Budget: HMRC preferred creditor status in insolvency – R3 comment

In response to the announcement in today’s Budget that HMRC will become a secondary preferential creditor for taxes held on behalf of employees and customers, Emma Lovell, chief executive of insolvency and restructuring trade body R3, says: “The announcement that HMRC is to partially regain its preferred creditor status in business insolvency could potentially be a retrograde and damaging step to UK plc if not thought through carefully. It will amount to a tax on creditors, including small businesses, pension funds, suppliers, and lenders, and reverses a status quo that has been encouraging business rescue since 2002. It may also make borrowing for small businesses harder to come by.

“R3’s members report that HMRC could do more to engage actively in insolvency procedures, and at an earlier stage. HMRC has a wide-ranging toolkit to help it to tackle abuse and evasion, which could be used more fully, instead of forcing its way to the top of the queue by legislation.

“HMRC considers itself to be an ‘involuntary creditor’ of businesses, because it cannot choose which companies to engage with. However, all suppliers to businesses are ‘involuntary creditors’ and have to take commercial risks, and this announcement will hugely increase the risks taken by small enterprises trying to do business.

“The Government has moved in recent months to improve and strengthen the UK’s business rescue framework, which R3 has welcomed. However, this announcement risks throwing away much of the recent progress that has been made.

“We hope that the Government will reconsider this move and listen to concerns of the insolvency and restructuring profession as it consults on the issue over the coming months.”

Late payments become the norm for British businesses

Businesses in Britain have a higher proportion of overdue invoices compared to their counterparts across Western Europe, new research by trade credit insurer Atradius reveals.

The annual Atradius Payment Practices Barometer for Western Europe found almost half of all British business invoices (48.7%) were overdue. This compares to an average across the region of 41.8%, up from 40.7% in 2017. In addition, Great Britain faces the longest B2B payment delays with businesses receiving payments for their products and services an average of 34 days late – 10 days longer than the average among Western European businesses.

The report, which surveys companies across 13 Western European countries, also found nine out of 10 British businesses (89.6%) were experiencing frequent late payments, slightly higher than the Western European average (87.6%). British businesses are marginally more likely to experience payment delays when trading internationally; 91% reported frequent late payments from overseas customers compared to 88.2% from domestic customers.

Late payment from B2B customers is reflected in a longer DSO, which may adversely impact businesses’ liquidity, increasing B2B trade credit risk. Based on the Atradius research, over the past year Great Britain recorded the second biggest increase in DSO at 35 days, up from 31 days. The biggest increase in DSO was recorded in the Netherlands (46 days, up from 41 days). More than half of the firms surveyed across Western Europe said payment delays affected their business. Of these, 18% had to take specific measures to correct cash flow, 16.8% reported losing revenue and 15.9% subsequently postponed payments to their own suppliers.

The reason most cited for payment delays was an insufficient availability of funds, reported by 39.2% of British businesses. More than a quarter of businesses (28.8%) blamed delays on their customers using outstanding invoices as a form of financing. Interestingly, disputes also accounted for a significant number of late payments; 26.3% of businesses said delays were due to the goods or services provided not corresponding to what was agreed in the contract. Moreover, 22.6% cited a dispute over the quality of the goods or services provided as a contributing factor.

The Payment Practices Barometer also reported the proportion of B2B sales made on credit in Great Britain as having dropped by 6.7% year on year to 39% – although this remains slightly higher than the Western European average of 37.4%. A third of Western European businesses said they would refuse to grant credit terms to an overseas B2B customer if they lacked information on the customer’s business or payment performance.

Tom Danson, Head of Commercial for the Midlands Region at Atradius, said: “Today’s economic climate is characterised by change and uncertainty, and it is evident that this has taken its toll on businesses in all sectors. What lies ahead is becoming more difficult to predict which makes the risks of trading all the more acute. With an increase in late payments and Atradius economists predicting a 6% increase in UK insolvencies in 2018 and a further 3% in 2019, businesses need to have a risk management strategy which is robust and adequately safeguards their bottom line – or face the consequences. Protection of receivables is of paramount importance. Credit insurance enables businesses to manage the inevitable risks of selling on credit and importantly, also equips firms with access to accurate and up to date business intelligence to help them grasp growth opportunities through safe and profitable trade.”

Leading Lebanese bank centralises compliance systems with FICO solutions

First National Bank (FNB) of Lebanon has migrated to the FICO® TONBELLER® Siron® Anti Financial Crimes Suite to take a more holistic, integrated approach to compliance with AML/CTF (anti-money laundering/counter-terrorism financing), KYC (know your customer) and tax regulations.

FNB will use the FICO solution to detect money laundering, terrorist financing and other financial crimes, and report suspected cases to the country’s financial intelligence unit, the Lebanese Special Investigation Commission. FNB will also use the Siron Tax Compliance Reporting module to meet the reporting standards for Foreign Account Tax Compliance Act (FATCA) in the US and the global Common Reporting Standard (CRS) developed by the Organisation for Economic Cooperation and Development.

“Even in the compliance area, our customers’ satisfaction is paramount,” said Elias Baz, general manager of FNB. “When we decided to change compliance solutions to improve efficiency and customer service, we talked to both local and global providers. The FICO solution was the most flexible, powerful and customisable platform on the market. No other provider offered us a platform with this breadth and depth of functionality: from customer risk classification and transaction screening to tax reporting, including risk and compliance cockpits for governance.”

“FNB is among the banks recognising that there are big gains to be made from using one system for compliance, rather than a patchwork of products,” said Torsten Mayer, vice president for compliance solutions at FICO. “Some providers even offer different systems for FATCA and CRS compliance — this is the wrong approach. By centralising compliance with one system, FNB can enhance detecting criminal activity, serving customers and reporting to multiple agencies.”

Qualco UK unveils major platform update to offer enhanced visibility of accounts and rich data insight

Qualco UK, widely acknowledged as a leading provider of panel and asset management software and analytics, has today unveiled a major platform update of its ExtraCollect service. It will offer clients and partners a more intuitive user interface (UI), enhanced visibility of customer accounts, and richer data insight.

To celebrate the launch Qualco has made its file transfer process available as a digital resource here. It contains its technical specification for the exchange of data between originators and their collections agencies and meets guidelines set out by the GDPR.

ExtraCollect is a panel management platform that gives clients access to more than 30 agency partners with proven capability to reduce costs, optimise allocations and enhance collections results. Version 1.5 is released following a successful beta testing period in partnership with one of Qualco UK’s clients. It is the beginning of a two-year investment and upgrade plan to develop a brand new platform.

The new release is designed to empower clients in their collections strategies. Its new UI look and feel is more user friendly, making it simpler for clients and agencies to find the information they need to make faster, more effective decisions.

The application boasts greater attention to detail on the usability flow, which focuses more on the user journey from start to finish using gamification principles to encourage user engagement and organisational productivity.

ExtraCollect now offers enhanced functionality, including:

  • Optimised for mobile devices – the portal has been developed in HTML5 and as such access can be via smartphones and tablets
  • New reporting front end – a clean and modern upgrade for Qualco’s Recoveries Solution
  • I&E – capture and storage of competed I&E forms. Agencies will now report the content of completed I&E forms which will be visible in the customer screen. This will enable clients to check affordability measures
  • AgentID tracking – every agency activity will be tracked back to the individual agent. As such it will be possible to analyse individual agent’s performance
  • Subject access requests – one-click solution to collate all the date required to respond
  • Search function – available on the entry dashboard the user can search any client reference and it will search results from the entire platform in less than a second

Deeper insight and analysis into customer accounts, and a 360’ view of each account under service throughout the collections lifecycle, will be unique attributes of the new release.

Qualco’s managing director, Christian Jacob, explains the motivation for a review: “Customers have made it clear that traditional approaches to managing and processing data to deliver an effective collections and recoveries strategy leave critical gaps. In response, Qualco’s latest version of the ExtraCollect application includes all the tools required to enable better decision making. For example, SAS and SAP BusinessObjects are integrated within the application to provide enhanced insight and reporting at no extra cost to the user.

“It is our aim to deliver the richest set of data with the highest level of detail to our clients. The continual evolution of Qualco’s ExtraCollect platform is evident in this rich release of new capabilities, built in close collaboration with leading customers and agency partners to provide a better user experience with rich data insight.”

Accountant in Bankruptcy figures show total personal insolvencies on the rise

The latest statistics from Accountant in Bankruptcy (AiB) show awards of bankruptcy have remained largely static compared to the same period a year ago.

The 1,150 bankruptcy awards for the second quarter of 2018-19, covering the period from 1 July to 30 September 2018, are almost identical to the 1,146 awarded in the same quarter for 2017-18, showing a mere 0.3% rise.

However, total personal insolvencies, which include both bankruptcies and protected trust deeds (PTDs), rose by 23% from 2,493 in the second quarter of 2017-18 to 3,067, driven by an increase in PTDs. There were 3,067 PTDs in the second quarter of 2018-19, which was nevertheless down from the 3,218 recorded in the first quarter of the year.

The Scottish Government’s pioneering Debt Arrangement Scheme (DAS), which allows people to take control of their finances and repay their debts without facing insolvency or further action being taken against them, was also largely static, with 638 debt payment programmes awarded under DAS for the quarter, compared to 662 in the same quarter for 2017-18.

A total of £9.2 million was repaid through the scheme in the quarter, narrowly down from the £9.4 million in the same quarter a year ago.

Commenting on the latest figures, Minister for Business, Fair Work and Skills Jamie Hepburn said: “The number of individuals entering insolvency continues to be significantly lower than 10 years ago, but we cannot take the issue of unsustainable personal debt lightly.

“The figures indicate that heavily marketed trust deeds are contributing significantly towards the rise in total personal insolvencies.
“Our absolute priority is to ensure that people struggling with debt receive the right advice and are offered the most appropriate solutions. That is why we will continue to consider whether the most financially vulnerable in society are made aware of the choices open to them, and if future legislative action is required.

“We are clear that insolvency should be an option of last resort and we will continue to consult on and review legislation to make sure the statutory debt relief and debt management products remain fit for purpose.”

The number of Scottish corporate insolvencies rose very slightly during the quarter from the same period a year ago. There were 232 total corporate insolvencies during the quarter, up just eight from the 224 recorded in the second quarter of 2017-18. This number was composed of 128 compulsory liquidations and 104 creditors’ voluntary liquidations. There were no receiverships recorded during the quarter.
Nevertheless, the 232 recorded during the second quarter of 2018-19 is down on the 245 reported in the first quarter of the year.

Peninsula Group choose Eckoh CallGuard for securing payments

Eckoh (AIM: ECK), the global provider of Secure Payment products and Customer Contact solutions has won a contract with the Peninsula Group (Peninsula) to provide CallGuard to secure their contact centre payments.

Peninsula is a global business services specialist founded in 1983 that is focused on supporting small businesses in the UK, Ireland, Australia, New Zealand and Canada. It has grown from offering employment law services to a portfolio today that comprises insurance, health and safety, HR, and employee wellbeing.

As Peninsula has grown and acquired other businesses the volume of Card-Not-Present payments being made through their contact centre has significantly increased. As a result of this Peninsula needed to be compliant with the Payment Card Industry Data Security Standard (PCI DSS) to continue taking card payments over the telephone. To help them achieve this Eckoh will implement its CallGuard Hosted solution, that prevents sensitive payment card data from entering the contact centre systems. As a result, the solution will de-scope the entire contact centre from the scope of the PCI DSS audit, making compliance simpler and maintainable every day.

Carl Lancaster, Group Head of Collections at Peninsula Group says, “The security of our client’s payment information is of critical importance to us, as is protecting our agents and our business from the risk of a data breach. Now, with CallGuard, there is no sensitive information in our systems so there’s no value to anyone seeking to misuse our data.”

Mark Holmes, Head of Sales at Eckoh commented, “We’re delighted to be working with Peninsula Group to safeguard its reputation and clients’ trust. With the incidence of card data theft rising and data protection regulation increasing, it’s vitally important for businesses to show they are taking their data security seriously and implement a solution. Eckoh’s CallGuard solution is simple, effective and fast to deploy and will deliver the results that Peninsula is looking for.”

Payments disrupter PaySend launches innovative Money Request service

The way consumers request and receive payments from each other is changing, thanks to payments disrupter PaySend.

The business’s new innovative service will allow users to request money transfers using just the sender’s phone number, and will allow the transfer to be directed to any card provided by the recipient.

With the new service the family or friend of a PaySend customer overseas can ask them to send some money to their card, and after receiving a request the PaySend customer can send the requested amount directly to a recipient’s Visa, MasterCard or UnionPay card.

Ronald Millar, CEO of PaySend, said: “We are excited to launch this innovative product and offer even more choice for our customers so they stay connected wherever they are. In many cases people in the developing economies depend on their friends and relatives working abroad so now they can always reach out to them when they find themselves a bit short of money. The only thing they need to provide is a sender’s mobile number and PaySend’s unique money transfer platform makes sure they get the money they need.”

As PaySend is the only global card-to-card money transfer network, consumers benefit from the business’s ability to move funds, bypassing the traditional banking system and eliminating all the inefficiencies associated with a slow speed of delivery, high foreign exchange rates and correspondent banks’ fees.

The service is available to any registered customer via the company’s website or mobile app.

Ronald added: “We are building a global Fintech brand and our partnership with major card schemes allows us to deliver money using Visa and MasterCard in a fast, simple and secure way. Sending money from card-to-card is the new innovative way of sharing value across borders and PaySend is pioneering this space by bringing our customers both in Europe and overseas an unrivalled convenience and peace of mind”.

Eckoh makes global secure payment available to contact centers via the NICE inContact CXexchange marketplace

Eckoh (AIM: ECK), the global provider of secure payment products and customer contact solutions, has joined the NICE inContact DEVone program to help contact centers make customer payments more secure and compliant.

Eckoh’s Secure Payment solution – CallGuard – is unique to Eckoh and is covered by US and UK Patents. The solution addresses the continuing rise in Card Not Present (CNP) fraud which is expected to rise to $7 billion in the US by 2020.[1] As more than one third of CNP crime takes place in contact centers, it’s an issue which needs to be taken seriously. The Payment Card Industry Data Security Standard (PCI DSS) was established to help combat this type of fraud and today businesses that take card payments over the phone – storing, processing and transmitting card details – need to comply.

The CallGuard product automatically replaces real card data with ‘placeholder data’ which flows through a contact center’s telephony and data networks. This means that the environment and agents are no longer exposed to customers’ sensitive payment or personal data. Because of this, CallGuard can completely de-scope a contact center from the PCI DSS audit as it prevents protected card data from entering the system in the first place. Put simply, if there’s no sensitive data there, it can’t be stolen.

NICE inContact CXone users will benefit from CallGuard because removing card data from the contact center environment provides them with a way to take customer card payments over the phone and reduce the risk of fraud from criminals or rogue agents. It also means that the contact center payments would comply with PCI DSS and could also contribute to GDPR compliance.

NICE inContact CXone empowers organizations to provide an exceptional customer experience by acting smarter and responding faster to ever-changing consumer expectations. To meet the needs of organizations of all sizes, CXone combines best-in-class Omnichannel Routing, Analytics, Workforce Optimization, Automation and Artificial Intelligence—all on an Open Cloud Foundation.

Kathleen Phillips, VP of Business Development and Channel Partnerships at Eckoh said “It’s a great step forward in our partnership program and we’re delighted to be working with NICE inContact to share our effective solution to processing contact center payments for users of NICE inContact CXone cloud customer experience platform.”

The NICE inContact DEVone program offers customers and partners broad tools and resources to enable them to create new applications on CXone, including extensive documentation and support, and access to an online developer community. Companies interested in how each company works with CXone can visit CXexchange to learn more about the applications and read reviews. CXexchange is a centralized, state-of-the-art marketplace for developers to market and sell their applications ready to integrate easily with CXone.

“Each customer that works with NICE inContact has specific needs and business goals in relation to their contact center operations,” said Paul Jarman, CEO of NICE inContact. “Eckoh’s integration with CXone adds a valuable feature to our cloud customer experience platform. Our 2018 CX Transformation Benchmark, which studied over 4600 real-world service interactions, found that 22 percent of customer experiences were regarding a purchase. We welcome Eckoh as part of the DEVone program and on CXexchange.”

Major infrastructure firm joins department for transport at Arvato’s Swansea shared service centre

Global customer services provider Arvato has won a new contract with the East West Railway Company to deliver back-office services from its shared service centre in Swansea.

The organisation, set up by the Department for Transport, is a non-departmental, arm’s length body created to accelerate delivery of the multi-billion pound East West Rail Project between Oxford and Cambridge. It will join the Department for Transport (DfT) and its executive agencies as a client of the Sandringham Park-based operation.

Arvato will deliver HR, payroll, finance and procurement services for the East West Railway Company through its established shared services centre, which is already serving 22,500 civil servants across the UK.

Arvato employs more than 200 people at the centre, which supports the Department for Transport (DfT), the Maritime and Coastguard Agency (MCA), the Driving and Vehicle Licensing Agency (DVLA), the Vehicle Certification Agency (VCA) and the Driver and Vehicles Standards Agency (DVSA). The team has resolved 749,000 customer enquiries, provided 1.3 million payslips and achieved a customer satisfaction rating above 98 per over the last five years.

The new agreement will see Arvato support the East West Railway Company until the end of the financial year.

Mathew Copp, Operations Director, CRM Solutions, Arvato UK & Ireland, said: “We’re excited by the opportunity to support this strategically important project for the East West Rail Company. This new contract highlights the strong reputation we’re developing in Swansea and is testament to the expertise and commitment of our dedicated team.

“By standardising back-office processes and introducing new technology such as robotic process automation, our proven shared services platform will help their employees devote more time to restoring this key transport link.

“We look forward to continuing the success we’ve achieved at Sandringham Park over the next 12 months.”

The centre’s achievements were recognised by the Welsh Contact Centre Awards in March, with Arvato winning the Customer Engagement accolade. The business was also named a finalist at this year’s Welsh Business Awards.

The Swansea site and services are accredited to the same level of security as any central government department, with certifications including IS027001, Cyber Essentials Plus, Information Assurance for Small and Medium Enterprises (IASME) and as a Supplier of Cyber Security Services to the government.

Arvato is one of the world’s leading business outsourcing companies with over 50 years’ experience and employing more than 68,000 people, across almost 40 countries. The business has more than fifteen years’ experience in the public sector, delivering award-winning partnerships with central government departments and local authorities, which include Slough and Chesterfield Borough Councils.

South Staffs Water implements AI-based credit management software from Rimilia

South Staffs Water has selected Rimilia’s artificial intelligence (AI) based credit management software, Rimilia Alloc8 Collect.

South Staffs Water (incorporating Cambridge Water) supplies high-quality drinking water to around 1.6 million people in its two areas of supply. South Staffs Water supplies to approximately 1.3m people over 1,500 square km in the West Midlands, South Staffordshire, South Derbyshire, North Warwickshire and North Worcestershire areas and Cambridge Water supplies to 319,000 people over an area of 730km2 around the city of Cambridge.

The utility’s household customers have some of the lowest water bills in England and Wales, and receive the highest levels of customer service, as measured by the Water Services Regulation Authority (Ofwat).

As part of an ambitious, innovative and creative approach to delivering its long-term plans, South Staffs Water will implement the new AI-driven collections management system to proactively identify and support customers who are at risk of falling behind with their water bill payments.

This will enable the company, which has a reputation for providing outstanding customer service and working closely with the communities it serves, in tailoring help and support for customers in a way that best suits their personal circumstances, recognising that they demand individuality, flexibility and choice.

Rimilia’s AI-powered, self-learning engine is a key part of this. It provides real-time customer data and dynamic collection strategies that will enable South Staffs Water to understand even more about its customers and prevent them from falling into water debt. For those who unfortunately fall into debt, this new system will help the team to treat customers as individuals – which South Staffs Water’s customer research shows, is exactly what customers now expect.

Phil Newland, managing director of South Staffs Water said: “We have a reputation for our commitment to high-quality water, our community involvement, customer service and great value for money. We are constantly looking for the best new and innovative technologies which allow us to deliver our vision. This means treating each customer fairly and using rich insight and data so we can work with every individual in a way that is appropriate to their situation.”

Newland continued: “Rimilia’s Alloc8 Collect system will give us real-time visibility and data to develop more personalised interactions with our customers. We were deeply impressed by how Rimilia’s team understood our business and the nuances of water collections management. Its Alloc8 Collect system is smart, sophisticated collections management software that we think will deliver real benefits for our customers.”

Steve Richardson, co-founder and CCO of Rimilia, added: “We are proud to be working with a utility company that is as innovative and customer focused as South Staffs Water. Fair and tailored collections management is fundamental to South Staffs Water and its customers and we look forward to seeing the impact that intelligent, dynamic software and strategies makes to 1.7 million customers.”