Here are four things in the financial world that happened this past month and how they affect you. Did you catch them?
1. Facebook plans to train one million small business owners by 2020.
Facebook recently announced that it intends to train one million small business owners in the U.S. on digital skills by 2020. In making the announcement, the company cited a new study that predicted that the shortage of skilled labor in the U.S. could result in 85.2 million unfilled jobs by 2030, saying it wants to do its part to help reverse this skills gap. (Source: Facebook, Adweek – link requires sign-in)
(Image source: Adweek)
Are you a freelancer? A marketing professional? A social media firm? Or maybe you’re looking to open up your own business and don’t have any skills? Make no mistake about it: being an expert at Facebook is a very valuable—and profitable—thing to know. More than 30 million small business have Facebook pages worldwide and the social media giant is relied upon by countless companies for sales, customer service and lead generation.
But as the platform grows, so does its complexity and the need for businesses to invest resources for advertising, page maintenance and ongoing interactions with their communities. All of this means opportunities for the startup entrepreneur—or even established firms looking for new revenue streams.
2. This chart shows how China is dominating fintech.
A study from accounting firm EY examined fintech adoption rates across 20 major economies and found 69 percent of Chinese consumers had used at least two fintech services in the last six months. India came in second with 52 percent, followed by the UK at 42 percent. The United States is tenth on the list.
In addition, the study showed that 83 percent of Chinese consumers make payments or money transfers on their phones, 58 percent use fintech platforms for savings and investments, and 46 percent used fintech to borrow money. (Source: CNBC)
(Chart image source: CNBC)
Many people outside of this country are quickly adapting to an increasingly cashless world, where consumers are paying for products with their phones, accounting applications are in the cloud, financing is made available online and businesses are eschewing checks for electronic transfers.
Why not here? Many experts point to the geographic size of the U.S. and our outdated, and complex financial services infrastructure which was established many years ago and is difficult to change. But change will eventually happen and when it does, fintech will completely alter the way businesses accept payment from their customers and make payments to each other. Is your business ready?
3. The Federal Reserve’s small business credit survey finds revenue growth and financial challenges.
The recently released Small Business Credit Survey of 12 Federal Reserve banks shows that small businesses reported stronger revenue growth and profitability but continued financial challenges for some segments. The survey reported higher success rates for loan and line of credit applicants in 2017. While 60 percent of loan applicants sought credit for expansion, others borrowed because of cash flow issues and cost pressures that required an infusion of funding to pay for operating expenses, including wages, and refinancing costs. (Source: FedSmallBusiness)
The economy continues to grow and the good news is that, especially since the last great recession, capital has become more widely available for smaller firms seeking money to finance their growth. What concerns me is that more firms are seeking capital to help them to pay operating costs and when the economy inevitably slows down (there are always peaks and valleys) some of these companies will be too highly leveraged.
The lesson is that if you need to seek capital, make sure you (and your accountant) are completely comfortable with your debt maintenance. Do not over-extend yourself and do not be fooled into thinking that the economy—and your business—will grow forever.
4. Tweeting about banking troubles? You’re a fraudster’s dream.
Customers who use social media to vent frustration at their banks could become targets for fraudsters, according to law enforcement officials and industry insiders. In the UK recently, customers of TSB Bank went on social media to complain after a computer systems migration left thousands of them locked out of their accounts. Afterward, TSB’s chief executive said the daily rate of attempted fraud on its customers spiked by up to 70 times. The fraudsters used fake text messages and emails claiming to be from the bank in order to gather customers’ personal data. (Source: Reuters)
Social media is a good place to raise issues with service providers, even banks. But as the Reuters report reveals, it can also open up a can of worms. If you’re having a problem with your financial service provider then your best bet is to first try to resolve it over more traditional channels, like phone, chat or email. If you do decide to take the issue to social media (and it’s usually Twitter) then try to avoid a public spat.
Instead, try sending a private, direct message to the company with your complaint. It may not feel as satisfying, but you’ll likely get the same response…and limit your exposure to potential fraud.
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