Scaling a Business Needs Finance Agility and Efficiency

It's incredible how quickly a business can suddenly grow. From opening a new line of business, acquiring a major new partner or just being in the right place at the right time, going from zero to 1000 is an incredible experience. But without the organisation being set up to capitalise on this growth, opportunities that need a swift response can vanish before action is taken.

Because of this, when a business scales up, the finance function must be a beacon of efficiency. It must be agile, flexible, able to anticipate the next turn in the road and prepare the business for each momentous step. And this agility can only be delivered when the CFO takes a lead in transforming the traditional finance function into the intelligent financial hub of the company.

Through automating routine and mundane processes, and integrating smart technology that orchestrates data, the CFO can streamline reporting, analysing performance at the most granular level that provides new insights across the business. This new finance function provides more services to the business and plays a far greater role in making strategic decisions that drive the organisation forward.

Finance is the home of real business data

For data to be helpful to the business, it must be accessible on demand, reliable and structured. For the vast majority of finance teams, this is a herculean ask that requires a new mindset and equipping with new tools. But with the right finance system in place, the team can remove the laborious process of scraping data together and begin to derive meaning from the reports themselves, without delegating this responsibility elsewhere within the company. It allows the team to build rapport across departments and units, and enables purposeful discussions based on evidence and genuine business intelligence.

This new mindset means focusing less on processing transactions and moving more toward producing dynamic data that paints a true picture of the business, from moment to moment, and at fixed points in time, to analyse progress. This 360-view not only improves cashflow and forecasting but can shorten the working capital cycle and make the company’s assets work harder.

This means that the skills within the finance team can be exploited to their full potential. After all, intelligent and ambitious finance graduates didn’t sign up for data entry. The chances are your finance team already has the skills to deliver insights, they just need the opportunity to do so.

And there is no secret magic required to transform finance and create efficiency, it all comes down to the right choice of automation tools and software.

Freeing up your most valuable currency - time

Efficiency isn’t about removing tasks that are unimportant, far from it. But in order to build a new type of finance function, time spent on manual tasks needs to be minimised. There is recognition in all teams where manual processes dominate, that there must be a better way of working to impact business growth.

Applying technology allows for inverting the traditional finance pyramid, where transactional processing along with compliance and reporting take up the majority of finance time. By automating the tasks that can be automated, the finance team can devote more time to what it should be doing –providing creative insights across the business that support intelligent, evidence-based business decisions.

Along with cashflow forecasting, consolidated and segmented P&L, the finance team also needs to be on top of sales forecasts and the product sales mix. But when multi-entry consolidation or multi-currency management can tie up a department for weeks at a time, how can the finance department fulfil its expectations without automating these tasks into one-click operations?

Finance must lead by example

After taming much of the manual processes which has plagued the department for decades, the finance team can begin collaborating with other parts of the business. In doing so, they can move from a data entry department to a fully-fledged consulting arm of the enterprise.

Without taking these steps, finance teams risk being a bottleneck in the development of the business. As revenues and opportunities grow, finance teams need to grow in accordance to provide the acute advice and guidance that every fast-moving business requires.

Which Cloud architecture model is best for Insurtech?

It's no surprise that insurers are quickly adopting Cloud solutions as part of their core technology platforms, modifying legacy systems to make way for digitally advanced software. Global cloud infrastructure service spending increased to $57 billion in Q3 of 2022, bringing the industry total for the previous twelve months to $217 billion. There are numerous ways for insurers to use the Cloud to improve their business operations, particularly when it comes to deploying new applications or services, reducing time to market, and improving data storage and backup resilience.

The insurance industry was one of the first to embrace Cloud computing, with nearly 60% of companies utilising the technology in some capacity. There are several reasons for this, the most important of which is that it allows for greater agility and can handle large amounts of traffic, making it the ideal platform for insurers to scale their offerings during periods of high activity. The insurance industry is highly competitive and regulated, and companies must be able to respond quickly to changes in the market, making the Cloud the perfect solution. It can, furthermore, be used to connect Insurtech systems to third-party providers via APIs, giving them access to better functionalities and improving customer service with real-time responses.

Different Archetypes for Different Requirements

There is no doubt that Cloud computing has transformed the insurance industry, but the most important question for IT leaders in this space is: what Cloud architecture model is best for their business? They have three options for Cloud architecture: public, private, and hybrid, each with its own set of challenges and benefits. The best cloud architecture for a company is determined by several factors, including the type of data they are working with, their budget, and the level of control they require over the infrastructure. Companies must consider the advantages and disadvantages of each type of Cloud architecture to determine which best meets their business requirements.

Public Cloud Architecture

The public Cloud has democratised technology, allowing businesses of all sizes to access the same level of innovation and scale as the largest corporations. A third-party service provider owns and manages this cloud infrastructure, and the resources are made available to the general public via the Internet. It provides lower upfront costs because resources are paid based on usage, elasticity, and scalability, allowing insurers to adjust resource usage as needed. Finally, it lowers IT costs as the service provider handles most of the infrastructure maintenance.

However, the public Cloud is not without its drawbacks. Limited upfront costs also mean limited control over the infrastructure and security. And with that comes the potential for privacy concerns, as data is stored in a third-party data centre. Public Cloud providers implement a variety of security measures to protect their customers' data, but there is always a risk of data breaches, data loss, or unauthorised access. Ultimately, the greatest challenge comes with the possibility of service outages or disruptions due to shared infrastructure and dependence on internet connectivity.

Private Cloud Architecture

This is a Cloud infrastructure owned and managed by a single insurer, and the resources are only used by that organisation. Private Clouds enable faster and more flexible deployment of new applications, resources, and services than traditional IT infrastructure, while also providing greater control and security for sensitive data and applications. This means it's an excellent Insurtech solution, as the industry has its own set of regulatory compliance. Furthermore, as long as it is well designed and maintained, it provides greater reliability than public networks.

Nevertheless, the advantages of a private solution entail much higher upfront costs as well as ongoing costs for infrastructure maintenance. Furthermore, the complexities of implementing this type of solution result in companies having limited scalability compared to a public Cloud. Finally, a private Cloud requires a team to manage, maintain, and adjust it as needed, which means insurers will need an in-house IT team with infrastructure expertise.

Hybrid Cloud Architecture

This Cloud infrastructure combines both public and private Cloud architectures, allowing insurers the flexibility to utilise both benefits. Beyond the obvious advantages of elasticity in a hybrid architecture, it also proved unprecedented scalability, depending on usage and workload requirements. What’s more, the hybrid Cloud delivers all the security and compliance needed to manage sensitive data in the insurance industry, while still providing flexibility.

However, with the integration of different solutions comes complexities. Integrating data between public and private Clouds can be challenging, as data may need to be migrated between different systems and formats, and data consistency and synchronisation must be ensured. Moreover, ensuring connectivity between public and private Clouds can be challenging, as different network architectures and protocols may be involved, and security and performance requirements must be addressed, especially in the insurance industry where most data is highly sensitive. Furthermore, as with any IT solution, there is a potential for security and data privacy issues if not properly managed.

Choosing The Right Tech

Cloud computing can provide greater agility and scalability while also handling high volumes of traffic, making it an ideal platform for insurers. But choosing a solution necessitates a thorough understanding of an organisation's goals, processes, and challenges and an in-depth understanding of the capabilities and limitations of available technologies. The key to selecting the right Cloud type for insurers is to concentrate on solving specific business problems and identifying the technology that best addresses those problems.

Each of the three Cloud architectures has its own set of challenges and benefits, and insurers must weigh the pros and cons of each to determine which one best meets their needs. Choosing the right Cloud architecture model is critical to success in the insurance industry, whether a company is looking for lower upfront costs, greater control over infrastructure and security, or the flexibility to leverage the benefits of both public and private Clouds.

Over the past few years, fintech apps have grown rapidly in popularity as consumers have adapted to managing their finances digitally, spurred by the global pandemic. At present, as the cost of living crisis and a looming recession remain a worry for many in the UK, we’re seeing some interesting trends in fintech app usage that prove just how resilient these apps really are, and highlight the opportunities that lie ahead for marketers.

Lessons learned from 2022

Last year, the fintech industry faced a number of significant knockbacks, from the crypto crash and subsequent ‘winter’ to the downturn in the stock market. Not to mention the wider economic uncertainty and fear of a potential recession.

Despite this, Adjust’s most recent 2023 Mobile App Trends report revealed some positive trends, similar to what we saw in 2022, which demonstrates the resilience of mobile financial services. According to the research, global installs for fintech apps grew 2% in 2022 with EMEA (10%) and LATAM (8%) experiencing the most growth. In fact, this growth is continuing into 2023 – with January up 6% YoY and 13% compared to the 2022 average.

In addition, we saw that consumers are using the apps more, as global sessions grew 19% YoY in 2022 — up most notably in LATAM (54%) and EMEA (40%). Evidently, even with understandable economic uncertainty, people are turning to their fintech apps to manage their funds. Sessions are also up so far in 2023, with January seeing 7% growth compared to the 2022 average and 15% compared to January 2022.

Importantly, users also spent more money YoY in 2022 compared to 2021. Fintech in-app revenue skyrocketed 44% YoY. November and December were the main months driving this impressive upward tick, increasing 83% and 112%, respectively, compared to the year’s average. In fact, December 2022 was the highest ever month for fintech inapp revenue tracked by Adjust.

With installs, sessions and spending in fintech apps increasing across all regions and sub-verticals, it is clear that the global fintech app ecosystem is thriving. Across the board, fintech apps have been able to retain the stream of customers gained throughout 2020 and 2021.

What we can expect to see in 2023

Continued growth can be expected from this space in the next year, even more so as the increasing cost of living drives consumer interest in easy money management. Consumers will continue to realise and take advantage of the benefits of fintech apps - simple payment processes, quick access to funds and effective money management tools, to name a few. It’s a great time to lean into this growth to look for app growth opportunities to retain valuable customers as we take on 2023.

Having said that, there will be users who are wary of the recession and are therefore not spending as much. To counter this challenge to revenue, fintech apps must focus on attracting and retaining customers by providing the best possible experience for their users. Developers must create features that complement the app’s core functionality to encourage continued engagement even when users are not actively spending.

Gathering feedback from app reviews, in-app prompts and email surveys will be crucial. App teams can then capitalise on what’s working well and work on fixes for what isn’t as effective. Identify points in the user journey when disengagement is highest and alleviate these pain points or insert prompts at these moments to get clear insights directly from the users themselves.

And more critical than ever in a time of needing to do more with less, fintech app developers must take full advantage of app analytics to optimise apps and marketing campaigns. The analysis of performance data is used to understand the user journey better and make informed decisions. Without app analytics, developers cannot clearly identify potential problems with their app and/ or campaigns, nor can they identify corresponding solutions.

In a competitive market with over 2.2 million mobile applications available on the Apple App Store and 3.5 million apps on the Google Play Store, the insights gained through app analytics are critical components to success in converting, engaging and retaining users with high lifetime value.