Can open banking drive benefits for small businesses?


The Consumer Data Right (CDR), or open banking, was introduced in 2018. The rollout has been delayed at various stages and the uptake is slow-moving, leaving Australians waiting to experience the full potential that open banking has to offer.

The consumer benefits of open banking have always been clear, from driving more competition between providers to greater control over their data. However, with December 2020’s changes to the legislation, open banking is now set to positively impact the two million small to medium-sized businesses around the country.

Streamlining accounting

Accounting takes up precious resources that many SMEs cannot afford to waste. Despite innovations and high-tech software, accounting processes remain convoluted and manual, often resulting in late payments, poor cash-flow and a drain on resources.

This impact to cashflow plays a major role in business failure – 51 per cent of businesses fail as a result of inadequate cash flow, according to ASIC. And, while card payments and bank transfers currently make up a high proportion of invoice payments for SMEs, problems exist with both options. For card payments, high fees, risk of payment failure or fraud are just some of the issues. While bank transfers require manual processing, which can result in overdue invoices and blocked cashflow.

The data-rich capabilities of open banking will enable small businesses to access innovations that provide greater oversight into clients’ accounts patterns and their own. For example, automating integration of business banking data to accounting software or providing insight into the ideal day to take payments based on clients’ wage schedules. Meanwhile the speed offered by the New Payments Platform will ensure payments are received instantly, vastly improving cashflow.

Trusted payments

Payment verification and account authentication is another element of financial services that’s due for an upgrade. Payment fraud remains a huge concern for Australian businesses, of all sizes, with the Australian Payment Network stating that card fraud alone costs businesses $447.2 million in FY20.

Take, for example, a business that relies on recurring payments as their main source of income – a gym, perhaps. With current technologies, there is a risk, when taking payments, of being provided with falsified bank account information and, consequently, experiencing failed payments. Or perhaps the credit card they used expired: until those details are updated, the gym cannot get paid. It also increases the risk of customer attrition, if the customer simply abandons their membership.

With the free and secure flow of customer data being made available by the open banking regime, authentication and verification will become increasingly simpler and more efficient, lowering rates of failed payments and improving the costs of fraud for small businesses.

More competitive business lending options

Finally, the broader rollout of open banking is set to overhaul business lending. Fintech disruptors who have entered the market to compete with the Big Four have yet to make a real splash in Australia’s business banking sector. This may be partly to do with the fact that businesses are hesitating to switch financial services providers because of the costs and difficulties associated with switching. However, open banking presents the opportunity to greatly simplify the process with simple and seamless data enabled switching for accredited service providers, which will undoubtedly increase competition in the sector.

In fact, as of the 1st of November this year, businesses are set to reap the benefits of the expanded CDR regime that will require account providers to make business and other non-individual customer data available to accredited data recipients, opening the floodgates to better deals and more choices for Australian small businesses.



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Half a million small businesses still behind the digital wave


New research indicates that nearly half a million Australian SMEs are either not fully or just barely made the transition into the digital wave and about $10 billion would be needed by the Australian economy, to facilitate their transition.

According to the research by business management platform MYOB, 466,062 SMEs – approximately 20 per cent of the 2.29 million in the sector – do not have access to digital tools that would have helped them in critical areas of their business workflow, such as compliance and supplier management.

On the flip side, among the SMEs using digital tools, 40 per cent of businesses use digital cloud-based software for work in progress (WIP) management, 38 per cent for managing their people, 37 per cent for growth opportunities, such as marketing, and 26 per cent for connecting with their customers on social media.

MYOB also noted that support packages that bridge the digital gap for the one in five SMEs left behind will bring aobut a 1.8 per cent increase in the SME GDP contribution, or a $10.5 billion gain for the Australian economy and that tax system and cloud-based software as a service (SaaS) products serve as the perfect gateway for SME digitalisation.

“Our new research tells us 24 per cent of SMEs are worried new technology is too expensive and a further 24 per cent don’t have the time to set it up,” MYOB’s Chief Employee Experience Officer, Helen Lea, said. “Of the businesses who digitised during the pandemic, 39 per cent found themselves to be more productive and 34 per cent were more profitable. Eighty-five per cent said they were able to keep their business running thanks to digital tools.

“For the one in five SMEs at risk of being left behind, a tax incentive that is easy for businesses to engage with, that is pointed out to them by their accounting and bookkeeping advisors with whom they speak regularly, will remove a significant hurdle to digital adaptation,” Lea added. “Our research supports this: 27 per cent of respondents shared that an incentive, such as a tax deduction, would help them get started.”

MYOB pointed out that the SaaS model software is custom built for the SME way of working and that cloud-based SaaS products allow businesses to work however and wherever they like, with the subscription model allowing a business to grow their software use with their operations.

“We are recommending to Government that they consider a refundable rebate on new SaaS subscriptions for SMEs with 0-199 employees, with a tiered incentive structure to promote end-to-end digitisation of businesses,” Lea said. “This change alone we predict is worth $10.5bn to our economy in the short term. If you combine this with the annual saving of $23.5bn afforded by a mandatory introduction of B2B e-invoicing, adoption of which could also be motivated by this SaaS incentive, it’s a pretty compelling case for putting our trust in small businesses as Australia’s economy recovers and grows,” Lea concluded.

digital wave, data mining, AI, digital stimulus, smart business, digital reslience

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QR crackdown for Victorian businesses


A CRACKDOWN on QR codes is coming for Victoria.

Businesses will face new on-the-spot fines of $1652 for non-compliance with the statewide system.

A recent business blitz in the state for April found 37 per cent of those businesses — 165 businesses overall — were found to not be using the system correctly.

Fines can increase to $9913 for repeated breaches, while blatant or wilful non-compliance could see businesses prosecuted.

Acting Police and Emergency Services Minister Danny Pearson said the recent active case in the Victorian community showed the importance of adhering to the rules.

“As we’ve seen this week, it’s essential every Victorian checks in when visiting a business, to help contact tracers quickly find those who could be at risk of coronavirus exposure,” he said.

“This new on-the-spot $1652 fine sends a clear message that we will not tolerate any business ignoring its responsibility to help Victoria stay safe and stay open.”

But state Member for Murray Plains Peter Walsh said businesses needed to be given proper information and tools.

“Victoria introduced a bureaucratic nightmare, sometimes almost requiring your life history before you could sign in,” he said.

“Then that changed, and not even the departments running the system seemed to know what was going on, the conflicting information caused widespread confusion, which goes a long way to explaining why so many people just walk past the check-in spots.

“And to ask small businesses to turn away customers, or alienate them by coming the ‘government heavy’, is asking too much.”

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What’s the economic impact of Ramadan on Muslim businesses?


It can see the majority of their clientele shift not only their eating habits but also how they spend their money.

It’s a month that’s been described by some Muslim businesses in Sydney as a festival of food with options aplenty for the eager foodie looking for a late night meal.

But in Underwood, a hub for the local Muslim community in the south-east of Brisbane, it’s a different story.

Oguzhan Cevik is the owner and manager of Micasa, a Muslim-owned cafe in the area.

He is frustrated whenever customers come into the store to say to him: “You guys must be pumping during Ramadan.”

“When I tell them that actually, it’s our worst month of the year, they’re very shocked.”

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Why and how small businesses need to diversify their marketing strategy


The recently mooted Google and Facebook legislation has created a cloud of uncertainty for business, with many investing heavily in Google AdWords and Facebook social ads.

This, in my view, has brought to light the lack of diversity in many business’ marketing strategies. In order to safeguard and build their business, I advise organisations to adopt hybrid marketing strategies moving forward.

This means spreading marketing spend across SEO, Google Ads, and social media advertising, rather than pouring it all into, say, Google Ads or Facebook advertising.

Putting all your eggs in one basket is risky in any venture. When it comes to marketing you need to diversify and adopt a hybrid strategy that protects your business while ensuring growth.

Tech really is changing faster than regulators can keep up with and a string of recent events has forced us to confront a truth we already knew: tech giants, the Zuckerbergs of this world, truly do call the shots when it comes to digital. Not our marketing teams, not our IT specialists and not the government.

It’s a clash of the titans and Australian businesses could be caught in the crossfire if they don’t take appropriate action to protect themselves. The recent and historic banning of news on Australian Facebook pages has left businesses small and large scrambling to deal with the sudden and unprecedented removal of content.

The event took place in the shadows of Google threatening to remove its search engine services from Australia and shortly followed by Apple now providing iOS 14 users with the option to essentially opt out of tech that removes the capabilities of targeted marketing on the iOS Facebook platform.

To take back control, businesses need to ensure their practice is based on a broad and sturdy foundation by adopting hybrid marketing strategies.

Hybrid marketing allows businesses to diversify and spread their investment across multiple channels in a way that best suits their objectives and needs. It’s not always just about return on investment.

Digital marketing agencies should be helping organisations understand what works for their business and there’s always somewhere to go after Facebook ads.

By investing time and finance into deciding which channels work best for their business, they can insure themselves against future snap crises like the Facebook one, which will keep happening. I figure one wouldn’t buy a house or car without insurance, so why run a business without it?

One of my clients Dean Elabbas, owner of 24 Hour Melbourne Plumbers, saw his leads increase by 413 per cent in three months after approaching me for hybrid marketing during COVID. Their marketing tactics just weren’t working – they were advertising on Facebook, spending money on print media and that was about it.

By designing a tailored, hybrid approach for customers like Dean, it meets the needs of their business and provides security in the event that one of those platforms or channels changes their rules, as we’re seeing pretty frequently lately.

The benefits of hybrid marketing are evident in the huge uptick of revenue. I would recommend, for any business spending money on marketing, researching new platforms to explore what they can do for your business.

Sometimes trying new strategies is the best way to know whether or not it will work for your business.



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Small businesses to see their names up in lights at this weekend’s footy


A variety of small businesses will see their names up in lights at sporting stadia around the country this weekend as part of Telstra’s small business campaign. The 17 small businesses to be featured at NRL and AFL games are funding their advertising with their share of a more than $1 million the Telco put up to help the small-business sector in its post-pandemic recovery.

“Small to medium businesses are the engine room of our economy and we want them to keep kicking goals,” Telstra Consumer and Small Business Group Executive, Michael Ackland, said. “We’re thrilled to be able to give these 17 small businesses the opportunity to have their name up in the lights.

“These small businesses will be able to reach millions of game attendees and living rooms across the country, something only big businesses with big budgets can normally afford,” Ackland added. ““For many, this will be a once-in-a-lifetime opportunity, and we hope it’s a great way to put the spotlight on some of the businesses that kept our economy going over the past 12 months.”

The businesses – that range from a barber shop to an avocado-themed tour bus company, and a children’s clothing label to a trail-riding enterprise – will benefit from exposure to visiting patrons and television audiences via signage, in-game content and references to their names by commentators.

Another 50 small businesses who missed out on the main prize will be promoted at Telstra retail stores and at Telstra.com.

The winners were selected from those small businesses that registered interest for the new Telstra Business Go Digital Consult service, which helps businesses embrace digital transformation – the company is offering Telstra Business Go Digital Consults to all small businesses for free throughout 2021.

The 17 small business that will be featured over the weekend are:

NRL

  • Ace of Blade Barber Shop (Wynnum, QLD) – Rabbitohs v. Storm
  • Brite Spark Electrical Services (Ashfield, NSW) – Eels v. Roosters
  • West Words (Parramatta, NSW) – Panthers v. Sharks
  • Holbrook Bakery (Holbrook, NSW) – Raiders v. Knights
  • Unico Kitchens (Ingleburn, NSW) – Tigers v. Titans
  • Muscle Mat (Brisbane, QLD) – Cowboys v. Broncos
  • EME Roofing (Lidcombe, NSW) – Dragons v. Bulldogs
  • Vegepod (Sydney, NSW) – Sea Eagles v. Warriors

AFL

  • Animal Land Children’s Farm (Diggers Rest, VIC) – Richmond v. Geelong
  • Chum Creek Horse Riding & Huts (Yarra Valley, VIC) – Melbourne v. Sydney
  • The Little Veggie Patch Co. (Melbourne, VIC) – North Melbourne v. Collingwood
  • Just Shear (Yorke Peninsula, SA) – Suns v. St Kilda
  • TradiePad (Sydney, NSW) – Giants v. Essendon
  • Goldie + Ace (Melbourne, VIC) – Port Adelaide v. Crows
  • Dean Stringer Carpentry (Hervey Bay, QLD) – Western Bulldogs v. Carlton
  • New Style Painting Service (Perth, WA) – Fremantle v. Brisbane Lions (Round 21)
  • The Avocado Bus & Mine Movers (Perth, WA) – Hawthorn v. West Coast.



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What smaller businesses should be looking for from their telecoms services


With adaptability and reliability a core requirement for small business operations, having the right telecommunications partner has never been so vital.

Business telecoms service providers can help businesses meet or miss these core requirements. Flexibility is important because small businesses move much faster than larger ones.Reliability is important because they have thinner margins and less secure cashflow.

Here are our top five tips on what we think you should focus your attention on.

Understand what you have now

You need to understand what your current service is providing in terms of speed, technical support, security, and service inclusions so that you can compare services. This will also help you understand what your pain points are and what requirements are important for your business. You will also need to know what your current contract term length is.

Look beyond the sales pitch

Many service providers advertise “up to” speeds, not actual speeds. When looking into a new service provider ask for their actual speeds and whether their connections are contended. Contended connections often perform worse because your business is essentially sharing services with other businesses or home users to save the service provider money. As a small-business owner you cannot afford to be offline and you certainly do not have the time to be sitting on the phone waiting to find out when your internet will be restored.

Plan B

Some providers offer a backup connection (often called a redundant connection) in the event of an outage. This could involve switching over to a wireless network, or it could rely on a secondary wired connection into the business. If your business relies on the internet to make money, then we suggest placing service providers that can offer an automatic failover service at the top of your comparison list. When you are looking for providers that can offer redundancy, make sure that the backup connection can be provided on a “diverse path”. This ensures that the physical infrastructure your connection is reliant on for your backup connection is separate from your primary connection.

Technical support

Another item that should be at the top of your selection criteria is great customer service and technical support. If your business relies on your website to make money or you run your operation out of the cloud, you cannot afford for your hosted infrastructure to be offline and will need to ensure you are signing with a service provider that has good customer and technical service reviews. You might also wish to try calling up their support line (before you sign up) and see how long it takes you to get through.

Scalability

With adaptability and flexibility now a small business staple, you need to ensure your telecoms service provider is also adaptable and flexible. If you need to scale up, you will need your telecommunications to scale up with you.

Bundle up and save

Bundling services together such as phone call packages, team collaboration tools and video conferencing can save your business money. It also comes with the added advantage of avoiding the finger pointing that can often occur between providers when something goes wrong. It can also lead to faster resolution times for support issues because the provider has access to all of your services and isn’t stuck only seeing part of the picture.

Your telecoms service provider is much more than an internet or telephony provider. They can solve many small-business problems and help your business grow and adapt. Selecting your right service provider can be a time-consuming task, but it is definitely worth investing the time to get it right.

telecommunications, telecommunication, pain relief, telecoms

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NT farmers and businesses push for second quarantine facility near Darwin


Northern Territory farming and business groups are proposing a second Howard Springs-style quarantine facility outside Darwin, to bring in much-needed overseas workers.

The NT Farmers Association and Hospitality NT want to use Bladin Village — a former detention centre 50 kilometres from Darwin, previously known as Wickham Point — to help bring in foreign workers for industries including agriculture, hospitality and construction.

They say the facility could also be used to quarantine international students who wish to study in Australia. 

The Howard Springs quarantine facility, held up as the “gold-standard” for quarantine, is only available for the repatriation of Australians returning from overseas.

Bladin Village is a former detention centre near Darwin.(

Supplied

)

NT Farmers CEO Paul Burke said Bladin Village could quickly be made ready for use as a quarantine facility for international workers who could then fill the labour shortage crisis.

“We think there is a real opportunity for all industries to come together to utilise that facility to get the workforce we need,” he said. 

“The first thing that anyone in business talks to me about — whether it’s agriculture, hospitality, civil engineering, construction — is [a need for] a workforce. 

Mr Burke said Bladin Village was being used by the Australian Defence Force and workers in the gas industry, but that contract would end on July 17, opening up opportunities for other industries.

Village can house 1,400

The facility has the capacity for more than 1,400 people and, under the NT Farmers’ proposal, it would be run by the Federal Government, with states and territories contributing to operational costs. 

Industries would pay $2,500 per person for the 14-day quarantine period. 

Federal Minister for Employment Stuart Robert, who visited Darwin on Wednesday, did not comment specifically on the Bladin Village proposal, but said the government was considering a number of similar quarantine proposals in Queensland and Victoria. 

a Pacific Islander picking watermelons on a farm.
A seasonal worker picking watermelons on a Northern Territory farm.(

ABC Rural: Daniel Fitzgerald

)

NT Minister for Agribusiness Nicole Manison said the NT Government’s top priority was running Howard Springs.

“We have a raft of different application processes, where the chief health officer clearly and carefully has a look at these applications to make sure they maintain people in a safe way,” Ms Manison said.

“I am working closely with NT Farmers and the mango industry about getting seasonal workers here, but I want to be clear, it is those countries that we see as not having COVID-19 that we want to work with.”

Hospitality needs 7,000 staff 

Hospitality NT is backing the NT Farmers’ proposal for Bladin Village, with CEO Alex Bruce saying he hopes it will help his industry solve a 7,000-worker shortage.

“That is casuals and part-time workers, but the reality is the Territory has always had a workforce shortage in our industry, so we always just make do,” he said.

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Republicans want to ban businesses from requiring proof of vaccination


AS CASES OF covid-19 in America are falling and the fourth wave subsides, states are again wondering how and when to loosen the remaining rules on travel between them. Six states, all led by Republican governors, have banned covid-19 vaccine passports. Three (Florida, Texas, and Montana) even prevent private businesses from requiring proof of vaccination. These bans may be politically advantageous for Republicans catering to a base angered by mask mandates (which changed this week after new guidance from the Centres for Disease Control and Prevention). Only one state, Democratic-led Hawaii, is publicly planning to use vaccination credentials for in-bound travel.

Vaccine passports come in three colours. The first and least controversial form is a vaccine passport for international travel, similar to the Yellow Card implemented by the World Health Organisation to prove inoculation for diseases like yellow fever and childhood illnesses like rubella. The second form is a one-time proof, such as those currently required by some schools for childhood vaccinations. The third is a transactional pass required for entrance into establishments. Denmark, Estonia and Israel have launched passports that grant vaccinated individuals access to restaurants, salons, large events, and more. The European Union plans to roll out a vaccine passport in June…

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Victorian Ombudsman finds lockdown fund failed some businesses




An investigation by the Vic. Ombudsman has found thousands of small businesses unfairly missed out on critical financial help during last year’s COVID-19 lockdowns. Zalika Rizmal reports.

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