Bounce Back Loan Fraud Post Pandemic

The Government started to offer support to business owners soon after Covid 19 in April 2020. The level of due diligence carried out by those offering these loans was very little and so it was easier for directors and business owners to obtain these loans relatively quickly and without the need to provide too much financial information.

For anyone who has an outstanding Bounce Back Loan (BBL) and is familiar with the way in which one can make an application online, will know that it took little over 15 minutes to type in a handful of figures and voila, you had confirmation that your application was successful, and that the money would be in the bank within 7 days!

There were clearly inadequate measures in place to prevent fraud. This I read from the report of the National Audit Office (NAO). This report also found that the government took too long to act against the fraud and to stop any further fraud from taking place. The process of recovery for these loans also needs to be improved.

The NAO’s report (link provide at the end of this blog), on the handling of the loan scheme’s counter-fraud activity investigated how the government’s attempts to set up a “simple, quick, easy solution for those in need in of smaller loans” was fraudulently exploited.

Over £47billion were obtained in loans, and billions were lost to fraud. The Department for Business, Energy, and Industrial Strategy (BEIS) estimated in March 2021 that 11% of BBLs worth £4.9bn were fraudulent. But this estimate excluded some frauds such as where a borrower overstates their turnover to get a large BBL.

The department also estimated that 37% of BBLs worth £17bn will not be repaid. However, this percentage included those wanting to repay, but who can’t and those who took the money fraudulently.

Loans and repayments

When the loans schemes were initially on the market, the most important thing was to get the funds out to business owners as urgently as possible and so the department relied on the lenders to carry out appropriate measures in relation to the due diligence before the loans were granted to the applicants. As far as it is reported the only checks carried out were know your customer checks and the loans were paid out within 7 days and some cases within 48 hours.

The NAOs report shows concern in relation to the lack of checks carried out in terms of affordability, in fact it seems to suggest that these checks may have been removed and that it was easy to self-certify as this made the application process quicker. By the time certain measures were put in place it was too late as much of the fraud had already taken place.

Additional counter-fraud measures were introduced over time, but by then it was too late, and these measures focused instead on detecting fraud that had already taken place, with the launch of a fraud hotline which didn’t really tackle the issue.

Understandably the more due diligence around obtaining the BBLs would have slowed down the process BUT at least the number of fraudulent loans would have been a lot less. The NAO also found that the BEIS didn’t get round to inspecting the fraud data until a few months after the scheme had been launched and by then so many fraudulent applications had already been made.

Although the counter-fraud measures changed over several months, the government scheme “lacked clear governance at the outset and sufficient resources” and the auditors did not find any documents setting out the department’s ambitions or metrics to measure the impact of counter-fraud activity.

Pursuing organised crime

As a result of the extent of the fraud and limited resources, the department is focusing its efforts on pursuing organised crime, where sums more than £100,000 were involved. The BEIS has set a target to recover at least £6m in fraudulent loans from organised crime over three years, but the NAO has called this inadequate.

So far, the agency’s work has resulted in an estimated 43 arrests across 33 investigations and more than £3m of recoveries.

With much attention on organised crime, the department chose not to investigate borrowers who overstated their turnover by less than 25% if there were no other fraud indicators.

While the department has given a low priority to this bottom-tier fraud, and is hoping lenders will pick up the slack, the NAO warned that lenders have limited commercial incentives to do so.

The theme of overstretched government departments continued throughout the report, with enforcement agencies enlisted to recover loans, also stretched by the potential fraud levels across all the other government Covid support schemes.

Recommendations

The NAO signed off its report with recommendations that the department should implement by April 2022.

Top of the list of recommendations was to produce a formal strategy for measuring BBL fraud and to measure the performance of each counter fraud measure, adapting its approach as necessary.

Other recommendations include the need to develop a robust business case for detecting and preventing loan fraud, refreshing its fraud risk assessment at least every six months and evaluating options for controls against any new fraud risks on a cost-benefit basis.

It should be noted that BBL is not the only post pandemic support which was exploited. There was fraud surrounding Furlough, Coronavirus Business Interruption loans (CBILS) and Coronavirus Large Business Interruption Loan.

For more information on National Audit Office report, click below:

https://www.nao.org.uk/wp-content/uploads/2021/12/The-Bounce-Back-Loan-Scheme-an-update.pdf

Vee Bharkhada

Founder - Navigate Business Recovery
https://www.navigatebr.com
vee@navigatebr.com
07961 116321

Why Growth Mindset is Important to Career Success

We’re often taught that to succeed, we need the processes in place – a plan, reducing expenses, saving more, creating a budget, investing and working like a dog to earn whatever we can.

And while that’s true, what fails to get mentioned is the mindset we need adopt to see our plans come to fruition.

Without a healthy money mindset to back us up, it’d be going around in circles like I did a few years ago.

“The kitchen sink was starting to smell unpleasant and I decided to tackle it. I removed the offending u-bend which caused water to drip from the open pipework. There was a small pool of water on the shelf under the sink where the washing liquid was kept. Using a cloth, I was able to mop up the spill which I squeezed back to the sink, but unfortunately the open pipe kept dripping and shelf remained wet.

I continued to mop the spill and squeeze the liquid back into the sink for probably about 5 mins. I was mopping and squeezing, mopping and squeezing, over and over and over.

It was at this point that my brain started functioning again, and I remember that the pipe continued to drip because I hadn’t replace the missing U-bend, do’h! I was going round in circles like a big fool.”

A positive money mindset must come first when planning for financial success.

How Can Growth Mindset Help You

A money mindset is made up of your beliefs and attitudes about money – good and bad, true and not so true. These will be either negative or positive opinions, depending on your past experiences and influences.

You can think of it as a scale; on one side sits the scarcity mindset, and on the other, an abundance mindset.

As the word suggests, a scarcity mindset would believe that money is hard to come by – it’s only for the rich, I’ll never earn enough money, I’m not good with money, money is the root of all evil, I can’t earn more money in my profession, money makes you selfish…

An abundance mindset on the other hand believes that:

• There will always be money available when you need it.

• You’re not comparing yourself to others.

• Your money experience is separate to theirs, and you can both win.

• Money is a tool to be used and you are confident in your ability to manage your money.

Quite often we sit somewhere in between, and this position is what determines how we experience money.

Your money mindset can be formed from a lot of different inputs – how your parents talked about money as you grew up, what your friends do, the values of people of influence in your life and your own experiences.

It’s not just based on the money itself either. It’s what you feel about people who have, or don’t have, money. For example, there’s a stereotypical belief that to be rich you have to be greedy or manipulative, or you’ve inherited your wealth so are just plain lucky.

All these different beliefs will guide you in your ability to use money and sabotage you when you’re stepping outside of those beliefs to keep you in line.

The things is, how many of these beliefs are actually true?

How Growth Mindset can Lead to Success

If you’re finding that you’re not achieving what you set out to financially, then limiting beliefs around money are in play.

And they’re sneaky. They hide in the background, secretly sabotaging your efforts while you try desperately to achieve whatever goal you’ve set yourself.

Without recognising these limiting beliefs and challenging their validity, you will continue trying to make changes without any significant improvements. This then ‘proves’ your beliefs, setting the cycle in motion again.

What To Do?

Your Current Beliefs

Discovering what you currently hold as true is the first step. If you don’t know what you think, you can’t do anything about it.

Create a list of every belief and thought you have about money – good and bad. For example, ‘rich people are greedy’ or ‘I’ll never earn more than £30K’.

Consider your thoughts on debt, spending, investing, saving, earning, rich people, poor people, budgeting… anything you can think of that gives you an opinion on money.

Next, decide where each of these beliefs comes from – are they yours from experience or did you acquire them from someone else’s say so? Are they a stereotype or have you witnessed them first hand.

Now decide if you really believe them – are they actually true, or are they an excuse, a perception or limitation that could be holding you back.

For example, if you wrote down ‘I’m not good with money’, that may be true. But it doesn’t have to be true forever and to continue using it would be an excuse for never having enough money. You could learn to be better with money.

And if you hold the belief ‘I’ll never earn more than £30K’, how does this serve you? If you didn’t hold this belief, could you earn more than £30K? The answer is yes, absolutely. You just haven’t earned it yet.

The point of this exercise is not to dwell on what has happened in the past, but to get you thinking about and aware of how you truly feel about money. Most people live in autopilot when it comes to finances, so seeing beliefs surface when you consider a money situation helps you make better choices.

Your New Beliefs

Write down your new beliefs. These can be true now, or what you’d like to be true for you. Reframing an old belief into a new, more helpful one is a great way to start this.

Be as creative as you like. These new beliefs are there for you to create the financial life you dream of, so don’t censor yourself or think small.

And make them work for you. For example, if you would like to be influential in your field, then make the old ‘rich people are greedy’ into ‘rich people are influential’.

Or if you want to give more to charity, then try ‘rich people are philanthropists’. Even simple wordplay like this can help you – you are charitable, rich people are charitable, therefore you are rich.

Read your beliefs every day until you believe them. If your limiting beliefs have the power to hold you back subconsciously, then these new empowering ones can propel you forward without your even knowing it. But you have to believe them.

What Else?

As well as working on your mindset list, you can change the way you think about money by working on a few other items too.

Set Goals

Setting realistic and exciting goals is a must – you need to have a destination. You might update the destination on the way, but have an end goal in mind to give yourself something to strive towards.

You can have several different goals with different time periods. For example, you might decide that long-term, you want to retire in 10 years. That’s a goal. Work backwards from that to see how you get there, setting SMART goals along the way.

Educate Yourself

If you’re just hoping that ‘I’m no good with money’ will magically transform when you change your mindset then you’ll be waiting a while. You need to inform yourself on good practices, and then do the work!

Read financial books, listen to podcasts, speak to people who are ‘making it’ already – the more you know about money, the less mystical and otherpeopley it will become (I might have made that word up).

Know Your Why

Understanding the deep, underlining reasons why you want to reach financial success helps you to continue to take action towards the goals that get you there, even when things don’t go to plan.

When finding your ‘why’, be like an annoying 5 year old who keeps asking ‘but why?’ every time you come up with a reason until you can go no further. It will hit you as true when you find it, so remind yourself of it whenever things get tough.

Practice Gratitude

Being grateful for what you already have sounds like an odd one to throw into creating a positive money mindset, after all, you’re wanting to be able to grow your finances and it can sound like settling.

But appreciating what you have is all a part of growth. When you can show gratitude for your current situation, and recognise the positive things that have come about by your steps so far, you’re moving away from the negativity of the scarcity mindset.

‘I’ll never be out of debt’ becomes ‘I’m grateful for the student loans and the opportunity to learn and create financial freedom for myself through my skills’.

‘I’ll never earn more from my job’ becomes ‘I’m grateful for my current income which keeps me afloat while I work towards my dream lifestyle’.

Find the positives, and the positives keep coming.

Forgive Past Mistakes

We’ve all made bad choices in our past. It’s when you cling to them as your identity that they become harmful.

Forgiving these past mistakes, learning from them and moving forward is the only way to reach your goals.

Don’t let them define your entire life; they’re in the past. Be grateful for the lesson, and then move on.

In Summary

The saying ‘I have to see it to believe it’ is backwards. In reality, you have to believe it to see it. Belief leads to emotions which leads to behaviour. Start with believing what’s possible, and see how your mind works to make it a reality.

Ian Genius

Owner - Ian Genius - The Ingenious Alternative to Selling
https://www.iangenius.co.uk
ian@iangenius.co.uk
07563141242

Should mid-market businesses adopt BPO or RPA to beat the competition?

It could be a specialist subject for Mastermind as many business leaders consider the two approaches. In just over 2 minutes, this article will provide some answers.

The challenge for business

Every business wants to be able to do more with less effort. It is essential for a business to remain competitive in an evolving world. Where a process exists in a business it is contributing to the overall success of the organisation but generic processes can be found in many other businesses, for example, “Accounts Payable”. This is essential for any business, but it does not differentiate the business.

The challenge in every business is for the generic processes to be performed well and at a low cost.

Mid-market businesses have sufficient volume of activity to achieve benefits from different approaches to the operation of their business processes whereas small and micro business lack the volume of transactions. Similarly, mid-market businesses will have sufficient structure in the existing processes that smaller organisations typically lack.

“Perform the core activity and outsource everything else” has been a strategy adopted by some successful businesses and is advice provided by Management Consultants to some established businesses.

This outsource approach has been shown to work but there are consequences to adopting such a strategy in terms of business risks and control. The COVID situation has highlighted how a lack of control can leave a business exposed and not able to react to a change in circumstances such as the need to rapidly scale up or scale down.

Since the millennium there has been a shift in workforce expectations. Questions about purpose, risks to mental wellbeing and risks to physical wellbeing are raised. Business can no longer expect people to work like “Robots”.

The benefits from BPO and RPA

Business Process Outsourcing (BPO) provides execution of a generic process by a specialist organisation which through economies of scale can deliver cost savings compared with the operation of the process in-house.

Robotic Process Automation (RPA) is technology which enables a process to be completed through the use of software robots simulating the interactions a person would have made on computer applications. By automating the work which people do, the cost of processing can be reduced and the people can use their time more effectively than performing repetitive work.

• Both BPO and RPA offer financial benefits to existing business process operations.

• BPO takes over the “Day to Day” management of the process, reducing the operational load on the existing business management.

• RPA has the potential to remove human errors from a process, as computers are 100% accurate and process consistently.

• RPA is data blind, so that no bias is introduced during processing and no leakage of sensitive information occurs through human gossip.

How has the situation changed?

During the 1990’s and early 2000’s there was a boom in BPO activity. Although India led the boom in activity, it has also spread to other countries such as Pakistan, Sri Lanka, Philippines, Thailand, Mexico and South Africa.

Initially BPO arrangements were fairly prescriptive, efforts were made to ensure precise details were covered in the contract price. More recently, the emphasis has changed so that BPO service providers are encouraged to leverage their expertise and scale to deliver annual incremental improvements to the BPO service for the benefit of the BPO customers. This has driven BPO providers to look for automation and innovation their service to achieve the gains necessary.

The emergence of RPA technology to automate repetitive processes has been recognised by BPO providers as one way to deliver their challenges of service improvement.

Cyber security and data ownership have become more important topics for business in recent years. These have added complexity to any BPO arrangement, particularly if the provider is offshore.

As RPA technology has been successfully deployed in FTSE 100 enterprises, the software has matured, so that it is no longer “Bleeding edge”. RPA has become proven, robust and affordable.

Microsoft, IBM and Salesforce have all made acquisitions to compete in the RPA market against the market leader UiPath. The UiPath aim of “A robot for every desktop” starts to seem realistic given the big players entering the area.

Different approaches with BPO and RPA

BPO is often divided into different types based on the service provider's location:

• Offshore outsourcing, or just offshoring, occurs when services are delivered from a foreign country.

• Onshore outsourcing, or domestic outsourcing, happens when services are provided in the same country

• Nearshore outsourcing is when services come from neighbouring countries.

BPO is sometimes categorized by the types of services being provided; three categories commonly cited are the following:

• Knowledge process outsourcing, or KPO, is when the outsource service provider is hired to provide expertise as well as processing capacity.

• Legal process outsourcing, or LPO, is specific to legal services; these range from drafting legal documents and performing legal research to offering advice.

• Research process outsourcing, or RPO is when research and analysis functions are required rather than specific deliverables

BPO is also sometimes referred to as IT-enabled services, or ITES -- a name that recognizes that IT infrastructure enables outsourcing to happen in some situations. In fact, IT Departments are often the subject of BPO arrangements, with IT operations, development partners, helpdesk services and IT Desktop support services being delivered through a BPO Service provider.

Similarly, there are a range of categorisations of RPA, the two most common are:

• Un-attended software robots, that work on data based on a schedule or as it becomes available

• Attended software robots that work alongside a person, as an assistant, reacting to and interacting with the person

The co-ordination and orchestration of the robots is a key factor in delivering a successful service, particularly when there is a mix of processing types involved to deliver hybrid solutions which are sometimes called “Human in the loop” implementations.

Key criteria for successful adoption are:

BPO

• Clearly defined scope of activities

• Explicitly defined integrations between the BPO service and the rest of the business

• Ability to deliver the service in the required timescale

• Mechanisms to ensure quality of the service

RPA

• There must be a digital input and output

• Clearly defined scope of activities, with rules based logic

• Any need for judgement during the process will require humans to continue to interact with those elements of the process, although the use of Artificial Intelligence (AI) can dramatically reduce this activity

It is clear, that any business process where RPA could be used, could also be achieved through BPO. However, not every process which could be implemented with BPO could be achieved through the use of RPA.

Conclusions

For Mid-market business that decide to use BPO, they may effectively be getting RPA without knowing it.

RPA is no longer a choice for BPO service providers but rather a necessity that they need to quickly adopt in order to stay current within the market.

COVID has shown that people are a real value to a business, so their time needs to be used effectively hence the focus on optimising “Day to Day” operations which makes BPO and RPA relevant.

Additional Resources

Making Work Matter

https://www.ether-solutions.co.uk/uipath/ebook-uipath-rpa-intro

Managers Guide to Automation using Software Robots

https://www.ether-solutions.co.uk/automation/managers-guide-to-automation-using-software-robots

RPA ROI Calculator

https://www.ether-solutions.co.uk/rpa-information/rpa-roi-calculator

Ether Solutions are specialists at using software robots to implement Robotic Process Automation (RPA) which helps businesses with Productivity and Quality. By combining Artificial Intelligence (AI) into the solutions Intelligent Automation is achieved.

For more information please call 0845 643 4410
or visit https://www.ether-solutions.co.uk

David Martin

RPA Specialist - Director, Ether Solutions Ltd
david.martin@ether-solutions.co.uk
07720707662

The Ingenious Alternative to Selling

Imagine you’re at a local food festival...

You spot a gelato stand and realise that an ice cream would be the perfect way to enjoy the warm summer’s day.

As a fan of salted caramel, you order your go-to ice cream. Then, with treat in hand, you settle down for ice cream bliss.

A moment later a couple sits next to you. You glance over and then realise, in utter disbelief, they’re tucking into what appears to be a double salted caramel deluxe with extra topping!

What the…?

Why didn’t the gelato man tell you he had that? You would have picked it if you had known.

You look back to your inferior ice cream and disgruntled, leave the festival.

This kind of assumption is all too common, especially in business.

When you fail to communicate your range of flavours, you leave it up to your clients to guess. They’ll make a decision based on what they think you probably do.

Clients can only pick the services they know about, so make sure you tell them!

Ian Genius

Owner - Ian Genius - The Ingenious Alternative to Selling
ian@iangenius.co.uk
07563141242

How to Encourage Business Growth

Over the past 25 years of helping entrepreneurs grow their business profits and value, the key thing I’ve found is that business owners don’t know what they don’t know. If they acknowledge that and are prepared to change, a business consultant can help them achieve incredible growth.

The three main issues for most struggling businesses are:

• managing cashflow

• not enough sales

• not seeking help soon enough

The right experts can help a business increase its profits through sales and marketing strategies, and make savings through more efficient processes.

Running your business should be enjoyable not painful!

According to a recent CBI survey, SME entrepreneurs are struggling to grow their businesses due to ‘pain points’ (issues) within the business such as finance (including cashflow problems), rising costs and staff recruitment and HR management.

WHAT ARE YOUR 3 MAIN ‘PAIN POINTS’ AFFECTING GROWTH WITHIN YOUR BUSINESS?

The GPS Network Corporate SATNAV Service has teams of experts who can prescribe ‘painkillers’ to solve your known problems and diagnose some ‘pain points’ you may not be aware of.

Don’t delay contact your professional adviser or contact us direct at the GPS Network nigel@rowlandsme.co.uk and book a free initial consultation and turn the pains into gains!!

LinkedIn post by Samantha Pond of Network My Club CLICK HERE

Nigel Rowland

DipPFS - Founder of the Rowland SME ‘GPS’ Network
nigel@rowlandsme.co.uk
07770770627