Kingdom’s vote to leave the European Union, global stock markets tumbled, losing about $2 trillion in value the day after the vote. Much of this stock market drop can be attributed to investors’ uncertainty about the UK’s financial future in the event of the UK actually leaving the EU. In the midst of the vote and continued discussions surrounding Brexit, investors, banks, FinTech companies and other stakeholders are left questioning just how much Brexit could impact the UK payments industry.
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London has spent the past several decades as the gatekeeper to the EU, from a financial and trade perspective. By setting up shop in London, financial institutions, banks and FinTech companies have been able to easily access the EU’s common market of more than half a billion people. This all has the potential to change following the Brexit vote. While Brexit isn’t entirely imminent—the UK would have to take several timeconsuming steps to make the exit official— most assumed the initial vote wouldn’t even pass and are not prepared for the new reality
Financial Operations | Summer 2016 | www.financialoperations.ca
that it now threatens to bring. For a UK payments and FinTech industry perspective, what will be Brexit’s impact? Outlined below are some of the key aspects of the payments and FinTech industries that might take a hit as the UK moves closer to exiting the EU.
Regulatory complications Brexit has the potential to make EU licensing much more complicated. In recent history, the majority of global financial technology companies have had the option to establish a European headquarters in London and
Trend Report Brexit has the potential to complicate major processors and cross-border acquirers that have turned to London as a key hub. This is because European privacy and data security laws require these processing centres to be based in the EU. It is still unclear what the UK’s position will be in the event of Brexit, but if it ends up being treated as an offshore country—seemingly the most logical outcome—payments processing operations of hundreds of companies could be forced to relocate to the continent.
Restricted market access Brexit will likely lead to UK-based financial institutions facing a variety of obstacles when accessing the European financial services market. As a somewhat similar example, Switzerland isn’t an official member of the EU and its banking sector does not have full access to the EU’s internal banking market despite a close working relationship with the EU. Ironically, Swiss banks have long used “passporting” from the UK to operate in other EU countries—a practice they will have to quickly reconsider, as do UK-based banks and FinTech startups. This could also cause some large UK banks who have been the “go to bank partners” for most FinTech startups throughout the EU to take a hit. Chances are, their competitor banks in France, Germany, and other EU countries are already getting ready to prove themselves as the banking partner of choice.
Venture capital uncertainty
apply for an eMoney license through the Financial Conduct Authority (FCA). Applying through the FCA has allowed payments and FinTech companies to “passport” this license to all other European countries. If the UK does exit the EU, any company with an FCA eMoney licence will have to apply for a new one with a different regulator, such as German BaFin or Swedish FI. This will not only make the licensing process more complex, but it will also leave companies questioning whether to operate multiple European offices or close their London office.
Just as stocks plummeted the day after the Brexit vote, should the UK exit, it will likely lead to market uncertainty that will possibly last for several years. Venture capital investors in particular are wary of investing in companies in such an uncertain market. While most venture capitalists in the market have expressed commitment to any existing portfolio companies, the market uncertainty could spell disaster for new Londonbased FinTech companies looking to raise seed rounds. Political and regulatory risk surrounding Brexit means newer Londonbased FinTech startups will be left having to rationalize their valuations or consider moving to another country within the EU. Other European cities certainly aren’t shy to express their interest in taking over London’s role as the EU financial services capital. Berlin is already the most important
entrepreneurship hub in Europe, although it only has a small footprint in FinTech. According to Ernst & Young, Berlin attracted the most VC capital of all cities in Europe in 2015 (EUR $2.2B vs. London’s $1.8B). Other than Berlin, other serious contenders to be the new leader in EU payments and FinTech include Frankfurt, Dublin and possibly Barcelona.
Reduced talent pool A multitude of financial technology companies have established a global or European headquarters in London largely due to its diverse talent pool, which has deep knowledge of cross-border payments. There is reason for concern about access to this talent pool in the long run. CityUK conducted a survey before the referendum, which found that an estimated 37 per cent of financial services companies are “very likely or fairly likely to relocate staff if the UK left the EU.” Additionally, CEOs of London-based FinTech companies admitted that they were considering a variety of relocation scenarios. Other factors, such as the UK’s stricter work visa policies, reduced attractiveness of British schools for European students, and a weakened pound valuation, will potentially lead to a gradual exit of some of the UK’s prime payments and FinTech talent.
Looking ahead As outlined earlier, Brexit isn’t imminent— yet—so it’s still up in air how much of a hit UK payments and FinTech businesses will take if the UK does leave the EU. Such a move is unprecedented and it will ultimately be up to EU officials to decide UK’s fate in the common market. But one thing is certain: payments companies will quickly move from drawing theoretical exit scenarios to making tough business decisions. Unfortunately, I struggle to see anything but downsides for the UK’s financial services economy. Tomas Likar is VP of strategy and business development at Hyperwallet.
Financial Operations | Summer 2016 | www.financialoperations.ca
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Features
How to run an effective virtual meeting By Cameron Herold
V
irtual meetings have increased in frequency more than in-person, face-to-face ones, and that’s a trend set to continue in the coming years. But the basic tenets used to conduct an in-person meeting remain the same in the virtual sphere. Video conferencing tools such as Zoom, Google Hangout or Skype make it possible for you to see everyone on the same call simultaneously. The visual aspect is powerful and important. Without the visual, too many distractions can tempt people when they’re not engaged through eye contact. So, if you’re going to hold a virtual meeting, video technology is the ideal way to go. Video conferencing also gives you the option to use other vital tools during a meeting. Something as simple as Google Docs allows multiple users to work simultaneously on a document. Instead of emailing or faxing a document back and forth and trying to highlight changes, participants on the call can update documents in real time, adding their notes and comments. There’s also virtual whiteboard software and other software that allows you to put sticky notes up on a virtual wall to then move around. The key is to leverage technology to the greatest extent possible in a way that makes the virtual meeting as effective and efficient
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as an offline one. And with technology today, that’s entirely possible. Many people ask what they can do to make virtual meetings run smoothly. I’ve found that just being conscious of the obvious shortcomings of the technology goes a long way. If you’re on an UberConference call without video chat, remember the person on the other end can’t see you, so they don’t know when you want to chime in. The best thing you can do is to leave pauses in your speech to allow someone to jump in, whether that’s to ask a question, add a point or just explain that something was inaudible. People, some more than others, often rely a lot on nonverbal communication. Think about the way we acknowledge what someone is saying with a nod or a hand gesture. If someone on the other end of the line who has spoken for five solid minutes hears only silence on your end, at some point they might ask if you’re still there. Making the occasional small noise goes a long way for the person on the other end to know you’re still alive and listening to them. I’ve coached many CEOs from around the world whom I’ve never met in person. But after coaching them for years, I know all about them—their mannerisms, gestures, whether they’re having a good day or
Financial Operations | Summer 2016 | www.financialoperations.ca
bad—because that’s the power of video and audio technology today. All the different types of meetings I review in Meetings Suck can work in a virtual setting, with the exception of the Daily Huddle and Adrenaline Meetings. That’s not to say you can’t hold those over video conferencing or a phone call. It will work, just not as effectively. It becomes a little bit harder, for instance, to share good news. But in fact, I have known companies that have literally phoned in their Daily Huddles for years. I have a friend who owns an advertising company in Nashville, Tennessee. No matter where in the world he is, he phones into his team’s Daily Huddle, as does anyone else on the team who works remotely. It works for them. In the end, there’s no reason why your virtual meetings can’t be as successful as your in-person ones. Cameron Herold is an international speaker and author of Meetings Suck and the bestselling book, Double Double: How to Double Your Revenue and Profit in 3 Years or Less, which is currently in its seventh printing. He is the mastermind behind hundreds of companies’ exponential growth and has built a dynamic consultancy, including his time as COO of 1-800-GOT-JUNK? Herold can be found online at www.cameronherold.com or @CameronHerold on Twitter.
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EVENTS 2016 SEptember September 18-20 CUMA CUMA Ontario Annual Conference Collingwood, ON www.cuma.ca
September 29 Tomorrow’s Transactions Unconference Toronto, ON www.chyp.com/thoughtleaders/unconferences/
October September 20-21 Women in Payments Symposium Toronto, ON www.womeninpayments.ca
October 4 Celero Solutions FinTech Conference Lake Louise, AB www.celero.ca
September 26-29 Sibos Annual Conference 2016 Geneva, Switzerland www.sibos.com
October 5-6 BAI BAI Beacon Chicago, IL www.bai.org/baibeacon
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Visit us online www.financialoperations.ca/events.html Financial Operations | Summer 2016 | www.financialoperations.ca
21
Features
Collection lemonade Making the best of the challenge of collecting receivables
By Tim Paulsen
T
hink back to when you were a kid. What did you want to be when you grew up? One of the studies on the internet indicated that the largest group of women (about 11 per cent) wanted to be a teacher. From there it ranged down to veterinarians, writers, singers, nurses and paramedics. The largest group for men was athletes, followed by pilots, scientists, lawyers and astronauts. Doctors, police officers, fire fighters and others will make the list in different degrees, but have you noticed what is NOT on the list? That’s right. Nobody said, “When I grow up, I want to work in Accounts Receivable. I want to call people up and collect on past due invoices… I want to be a collector!” Just in the province of Ontario there are 4,320 collectors working for agencies and about the same number in British Columbia. Just three years ago, there were an estimated 136,100 collectors in the Unites States and that again is only third party. Add in the banks, credit unions as well as all of the commercial credit departments and we’re talking some big numbers. No matter how you measure it, that is a lot of people working in a field they not only didn’t plan for but many never knew about. So how did they get there? They fell into the job, just like the rest of us. Sandy applied for a position in accounting. She didn’t even know about a position in ‘receivables.’ William was asked to fill in for a few months for an employee who went on maternity leave. Sofia wanted a job—any job. And what about Derrick? He was just “too abrasive for customer service so let’s move him over to the collection department where his attitude may work in our favour.”
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Yet, for me and many of us, it has become a profession, rather than ‘just a job’. If they are going to hand you a lemon, don’t just make lemonade—mix up and serve the best lemonade ever! Allow me to share with you some of the secrets my formula, tested and developed over 30 some odd years in many countries to different cultures and palates.
Secret recipe for best collection lemonade ever!
Sugar: Why should your customers pay you rather than somebody else? What is in it for them? This means we have to go ‘walk about’ in their shoes and know the reasons before we make contact. The very best collectors demonstrate empathy. They can see through the eyes of the customer/debtor. Lemons: In successful collections as well as negotiations, the best collectors will not take it personally. Yet, a bit of tartness (bitter lemon taste) is helpful. The taste buds stand up and pay attention to great lemonade! Good collectors can handle losing as despite their best efforts they will not always get paid, yet they very much want to win. Water: Sure, you can make lemonade with water from a tap or anywhere else for that matter, but why not filter and take out the impurities? Some of us in my business believe you can train anyone to be a reasonable collector in two days of training. It is ‘sort of ’ true, it just doesn’t give the full story. Start off with candidates who have more of ‘what it takes’ to be a good collector. That means using selective criteria, something like the C.I.A. (Collectability Index Assessment). Cool to room temperature: The very nature of our business means we will often
Financial Operations | Summer 2016 | www.financialoperations.ca
deal with customers who are under the influence or got up on the wrong side of the bed that morning. Nothing will give you as much of an advantage as keeping your cool when the other side loses their’s. Remove seeds: Allow the customer/ debtor to be involved in the negotiation, work on the same side of the table as you rather than across, in general save face and none of the drink will stick in the teeth, it will be much easier to swallow, accept and keep commitments. Garnish with a sprig of ? This may say more about presentation than content—find a style that works for you. It may be something that sets you apart in the introduction or the closing. Look for it, find it and improve on it. Taste test your audience: How did you like our lemonade and how could we make it better? Perhaps you cannot ask the debtor the question but at the end of at least one call every day ask: What did I do that I should do more of ? What should I stop doing, change or improve? Your lemonade can always improve: Read at least one collection book each year and attend one program or conference on the subject. There are plenty of them, live or online so money should not be an obstacle. No secrets: Share your formula with others. I for one, would love to hear about your recipe. Tim Paulsen is author of Paid in Full, Tipping the Scales and, recently, Sex, Lies & Negotiation Techniques. As the founder and managing director of ICPC (International Centre for Professional Collections) he consulted, trained and been keynote speaker across Canada and the United States and more than 20 other countries. Mr. Paulsen is the creator of SAGE – The Excuse Terminator and The CollectABILITY Index. He can be contacted at tim@trpaulsen.com or www.trpaulsen.com.
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