knowledge Archives - Kreston Menon

JAFZA is one of the fastest growing freezones of Dubai with its own set of regulations, and was created for the express purpose of attracting foreign investment. The Jebel Ali Free Zone (JAFZA) Offshore companies are non-resident companies with special status and are formed under the JAFZA Offshore Companies Regulations enacted on 15. 1.2003. Let’s take a look at the advantages and benefits offered for offshore company formation in JAFZA.

What you Should do for Offshore Company Formation in JAFZA?

At the outset, this freezone was set up to become a global business hub. With its solid infrastructure and strategic location, JAFZA is an attractive proposition for offshore company formation Dubai. Here entrepreneurs can register offshore company in Dubai and also free zone companies with licenses to operate. Though licenses are mandatory for doing business in UAE, offshore companies do not require an operating license as they cannot conduct trading, manufacturing or business within the Emirates.

So why are investors happy to setup offshore company in JAFZA? Let’s take a look at the special advantages offered by this special economic zone:

A company registered in JAFZA has a legal status for carrying on bona fide business and makes it easy to conduct business within the Middle East
JAFZA offshore has a reputation as a serious global hub for trading and manufacturing, which is advantageous for the company
Only offshore companies registered in JAFZA can own property, either in their individual names or through UAE companies
Offshore companies registered in JAFZA can easily open bank accounts in Dubai
No taxation and no restriction on capital and profit repatriation
Assistance with banking, insurance, visas, accounting, legal matters, feasibility studies and so on

These are the steps for offshore company formation in JAFZA:

You need to contact a reliable JAFZA authorized agent for the registration process
Get an official quote for the scope of work you need, like registration, nominee services, opening bank accounts, any specific attestations required
Submit three names for the company out of which one will be finalized by the authorities
Decide upon the activities of your business – property investment, consultancy, trade, or acting as a holding company
Determine the share capital
Finalize the list of shareholders, a minimum of 2 directors, and secretary
Submit the mandatory documents, like passport copy, address proof, reference from bank and shareholders’ resume.
The Memorandum, Share certificates, fees and application forms signed by the shareholders, secretary and directors is submitted in the presence of the shareholders.
If the Registrar is satisfied that everything is in order, the company is registered in three days.

Offshore company incorporation JAFZA can be done as limited liability companies. The companies can be formed with a single shareholder, and there is no limit on the maximum number. The company should have ‘limited’ as a suffix to its name.

Companies have to pay a one-time registration fee of AED 10,000 and an annual fee of AED 2,500 to renew it. Land and office space is provided at reasonable rates and easy terms of renewal.

Offshore company setup in JAFZA can engage in the following activities apart from those mentioned before:

Interacting professionally with legal consultants, lawyers, accountants and auditors
Holding shareholders and directors’ meetings
Opening branches or representative offices worldwide
Holding shares of a limited liability company being formed in Dubai or elsewhere in UAE
Holding shares in any other entity formed within the UAE, outside the UAE or within UAE Free Zones

Here is an infographic that accompanies the services about Business Setup Dubai

(Click infographic to enlarge.)

Why you Should Set up Your Company in JAFZA?

Kreston Menon

Dubai is a flourishing cosmopolitan city which offers excellent living conditions, making it an ideal location for starting a business and having a comfortable family life. Known as the business capital of the Middle East, Business setup in Dubai is relatively easy and hassle free. Its strategic location, liberal economy, presence of special economic zones, and solid financial infrastructure availability make it attractive as a business hub.

Dubai’s progressive thinking Government realized early on, the advantages of attracting foreign investment for the purpose of their own growth, and so they have always encouraged company setup in Dubai by foreign businesses. Towards this goal, they set up several free zones with special, easy rules – absence of taxation being the most attractive feature.

Let’s examine one of the first, most popular and flourishing free zones in this Emirate, the Jebel Ali Free Zone, or JAFZA. Setting up a business in JAFZA involves three simple steps:

Submitting your application
Selecting the products, registration, and payment of fees
Receiving licences and products

Yes, that’s all it takes. The headaches connected to acquiring land, office space, warehousing, power connections, even visas – is all handled by the Zone authorities. Paperwork is minimal – no wonder that investors are keep to setup company in JAFZA.

Starting its operations way back in 1985, JAFZA allows businesses to be set up as one of the following legal entities – Free Zone Company, Free Zone Establishment, Branch of a Foreign Company, or as a Branch of a Local Company, in one of the following industry segments – logistics, service manufacturing, assembling or trading. Today, more than 7000 companies are successfully conducting their business within JAFZA.

The infrastructure facilities at JAFZA ensure that you get all that you need for a business set up Dubai might require, like land plots, office spaces, warehousing facilities, showrooms, on-site accommodation, tailor-made development solutions, and so on. Everything has been created to suit the precise requirements of manufacturing and trading businesses.

Let’s take a quick look at the advantages of company setup in JAFZA:
100% foreign ownership is possible
Exemption from income and corporate tax payment up to 50 years, extendable
100% capital repatriation allowed
Exemption from import and re-export duties
No restriction on currencies
Ability to hire 100% foreign employees
Premises can be mortgaged to banks or finance companies
Customs can be arranged onsite
Authorities help in obtaining visas
Banking, finance, insurance and other necessary services are easily accessible
Opening corporate bank accounts is easy
Convenient location near Jebel Ali port and Dubai airport allows convenient logistics to transport hubs
Authorities provide water and electricity connections and supply at reasonable rates.

However there are a couple of drawbacks: JAFZA has one of the highest capital requirements of all company setup free zones in Dubai, and rentals and one time fees are also on the higher side. There is also a pretty long list of companies applying to do business in JAFZA, so you may have to plan well in advance, if you are interested.

It must be said though, that the solid infrastructure, liberal regulations, and ease of business setup in JAFZA, makes it a great place for Dubai company setup.

Here is the infographic that accompanies the article about Company Formation in JAFZA:

Artificial Intelligence & its Impact on Business

Kreston Menon

PRELUDE

Technological Innovations have been the fundamental drivers for economic growth for more than 150 years. The most important of these are what economists call generalpurpose technologies like steam engine, electricity, engines run on petroleum variants, etc. Each innovation had its own ripple effect which led to complementary innovations and opportunities. Technological advancement gave rise to manufacturing of cars, airplanes, computers and phones and the transition from its crude form to the most advance smart forms today is phenomenal. Companies as diverse as Apple, Uber, Tesla and Fedex found ways to leverage the technology to create profitable new business models.

ARTIFICIAL INTELLIGENCE – THE TECHNOLOGY FOR FUTURE

The most important general-purpose technology of our era is Artificial Intelligence and in particular, machine learning (ML). Artificial Intelligence (AI)- Interestingly is not a new term. It was first used by Alan Turing in 1950. But recently, we are seeing an acceleration because the computational power as well as available data is going upward with exponential growth.

Machine Learning is nothing but, the machine’s ability to keep improving its performance without humans having to explain exactly how to accomplish all the tasks it is given. Within just the past few years machine learning has become far more effective and widely available, enabling us to build systems that learn how to perform tasks on their own. Human brain is a super computer which knows and holds immense data, but we are not able to explain how we do a lot of things – right from recognizing a face to making a smart move in the game of Chess. Prior to the introduction of ML, this inability to articulate our own knowledge meant that we could not automate many tasks.

We, humans learn from experience while computers follow instructions through programs. The question is, can computers learn from experience? The answer is yes; and for computers, experience is nothing but data. This is called machine learning.

In the sphere of business, AI is poised to have a transformational impact on the scale of existing technologies or is bound to take a disruptive role in the whole business process. Although many companies around the world have adapted Artificial Intelligence in their business processes, most big opportunities have not yet been tapped. The effects of AI will be more visible in the coming years, as manufacturing, retail, transportation, finance, healthcare, banking, education, and virtually every other industry transform their business models and core processes to take advantage of machine learning.

AI TODAY

One of the major developments is around physical AI, that is robotics and autonomous vehicles. Google cars and the Super Social humanoid Robot Sophia has caught the imagination of everyone. Second area is the computer vision—whether it’s image processing or video processing. Similarly, we are seeing a lot of natural-language work being done and virtual agents or conversational interfaces termed as Chatbots becoming common now. We all have supercomputers at our fingertips – the smart phone. The improved spell-checks that you have when you are typing an email or a message on your smartphone, this is all powered by machine learning.

When it comes to the human language, you will notice that your Siri or Google Assistant learns every day, and the understanding becomes better the more you use it. That is obviously machine learning in the background. There has been a rapid improvement in the quality of voice recognition technology that now Siri understands and responds to your queries with a 95% accuracy.

The latest versions of iPhone as well as some android phones use AI for face recognition to unlock the phone. You may also have noticed that Facebook and other apps now recognize many of your friends’ faces in posted photos and prompt you to tag them with their names. Image recognition is even replacing ID cards in offices, laboratories and factories. Vision systems, such as those used in self-driving cars like Waymo and Google Car used to make mistakes in identifying a pedestrian, but now they make less often than one mistake in 30 million frames.

Intelligent agents are being used by the cyber security companies to detect malware, and by PayPal to prevent money laundering. Insurance companies and major banks offer timely advice to improve customer support using AI technology. Dozens of companies are using Machine Learning to decide which trades to execute on Wall Street and other stock exchanges across the globe. Amazon and Alibaba employ ML to optimize inventory and improve product recommendations to customers.

AI has always been an integral part of UAE Government’s strategic plans and has been introduced in one form or another by the governmental agencies, latest being the UAE Public Prosecution introducing artificial intelligence into legal proceedings. From RTA customer service and drivers’ training to autonomous vehicles and mass transit, AI is at the heart of Dubai’s expanding mobility sector. Dubai Health Strategy 2021 of Dubai Health Authority (DHA) focuses on technology and automation, through AI and robotics.

ML systems are not only replacing old algorithms in many applications but are now superior at many tasks that were once done best by humans. Reaching this threshold opens vast possibilities for transforming the workplace and the economy.

ARTIFICIAL INTELLIGENCE AND JOBS

In the nineteenth-century textile workers destroyed the mechanical looms that threatened their livelihoods, and in the twentieth century India saw huge strikes against computers. Similarly, with the new era of AI and automation how nervous about the future of our own livelihoods should we be?

According to Gartner, Inc. the American research and advisory firm providing Information Technology related insight for IT and other business leaders located across the world, artificial intelligence (AI) will automate 1.8 million people out of work by 2020. Though the news of job losses catches the headlines, it tells only a small part of the story. While you dig a bit deeper into the information, you will see Gartner also predicts AI will create 2.3 million jobs by 2020, driving a net gain of 500,000 new jobs.

Artificial Intelligence could threaten unskilled jobs through automation, but it will also potentially create different kinds of jobs. The workforce will have to undergo extensive training to equip themselves with the new skill sets required for these future jobs. According to a study called ‘The Next Era of Human-Machine Partnerships’, an estimated 85 per cent of jobs in 2030 have not been invented yet.

FINAL WORDS

Today, technology is transforming the way business is done, powered by Artificial Intelligence and Blockchain. We are on the starting block of the Golden Age of Information Technology and it is time for businesses to take a hard look at their organizations and find ways to start integrating these latest tech trends. Yes, the change is coming at breakneck speed, what I have elaborated in this article is just the tip of the iceberg. Be ready for the greatest technological revolution, and trust me, it is going to be beyond human comprehension

Company Setup in DMCC

Kreston Menon

Dubai is known as the business capital of the Middle East thanks to its liberal economy and a Government which is progressive in thought. Its cosmopolitan culture also makes Dubai attractive to foreign entrepreneurs for Company setup in DMCC.

To encourage more foreign investment which they realized would be the driving force for the economy, the government established several special economic zones in Dubai called freezones, with more liberal regulation and minimal taxation. Let us take a brief look at one of these special zones, the Dubai Multi Commodities Centre or DMCC.

Started in 2002, the DMCC was incorporated under the legislation passed by the Chairman of the PCFC on 01.05.2002. Company formation in DMCC can be in one of these segments: commodities, gold, pearls, diamonds, tea, cotton, minerals and metals. The business will be incorporated as a DMCC company, with the minimum capital specified at the time by the DMCC authorities.

Advantages of Company Setup in DMCC :

You can start business with just one shareholder; no limit on maximum numbers, however, subscription needs to be AED 50,000 above the standard minimum capital.
You can operate out of privately developed properties
No income or corporate for a minimum of 50 years
No restriction on ownership or capital repatriation
Minimal paperwork
Licenses granted for a comprehensive range of services
Office space and land can be purchased or leased at very reasonable rates
Versatile office solutions
Provision of speedy immigration and other Government services
Conducting events, workshops and sector specific clubs for networking opportunities
Provision of training on latest trade regulation developments and standards of compliance

Company Setup in DMCC is easy, these are the steps

Decide what type of company you want – branch of local or foreign company, limited liability company: either as a newly formed entity with single or several shareholders, or as a fully owned subsidiary of a foreign or local company.
Select the business activities as per your business plan – whether you want to do trading, service or industrial activity.
You can also consider additional customized license structures like the Single Family Office option which helps in managing the wealth of a family.
Choose the company name.
Submit application with required paperwork like passport copy, residence proof, business plan, and other documents as may be required according to your type of business.
To make things even easier for businesses, online applications are also allowed.

Once your business setup in Dubai or Dubai Multi Commodities Centre, you gain access to a broad range of ancillary services from the Zone authorities like international courier services, commemorative certificates, insurance schemes for health, employee compensation and third party liability, exclusive credit cards for members of DMCC, and more.

The DMCC will also be starting a tech hub to help startups to function in a collaborative atmosphere among likeminded business people, with negligible upfront expenses. This round the clock tech hub will have offer training, workshops, a programmers’ ‘coding cave’, and more.

To provide easy access to the central registry of ownership for stored commodities in Dubai, an electronic system called the DMCC Tradeflow was started in 2012. Its main intention was to encourage commodities trade by providing more security to both warehouse owners and traders through various methods. The online platform also provides a secure platform for e-trading, accessible from anywhere in the world.

Any business consultants in Dubai will tell you that company formation in DMCC means being part of a vibrant and fast growing economy; so make full use of it!

Here is an infographic that accompanies the article about Company Setup in DMCC:

Investing in India – Opportunities, Trends and Challenges

Kreston Menon

This article coincides with the successful state visits of the Indian Prime Minister, Narendra Modi to France, Germany and Canada as well as the fruitful visit of Kerala Chief Minister, Oommen Chandy to the UAE, which included a high level meeting with His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and the Ruler of Dubai. The ultimate aim of both the leaders were the same: Bring investments to India.

As I am trying to do a reality check on the ground realities related to Foreign Direct Investments in India, I would like to emphasize on the investment opportunities, trends and challenges for the potential investor. People may have divided opinion on the style of functioning of the Prime Minister, but I am sure everyone will agree with me that he has brought a positive change in the perception of investors. Any investor would like to have a strong leader, who stands for reforms, who talks straight and means business, who is hands on and demands results. Let the politicians discuss about the other side of it, but for the business community he is a leader who has a vision and plan for tomorrow.

The “Make in India” initiative of the Indian Government has been well received by investors. The Kerala Government has given the nod to go ahead to build the metro coaches at the Sri City manufacturing unit of the French Giant Alstom, rather than importing them from France. Responding to Modi’s Make in India initiative, Airbus says it is prepared to manufacture aircraft in India, and has plans to raise component outsourcing to $2 billion over the next five years from $400 million at present.

No one has doubts about India’s significant manufacturing expertise. The entry into Mars orbit of the ‘Made in India – Managed by India’ Mangalyaan satellite trumpeted to the world the country’s skills in high technology. Yet India’s manufacturing industry is significantly small, both as a proportion of the economy and in terms of its share of global exports. It requires robust and drastic action to modernize archaic employment laws, simplify taxes, redraft dysfunctional trade agreements and fix the country’s chaotic and inferior infrastructure.

Also Read: The Seven Essentials of Successful Business Innovation

But the positives weigh more. Exports as a percentage of Gross Domestic Product have more than doubled – from 6.9% to 17%, since 1992, when Dr. Manmohan Singh, the then Finance Minister and later Prime Minister, introduced a pioneering budget that opened the Indian economy to the world. India exported more than $313 billion in goods in the fiscal year to March 2014 compared to $18 billion in 1992.

The surge in exports reflects a broad diversification in both product range and destination markets, which has accelerated in the past decade, moving away from the traditional trends. The share of traditional exports such as textiles, ready-made garments, leather products and agricultural commodities has fallen significantly over the past two decades. Petroleum products and engineering goods such as machinery and parts, transport equipment and electronic goods now account for more than 40% of exports.

If we look at the sector wise contribution to GDP, India is doing pretty well in services sector (includes IT, tourism, retail, banking, finance) which contributes 53% to GDP and employs 27% of the work force. Manufacturing or Industry (petroleum, pharmaceuticals, gems, jewelry, textile, mining, engineering industry) contributes 27% and employs 22% of total workforce. Agriculture contributes 14% but employs 51% of the total workforce. or so and will continue to do so; thanks to the advantage we have in the Information Technology sector. Agriculture sector needs to be mechanized in such a way that the productivity goes up exponentially ensuring food security to the billion plus population.This high per-person productivity will help the surplus manpower to move from agriculture to the manufacturing and service sectors.

Long-term growth drivers for India

• Demographic dividend

Currently half of India’s 1.2-billion population is under the age of 25. By 2020, India will have the world’s youngest population, with a median age of 29 years, compared with a median age of 37 in China. This demographic dividend could potentially give India the biggest labor force and make it the largest consumer market in the world.

• Growing middle class

India’s educated, tech-savvy and relatively affluent middle class of 250 million already represents one of the biggest consumer markets in the world.

• Low penetration of goods and services

Despite the economy’s progress over the past quarter-century, the Indian market still has a relatively low penetration of goods and services, which translates into massive untapped potential. For example, in 2009, there were only 11 passenger cars per 1,000 people in India, compared with 34 in China, 179 in Brazil, 233 in Russia, and 440 in the U.S.

• India is a mature democracy with well established institutions

India has a thriving business sector with dynamic SMEs and large companies that are increasingly expanding overseas, educational institutions that are among the world’s best, and competent financial organizations. RBI plays a responsible role in regulating the banks and the Indian stock market is one of the most mature and vibrant financial market. The daily turnover in the Equity Cash segment of National Stock Exchange (NSE) is around $3 billion and that of Bombay Stock Exchange (BSE) is half a billion dollars.

• Reforms Matter

In India, these include foreign direct investment, the Land Acquisition Bill, the coal and power sector, direct transfer subsidies and streamlined tax regimes. The government will have to take bold steps like allowing foreign investments into the key sectors and even divesting the PSUs, even the profit making ones.

• China-style GDP Growth

India is expected to have the fastest GDP growth rate in emerging markets and will beat China by 2016 if it grows over 7.5% next year. The government is counting on 8%. But you also have to note that India began its economic reforms in 1991 where as China began in 1980. China is today a $10.4- trillion economy and India is just a $2-trillion economy.China successfully built ultra modern cities and the rural areas were transformed to major business hubs. Similarly, the Indian Government has announced the plan to build 100 smart cities across the country.

• India Vs China

Under pressure from USA, China had to appreciate its currency which is eroding its export competitiveness. Currently the wages in India’s organized manufacturing sector is $1.50 an hour unlike China’s which stands at $3 an hour which implies India has a competitive advantage in terms of labour costs. Sustained effort over the next 10 years can definitely make India a manufacturing hub.

The Challenges

Improve the ease of doing business. Present Government has kept the goal of attaining 50th rank from the present rank of 134 in the next two years. Time taken in registration of business from existing 27 days be reduced to only one day as in Canada and New Zealand is one of the targets. Decision making has to be rule based and not left to the discretion of the individual which is Crony capitalism.

Provide clarity on taxation issues, merger & acquisition process. The recent examples of Nokia shutting its plant in Chennai because of tax issue and the Vodafone retrospective tax issue definitely had a negative impact on International investors exploring investment opportunities in India and was keeping potential major players away from India. I appreciate the Finance Minister Mr. Arun Jaitley for bringing some clarity to the issue, which might allay the fears of foreign investors.

Focus on quality education and not just improving skills. Skills are transient and might become redundant with changes in technologies. Quality education will ensure that people will continuously learn new skills to meet the changing requirements of an economy. Labour reforms are the need of the hour. Incentivize good performance rather than making it tenure based. We have numerous examples of PSU in India who are struggling to stay afloat because of inflexible labour laws. BSNL is a prime example of this. Labour reform is about adopting practices linked with growth of the contributing employee along with the growth of the organization.

Increasing FDI by opening up various sectors on need basis. Present government having a majority of its own must conduct the economic reforms at a good pace. The initial signs are encouraging but can it be sustained is the big question which only time will answer.

India offers a great opportunity for investments. And the world is looking towards India. India is undoubtedly emerging as the leading Global Economic Power and an Emerging Market.

This article was originally published in Kreston Menon April-June Newsletter.

FINTECH: Changing the way you think

Kreston Menon

Mankind and Inventions

Mankind has always found solutions to the problems at hand or have invented ways to make their life easier. Be it from the primitive age when fire was invented or rather discovered, or the invention of the wheel which revolutionized the world. There are many enthralling stories of inventions like the electrical bulb, aeroplanes and motor cars. But I would like to draw your attention to more than couple of thousands of years ago, when King Hieron engaged hundreds of people to launch Syracusia, a 55 meters long ship, which can rival the most luxurious modern cruises like RMS Queen Mary 2 or the Harmony of the Seas. Despite the physical labour of hundreds, they couldn’t get the vessel into the sea. That was when Archimedes who proclaimed, “Give me a place to stand and I will move the world” came into the picture. He built a pulley system that allowed him to single-handedly move the ship and set it on to the path for many voyages across the oceans.

Financial Services and Technology

Archimedes managed to invent and use technology to solve a problem, and today we have advanced technology to help

us make financial services more efficient and effective. That technological backbone is called Fintech.

In the 1970s, automated teller machines (ATMs) changed the way people banked. Later, credit cards and internet changed the way people purchase goods and services. Then, it was the penetration of smartphones that radically changed the way consumers interact with business. Today, Fintech is changing the way people do business.

With the increased use of smart phones and the development of appropriate interactive tools and platforms, Fintech has captured the market, offering products and solutions for which banks once claimed that there can be no substitution such as e-payments and online trading.

While Fintech companies were initially viewed as a competitor by banks, the two are now benefitting from working together. The World Retail Banking Report says, 91 percent of banks and 75 percent of Fintechs expect to partner with banks in the near future.

Today, Fintech disruptors are changing the face of financial services. For every aspect of transactions – be it lending, credit, payments and insurance – banks and traditional financial institutions are either partnering with Fintech companies or developing their own solutions.

Integrating Fintech & Banking

Application Programming Interface (API) is driving this evolution. Once a jargon only used by technical experts, APIs are becoming part of our everyday vocabulary as they provide more capabilities and opportunities for Fintech companies and financial institutions to work together and serve their customers better.

In an era, where institutions strive to be customer-focused and want to create a superior customer experience this technology ensures simple, frictionless experiences for their customers. Open banking allows banks to share data with third-party companies or applications securely and in real time, using APIs. The emergence of APIs and Open Banking has changed the image of traditional banking being slow by providing fast and secure banking experience for the customer.

TRENDS TO WATCH

New Regulations

Payment Services Directive 2.0 (PSD2) is the legislation made to create a single market for payments in the European Union and is considered as a giant step to ensure more protection to customer data. PSD2 will end the monopoly of banks on their customer’s data. It will allow merchants like Amazon, to retrieve customer account data from their bank – with your permission. That means when the customer buys something from Amazon, the payment can be direct, without having to redirect the customer to another service like Visa or PayPal. The changes in the directive will enable Account Information Service Providers to access, compare and process data from multiple bank accounts of a single customer. PSD2 will also require stronger identity checks when paying online, particularly for high value transactions.

It is noteworthy that both the General Data Protection Regulation (GDPR) and the PSD2 took effect simultaneously.

September 14, 2019 is the final deadline for all EU corporations to comply with PSD2’s Regulatory Technical Standard (RTS).

Regulation Technology (RegTech)

As Fintech has to adhere to regulatory compliance, financial institutions are investing in technology to sync the regulatory process with the transactions. Machine Learning (ML) algorithms can help banks to comply to the regulatory standards of controlling bodies like central banks, GDPR (General Data Protection Regulation), etc.

Blockchain Adoption

Though there has been much hype and much more confusion about blockchain technology, Fintech is exactly the industry that is influenced by blockchain. According to a study by PwC, 77% of Fintech companies will adopt blockchain by 2020. The blockchain records transactions and updates the digital ledger online without anyone having complete access to the data stored.

Mobile Pay

Mobile banking is showing a strong upward trend with 36% of smartphone users using payment apps like Paypal, Apple

Pay, Venmo and Google Wallet. QR code scanners and NFC (Near-field communication) devices in many points of sales

(POS) make mobile transactions so convenient.

AI, NLP, IoT and RPA

Artificial Intelligence is revolutionizing individual financial planning, fraud detection (AML) and process automation. This technology not only enhances the efficiency of financial sector by eliminating human interference but also has proved to be valuable for maintaining the supply chain, reducing the risks of cyber-attacks. NLP (Natural Language Processing), a branch of AI, can help the digital banking customer support by processing a large number of queries with the aid of virtual customer assistants (VCA) or chatbots.

By integrating Internet of Things (IoT) into Fintech, banks and other financial institutions are enhancing the customer experience as well as ensuring data protection. Robotic Process Automation (RPA) software will automate

human efforts and eradicate human error. Studies say that by 2020 there will be rapid acceptance in the financial service sector to adopt technologies that use bots, automation of employee duties and workflow construction.

Voice Recognition

After Siri and Alexa became popular among smart phone users, modern banks are now implementing AI-driven voice

technologies to help customers make easy and secure banking transactions. Already major banks are using voice recognition as a reliable authentication method for your bank account.

Fintech Tomorrow

The financial space has changed significantly in the past decade with the emergence of new technologies and increased competition in the marketplace. Today, bankers see the rise of Fintech as an opportunity to expand products and services as well as ensure customer satisfaction.

Digital disruption has the potential to shrink the role and relevance of today’s banks, but they are shaking themselves out of institutional complacency and recognize that merely navigating waves of regulation and waiting for interest rates to rise won’t protect them from obsolescence. Embracing openness and collaboration will be the key

DIGITAL MARKETING FOR BETTER DEMAND GENERATION

Kreston Menon

Majority of marketing and sales team members will agree that internet has changed the buying behavior and pattern of businesses as well as end consumers.

The main trigger for this change in buying behavior has been the easy access to information access. Today’s buyer is faster, wired, energetic, independent, distracted and in few cases confused.The rise of the social media, blogs and online literature has resulted in buyers making well-informed purchase decisions. It is being increasingly seen that the buyers have become less reliant on live conversations with vendors during the buying process; making it more difficult for vendors to directly impact their final purchase decision.

Marketers need to understand the different dynamics of the buying process and align their content and messaging to the unique needs of each such buyer. Suddenly the business leaders have begun to realize that the old sales model no longer appears to be effective. The emergence of social networks specially LinkedIn, Twitter and Facebook has made the customers well informed about various alternatives vailable to resolve issues and enable them to nearly freeze their buying decision even before engaging with the vendor. An effective digital marketing strategy cannot ignore social media.

Buying Strategy

For companies planning to use digital marketing effectively for better demand generation and increased sales, it is important to understand the target company’s buying strategy. Certain facts about buying in most companies are:

The number of people involved in the buying process can vary based on the company size and type of purchase
Individuals involved in short listing purchase decisions do not necessarily have senior titles
Information required to aid the purchases is collected from a range of information sources, many of which are not owned or controlled by vendors
Content is consumed across the entire buying process and through a variety of media types
Comparative content is key for lesser-known vendors to influence purchase decisions
Well-informed buyers expect consultative, technically focused engagements from sales representatives

In a typical buying process there are three key stakeholders who will be involved: the decision maker (senior management),decision influencer (mid-management) and consumer (linestaff).If the vendor from whom the service is being bought is a previously-purchased vendor then the role of senior management in purchase decision diminishes compared to when it is a firsttime vendor. The way buyer does research on the product or solution they want to buy has also drastically changed in the last five years. Typical process followed by buyer is:

Designing digital marketing campaigns

While designing digital marketing campaigns it is essential to design content to meet requirement of each stake holder in the buyer team; the decision maker, decision enabler and end user. Trying to understand prospective customers’ pain points, challenges and then creating content addressing those concerns will be very useful so as to resonate with that of the buyer. Also understanding the device the buyer will use to access information becomes critical

Buyers while short listing vendors, use public domain to search for
Technical details and product functionality
Comparative products and vendors
Expert insight and guidance on the product
Success stories of the users of the product through white papers
Demo videos and webcasts where applicable

Buyers prefer information to seep in primarily from the manufacturers and third-party publications. For initial short-listing, product literature or white paper should be as crisp as possible, perhaps not more than couple of pages so as to create interest in the buyers. Digital content has to be meaningful, relevant and able to initiate conversation with target customers by delivering the right message to the right audience at the right time along the buyer’s journey.

Typically, mid-management and line staff involved in the purchase decision use laptops or desktops to view content, watch videos and web casts if available and vendor demos if required. Decision makers generally view the content on hand-held device and in some cases save the content that cannot be viewed in mobile in their laptop for viewing later.

There is no denying that investments in digital capabilities consume a significant amount of time and money, and no B2B leader would like to be responsible for making an investment that fails to deliver sufficient ROI. For vendors who are new in the market, content strength that compares the vendor solution with the competitors in terms of product capability and price would be useful for the buyer. Content should also ideally showcase the leadership of the vendor so as to inspire confidence in many cases.

Challenges faced in implementing digital marketing

The lack of a clear strategy and organizational inertia are two of the most difficult hurdles B2B leaders face in transforming their digital teams, processes, practices and technologies. Often considerable time is spent by sales and marketing team in debating and deciding the digital capabilities their organizations really need – and to build consensus across functions on digital strategy, priorities and investments.

[Tweet “#Digital #Marketing for better demand generation”]

Leading hurdles to success of digital marketing are:

Limited organizational buy-in
Complexity of integrating technologies
Inadequate budget/resources
Inefficient processes and workflow
Inconsistent data across technologies
Inadequate technical knowledge
Poor data quality/accuracy
Aim of digital marketing campaign

The digital marketing campaign targeting the buyer should be able to:

Generate sufficient number of quality leads
Identify and qualify prospects by need
Know prospect company’s buying organization structure
Identify and qualify prospects by time to close the purchase cycle
Identify and qualify prospects by budget
Key takeaways

To summarize, a successful digital marketing campaign needs to have a dynamic content strategy, interactive platform to constantly engage with the customers, deployable across multiple platforms.

Key aspects of digital marketing:

Customized content to the purchase team: decision maker, decision influencer and the consumer
Emphasizing content strategy that addresses the buyers’ needs for technical and comparative information
A large content portfolio featuring a variety of content types in order to guide buyers through each stage
Producing content that showcases how seller’s products/solutions are better alternatives to existing vendors
Not relying only on inbound environments; several buyers leverage variety of information sources prior to a buy
Developing a fair balance of inbound and outbound marketing efforts to influence the buying team throughout the process
Liberal approach in deploying marketing messaging; transmit it via all possible media type
Aggressive positioning against the competition, if you are a lesser-known vendor
Monitoring the content activities of buying teams to see if you are among those being considered
Prioritizing mobile content strategies

To conclude no single digital approach works for every company. Based on each company’s unique characteristics, B2B leaders should develop a digital marketing strategy that brings in more customers.